The Obama Watch

Obama’s Regulatory Excess and Abuse

It's been a cynical, radical transformation -- as now chronicled in the aptly titled Democracy Denied.

By 10.26.11

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The critique of Obamanomics has focused primarily on the runaway spending, taxes, deficits and debt, and the throwback monetary policies at the Fed. But Phil Kerpen, Vice-President for Policy at Americans for Prosperity, has now fully complemented that with a thorough exposé of Obama's regulatory excess and abuse in his just published new book, Democracy Denied: How Obama Is Ignoring You and Bypassing Congress to Radically Transform America -- and How to Stop Him.

The theme is "democracy denied" because after the blowout Republican landslide of 2010 Obama refused to listen to the people and did not even consider changing course from the most left-wing policies of any President in U.S. history. Instead, he just pivoted to bypassing the Congress the people elected and maximizing instead the vast regulatory powers of the Executive Branch.

For example, since cap and trade legislation obviously no longer had any prayer of getting through Congress (even the overwhelmingly Democrat Congress of 2009-2010 wouldn't pass it), Obama said after the election, "Cap and trade was just one way of skinning the cat; it was not the only way. It was a means, not an end." I took that as a personal threat. You should too.

But Obama is going beyond even maximizing Executive Branch regulatory powers. His established pattern and practice now includes exceeding statutory authority, ignoring court rulings to rein him in, and breaking agreements with Congress, as Kerpen documents.

Obama's Flower Power Energy Policy

Kerpen powerfully illustrates this with a thorough discussion of Obama's regulatory abuses and excesses on energy policy, just one example of many in the book. Shortly after Obama took office, his Interior Secretary Ken Salazar "canceled land leases for energy development on 77 parcels of land in Utah. Then he canceled a pending oil-shale lease sale based on his expert judgment that it 'didn't meet the smell test.'" Kerpen adds, "Overall there has been a steep drop-off in leasing on federal lands….2010 saw a 79 percent drop in leasing in Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming from 2005. Total onshore royalties dropped 33 percent in just two years."

Even more virulent is the Obama Administration's attack on coal, which the President seems to have targeted for quick phaseout, even though we have the world's most expansive coal reserves, offering 200 years of inexpensive energy. Kerpen writes:

The Interior Department's Office of Surface Mining Reclamation and Enforcement is pursuing tight restrictions on coal mining under a so-called "Stream Protection Rule" that the agency admits would destroy 7,000 of the country's 81,000 coal-mining jobs. The EPA has virtually shut down mountaintop removal mining in Appalachia using guidance documents….[S]aid Luke Popovich of the National Mining Association, "That is tantamount to saying the intent is to strictly limit coal mining in Appalachia."

After the 2010 electoral blowout, the left-wing Center for American Progress (CAP) was immediately ready with a 53-page report on how Obama could use federal regulatory powers to continue "progressive" left-wing policies, regardless of what the voters had just said. Kerpen described the results for the coal industry: "Many of the EPA actions urged by the [CAP] report are already underway at the EPA and are referred to in the energy industry as the 'train wreck' because they seek to massively burden the coal industry with enough regulations to bankrupt it." As Obama explained his regulatory policies during the campaign to what he thought was a closed-door meeting among left-wing extremists, "So, if somebody wants to build a coal plant, they can -- it's just that it will bankrupt them."

Public outrage over soaring gas prices in 2008 forced both Congress and the Bush Administration to repeal the ban on offshore drilling. Kerpen reports, "The pressure on [candidate] Obama was so intense that he even reversed his opposition, claiming on August 1, 2008, that he would support offshore drilling under some circumstances." But that just turned out to be more Obama calculated deception, which I knew at the time. Kerpen explains:

Salazar's first public policy statement, just weeks after being confirmed… focused on stopping the opening of the outer continental shelf…. The policy stance of the Obama Administration throughout 2009 -- a year of severe economic weakness -- was to ignore the overwhelming desires of the American people and do nothing to move forward on the no-cost, genuine, stimulus policy of allowing access to offshore oil and gas.

