Obama Calls for Simplification of Rules, Review of Regulations That Hurt Growth

This story appears in the Jan. 24 print edition of Transport Topics.

President Obama signed an executive order on Jan. 18 calling for a simplification of regulations and a review of ones that stifle economic growth.

The following day, American Trucking Associations President Bill Graves called on the administration to live up to that order by halting its proposed changes to the hours-of-service rules.

“Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business — burdens that have stifled innovation and have had a chilling effect on growth and jobs,” Obama said in an op-ed published in the Wall Street Journal.

In that op-ed, Obama said the order directs federal agencies to conduct a “review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.”

“It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades,” Obama wrote.

In a memo to federal agencies, Obama said that when a rule may have a “significant economic impact on a substantial number of small entities,” regulators should “give serious consideration to whether and how it is appropriate . . . to reduce regulatory burdens on small businesses through increased flexibility.”

In a letter to the president, Graves said the trucking industry agrees on the need to review regulations.

“The current HOS rule — in place for more than seven years now — has strengthened the $550 billion trucking industry and the huge slice of the U.S. economy that relies on trucks, while at the same time facilitating the most dramatic truck safety improvements our industry has ever seen,” Graves wrote. “FMCSA’s Dec. 29, 2010, proposed changes to the HOS rule are, using your words, ‘just plain dumb,’ and ‘not worth the cost’ of making ‘our economy less competitive.’ ”

Graves added that the Federal Motor Carrier Safety Administration’s “own analysis shows the rule’s costs outweigh the safety benefits. Further, the alleged health benefits are purely speculative and not based on hard data or science.”

“We ask that your DOT meet its responsibility to address safety and health issues with science and legitimate benefit-cost analyses,” he said, adding that the proposed new rule “fails on both accounts.”

Public Citizen President Robert Weissman said Obama’s order was “the wrong way to think about regulation.”

“Markets cannot function without proper regulation. That means businesses cannot function without proper regulation,” he said. “We do not need a ‘balance’ between regulation and the free market. We need effective regulations that foster the right types of markets.”

Other business groups said the Obama order was a step in the right direction.

“While a positive first step, a robust and globally competitive economy requires fundamental reform of our broken regulatory system,” U.S. Chamber of Commerce President Thomas Donohue said.

That reform, he said, should include Congress reclaiming “some of the authority it has delegated to the agencies” and “repealing or replacing outdated or ineffective regulations, ensuring realistic cost-benefit analyses using quality data.”

Meanwhile, rail industry executives will be meeting with White House officials this week to discuss regulatory issues, Union Pacific Corp. CEO James Young said in Jan. 20 conference call.

Young, who heads the largest U.S. railroad, said one of the subjects for discussion would be a federal mandate that freight railroads install technology known as positive train control in locomotives to prevent head-on and rear-end crashes.

That technology, required under a 2008 law, could cost the industry $22 for every $1 of benefits provided, Young said.

Senior Reporter Rip Watson contributed to this report.