Washington Update: Obama: Rein in regulations

Days after federal agencies announced their semi-annual regulatory agendas, President Barack Obama issued an executive order that has the potential to slow down – if not derail – some of the regulations being pursued. Issued Jan. 18, the executive order requires agencies to consider the impact new regulations may have on economic growth.

An editorial written by Obama, and published in The Wall Street Journal the same day the executive order was released, said the intent is to balance proper oversight with business growth.

“This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth,” Obama wrote.

To an extent, agencies such as OSHA already do this. Rules are subject to cost-benefit analyses, such as Small Businesses Regulatory Enforcement Fairness Act panel reviews. In a recovering economy, this could be a reminder to agencies to keep costs in mind.

But the executive order includes another wrinkle – Obama also instructed agencies to conduct a periodic review of existing regulations and remove those that hamper business growth. The president stressed that while his administration will root out costly or “just plain dumb” regulations, it will still continue “efforts to target chronic violators of workplace safety laws.”

Reviewing regulations already on the books is not something OSHA does well, according to Frank White, global director of HSE services at Mercer (formerly ORC Worldwide), a consulting firm based in New York. The executive order will not result in OSHA getting rid of current rules that improve safety and health, White said, but it could lead to updating standards or removing those considered outdated or unnecessary.

OSHA’s semiannual regulatory agenda, released Jan. 5, sets a fairly aggressive schedule: At least five final standards are scheduled to be published this year, and regulatory steps are set for several other proposed standards.

Although the standards set to be promulgated in the near future likely will not disappear due to the executive order, the process could slow down because of the agency’s limitations, according to White.

“OSHA’s got to make some hard choices where it’s going to devote its resources,” he said.Given that the agency already has made some hard choices, the president’s order could make an agency already stretched thin even thinner.

Defining the cost

The executive order could be evidence of Obama trying to appease business groups by sliding more to the center, given the drubbing Democrats took in the November election. If that is the case, it seems to be working.

“We stand ready to assist in the president’s efforts to address an escalating problem and meaningfully reduce unnecessary burdens on manufacturers in America so they can get back to creating jobs,” said Aric Newhouse, senior vice president for government relations and policy at the National Association of Manufacturers in Washington.

Rep. Darrell Issa (R-CA) also applauded the executive order. As the new chairman of the House Oversight and Government Reform Committee, Issa recently launched an initiative asking employers about their experiences on government regulations. It bluntly asked, “Is government holding back your business?”

In response to Issa’s request, NAM identified OSHA’s pursuit of an injury and illness prevention program standard as one potential regulation that could cost businesses money. The proposed regulation – commonly referred to as I2P2 – would require employers to set up a process to “find and fix” workplace hazards.

What effect will Obama’s executive order have on I2P2? The proposed standard is OSHA administrator David Michaels’ top priority, but it has not been published, and a timeline for when a notice of proposed rulemaking may occur has not been announced. The standard is due to undergo a SBREFA review this June.

Several groups are supportive of I2P2, and the general idea behind the proposal – a prevention program to spot and correct hazards before they cause an injury – receives broad support. However, some business groups have expressed concerns about a mandate to create such a program – which in the past had been voluntary – and the costs involved.

Of course, additional costs for implementing new safety procedures always exist. This has long been the argument from the business community regarding new safety regulations, and the executive order may even help such an argument. “I think it gives businesses reason to think they can argue that costs are a very important factor,” White said of the executive order.

What some people may forget or choose to ignore is that expenditures on new safety measures spent now actually save money in the long run. Complying with a new regulation could prevent a costly injury or death.

OSHA shares this line of thinking. “OSHA believes that, looking across the whole economy, many OSHA regulations – and particularly the I2P2 regulation – improve the productivity of the economy, and thus improve economic growth by cost-effectively reducing injuries, illnesses, and fatalities and the economic losses they cause,” an OSHA spokesperson told Safety+Health magazine.

It is certainly a good idea to evaluate the costs of additional regulations and review current regulations to ensure their effectiveness, but constantly going to the same well of saying “this costs too much” begins to make the argument sound a bit disingenuous. As White suggested, the executive order potentially could slow down the rulemaking process.

One day after the order was issued, OSHA withdrew a proposed interpretation on its noise standards. Days later the agency temporarily withdrew a rule that would have added a musculoskeletal disorder column to the OSHA 300 log. Creating potential slow-downs in an already lengthy rulemaking process has brought some sharp criticism upon the president.

Robert Weissman, president of Washington-based advocacy group Public Citizen, suggested the possible threat of additional regulations is not the major issue; instead, he believes the bigger issue is the recent occupational disasters and the apparent disregard of safety rules by some corporations. “We need to focus most urgently on fixing these problems and others, not burden agencies, which already are overworked and under-resourced, with more internal reviews and red tape,” Weissman said.

The opinions expressed in “Washington Update” do not necessarily reflect those of the National Safety Council or affiliated local Chapters.