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Obama Grabs Reins on Regulation

President Barack Obama showed Tuesday that he wants to take the lead on regulatory reform, an issue that Republicans were hoping to dominate over the next two years.

In his first major salvo on the issue since the GOP captured the majority in the House, Obama came out strong with an executive order, two memorandums and a Wall Street Journal opinion piece mapping out his strategy for the months ahead. The executive order requires federal agencies to review health and safety regulations to determine if they are too burdensome on businesses, in which case they may be changed or repealed. The memorandums direct enforcement agencies to make compliance information easily accessible online and to look for ways to reduce regulatory burdens on small businesses. A key change is that agencies will now be required to give written justification when they do not show flexibility in their proposed regulations.

“We are … making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb,” Obama wrote in the Wall Street Journal opinion piece timed with the unveiling of his strategy.

The president’s move may have blindsided Republicans, who have been gearing up for a debate on the issue that frames their party as pro-business and pro-jobs in the lead-up to the 2012 elections.

“I don’t think the GOP saw this coming,” a senior Democratic aide said. 

House Majority Leader Eric Cantor called Obama’s strategy “interestingly” similar to a job-growth plan the Virginia Republican proposed last year.

“One of the chief planks of my plan was to address the out-of-control and costly bureaucratic rules and regulations that bog down businesses small and large,” Cantor said. “Though he and his administration didn’t embrace it last year, we have noticed pieces of the plan being incorporated by the president including … rolling back barriers to job creation found in the regulatory system.”

Oversight and Government Reform Chairman Darrell Issa, who is expected to take an aggressive stance in his investigations into government waste, said he welcomed Obama’s interest in the issue.

“I applaud President Obama for joining what must be an effort that stretches beyond ideological entrenchments to identify the regulatory impediments that have prevented real and sustained job growth in the private sector,” the California Republican said.

Senior GOP aides reluctantly endorsed the executive order but questioned Obama’s credibility on the issue given the sweeping regulations ushered in under health care reform and financial reform.

“It’s hard to see how an administration that celebrates its record of expansive, often intrusive regulations will be capable of calming small businesses who feel besieged by Washington’s expanding reach, especially when the same regulators who have written rules that stifle economic growth are now being asked to identify and eliminate them,” a top House Republican aide said.

But a senior Democratic aide said that by going on offense on the issue, Obama makes it difficult for Republicans to criticize him, given how many of them campaigned on regulatory reform in the last election cycle.

“Go back and look at how many of the incoming Republican freshmen in the House ran on a platform of ‘cutting the red tape’ to help businesses. I’d venture, nearly all of them,” the aide said.

Senate Democrats hailed the president’s move as sending a signal to the business community that Democrats are prepared to help it crawl out from under unnecessary paperwork and outdated regulations. 

“I applaud their efforts to make tackling this problem a priority,” said Senate Small Business Chairwoman Mary Landrieu (D-La.), who said she will push for a full repeal of the IRS Form 1099 regimen that requires businesses to report even small vendor purchases. The requirement is set to take effect in 2012. 

Sen. Mark Warner, who chairs the Budget Committee’s Task Force on Government Performance, called Obama’s move “a promising first step” toward better government oversight but said the administration should “act even more aggressively” on regulatory reform. 

“No one is talking about reducing or removing effective protections of the public’s health and safety, but we need to be able to get rid of the old, stale regulations that inhibit economic growth,” the Virginia Democrat said.

During a Tuesday conference call, senior administration officials dismissed the idea that Obama’s overtures to the business community should be interpreted as him taking a more centrist approach as he enters an era of divided government.

“The notion that it’s left or right or center is less relevant,” one official said. “The point is, are we doing what’s best for the American people? I would hope that that’s something people of the left and right ultimately agree on.”

A prominent Republican strategist begged to differ.

The president’s latest move is “more of the post-election pattern we’re seeing of him trying to pivot back to the center,” said the strategist, citing the bipartisan tax package passed in December and recent White House personnel moves as proof of the president’s move to the middle.

“The real issue is how does the GOP respond,” he added. “They should consider ‘seeing him and raising the ante’ by aggressively highlighting reams of new federal regulations that are not only ‘dumb’ (in his words) but can clearly be shown to chill job growth. Seems to me that the Obama executive order gives them the perfect opening to do just that.”

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