Obama Orders Regulation Review to Boost U.S. Growth

President Barack Obama ordered a review of U.S. regulations to remove or overhaul those that stifle economic expansion without helping consumers, advancing his outreach to the business community.

Obama wrote in an opinion piece in the Wall Street Journal today that he is mandating “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.” The initiative is part of an executive order he signed today, which he said would codify a “balanced” approach to regulation.

The president has sought to counter perceptions that his administration is insensitive to business interests, appointing a former corporate executive as his new chief of staff and planning to speak to the U.S. Chamber of Commerce on Feb. 7. While the American recession ended in June 2009, employers have yet to step up hiring enough to pull the jobless rate below 9.4 percent.

“This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth,” Obama wrote. “We are seeking more affordable, less intrusive means to achieve the same ends.”

Business Pressure

Tom Donohue, the president of the U.S. Chamber of Commerce, this month called on officials to “rein in excessive regulation and reform the regulatory process.” Federal codes total 150,000 pages of “fine print” and cost the nation $1.7 trillion a year, Donohue said, adding that, while some rules are important, there has in recent years been an “explosion” of regulation.

Donohue expressed concern Obama would turn to using federal agencies to pursue policy goals, rather than legislation, in the wake of the Republican takeover of the House of Representatives.

In a move seen by political analysts as an attempt to ease U.S. business concerns, Obama earlier this month named William M. Daley as his chief of staff. Daley, a lawyer and banker, is known for his negotiating skills.

Administration officials, who briefed reporters on condition of anonymity, said the president’s main goals in issuing the order were getting agencies to find the lowest cost and least burdensome path in writing regulations and making sure rules that overlap agency boundaries work in harmony.

The review will involve hundreds, if not thousands, of existing rules, the officials said on a conference call. Agencies have 120 days to provide a list of those they plan to look over and possibly eliminate.

Small-Business Impact

The administration also is directing federal departments and agencies to pay special attention to the effect regulations and paperwork have on small business, the officials said. Regulators are being ordered to consider alternatives for small business, including exemptions.

Representative Darrell Issa, the California Republican who is chairman of the House Oversight and Government Reform Committee, praised the White House move, saying in a statement that “the anti-business policies of the past have hurt job creators, small and large.” The Obama administration must fashion a regulatory program that helps make U.S. companies “globally competitive,” Issa said.

American stocks have climbed since Obama agreed with Republican lawmakers in early December to extend tax cuts that were scheduled to expire in 2010. The Standard & Poor’s 500 Stock Index has risen for seven straight weeks, the longest winning streak since May 2007, before the recession began.

Overlapping Rules

Following his inauguration in 2009, Obama launched a review of federal regulations, including an analysis of costs versus benefits and how wider disclosure can help consumers make decisions. Today’s order will help simplify a “patchwork of overlapping rules” and encourage development of new regulations with input from “experts, businesses, and ordinary citizens.”

“We’re looking at the system as a whole to make sure we avoid excessive, inconsistent, and redundant regulation,” the president wrote.

The Food and Drug Administration will tomorrow unveil “a new effort to improve the process for approving medical devices, to keep patients safer while getting innovative and life-saving products to market faster,” Obama said.

Update in Process

Revisions in the device-approval process are needed because the program hasn’t undergone a major update in more than 30 years, Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health, told a gathering of industry officials in October.

The Advanced Medical Technology Association, a trade group, last year expressed concern that proposed changes would needlessly alter the process used to bring hip, spine and other medical devices to market by such companies as Johnson & Johnson of New Brunswick, New Jersey, Minneapolis-based Medtronic Inc. and Stryker Corp. of Kalamazoo, Michigan.

Obama defended the importance of government regulations that set the right balance between “freedom of commerce” and the protection of consumers.

“The benefits of these regulations exceed their costs by billions of dollars,” he wrote. “We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.”

Obama’s predecessors, Presidents Bill Clinton and George W. Bush, each issued executive orders providing an overall framework for regulatory decision-making in their administrations. As an interim measure, Obama rescinded Bush’s order and replaced it with the Clinton order shortly after taking office.

To contact the reporters on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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