“We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.” Ayn Rand. Strikes a nerve doesn’t it?
BACKGROUND AND STATS: The Obama/Biden administration set the stage for a regulation nation, Trump made progress in reducing bureaucratic controls but Biden, the good Obama student, is back at it. During the first three years of the Obama/Biden rule, 1106 new major federal regulations added more than $46 billion per year in new costs for Americans. That was four times the number and more than five times the cost of the major regulations issued by President Bush,43, in his first three years.
But 2009-2012 was just the warm up for the Obama/Biden regulation nation. January, 2014, “We are not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help that they need. I’ve got a pen and I’ve got a phone.” President Obama
In their sprint to the finish in 2016 nearly 4000 regulations made their way through the federal bureaucracy, costing billions of dollars per year and wreaking havoc on American businesses in particular.
President Reagan aptly described that concept of leading the nation; “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
In 2017, a week after the inauguration, President Trump sent a message to the Congress, the government bureaucracy and the American people with his Executive Order, “Reducing Regulation and Controlling Regulatory Costs”, that required agencies to revoke two regulations for every new rule they want to issue.
On 20 January, 2021 a few hours after being sworn in, President Biden cancelled the Trump 2 for 1 Executive Order.
In 2020, the Trump administration’s regulatory costs were about $20 billion. In 2021, Biden’s first year, the cost exploded to approximately $200 billion.
In 24 months, Biden has demonstrated he is hell-bent on an unprecedented expansion of the regulation nation. According to the American Action Forum, Biden has imposed 517 regulatory actions costing some $318 billion. By comparison in four years Trump imposed rules at $64.7 billion in net regulatory costs.
The Constitution specifically gives the power to pass laws to Congress, not agencies. Yet in 2021 federal agencies issued 3,257 rules based on 143 laws. In 2022 another 3,168 rules were added to the Federal Register based on 247 laws. But as the saying goes, “You ain’t seen nothing yet.” Agencies are hard at work writing the regulations and rules that will be necessary to cover the 4,155-page, $1.7 trillion government funding bill passed December, 2022.
Under Trump, calendar year 2019 concluded with 21,964 final rules in the Federal Register which was the lowest count since records began being kept in the 1970’s.
In Trump’s first year, 2017, the Federal Register finished at 61,308 pages the lowest count since 1993 and a drop of 36% from Obama’s 95,894 pages in 2016 which was the highest in history.
REGULATIONS IMPACT: Regulations are a tax on every American. The Competitive Enterprise Institute estimates that overall regulatory costs to the economy are at least $2 trillion; about 8% of the gross domestic product. If you think of regulation costs as a tax, it would be larger than federal income tax. Or, if it was a country, U.S. regulation would be the world’s eighth-largest economy.
As President Calvin Coolidge reminded us 100 years ago, “The business of America is business.” But:
- Mounting regulations reduce business start-ups; it’s just too hard to counter the massive government red tape.
- Meeting regulatory requirements costs businesses time and money.
- Regulations can kill the American entrepreneurial spirit that made this the greatest nation on earth.
- Mounting regulations slow overall Gross Domestic Product growth and negatively impact everything consumers. During an inflationary period, the last thing we need is more regulation trauma that further raises prices.
- Forbes reported that a 10% increase in total regulation leads to about a 1% increase in prices and most often impacts low-income households.
While large corporations across America get the spotlight, according to the U.S. Small Business Administration, 99.9% of American businesses are “small” and there are 33.2 million of them. They employ 61.7 million workers, 46.4% of all U.S. employees.
FOR EXAMPLE: Here is one of the thousands of federal and state regulations creating a hostile business environment for small business.
With the aim of combating wage discrimination, the Equal Employment Opportunity Commission, EEOC requires employers with 100 or more workers to report how much they pay workers, broken down by sex and ethnicity. The form for doing so includes 12 rows for different pay levels in 10 broad job categories, ranging from executives to service workers. For each of these rows, there are 15 columns identifying employees by gender and ethnicity; white, black, Latino, Native Hawaiian, Pacific Islander, Asian, Native American, Alaska Native, or “Two or More Races.” Employers also would have to tally the total number of hours worked by employees in each pay band over the past 12 months.
It’s easy to see possibly three problems associated with this report. First, it’s just a mass of raw numbers. But raw numbers could be misleading because pay disparity could be legitimately due to factors such as seniority, training or decisions workers make on whether to work overtime.
The second problem has to do with perceptions. The EEOC bureaucrats’ most senior boss, aka President Biden, has told the Executive Branch and the American people in prepared remarks, June 2021, that, “White supremacy is the most lethal terrorist threat to America.” Armed with that guidance from the president, the bureaucrats logically begin to execute their mission by looking at, you guessed it, business owners who are white.
The third problem is that the regulation exists because of the assumption that wage disparity is so rampant in America that the federal government has to take it on. With that assumption underpinning the whole operation, one weaponized bureaucrat’s conclusions from the raw data can bring the force of the federal government down on large numbers of business owners, strangling them with red tape and legal fees
“The most terrifying words in the English language are; I’m from the government and I’m here to help you.” Ronald Reagan.
NATIONAL SECURITY: Then there are the senior bureaucrats who can, on their own initiative bend the rules and regulations just enough to produce an outcome that is favourable to their personal viewpoint but not in the best interest of We-The-People or U.S. business. Case in point is an on-going issue called the Willow Project. It is part of a decades-long oil drilling venture on Alaska’s North Slope in the National Petroleum Reserve which is owned by the federal government.
