A lot of anti-regulation warriors cheered today when they opened the Wall Street Journal and found an op/ed on reducing regulation from none other than the President himself. However, once you actually read the piece you realize that Obama doesn’t realize the depth of the problem, and one of his centerpiece examples proves that.
The President initially seemed to realize the problem of our $1.2 trillion regulatory state. He said:
Fine words, but the proof of the pudding is in the eating. As an example of the new way forward on regulation, he cited the new EPA standards on fuel economy, which he suggests is a tasty dessert:
In fact, the new regulations are almost indigestible. No-one in the auto industry has any idea of how to meet their requirements while still supplying the sort of car Americans need to drive. One thing is for certain – that the attempts to meet the standards will result in vehicles that are both much more expensive and much smaller, meaning many more deaths on the road.
Moreover, the “confusion” the President talks about arose from EPA bureaucrats’ desire to muscle in on territory formerly occupied by the Department of Transportation. Fuel economy standards have always been set by that department. However, Governor Schwarzenegger of California has a mighty bureaucracy of his own – the California Air Resources Board – which has a privileged position under Federal law. Because of the unique geography and meteorology of California, CARB has the power to apply for waivers under the Clean Air Act to solve local problems. Governor Schwarzenegger asked for such a waiver to allow CARB to design a greenhouse gas emissions program that would impose fuel economy standards (note that this is a global problem, in so far as it is a problem). President Bush’s EPA Administrator Johnson denied such a waiver, on the grounds that it would create the confusion President Obama talks about. It was Obama’s new Administrator, Lisa Jackson, who created the confusion by granting California’s waiver!
Once the waiver was granted, regulatory chaos would have ensued. As former Virginia Governor and Senator George Allen and my colleague Marlo Lewis explain:
So in stepped the EPA to solve the problem it had created. It wrested power from the Transportation Department, despite having no legal basis for doing so. EPA suggested linking fuel economy standards to greenhouse gas emissions, thereby making it the senior partner with the Transportation Department in the administration of the scheme. US automakers, already dependent on Federal goodwill thanks to the auto bailouts of 2008, readily accepted the scheme as preferable to regulatory chaos. Yet nixing the rule and the California waiver would be far better for them.
As for consumers, they may pay less at the pump because of higher gas mileage, but there’s a high cost to smaller, higher-mpg vehicles. Allen and Lewis explain again:
Even if the nation’s security is improved through less importation of oil (itself a dubious prospect, as it is the more expensive oil that will be dropped first, and that tends to come from countries with high environmental standards, like Canada and the US itself, rather than the Middle East), another 2000 deaths a year on the road cannot be regarded as a victory for public safety. This program is a true example of “death by regulation.”
There couldn’t be a better example of the sort of regulation that needs to go. Yet Obama cites it as an example of the sort of regulation we need. The President is simply not serious about reducing regulation.
