The Cost of Overregulation

Reporters often ask me which concerns I hear most frequently from the people of the Third District. My answer is almost always the same – Nebraskans are tired of overreach by the federal government.

One area where the government’s hand is heaviest is in the issuing of regulations. In 2015, federal regulations cost our economy $1.885 trillion. To put this figure in perspective, it is higher than the gross domestic product of Russia, Canada, or Australia.

These costs are harmful to individuals and families. An analysis by the Competitive Enterprise Institute (CEI) found regulations cost each U.S. household nearly $15,000 annually.

Overregulation not only hurts hardworking Americans already feeling the impacts of a sluggish economy, but it also undermines the separation of powers set up by our Founders. According to CEI, for every one law enacted by Congress last year, 30 rules were issued by agencies.  

The executive branch is tasked with enforcing laws, not creating them. Unfortunately, President Obama and his administration have followed through on the promise to use a pen and phone to go around Congress, and a continuous roll of red tape has been one of the many consequences.

Over the past few months, House Republicans have been introducing our Better Way plan. An important aspect of this agenda is reducing the regulatory burden on Americans.

Under our Better Way, major regulations could not take effect without a vote in Congress. This would hold agencies accountable and block the constant stream of costly new, unbudgeted rules. We are also proposing Congress set a cap on federal regulatory costs, which agencies would not be able to exceed in a given year.

The Better Way plan is the big picture for how we want to get our country back on track, but we also continue to pursue legislative solutions for individual regulations plaguing families and businesses. In September, the House passed the Overtime Rule and Regulatory Relief for Small Businesses, Schools, and Nonprofits Act to delay implementation of the Department of Labor’s (DOL) overtime rule for six months. The rule raises the threshold under which salaried employees qualify for overtime pay from $23,660 to $47,476 per year and sets it to increase every three years.  

Many Nebraska employers have expressed concerns to me about how this rule could force them to cut employees’ hours or wages. These concerns are not unfounded; DOL’s own analysis predicts pay rates for salaried workers will drop by more than five percent in 2017, after the new rule is scheduled to take effect. Overall, employers are confused about when and how to comply. The six-month delay will provide more time to learn about the rule and, hopefully, allow a new administration to stop it from moving forward.

Since 2014, I have been working on my own Regulation Rewind initiative to fight back against government overreach. With the help of Nebraskans sharing their stories with me about how regulations have impacted them, their families, and their businesses, I have taken action on many legislative solutions to cut through unnecessary and harmful red tape. If you would like to learn more about these efforts, please visit AdrianSmith.house.gov/RegulationRewind.

Getting the federal government out of the way of Nebraskans’ success is a top priority for me, and I will keep focusing on efforts to reduce the burden of overregulation.