Like It or Not, More Regulation Is Coming-Kiplinger

Washington Matters


Like It or Not, More Regulation Is Coming


After eight years of tying the federal government's hands behind its back, the Bush administration wants to let the bureaucracy loose to shore up the housing and financial industries. Fearful of economic chaos, Bush and Treasury Secretary Hank Paulson have apparently lost faith in the notion that if there's a problem, the markets will fix it.

 

The new approach is bothering a lot of Republicans, who think the government should stay out of the way, and if the comments to a recent blog on an individual's responsibility to one's neighbors are any indication, a lot of our readers feel the same way.

 

The truth is, small- or no-government advocates often have a double standard -- regulations and rules are burdensome when they require an individual or a business to meet a standard or follow certain rules, but government is ineffective or bumbling if it doesn't protect the public in a way that most citizens expect. Witness the Katrina debacle. Sen. Trent Lott, now retired but once a big advocate of keeping the government at arm's length, lost his home in the hurricane. He not only berated Washington for failing to mount a more effective rescue and reconstruction effort, but he began to push regulation of insurers after State Farm denied his claim for damages. The truth is, no one wants the government around -- except when we need its help.

 

Anti-regulation voters are in for a big shock come January, when a far more aggressive approach is likely under either Barack Obama or John McCain. With a bigger Democratic majority in Congress pushing, the effort won't be limited to financial bailouts aimed at helping the market work effectively. Other agencies, such as the Environmental Protection Agency and the Food and Drug Administration, will be ordered into action.

 

The question of whether the government is doing enough to issue and enforce regulations was raised again this week in a report from the Governmental Accountability Office (GAO). It should have been front page news, but it garnered only a small story in the New York Times, in part because what it was describing has happened so often in so many government offices.

 

The GAO, the nonpartisan investigative arm of Congress, was reporting on a study of the Labor Department's handling of wage and overtime complaints. What did it find? A total disregard for the rights of workers. The blistering report said Labor's Wage and Hour Division cut enforcement actions last year by 37%, ignored congressional orders to pay more attention to low-income industries, where violations are most likely, and failed in hundreds of cases to take appropriate action.

 

Consider the case of a truck driver who worked 55 hours a week but wasn't paid overtime. It took 17 months for the government to assign an investigator, who quickly dropped the case because he knew he couldn't complete his work before the two-year statute of limitations would run out.  Or the gas station cashier who never got her last paycheck. The case was dropped when the gas station failed to return a phone call from the government. Another 100 cases were dropped because investigators couldn't locate the employer. This is not to say that all complaints are valid, but it's the government's job to at least give complainants and employers a fair hearing.

 

Citizens have a tendency to blame these cases on bureaucrats, but that's unfair. The wage division's investigation staff was cut from 945 to 732 last year, and clearly there's no pressure from political appointees to do this kind of work. Many other agencies -- including the FDA and  others charged with protecting public health and safety -- are also terribly understaffed.

 

The regulatory climate will change next year, but money to hire the staff and get the work done will be a problem. Let's hope these kinds of tasks don't get crowded off the shelves by other priorities.

 




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