By Cindy Skrzycki
March 10 (Bloomberg) -- For business lobbyists, U.S. regulators are becoming like the zombies in George Romero’s horror flick, “Night of the Living Dead”: relentless, merciless and everywhere.
Not since President Franklin Roosevelt sat in the Oval Office has business faced so much prospective regulation from so many directions at once. While the Bush administration offered regulatory cooperation with business on many issues, the Obama White House is moving to advance rules that fulfill campaign promises and deal with global warming, health-care costs and the collapse of the economy.
Add to this a Democratic Congress that is scheduling hearings daily on plans to provide new worker protections, punish financial misdeeds and regulate even the cigars stuck between the lobbyists’ clenched teeth.
“The return of the regulator is driven by the economic crisis, and it meshes with the political culture in town today,” said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce.
That means some of the regulatory initiatives that were buried or moderated by Bush will be back. The biggest-ticket item is a rule intended to prevent repetitive-stress injuries in the workplace, an initiative that was killed off by special legislation in 2001. Labor groups and congressional committees already are considering strategy for achieving the goal, perhaps by pushing for regulations industry-by-industry.
Another rule being examined is a Labor Department standard that allows employees to take time off from work to attend to sick relatives or to deal with other family problems. Employers succeeded in the last administration in making it harder for workers to take the leave. The regulation is likely to be expanded to cover more workers under President Barack Obama and Democratic proponents in Congress.
‘Strengthen It’
“We need to look at the rule and strengthen it so it does what it was intended to do,” said Representative Lynn Woolsey, a California Democrat and the chairman of the House Education and Labor subcommittee on workforce protections.
Environmental groups are pushing for reinstatement of a 1987 rule that allows the Environmental Protection Agency to collect from companies extensive information about chemical pollution. Two years ago, the Bush administration reduced how much information had to be submitted to the government and the public.
Last week, the Obama administration reversed an Interior Department rule adopted in December 2008 that eliminated consultation with scientists about whether federally funded development would harm an endangered species.
“That barn door is open and the rules are flowing out,” said Thomas Sullivan, an attorney with Nelson Mullins in Washington who formerly worked in the Bush administration.
Submit Plans
The administration also moved ahead with setting new corporate fuel-economy standards, asking vehicle manufacturers to submit future product plans through the 2020 model years.
“This will indeed be a new day in some respects,” said Rick Melberth, director of federal regulatory policy for OMB Watch, a non-profit watchdog group in Washington.
“Regulation is a critical government function,” Melberth said. “If they are going to tackle the big problems, legislation just doesn’t get it done. You have to have implementation.”
Rules that were in process, and never made it though the pipeline, will start to move. These include reducing worker exposure to silica at excavation sites and to diacetyl, the chemical used to give a buttery flavor to microwave popcorn.
Last month, legislation was introduced that would require the Occupational Health and Safety Administration to regulate industrial dusts, such as sugar dust, that can build up to hazardous levels and explode. The legislation is in response to several fatal accidents.
‘A Pendulum Shift’
“All of these things have been in a state of constipation over the last eight years,” said Baruch A. Fellner, a management attorney partner in Gibson, Dunn & Crutcher’s Washington, D.C. office. “It’s definitely a pendulum shift.”
The new administration also is putting its money where its mouth is. The Obama 2010 budget plan signaled that it wanted more funds for new rules and enforcement at the Securities and Exchange Commission, the Labor Department and the EPA -- all big regulators.
“EPA is back on the job,” said Lisa Jackson, the new head of the agency declared last month. The Obama administration proposed $10.5 billion for the EPA, an increase of $3 billion from the 2008 funding levels and the largest in the agency’s 39- year history.
The public’s doubt about the safety of products such as pet food and peanut butter is another powerful incentive to regulate.
Ramped Up
Right after she became SEC chairman, Mary Schapiro told the Practising Law Institute, a non-profit legal education organization in New York, that the agency’s regulatory functions would be ramped up immediately.
“In addition to our enforcement priorities, the commission will of course also have a full plate when it comes to our policy and rulemaking agenda,” said Schapiro, singling out improving the quality of credit ratings, regulating centralized clearinghouses for credit default swaps, strengthening oversight of broker-dealers and investment advisers, and improving the quality of audits for nonpublic broker-dealers.
Considering the state of the economy, the National Association of Manufacturers is urging caution.
“A tipping point could be a 1 percent incremental increase in costs which an agency like the EPA might not think is significant,” said Rosario Palmieri, NAM vice president of regulatory policy. “We hope that we only do what is absolutely necessary to protect human health and safety.”
(Cindy Skrzycki is a regulatory columnist for Bloomberg News. She can be reached at cskrzycki@bloomberg.net)
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To contact the writer of this column: Cindy Skrzycki at cskrzycki@bloomberg.net.
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