COLUMN: A Prescription for “Top-Down” Fever

October 3, 2016
Weekly Column and Op-Ed

I am convinced that there is a recurring “top-down” fever that strikes Washington D.C., which gives rise to the idea that more government regulations are the answer to creating economic prosperity and supporting job growth. In reality, one-size-fits-all regulations often have unintended and damaging consequences to individuals, job creation, and the economy. According to the Competitive Enterprise Institute, regulations cost Americans $1.89 trillion in lost productivity and growth in 2015 alone. That enormous number is more than the entire annual economic output of the second-largest state in our nation’s economy. I have been working in Congress to break the regulatory fever that makes regulations work against Americans instead of for us.

In recent months, I have heard from constituents in Central Washington who are very concerned about the impact of an overtime regulation proposed by the U.S. Department of Labor (DOL) on their jobs, businesses, and non-profit organizations. The DOL’s rule would impose new costs on businesses by lifting the cap of workers eligible for overtime pay from $23,600 to $47,476. At first glance, this may sound like a benefit for workers, but the regulation will likely have devastating unintended consequences. Small businesses and non-profits confronted with this new burden will be faced with being required to pay thousands of dollars in additional labor costs, limiting the hours of their employees, moving salaried workers to hourly positions, or laying off workers. Higher wages and more jobs do not come from government mandates, but from increasing opportunity.

The DOL has not even made an attempt to make this national rule workable for small businesses. First, there is no phase-in period – on December 1st it will hit every business, school, and non-profit in America at full-force. Second, the rule is not adaptable to varying economic conditions of different regions. The rule will apply as much to the Seattle metro area – with an unemployment rate of 4.1 percent – as it will to the Yakima area, where the unemployment rate is 7.2 percent. Rather than more regulatory burdens and red tape, communities in Central Washington need flexibility to provide more jobs and opportunities.

I recently cosponsored the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act, introduced by Rep. Tim Walberg (R-MI), which passed the House just last week. This legislation would simply delay DOL’s rule for six months to give time to consider the economic impact of the workplace regulation on small businesses, nonprofits, institutions of higher education. The bill would also ensure future changes to the salary threshold accurately reflect the economic realities facing workers and employers. One might say the legislation is a prescription to help break DOL’s fever for more federal regulations.

*This column is adapted from a speech Rep. Newhouse gave in the U.S. House of Representatives on September 28, 2016.