Cutting regulation

Tuesday, May 31, 2011 | 2:01 a.m.

In January, President Barack Obama issued an executive order telling federal agencies to review regulations and find ways to cut red tape, getting rid of “absurd and unnecessary paperwork requirements that waste time and money.”

On Thursday, the White House unveiled proposals to roll back regulations that would save hundreds of millions of dollars in expenses and thousands of man hours a year, it said.

Cass Sunstein, the Harvard Law School professor heading up the review, said the White House is seeking public input and will review it along with the proposals to determine what can be cut without endangering health and safety.

In a speech before the conservative American Enterprise Institute, Sunstein noted that a regulation on the books since 1970 classifies milk as an “oil.” As a result, he said, the dairy industry had to take expensive precautions to prevent spills. In response to the president’s executive order, the Environmental Protection Agency exempted the dairy industry from regulation that treats milk as oil. Sunstein said that will save the industry $1.4 billion over the next decade.

Sunstein said there are plenty of other examples, including:

• The Occupational Safety and Health Administration announced a rule that will remove redundant reporting requirements that employers face. That, Sunstein said, would cut $40 million in annual costs and 1.9 million hours of labor.

• A plan by OSHA would harmonize hazard material classifications and labels with other nations and require standardized forms, saving $585 million a year.

• A Transportation Department plan to change rules for trains, removing requirements for certain equipment except where it is “really needed on grounds of safety,” would save the railroad industry up to $400 million initially and $1 billion over the next two decades.

He said this is not a one-time exercise but said government officials will continue to review regulations. He noted that the president’s order requires agencies to “identify and consider flexible approaches (to regulation) that reduce burdens and maintain freedom of choice for the public.” He added that the administration is also trying to make regulations “clear and intelligible” to help people comply.

Many Republicans in Congress and business groups, which have groused about “job killing” regulation, were skeptical about the White House’s effort. Bill Kovacs, a U.S. Chamber of Commerce executive, said the proposals were “not nearly enough” and complained that the administration “sidestepped the fundamental issues of cost and burden that have Republicans and Democrats alike clamoring for long-term regulatory reform.”

There is apparently no pleasing the business lobby. The administration didn’t sidestep anything. This review, which took just four months, shows clear evidence that the administration is intent on cutting both the cost and burden of regulation.

Some conservatives and members of the business community might prefer to have regulation slashed completely, but there should instead be a careful review.

It is important that there be a careful review of regulations because they exist for a reason. When it comes to agencies like OSHA, regulations can be the difference between life and death.

Sunstein said he hoped the review would “promote economic growth and job creation while protecting the health and safety of the American people.” That’s key. We hope that people and businesses will work with the government to find the right balance between easing regulation and protecting the public.