Easing the burden? President Clinton has taken some steps toward easing regulations on business, but business is anxious about long-term trends

Nation's Business, Dec, 1993 by David Warner

In his 168-page report on reinventing the federal government, Vice President AI Gore recommended eliminating regulatory overkill. The Clinton administration has, indeed, taken steps to ease some regulatory burdens on business, but there are signs, too, that the White House will use more, not fewer, government rules to achieve its social and economic goals.

On the positive side for business, the president signed an executive order Sept. 30 that calls on federal regulatory agencies to consider costs and benefits of proposed rules. This order requires them to follow a number of "principles" in determining the need for and consequences of regulations, such as basing the decisions "on the best reasonably obtainable scientific, technical, economic, and other information."

The directive also requires agencies to determine whether existing regulations are unnecessary, outdated, or duplicative.

The federal government must "lighten the load for regulated industries and make government regulations that are needed more efficient," President Clinton said in signing the order.

Business groups have generally praised Clinton's regulatory-review policy, but they have cautioned that the implementation of the order will be the true test of the administration's commitment to "lighten the load."

Another positive development for business is the appointment of an administrator of the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA), which reviews agencies' proposed rules and enforces the 1980 Paperwork Reduction Act.

That job went unfilled during the Bush administration, largely because of disagreements between the administration and Congress over reauthorization of the paperwork law, which established OIRA. Bush formed his own regulatory-review group--the Council on Competitiveness--under Vice President Dan Quayle.

The Clinton administration eliminated the council, but the president's appointment of an OIRA administrator, like the recent executive order, signals the administration's commitment to regulatory review. The OIRA post went to Sally Katzen, who worked for the Council on Wage and Price Stability in the Carter administration.

The White House is also supporting reauthorization of the Paperwork Reduction Act and the Regulatory Flexibility Act, which requires agencies to consider their rules' costs on small businesses.

The appointment of Erskine Bowles, a former North Carolina businessman, to the administrator's job at the Small Business Administration is seen as another signal that the Clinton White House is concerned about small business.

Both Bowles and Katzen have expressed concern for small business's struggles with government rules and red tape.

Bowles testified before the House Committee on Small Business in June that the Clinton administration wants to "get rid of the unnecessary paperwork and bureaucratic regulations that inhibit the growth and productivity of small business.

"Government regulations have a disproportionately adverse effect on small companies," he said. "The president wants to attack this issue head-on, and I am absolutely committed to doing that."

Says Katzen: "We are particularly sensitive to small businesses, to tiny entities."

The administration has proposed easing some rules that adversely affect business. It has called for reform of a regulation governing pesticide uses on foods; the rule has kept newer, safer pesticides off the market. The administration has also eased some of the lending rules on banks to encourage more loans to small businesses and has relaxed controls on certain kinds of technology exported to specific countries.

Despite those relief efforts and the recent executive order, there are many who believe regulation under the Clinton administration will increase, not decrease.

"Will regulation four years from now be on balance more onerous, more cumbersome, more costly than it is today? Sure. That's the trend," says Murray Weidenbaum, director of the Center for the Study of American Business at Washington University, in St. Louis.

Weidenbaum, who was a member of the Reagan administration's task force on regulatory reform and chairman of the president's Council of Economic Advisers in the Nixon administration, rites the "very substantial expansion of regulation that's under way." He notes efforts to impose new requirements on business under the Occupational Safety and Health Act, to increase the minimum wage, and to make significant cuts in carbon dioxide emissions, which could require new clean-air regulations.

One of Clinton's first acts following his inauguration was to sign the Family and Medical Leave Act, a measure requiring businesses to grant their workers up to 12 weeks a year of unpaid leave for the birth or adoption of a child, or for the serious illness of the individual or a close relative. The administration is also supporting legislation pending in Congress to prohibit employers from permanently replacing striking workers.

Meanwhile, some policy analysts believe a presidential commission set up to improve labor-management relations is considering reform of federal labor laws to make it easier for unions to organize.