Current government estimates of America's offshore oil reserves project that they are sufficient to replace all imported oil from Saudi Arabia for 30 years, and such initial estimates usually involve just a fraction of the oil to be found once exploration and drilling starts. But Obama does support offshore drilling -- in Brazil, at the expense of American taxpayers. He announced in April 2009 a $2 billion U.S. loan guarantee for Brazilian offshore drilling, offering the aspiration for America to be Brazil's best customer.

In March 2010, Obama announced a supposed offshore drilling plan, to great fanfare celebrated by the Democrat captive media (e.g. the New York Times). But that just turned out to be more calculated deception as well. Kerpen explains, "He was promising to allow a limited lease sale for waters beyond 50 miles -- past where geologists think most of the oil is." The plan actually involved, Kerpen further explains, reimposing the offshore ban within 50 miles along the East Coast, and entirely north of Delaware and on the entire West Coast. It was even accompanied by canceling five lease sales in Alaska.

Outright lawlessness occurred in the offshore drilling moratorium imposed by Obama's Interior Department in response to the 2010 Gulf oil spill. Kerpen recounts that Obama appointed an expert task force to make recommendations concerning how the federal government should respond to the spill. The task force report featured a recommendation for a six-month moratorium on all deepwater drilling activities. But as Kerpen explains, "the recommendation for a moratorium was not supported by the authors of the task force report." Task force authors wrote in a letter to Louisiana Governor Bobby Jindal and Senators David Vitter and Mary Landrieu:

[W]e are concerned that our names are connected with the moratorium as proposed in the executive summary of the report. There is an implication that we have somehow agreed to or "peer reviewed" the main recommendation of that report. This is not the case….[T]he scope of the moratorium on drilling which is in the executive summary differs in important ways from the recommendation in the draft which we reviewed. We believe the report does not justify the moratorium as written and that the moratorium as changed will not contribute measurably to increased safety and will have immediate and long-term economic effects.

Kerpen reports that the executive summary in question was rewritten by the staff of White House energy czar Carol Browner to endorse the moratorium. President Obama then used his staff rewritten task force report to justify the offshore drilling moratorium "with full knowledge that it would put more than 23,000 Americans out of work at a time of record high unemployment." That moratorium applied off the coast of Alaska as well as in the Gulf and everywhere else. This is yet another example of the Obama public relations style I have called "calculated deception," more worthy of a Third World authoritarian government than the world's leading liberal democracy.

Kerpen continues, explaining: "On June 23, 2010, U.S. District Judge Martin Feldman issued a stinging 22 page decision, [with] an injunction to overturn the moratorium based on the political manipulation and the Interior Department's utter failure to justify the breadth of the moratorium." Judge Feldman wrote regarding the studies Interior cited for the moratorium:

How these studies support a finding that shear equipment does not work consistently at 500 feet is incomprehensible. If some drilling equipment parts are flawed, is it rational to say all are? Are all planes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed and rather over-bearing.

The Fifth Circuit Court of Appeals rejected the Obama Administration's request for a stay of Feldman's ruling. Yet Obama's Interior Secretary Ken Salazar "reimposed a very similar moratorium disregarding the rulings of the two courts," Kerpen reports. Salazar imperiously pronounced, "We will only lift the moratorium when I as Secretary of Interior am comfortable that we have significantly reduced those risks." Salazar and the Interior Department were held in contempt of court by Feldman, to no avail.

The moratorium was supposedly lifted in October 2010. But as Kerpen explains:

[T]he end of the formal moratorium didn't put anyone back to work, because the Administration continued to drag its feet on permitting…. By February, 2011, there were more than 100 Gulf of Mexico permits pending at the Interior Department's newly created regulator, Bureau of Ocean Energy Management… which had not approved a single permit since the moratorium was supposedly lifted.

The state of Alaska sued in September 2010, alleging that the illegal moratorium effectively continued. But by February 2011, Shell pulled the plug on already permitted offshore exploration in Alaska, which the Administration had suspended even after the investment of billions in the project. Shell said it couldn't spend any more given the regulatory uncertainty.

