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Obama missed opportunity to highlight red tape in final State of the Union

By   /   January 13, 2016  /   News  /   No Comments

One line. One half of one sentence.

In a speech that lasted more than an hour and used more than 5,400 words, President Barack Obama on Tuesday night assured Americans that he was confident in the state of the union. But he found precious little time – one brief mention – to talk about the problem of over-regulation, a problem that even his administration has publicly acknowledged.

AP photo

MISSED OPPORTUNITY: President Barack Obama (seen here delivering the 2015 State of the Union address) missed a chance, in his final major address to the nation, to highlight how state and federal regulations hurt working-class Americans

“I believe a thriving private sector is the lifeblood of our economy,” Obama said, about a quarter of the way through his final State of the Union address. “I think there are outdated regulations that need to be changed, and there’s red tape that needs to be cut.”

Here we go, right? It sounded like he was about to launch into a much-needed national diatribe about the insanity of occupational licensing laws, or at least give a subtle nod to some of the recommendations made by the White House in a study published last year on how to free up the economy from pointless regulations.

But in the next breath, the president turned away from tackling a serious issue at the intersection of economics and politics. He went back to where he’s more comfortable.

“But after years of record corporate profits, working families won’t get more opportunity or bigger paychecks by letting big banks or big oil or hedge funds make their own rules at the expense of everyone else; or by allowing attacks on collective bargaining to go unanswered,” he said.

Yes, that’s really the very next line of the speech. Never again did the president return to the issues of regulation or red tape, despite his claim that changes and cutting are necessary.

Maybe that’s because the president realizes that many of his other stated priorities for his final year in office will require expanding the regulatory state with his pen and his phone.

“Since the president’s final year is no time to lay out a legislative agenda that Congress would reject, one must instead anticipate more executive actions and regulations to implement the progressive agenda of more federal power and middle-class dependency on the same – in service both to his own legacy and to aiding his potential Democratic party successor,” predicts Clyde Wayne Crews, who tracks federal regulations as policy director at the Competitive Enterprise Institute.

Just 87 new laws were enacted last year, by Crews’ count, but federal agencies published more than 3,400 new rules and regulations.

It was probably hopeless to expect Obama to use his final State of the Union to promise a roll-back in the massive federal regulatory state, but he could have used the bully pulpit to put state governments on notice.

In July, the White House Council of Economic Advisers released a report outlining the growth in occupational licensing over the past few decades and arguing that licensing schemes reduce employment, raise prices and lower wages.

Licensing rules create “substantial costs” and are often not in sync with the skills needed for the job, the report found. They also make it harder for workers to transport skills across state lines – moving to a new state often requires going through a brand new licensing process – and raise the price of goods and services.

READ MORE: Americans spend more on the hidden costs of licensing than they do on Christmas presents

“Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing,” the White House concluded.

Even a passing mention of that report in such a high-profile moment could have put the issue on the radar of state lawmakers from Annapolis to Sacramento.

If the president wanted to highlight policies that give working families more opportunity, he didn’t need to whack big oil companies (has he seen the price of oil lately?) or hedge fund managers.

He could have talked in the State of the Union about Aichera Bell, a working class immigrant and professional hair braider in Iowa who is challenging the state’s licensing laws. Iowa says Bell must go through 2,100 hours of cosmetology training – almost none of which has anything to do with hair braiding – to be licensed by the state board.

Loosening those regulations would give lots of people like Bell the opportunity to earn a better living for themselves.

That’s the kind of personally touching story Obama could have hit out of the park, something he’s done plenty of times before. It’s a shame he missed the chance to do it.