Reform & Fiscal Responsibility News

A Smarter Approach to Regulation

Watch the White House white board here.

Since taking office, President Obama has been committed to eliminating red tape and ensuring that when rules are issued to protect safety and health, they are sensitive to the economic situation and attuned to the importance of job creation and economic growth. 

As this White House White Board shows, the net benefits, or the benefits minus the costs, of regulations issued through the third fiscal year of the Obama Administration have exceeded $91 billion. This amount, including not only monetary savings but also thousands of lives saved and tens of thousands of illnesses and injuries prevented,is over 25 times the net benefits through the third fiscal year of the previous Administration.  What are the ingredients of these benefits?

So How Many Consumer Reporting Companies Are There?

Ed note: The Consumer Financial Protection Bureau (CFPB) announced yesterday that they adopted a rule to begin supervising larger consumer reporting agencies, which include what are popularly called credit bureaus or credit reporting companies. This is the first time these companies will be supervised at the federal level. This blog post, originally published on the CFPB blog, explains what this will mean for consumers.

You may know about the three biggest nationwide credit reporting companies: Experian, Equifax, and TransUnion. But did you know that there are other companies out there that may be providing reports on you that could be used to decide if you’re eligible for consumer financial, insurance, medical and other products?

Today the CFPB is posting a list of consumer reporting companies – companies that collect information and write reports that could be used to decide if you will be able to get credit, insurance, or a job. This list doesn’t cover every company in the industry. It’s a list of companies that have identified themselves as consumer reporting companies or provide consumers access to their consumer reports. (1) The list includes both the biggest nationwide credit reporting companies and a longer list of “specialty reporting companies.”

Specialty reporting companies focus on certain industries. Just like the three biggest nationwide credit reporting companies, specialty reporting companies collect and share information with creditors and other businesses. There are a lot of these companies on the list, so we’re also trying to give tips on which of them may be important to you. The list also has information about how you can get copies of your reports (see below).

Making Regulation Smarter to Save Lives and Money

Smart regulations save lives and dollars. For example, the number of deaths on the highways is now down to its lowest level in over 60 years. This is an extraordinary achievement, produced not only by the commitment and creativity of the private sector but also by educational and regulatory initiatives from local, state, and national governments. In areas that include food and workplace safety, clean air, fuel economy, energy efficiency, and investor protection, well-designed regulations are preventing tens of thousands of premature deaths and hundreds of thousands of illnesses and accidents -- and saving billions of dollars.

Under the President’s direction, we have finalized rules, in our first three years, with more than $91 billion in net benefits – over 25 times the corresponding figure in the first three years of the Bush Administration, and over 6 times the corresponding figure in the first three years of the Clinton Administration.

But we don’t need all of the regulations that are on the books. By streamlining some and eliminating others, we can save billions of dollars in unnecessary costs. As President Obama has emphasized, it is possible, even indispensable, both to issue sensible, protective regulations and to eliminate rules that are no longer justified.  Today, we are taking three important steps in that direction.

Three Charts Illustrating Two Different Visions for Our Nation

President Barack Obama delivers remarks at the Associated Press (AP) Luncheon at the Marriott Wardman Park Hotel in Washington, D.C., April 3, 2012. (Official White House Photo by Pete Souza)

The President believes this is a make or break moment for the middle class and those working to reach it.  That’s why he has put forward a blueprint for an economy built to last - one where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.  

Today at the Associated Press Luncheon, the President discussed how his vision differs with the radical vision laid out in the House Republican Budget: 

“This Congressional Republican budget, however, is something different altogether.  It’s a Trojan Horse.  Disguised as deficit reduction plan, it’s really an attempt to impose a radical vision on our country.  It’s nothing but thinly-veiled Social Darwinism.  It’s antithetical to our entire history as a land of opportunity and upward mobility for everyone who’s willing to work for it – a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of the middle class.  And by gutting the very things we need to grow an economy that’s built to last – education and training; research and development – it’s a prescription for decline.”

The President’s approach to reducing our deficit is a balanced approach that asks the wealthiest to pay their fair share, achieves significant health savings and enacts sensible spending cuts while making the investments we need to have a strong middle class.  

Take a look at how the President’s approach and the Congressional Republican policies stack up side by side: 

Side by Side - The President’s Budget vs. Republican Budget

Breaking it Down: The Health Care Law and Cost Control

For too long, too many hard working Americans paid the price for policies that handed free rein to insurance companies and put barriers between patients and their doctors. The Affordable Care Act gives families the security they deserve. The new health care law forces insurance companies to play by the rules, prohibiting them from dropping your coverage if you get sick, billing you into bankruptcy because of an annual or lifetime limit, or, soon, discriminating against anyone with a pre-existing condition. 

The new law also includes a number of key provisions designed to help make health care more affordable – and help address the drivers of health care costs. The new health care law is already making a difference. Many Americans are seeing lower costs, and health care spending growth in 2009 and 2010 decreased to record lows.

