A report from top GOP oversight official Rep. Darrell Issa based on almost 2,000 pages of letters from business groups says government red tape is deeply harming the competitiveness of American industry and contributing to unemployment, especially in the manufacturing sector.
The report comes as President Obama has vowed to eliminate unnecessary regulations, ordering a broad review of current government rules “to remove outdated regulations that stifle job creation and make our economy less competitive.”
With the report, Republicans are symbolically calling his bluff, providing meticulous detail on the many new rules put into place by Obama’s own administration they say are impeding economic growth.
The report also strikes at a key argument forwarded by the Obama administration that regulations drive job growth because new positions must be created to help comply with the new rules.
“A common misconception is that new regulatory requirements can translate into new compliance positions, which should help put people back to work,” the report says, “However, regulatory compliance burdens actually divert resources away from productive positions and channel investment toward compliance roles … Resources and personnel devoted to regulatory compliance are not able to contribute towards producing the goods and services that consumers value.”
Issa’s report cites an estimate from the National Association of Manufacturers that “structural costs imposed on U.S. manufacturers including regulation create a 17.6 percent cost disadvantage when compared with nine major industrialized countries.”
The issue of cost disadvantage is important because Obama has made “winning the future” by making American business more competitive with foreign industries a top priority.
Read about the top five regulations that American businesses hate the most.