WASHINGTON (Reuters) - President Barack Obama on Tuesday ordered a review of U.S. regulations, both old and new, in a push to blunt criticism from Republicans and businesses that excessive government is hindering economic growth.
The impact of the initiative was limited, however, since it excludes “independent agencies” such as the major financial regulators that are implementing most of 2010’s Dodd-Frank reforms for Wall Street and the banking industry.
Obama ordered government agencies to consider the costs of regulations and maximize public input in their development, while ensuring they are underpinned by science and that their impact on small businesses is taken into account.
Some rules place “unreasonable burdens on business — burdens that have stifled innovation and have had a chilling effect on growth and jobs,” Obama said in an op-ed piece in the Wall Street Journal in which he unveiled his plans.
His initiative came as agencies work to implement hundreds of new regulations stemming from some of the president’s biggest legislative achievements to date — major packages overhauling healthcare and the financial system.
“This is all about political protection,” said Ed Mills, an analyst at investment firm FBR Capital Markets.
Obama needs to be able to show he favors “smart regulation,” not regulation that burdens the economy, and his new push will give him something to highlight when Republicans and businesses attack him over the issue, Mills said.
Senior administration officials, on a conference call with reporters, focused on the impact of the review on environmental and health rules, with little mention of financial regulation.
The Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corp and the Federal Reserve are spared from the executive order.
“This may be great for non-financial companies, but I doubt it offers much hope for banks and other financial firms,” said Jaret Seiberg, an analyst at investment firm MF Global.
“They are facing hundreds of new rules, which is hampering their ability to expand credit,” he said.
It was not immediately clear how far-reaching Obama’s new strategy would be in changing the way the government operates. He did not specify which regulations are unreasonably onerous.
The president has struck a more business-friendly tone since his Democrats lost majority control of the U.S. House of Representatives and saw their Senate majority reduced in November’s congressional elections.
Obama is scheduled to meet with the U.S. Chamber of Commerce, corporate America’s biggest lobbying group and a long-time foe of expanded regulations, on February 7.
Business leaders say regulations, including those being written for the healthcare and financial reform, have hurt job creation at a time of nearly double-digit unemployment.
They said agencies will have to put more regulatory enforcement and compliance information online, and that steps in this direction have already been taken by the Food and Drug Administration and the Environmental Protection Agency.
While vowing to eliminate rules that are “not worth the cost, or that are just plain dumb,” the president said his administration would not shy away from writing new rules to address “obvious gaps” in government oversight.
Additional reporting by Caren Bohan and Eric Beech; Editing by Cynthia Osterman