Kerpen concludes on energy policy: "When President Obama took office, the average price of a gallon of gasoline in the United States was $1.83. What has happened since was not an accident, but the result of a consistent set of anti-energy policies designed to make prices skyrocket so that we can't afford to use as much gasoline and electricity."

Internet Authoritarianism

Kerpen discusses in detail the FCC's adoption of net neutrality regulations on December 21, 2010. The foundation for those regulations is that the companies that invest in and build the Internet infrastructure can't be trusted to manage it, arbitrarily favoring some users over others. So the government needs to step in and manage it, eventually taking over control of the Net.

Of course, the experience has been that under private management in the competitive market, the Internet has been the freest institution in the world. But wherever the government has stepped in to control the web, that freedom has been restricted or squelched.

Obama's FCC appointees adopted this regulation even though just 8 months earlier the D.C. Circuit Court of Appeals ruled unanimously in Comcast v. FCC that the FCC has no statutory authority for it. Kerpen also notes that in the 2010 Congressional campaigns, 95 candidates signed the pledge of the Progressive Change Campaign Committee to promote Net Neutrality and Internet regulation, and all 95 lost. Moreover, a bill introduced in Congress to provide FCC authority for such regulation garnered only 27 co-sponsors.

Yet Obama continues to implement such regulation heedless of the people, the courts, and Congress.

Hot Air Tax

During the 2008 campaign, Obama privately told the editorial board of the ultra-left San Francisco Chronicle that under the cap and trade plan he now intends to implement regardless of the wishes of the voters, "electricity rates would necessarily skyrocket…. Because I'm capping greenhouse gases, coal power plants, natural gas, you name it -- whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers." Kerpen explains, "In other words, cap and trade is a way to impose a massive energy tax -- and pretend it's not a tax. He adds:

These regulations will cost every American thousands of dollars a year without any environmental benefit to show for it --except a nice, green feeling for our political elites. And to what end? The regulations would have no discernible impact on global levels of greenhouse gases or on global average temperature, even if you believe the most dire predictions about global warming. In fact, the 83 percent reduction in emissions Obama supports would prevent a ridiculously insignificant 0.09 degrees Fahrenheit of warming.

CBO in fact scored the Waxman-Markey House cap and trade bill as an $873 billion tax increase, and agreed with Obama's private opinion that it would be passed on to consumers. Yet, despite the overwhelming opposition of the voters, and the refusal of Congress to pass it, the same greenhouse gas reduction goals were included in Obama's 2012 budget. As Kerpen explains, "Obama is telling the EPA to just pretend the bill passed and regulate away."

Grassroots, Tea Party Solutions

But Kerpen doesn't just complain. He offers good, long overdue solutions, leading with the REINS Act (Regulations from the Executive in Need of Scrutiny). As Kerpen explains, that legislation proposed by Rep. Geoff Davis (R-KY) and Sen. Rand Paul (R-KY) "cuts to the heart of abuse of regulatory power by requiring any major regulatory action to receive the approval of the House and Senate as well as the signature of the president before it can take effect."

That would restore the Constitution to control over-regulation. As stated in Article I, Section I, "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and a House of Representatives." Kerpen adds, "In Federalist 47, James Madison explained that the U.S. Constitution was written to avoid the danger of legislative and executive power being fused by prohibiting the executive from making laws…. Yet we now have precisely the situation that Madison and the other framers wanted to avoid. We have regulators who are effectively writing and executing their own laws."

The Republican-controlled House is expected to pass the REINS Act this year. Nobody knows what the Democrat-controlled Senate will do, or even whether it will allow a vote on the measure.

Kerpen further advises that "We must repeatedly and unrelentingly… deliver these two messages to Congress: You can delegate authority, but you can never delegate responsibility. If you fail to stop out-of-control regulators, voters will hold you accountable." That is a powerful message coming from one of the nation's most effective grassroots organizations.

Kerpen has written the best book available on Obama Administration regulatory abuse and excess. It is must reading for every informed voter.

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About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.