Obama Administration Slashes Red Tape Tangling Car Fumes to Spilled Milk
The White House announced today that 30 U.S. agencies are seeking to repeal or modify regulations in an effort to reduce reporting requirements and save businesses and individuals billions of dollars in compliance costs.
Among the revisions the Obama administration is proposing is elimination of a requirement in some states for vapor recovery systems at gas stations and changes in labeling mandates for hazardous materials, according to a fact sheet prepared by the White House.
Cass Sunstein, director of the White House’s Office of Information and Regulatory Affairs, said in an interview that the proposed regulatory changes would have a “big impact” on industries including railroads, airlines, medical device makers, and hospitals and doctors.
The regulatory proposals also would “simplify and streamline” requirements for businesses to gain export control approvals for “low-risk” national security technology, he said.
“It’s pretty technical stuff, but the impact will be to free up small businesses and large businesses to export goods to other nations without facing nearly as much red tape and bureaucratic barriers,” Sunstein said.
The revisions are the result of a review President Barack Obama ordered on Jan. 18, saying he wanted “to remove outdated regulations that stifle job creation and make our economy less competitive.”
Spilled Milk
Already in place as a result of the review is an exemption for the dairy industry from Environmental Protection Agency rules that defined milk as an “oil” and subjected farmers to regulations designed to cover oil spills, Sunstein said, estimating that the change will save the milk and dairy industries $1.4 billion over 10 years in clean-up costs.
“The exemption gives whole new meaning to the phrase ‘Don’t cry over spilled milk,’” Sunstein said.
In most cases, the proposed regulatory changes will first be subject to a 30-day public comment period, followed by a review process that averages four months to a year before a rule modification becomes final.
The gas station recovery systems were described as “redundant” because modern vehicles include air pollution control technologies. Eliminating the requirement, which some states impose under the Clean Air Act, would save $67 million annually, according to the fact sheet.
A proposed change in Occupational Safety and Health Administration rules to “harmonize” classification and label requirements for hazardous chemicals with international standards would save at least $585 million per year, according to the proposal submitted by the Department of Labor.
Railroad Safety
Other proposals to come out of the review include changes to railroad safety rules and an easing of paperwork requirements in the Endangered Species Act that would “streamline” approval of conservation agreements.
The railroad proposal would scale back a requirement that railroads, including Burlington Northern Santa Fe, install technology intended to prevent collisions between trains.
So-called positive train control technology was mandated in a 2008 law following a fatal crash between a Union Pacific Corp. (UNP) freight train and a commuter train in Los Angeles that could have been prevented if the trains had been equipped with the technology. The plan says the requirement would be limited to areas where it is “actually needed.” The change would save $400 million initially and up to $1 billion over 20 years, according to the fact sheet.
‘Too Rigid’
Sunstein said medical device manufacturers should benefit from an effort the Food and Drug Administration is mounting to revise their approval process.
“There have been a lot of concerns about whether our approval for medical devices has been too rigid and complicated,” he said. “The FDA is adopting an effort to make is more simple and streamlined.”
Altogether, Sunstein said, the regulatory proposals have the potential to save businesses billions of dollars a year by eliminating “out-of-date” requirements.
The regulatory review is among a series of steps the president has taken this year to counter perceptions that he is insensitive to business interests. In January, he appointed former JPMorgan Chase & Co. (JPM) executive William Daley as his chief of staff, and a month later he went to the U.S. Chamber of Commerce to make a case for his administration to business leaders.
Slow to Hire
While the U.S. recession ended in June 2009 and the benchmark Standard & Poor’s 500 stock index has risen more than 55 percent since Obama took office in January 2009, employers have been slow to hire workers. The unemployment rate stood at 9 percent in April. Only 1.8 million U.S. jobs have been regained of the more than 8.7 million lost since January 2008.
Under the review Obama ordered, agencies were required to submit to the White House by May 18 a list of rules they planned to look over or eliminate.
The review didn’t include independent agencies set up by Congress, including the Securities and Exchange Commission, the Federal Reserve, the Federal Communications Commission and the Federal Trade Commission, which exercise substantial regulatory authority over industries such as finance and telecommunications.
To contact the reporter on this story: 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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