First, let’s be clear about the importance of drilling our own oil. Given the strategically challenging world we live in, energy independence, achieved in 2019 for the first time in 62 years, is a critical national security issue right up there with illegal immigration.
What we should know about the Willow Project:
- ConocoPhillips acquired its first Willow leases in 1999. Willow is an $8 billion business investment.
- The National Petroleum Reserve is an area the size of Indiana that Congress specifically set aside for oil development.
- The project would occupy 0.002% of the National Petroleum Reserve.
- It would use the existing Alaska pipeline and require no new roads.
- Willow is capable of providing 180,000 barrels a day from its estimated 600-million-barrel reserve.
- It would employ 2500 workers, mostly union labour construction jobs.
- The project has passed every environmental analysis.
- It has been signed off by every concerned agency to include Fish & Wildlife and the Army Corps of Engineers.
- Willow is a low-carbon project approved by the Bureau of Land Management.
- It would generate about $17 billion in new revenue for the feds, the state of Alaska and the North Slope Native communities.
- The project has overwhelming bipartisan support in Alaska.
- The Bureau of Land Management issued a statement, “In the absence of production from Willow, energy production from this project’s oil would be replaced by other sources around the globe.” Which, of course, would include the likes of Venezuela.
- The final regulatory review was completed in early February
What’s not to like about this project? Notwithstanding the national security issues associated with Willow, the single-focused anti-fossil-fuel crowd is naturally against it. They have organized online activism to include more than one million letters to the White House and a petition with more than 2.9 million signatures.
Within minutes of her own BLM scientists issuing their favourable report, Department of the Interior Secretary Deb Haaland issued a statement citing “substantial concerns.” Haaland has refused to meet with a delegation of pro-Willow Alaskan Natives who are advocating for the project. Where are her “substantial concerns” over our national security in light of the world’s growing energy security issues and Biden’s depleted strategic oil reserves?
While campaigning for a seat in the House of Representatives in 2018, Haaland stated, “As a Native American woman whose ancestral homeland is under attack from the Fossil Fuel Industry, I 100% support a Green New deal and a Congressional Climate Commission.”
As a new member of Congress in 2019 Haaland stated, “I am wholeheartedly against fracking and drilling on public lands.”
In order to be most efficient and effective with their $8 billion investment, ConocoPhillips is proposing construction of five drilling pads. During its review, the Bureau of Land Management suggested that three drilling pads may be sufficient. What Secretary Haaland can, and may do, in spite of all the approvals by her internal professionals’ advice, is to approve the project but limit the scope to less than three drilling pads. This would effectively kill the project in that ConocoPhillips has already declared less than three drilling pads is economically infeasible.
Additionally, it was reported this week that the production from existing industry-wide drilling was down significantly during 2022; there is a need for new drilling projects. This nation is a long way from the point where we can forget about having a steady, reliable supply of gas and oil. Biden proved that on day-one of his administration when he gutted the energy industry with a stroke of his pen and thereby negatively impacted the financial security of every American with $5 a gallon gas and $5.81 for diesel that drove the inflation equation.
Secretary Haaland’s “substantial concerns” serves to demonstrate the rules and regulations power in the hands of top-tier bureaucrats.
TAXING BUSINESSES: Let’s begin with some sage advice from Winston Churchill: “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Don’t you love it?
Biden, last week, “I’m going to raise your taxes,” Wow, is he ever; he is proposing $5 trillion in new tax revenue over the next 10 years. Among his business tax proposals is raising the corporate tax rate to 28% from 21%, which would affect all the big corporations and about one million small businesses organized as corporations.
Biden, for the last three years, “I will not raise taxes on those making less than $400,000” Well, I’m sorry Mr. President that is not true; you know it, your economic advisors know it but it is a great sound bite and you use it because you and all of your Democrats believe We-The-People are too dumb to know any better.
Let me explain it to you one more time Mr. and Mrs. Democrat. Almost 100% of all large corporations and all 33.2 million small business have one thing in common; their balance sheets’ bottom line consists of two main issues, income and expenses.
READER CAUTION: If you read on, I’m sure what I have written will insult your intelligence because its third-grade math. But I want to get this on record as the nonsense the White House handlers are putting on the president’s teleprompter.
If you subtract the expenses from the income, you have profit; the end game for every business. When expenses go up (tax is an expense, just like the light bill) and the income remains the same, guess what; profit goes down. When the profit margin becomes untenable something has to change; the most probable way to remedy that is to raise prices and thereby increase income.
Headline Mr. President, when prices go up everyone is negatively impacted. Tax is just another expense in the business world; businesses may write the check to the IRS but it is the consumer who actually pays the tax. By the way, Mr. President 99% of Americans make less than $400,000 per year. So please stop with the, “I will not raise taxes on those making less than $400,000.” Business don’t pay taxes, people do.
CONCLUSIONS:
Over the decades we have grown a federal bureaucracy which is now at the point of independent power and control that is not in the best interest of our nation.
We should not be driven by single-issue activists who can make enough noise to turn bureaucrat leaders against the best interests of all Americans.
Energy dependence is a critical national security issue that should not be left in the hands of uninformed activists.
As of 11 March, Secretary Haaland had not issued a decision the Willow project.
BOTTOM LINE: Obama/Biden figured out how to weaponize the bureaucracy and use it against businesses, national security and the American people. Biden has taken weaponization to an art form.
Marvin L. Covault, Lt Gen US Army, retired, is the author of VISION TO EXECUTION, a book for leaders, and a new book May 2022, FIX THE SYSTEMS, TRANSFORM AMERICA as well as the author of a blog WeThePeopleSpeaking.com