Here are more ways the law helps control costs for families and small businesses:

1. The law’s small business tax credit has lowered health insurance costs for small business owners. On average, small businesses have paid about 18 percent more than large firms for the same health insurance policy.  If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35 percent (up to 25 percent for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
2. Holding insurance companies accountable for how they spend your premium dollars.  In 2011, if health insurers don’t spend at least 80 percent of your premium dollar on medical care and quality improvements rather than advertising, overhead and bonuses for executives, they will have to provide you a rebate for that excessive overhead.  The first rebates will be made in the summer of 2012. 
3. Preventing insurance companies from raising rates with no accountability or transparency.  In every State and for the first time ever, insurance companies are required to publicly justify their actions if they want to raise rates by 10 percent or more. These efforts are paying off.  In the last quarter of 2011 alone, States reported that premium increases dropped by 4.5 percent. And, in States like Nevada, premiums actually declined. 
4. Recommended preventive benefits without deductibles or copayments. Millions of Americans with Medicare and private insurance have seen their out-pocket costs go down to zero for recommended preventive care like flu shots or cancer screenings now covered with no cost sharing under the law. This puts more money back into people’s pockets, while making sure they get the preventive care they need.

Nine New Administrative Patent Judges Will Help Entrepreneurs Turn Ideas Into Jobs

As part of our ongoing efforts to make government more accountable to the American people and cut wasteful spending, yesterday I had the honor of swearing in nine new administrative patent judges who will help reduce patent backlogs. These nine talented and dynamic individuals will serve on the Board of Patent Appeals and Interferences in the U.S. Patent and Trademark Office (USPTO), joining the dedicated public servants at USPTO who support millions of jobs in the intellectual property industry.

Today, a high share of companies regularly relying on robust intellectual property (IP) protections to attract investor capital and stay competitive. These IP-intensive firms create an average of three million U.S. jobs per year. More than ever, we must be efficient and effective in helping entrepreneurs protect their intellectual property.

America’s entrepreneurs are the primary source of new ideas that drive innovation. Entrepreneurs provide us with better production processes, new advances in health, and improved consumer products. These are people who can move from ideas to products and from products to the marketplace. These activities strengthen our economy and our global competitiveness. And they create jobs.These new administrative jurists will directly help to reduce backlogs that prevent game-changing ideas from breaking through. Specifically, they will help with the new in-house review process for challenging patents that have already been granted. This process is faster and less expensive than litigation.

Protecting Taxpayer Dollars by Strengthening SNAP

Ed note: This was originally posted on the USDA blog.

While fraud in the Supplemental Nutrition Assistance Program (SNAP) is a relatively limited problem, any amount of waste or abuse is too much. As I wrote back in December, we are taking more aggressive steps to root out fraud and abuse as part of this administration’s Campaign to Cut Waste and to continue improving our stewardship of taxpayer dollars.

This week we were pleased to announce that fiscal year 2012 first quarter results for USDA’s efforts to identify and eliminate fraudulent retailers from SNAP are available.  From October 1 through December 31, 2011, USDA took final actions to sanction through fines or temporary disqualifications—more than 225 stores found violating program rules. We also permanently disqualified over 350 stores for trafficking (exchanging benefits for cash) SNAP benefits.

Again, cases of abuse in SNAP are pretty rare and the vast majority of SNAP participants and authorized retailers play by the rules using the program as intended. However, it’s important that we stay vigilant and raise awareness of these issues so people know how and where to report any incidences of abuse.

Making it Easier to Do Business in America

President Barack Obama delivers remarks on government reform in the East Room of the White House, Jan. 13, 2012. (Official White House Photo by Lawrence Jackson)

Today, President Obama announced a new plan that will make it easier to do business in America.

There are currently six major federal departments or agencies that focus on business or trade: the U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

The President is asking Congress for the authority to merge those six entities into a single department tasked with boosting American business and promoting competitiveness.

The way the system is currently organized, every entrepreneur who needs to do business with the government has to navigate a maze of overlapping regulations and competing bureaucracy.

We've put together a chart that shows exactly how impossible that process can be.

This move from President Obama would change that.

He's hoping to consolidate the redundancies that currently exist, to cut waste, and eliminate duplication.

By the way, this kind of authority isn't new or rare. Presidents had the ability to mandate this type of reorganization for almost the entire period from 1932 through 1984.

And the executive branch of the federal government shouldn't be stuck in 1984.

President Obama meets CFPB

President Barack Obama delivers remarks at the Consumer Financial Protection Bureau in Washington, D.C., Jan. 6, 2012. CFPB Director Richard Cordray, left. (Official White House Photo by Pete Souza)

Two days after appointing Richard Cordray to head the Consumer Financial Protection Bureau, President Obama headed over to the CFPB offices to help staff welcome their boss and talk about the day's economic news.

First, the President discussed the new jobs figures:

This morning, we learned that American businesses added another 212,000 jobs last month. Altogether, more private sector jobs were created in 2011 than any year since 2005. And there are a lot of people that are still ... hurting out there. After losing more than 8 million jobs in the recession, obviously we have a lot more work to do. But it is important for the American people to recognize that we’ve now added 3.2 million new private sector jobs over the last 22 months -- nearly 2 million jobs last year alone. So after shedding jobs for more than a decade, our manufacturing sector is also adding jobs two years in a row now.  So we’re making progress. We’re moving in the right direction.

But as the economy starts to rebound, the President said, we have a responsibility to do more than just get back to where we were before the financial crisis. We have to remake the system so that the middle class knows that hard work pays off, that everyone plays by the same set of rules.