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The High Cost of Regulation & Not Just Insurance

Posted By Administration, Tuesday, January 31, 2017

 

Most insurers and a great many independent insurance agents will tell you — while admitting some are necessary — there are too many insurance regulations. Other businesses feel the same way about regulation.

 

As a society, we are faced with increasing regulations and the urge of government to use them is happening at an alarming rate. It’s a fact not lost on President Trump who has promised to start doing away with regulations and rules on a wholesale basis.

 

How bad is it? Take the case of federal regulation. When Donald Trump was sworn in a couple of weeks ago, the Federal Register had a record 89,535 pages of regulations. Add to that the number of state, county and local government regulations and the number of pages is staggering.

 

So, Trump — who has promised to cut federal regulations by 75% — has issued an executive order saying for every one regulation introduced, two will be eliminated. Trump said, “If you have a regulation you want, number one, we’re not gonna approve it because it’s already been approved probably in 17 different forms. But if we do, the only way you have a chance is we must knock out two regulations for every new regulation. So, if there’s a new regulation, they have to knock out two.”

 

Second, Trump said, “This will be the biggest such act that our country has ever seen. There will be regulation, there will be control, but it will be a normalized control where you can open your business and expand your business very easily. And that's what our country has been all about.”

 

Third, the president said this is really more about small business. “We’re cutting regulations massively for small business — and for large business. But they're different. But for small business, and that’s what this is about today. And we’ll be reducing them big league and their damaging effects on our small businesses, our economy, our entrepreneurial spirit. And it’s been very badly damaged. The American dream is back.”

 

And Trump emphasized that the decision is not a knock-on President Obama though — he said — “it got particularly bad in the last eight years.”

 

So how much do regulations cost business? Tons says the Office of Management and Budget (OMB). It estimates the cost at between $68.5 billion and $101.8 billion for salaries and somewhere between $261.7 billion and $1,042 billion for benefits.

 

The National Association of Manufacturers says the OMB’s numbers are too conservative. It estimates the cost of complying with regulations at $2.028 trillion or 12% of the gross domestic product.

 

As the president and a lot of Republicans — and even some Democrats — say, many regulations are outdated and some duplicate what other rules say or contradict what other rules say.

 

Competitive Enterprise Institute spokesman Clyde Wayne Crews said in 2015 there were 81,611 pages published. That’s much higher than 2014’s 77,687 and higher than 2010’s old record of 81,405 pages but not close to 2016’s 89,535 pages.

 

Trump’s proposed cuts — says Amit Narang of the left of center group Public Citizen — will not happen. “There is no way for President Donald Trump to slash regulations by 75 percent without cutting into bedrock public protections that hold Wall Street accountable, keep our water and children safe from lead poisoning, and contain food contamination outbreaks,” he said.

 

Narang said all Trump is going to accomplish is to “permit corporations to rip off consumers, poison our environment, [and] cheat and mistreat workers.”

 

Other than to specify the percentage, the president has not offered many specifics about what he wants to do and when. But House Republicans have gone there. Leadership in the House is looking at passing the Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act.

 

It’s purpose is to put a commission in place to wade through the regulations and introduce legislation to eliminate or update them.

 

Source links: The Hill — link 1, link 2, National Association of Manufacturers, Congressional Research Service, USA TODAY, Politico, Yahoo

 

 

Tags:  Insurance Content  Insurance Industry  Insurance News  The High Cost of Regulation & Not Just Insurance  Weekly Industry News 

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