“We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation.”
—President Obama, Wall Street Journal op-ed, January 18, 2011
Last month the National Federation of Independent Business (NFIB) said its Small Business Optimism Index fell 1.8 points to 88.1, the sixth consecutive monthly decline. The decline was primarily due to weaker expectations for real sales growth and a negative outlook for business conditions. NFIB chief economist, William Dunkleberg, stated, “With such a dim outlook, owners are not going to do a lot of hiring or expanding.”
NFIB has highlighted the example of Karen Beagle, President of DARE Electronics in Troy, Ohio. With EPA capriciously mandating changes to her business, Ms. Beagle noted, “I think there certainly could be a point where there are so many regulations that it stops our business and you just can’t afford to stay in business… We have all of our customers always pressing, pressing, pressing for lower prices, lower prices—you need to drop your prices. You got costs going up and more rules to deal with and you just get squeezed in the middle.”
The Wrong Solution
The EPA estimates the cost of its new Cement MACT (maximum achievable control technology) regulations will be $2.2 billion and concedes that the rule may lead to the “idling” or closure of 12 plants. The agency further estimates that national average prices for Portland cement may increase 5.4 percent and domestic production may fall by 12 percent. However, the Portland Cement Association concludes that EPA regulations could result in 18 plant closures and the direct loss of 3,000 to 4,000 jobs in the cement industry by 2015, translating to $200 million to $260 million in lost wages annually. In addition to the job losses directly caused by plant closures, rising cement prices pose a threat to the nation’s beleaguered construction industry, which could reportedly lose between 12,000 and 19,000 jobs due to higher construction costs. Further, as domestic production decreases, Americans will become more dependent on supplies imported from other countries.
The Right Solution
The Cement Sector Regulatory Relief Act, H.R. 2681 would provide a stay of the EPA’s overly burdensome rules and allow for the implementation of effective regulation that protects communities both environmentally and economically. The bill is being considered in the House this week as part of the House GOP plan for job creation, which includes a focus on preventing or reversing the negative impact of over-regulation.