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Red Tape Does Not Drive Economic Growth
Posted by Randy | June 22, 2012

Government spending on regulatory activities has increased so dramatically that it is growing at a rate that has completely overtaken GDP growth. 

In a global economy, the United States must compete with governments, cultures, and economies throughout the world. Internationally, our products must compete with all embedded costs, raw materials, labor, transportation, and equipment. Government regulations add to unit costs and make America less competitive worldwide. Not only do federal regulations make our nation less competitive globally, but they also stifle growth and innovation.

All regulations have a price, and both small and large businesses must pass along these costs to consumers.  Of the 21,300 businesses in Virginia's Fourth District, over 11,000 have four employees or fewer, illustrating that small business are vital to the success of our district. The excessive number of regulations on these operations directly discourages entrepreneurship and inventiveness in Virginia.

A recent Federal Reserve Bank study showed that while government spending on regulatory activities has grown significantly, GDP has plummeted – demonstrating an alarming trend that shows more red tape means less economic growth.

The above chart makes it clear; federal regulations stifle growth and creativity. The burdensome cost of regulations disincentivizes prospective owners from opening small businesses. Our economy is suffering because of overspending on regulations, and it is clear that the cost far outweighs the benefit.

In response to this barrage of regulations, I have cosponsored the Regulations from the Executive in Need of Scrutiny (REINS) Act (H.R.10).  This bill would require that Congress take an up-or-down vote on every new major rule before it could be enforced on businesses and the American people. By requiring congressional approval of all major rules (i.e., those having an economic effect of at least $100 million), the REINS Act would ensure legislative accountability and give a voice to job creators. Such major rules include the requirement for interstate commercial truck and bus companies to install Electronic On-Board Recorders and Hours of Service Supporting Documents, costing $2 billion annually, and the Energy Conservation Standards for Small Electric Motors (2010) which mandated full load capacity standards in small electric vehicles.

Additionally, I am actively fighting against overreaching and costly government regulations in Virginia. I cosponsored both the Farm Dust Regulation Prevention Act (H.R. 1633) and the Reducing Regulatory Burdens Act (H.R. 872) to protect Virginia’s farms from the burdensome and unnecessary regulations put in place by the EPA. Furthermore, I have consistently fought excessive environmental regulations in the energy, food processing, and manufacturing industries.

I  will continue to stand up against imposing further costs on Virginians by way of increased government regulations, and am working hard to make the Fourth District a vital part of Virginia’s economic success. To read more about my work for jobs in Virginia’s 4th District, please read here.

Comments
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  • Thomas G commented on 6/22/2012
    I oppose your extremist initiatives here congressman Forbes. In the past two years on this blog you have put forth several arguments on regluations that twisted reality and outright omitted data that discredited your claims. What you are advocating sir will more often harm the quality of life Americans desire in the interest of profit motives that you then manipulate unfairly into the hands of the super wealthy at the expense of the middle class you have totally abandoned for your entire twelve year tenure in the congress. You know sir, because I have written to you on numerous occassions, that the president has done more to bring about regulatory reform, far more, than any president since Theodore Roosevelt acted to rein in corporate misdeed and abuse of the public. It was shocking what you have tried to do with that 414 plan to stomp on the right of workers and turn a blind eye to public protections. The independent CBO issued a report that utterly left your claims of the burden of regulations in disgrace. I called your attention to this and pleaded with you to honor your constituents with the balanced truth for them to decide but you refused to acknowledge the report. How does it serve the district to continue to shade the truth, omit the truth and effectively perpetuate untruths to the point where your intellectual dishonesty disgraces those that voted for you? You well know that the EPA is aggressively working to get a handle on fracking before the industy does even more damage. This promising technology cannot be allowed to be misused to the point of poisoning land and water resources and contaminating the food supply. Have you no sense of responsibilty sir. You make these wild outrageous claims without substantiating argument. Its a policy that highlights the very reasons the public is so disgusted with this congress. Just this week you posted a question of week designed to create deep divisiveness over the presidents policy announcement on deportation priorities. Instead of waiting for all the public to respond, you pulled the question and I think it was a disservice. Why would you do this on an issue you have refused to act upon in 12 years in congress and then irritate the district with the pettiness of mayor Bloombergs soda size restriction? We have no action on congress on the jobs bill that was sent to you last September, you refuse to support the Password Protection Act which prevents employers from demanding access to email and social networking sites, you have not worked to advance the transportation bill and have done nothing to prevent the doubling of student loan interest rates. All you've managed to accomplish this year is forcing the defense department to pay for military hardware they DID NOT WANT. Please sir, I urge you to change your position and cease harming this great nation with continued obstructionist actions and work together to solve the nation's problems. Please, rescind your commitment to the Grover Norquist blackmail pledge as several of your colleagues have now done so you can act with judgment to move the nation forward. The district is watching sir, and if you vote to hold the Attorney General in contempt, as a member of the Judiciary committee yourself, all of us will know you have no intention of serving the nation.
  • Gregg J commented on 6/22/2012
    If congress keeps deregulating, who’s going to bail the country out of the next crisis? Let’s see, so far deregulating has caused a financial crisis and a collapse in the housing sector. Not a great track record by any measure. If you still think deregulating is the way to go, put some skin in the game. Promise to forfeit all pay, entitlements and assets to avert the next deregulating crisis if/when it happens. This promise should apply to all members of the legislative branch and the executive branch. With your personal assets at stake, maybe deregulating will not seem such an attractive solution.
  • Thomas G commented on 6/22/2012
    To Mark: The fact is that public sector employment has been reduced across the nation by 600,000 jobs, a reality brought about from the economic collapse at the end of the Bush administration. It's no secret that corporate America is sitting on nearly 2 trillion dollars and reporting astonishing profits. The sad truth is that the middle class has paid a horrendous price for the uneven treatment of workers for 30 years while the rich have benefited from from borrowed money to finance unwise tax cuts that were even opposed by president Bush's own Treasury Secretary. We have tremendous problems we are still working through and the lack of support from the republican party has perpetuated the national pain.
  • Thomas G commented on 6/28/2012
    Today the Supreme Court acted for the American people and rejected the outrageous positions of republicans in congress and the extremist views of representatives aligning with congressman Forbes. Millions of Americans are relieved that no longer will republicans be able to sell their influence to the insurance industry and work tirelessly to deny deserving Americans access to health care. No longer will millions of young adults who are still organizing their new lives have to roll the dice on their health. No longer will the republicans essentially force families into bankruptcy when they are sick or will providers gouge the public in corrupt practices. The only death panels in America are those who oppose this historic legislation that finally begins to control health care costs that the republicans for years failed to do and led to harm of the private sector as precious dollars tilted out of balance. I am ashamed of the representation in congress from the 4th district as astonishingly out of step with the will of the public. Perhaps now congressman Forbes will simply admit defeat of his extreme tea party views and surrender his commitment to obstructionism and harm of our republic.
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