Investor's Business Daily: A Freeze On New Regulations Would Help Boost Job Growth

Printed in Investor's Business Daily, July 27th, 2011

It's easy to have missed it, but the U.S. is now entering the third year of the Obama "recovery." The economy stopped shrinking in 2009, and White House economists tell us that it has been growing ever since.

But while some corporate balance sheets have improved, job growth remains anemic. And analysts have even begun to ask whether we're heading into another stretch of mass layoffs.

You would think that Washington would be focused on job creation. Instead — all too often — Washington seems intent on adding new layers of job-killing regulation.

The incredible thing isn't that there are a lot of regulations. You know that, and I certainly do, having dealt with government rules and regulations for over 31 years, building a manufacturing business in Oshkosh, Wis.

The incredible thing is that the number keeps rising, even when unemployment is 9.2% and businesses are so uncertain that they've given up hiring. We can talk all day about how regulations hurt business, but the bottom line is that they keep people from finding work.

You would think that in a weak economy, government would show restraint. Wrong: The Code of Federal Regulations, 55% longer than it was only 30 years ago, apparently isn't long enough, so the Federal Register last year included 24,914 pages of new rules. Federal regulators issued 3,573 new rules in 2010.

Not just little ones: Under the Obama administration, each year the government averages 84 "economically-significant" new regulations, ones that each cost the economy $100 million or more annually.

There are 4,257 new regulations now being written, including 219 economically-significant ones, but any one of them is significant if it's the one that overturns your business model. If you were a worried entrepreneur, would you be eager to hire amid such uncertainty?

Regulators intend to act in the public interest. But the first part of the public interest is a robust economy. Most Americans have a simpler way of saying "robust economy." They call it, "having a job."

That's why I say that until more Americans can find work, regulators should take a pause — not on enforcing regulations we already have, but on writing still more of them.

Take just one of those regulations heading our way. The Environmental Protection Agency (EPA) plans to lower the limit on ozone in the air from 75 parts per billion (ppb) to between 70 and 60 ppb.

Most of the eastern part of my home state of Wisconsin — which worked hard to successfully clean its air — would find itself back under harsh rules making it costly and slow for factories to expand or even add machinery.

The EPA predicts its rule would cost the U.S. economy up to $90 billion annually by 2020, about the same as if the country threw away all the output of metro Milwaukee. But that estimate is likely low: The agency admits most of the technology needed to hit its new standard doesn't even exist.

Inventing it will cost more than the agency projects. Using better estimates, researchers at the Manufacturing Alliance calculated this one rule will sap over $1 trillion from the economy each year by 2020, destroying 7.5 million jobs. In Wisconsin, the impact will be $12.6 billion a year, and 78,600 jobs destroyed.

It is all unnecessary. The EPA just lowered its ozone limit in 2008. Our air isn't filthy. Ozone levels have fallen steadily. Milwaukee has cut its ozone by 30% in 20 years. The question isn't whether we can get any cleaner; it is whether purging the last remnants of ozone is worth throwing away the livelihoods of 78,600 Wisconsinites.

It's not — certainly not when so many people are out of work. I'm proposing a bill, the Regulation Moratorium and Job Preservation Act, which puts a hold on new regulations until unemployment falls below the level it was when the administration took office, to 7.7%. At least until the crisis passes, we need to stop shifting the earth under the feet of the nation's employers.

Many regulations have been helpful. No one wants to get rid of all regulations. But with an economy stuck in neutral, it's time to give job creators a chance to catch up with the myriad regulations we already have.

Mr. Johnson is a Republican senator from Wisconsin.