Energy & Entrepreneurs

The Obama Regulatory Assault: Scary and Spooky

by Raymond J. Keating

Halloween arrives in less than two weeks. Time for scary, spooky fun.

Unfortunately, the Obama administration has been scaring the heck out of the business and investment communities since January 2009.  It's downright spooky that this grossly misguided policymaking persists while the economic recovery continues to struggle and job creation remains nonexistent. And no one -- except apparently for various officials and regulators who don't understand the economy -- is having any fun.

The Obama Environmental Protection Agency (EPA) houses many of these regulatory-happy policy ghouls. Early this year, the EPA proposed tightening federal ozone standards, with the limit shifting from the current 75 parts per billion (ppb) standard to 60 ppb.

What would the effects be?

Writing on NationalReview.com, Kathleen Hartnett White, who was commissioner and chairman of the Texas Commission on Environmental Quality from 2001 to 2007 and now is senior fellow and director of the Armstrong Center for Energy and Environment at the Texas Public Policy Foundation, reported: "According to the Congressional Research Service, the new ozone standard will likely designate 650 of the nation's 3,000 counties ... as ‘non-attainment areas' - which EPA defines as ‘areas of the country where air pollution levels persistently exceed the national ambient air quality standards.'"

Other estimates push the number of counties higher - to as many as 675.

A new study from the Manufacturers Alliance offered the following frightening estimates of the fallout from these new standards:

• "The annual attainment cost is estimated to be $1.013 trillion between 2020 and 2030 (in 2010 dollars). This is equivalent to 5.4 percent of projected constant dollar gross domestic product (GDP) in 2020. The present value of attainment costs over this period amounts to $7.1 trillion (based on a discount rate of 7 percent)."

• "GDP would be reduced by $676.8 billion in 2020 (in 2010 dollars), an amount that represents 3.6 percent of projected 2020 GDP in the baseline case."

• "Together, annual attainment costs and reduced GDP in 2020 total $1.7 trillion."

• "Total U.S. job losses attributable to a 60 ppb ozone standard are estimated to rise to 7.3 million by 2020, a figure that is equal to 4.3 percent of the projected 2020 labor force."

• Forty-five states would suffer job losses in 2020, for example, ranging as high as 1.7 million in Texas.

The study notes that "EPA has significantly underestimated the costs of a 60 ppb ozone standard."

The conclusion? "It is clear that the manufacturing sector would be seriously affected by EPA's proposal for stricter ozone standards. Production costs would be further elevated while domestic markets would grow more slowly. The net result would likely be another inducement for companies to move operations offshore so as to avoid bearing the attainment costs and to seek to capture markets in faster growing parts of the world."

Destroying U.S. competitiveness, growth and jobs - the Obama regulatory monster marches on, wreaking havoc with our economy and scaring entrepreneurs, businesses and investors. Here's to a not-so-happy Halloween.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.