This is what Obama calls ‘slashing red tape’

Following up on a draft released in May, the Obama administration Tuesday outlined federal rules changes that it says will save private businesses about $10 billion over five years.

The changes include accelerating payments to 60,000 small businesses working on Defense contracts, and requiring the Small Business Administration to adopt a single electronic application for borrowers, Bloomberg News reports.

The Department of Health and Human Services will work to remove some reporting requirements on hospitals and health-care providers to potentially save $4 billion over five years, according to White House spokesman Cass Sunstein.

And rule revisions by the Energy Department may save makers of commercial appliances and bathroom shower heads as much as $900 million, according to the plan posted on the White House web site.

The U.S. Chamber of Commerce welcomed the administration’s initiative while saying it didn’t go far enough.

“This lookback will not have a material impact on the real regulatory burdens facing business,” spokesman Bill Kovacs wrote on the Chamber’s web site. Still, the plan is a “worthy effort at making technical changes to the regulatory process,” he said.

Indeed, this is movement in the right direction, and the president is to be congratulated for acknowledging the regulatory environment is a big part of what’s blocking more job creation. The question is whether this reflects any real change in the regulatory mind set, down the line.

“While removing some modest burdens with this hand, with the other hand the administration is proposing new costly and unnecessarily burdensome rules that will wipe away all the savings that have been proposed today,” observes Rosario Palmieri of the National Association of Manufacturers.

He cited the Environmental Protection Agency’s proposal to tighten ozone standards, saying it may cost the economy an additional $1 trillion annually between 2020 and 2030 and jeopardize 7.3 million jobs, calling it “the most costly rule that this administration has proposed.”

Let’s look at just one example, those rule revisions by the Energy Department that reportedly “may save makers of commercial appliances and bathroom shower heads as much as $900 million.”

In July of 2010, the Wall Street Journal reported “Regulators are going after some of the luxury shower fixtures that took off in the housing boom. Many have multiple nozzles … and emit as many as 12 gallons of water a minute. In May, the DOE stunned the plumbing-products industry when it said it would adopt a strict definition of the term ‘shower head’ in enforcing standards that have been on the books — but largely unenforced — for nearly 20 years.”

For years, each nozzle in a shower was considered separate and in compliance if it delivered no more than the 2.5-gallon maximum, the Journal reported. But in May, 2010, the DOE introduced a new interpretation under which all nozzles would count as a single shower head and be deemed noncompliant if, taken together, they exceed the 2.5 gallons-a-minute maximum.

In May, 2010, the DOE fined four shower head makers $165,104 in civil penalties, alleging they failed to demonstrate compliance for some devices.

Manufacturers and retailers warned the new rules also affect hand-held sprays used by the elderly and disabled. Multiple showerheads found in shower rooms at schools or gyms could also be at risk, manufacturers say.

“Did Congress limit consumer choice? Absolutely,” DOE General Counsel Scott Blake Harris told the Journal.

So what about the DOE shower-head rule change announced Tuesday?

The agency has now decided to “provide an enforcement grace period of two years to allow such manufacturers to sell any remaining non-compliant products … in order to enforce the existing standards in a manner that avoids needless economic dislocation that some industry representatives estimated at $400 million.”

Not really a rule change, then, but a two-year grace period before those who spent time and money developing these successful products will have to lay off anyone still manufacturing, distributing or selling them.

This despite the fact “It was not the legislative intent of Congress to authorize DOE to regulate the bathing habits of Americans,” according to Frederick Desborough, vice president of California Faucets of Huntington Beach, Calif.

It’s hard to believe the Founding Fathers contemplated a central government large and intrusive enough to regulate our toilets and our shower heads — fining and driving out of business not those whose products don’t work, but rather those whose products work too well. And so long as Washington endeavors to do so, it’s hard to work up high hopes for this administration’s version of “slashing the red tape.”

One Comment to “This is what Obama calls ‘slashing red tape’”

  1. J. Brook Says:

    Well, we’re not stupid. The devices will now be sold with caps on them, and then the consumer can decide how many shower heads to purchase and install.