Reid challenges Republicans on 'job-killing regs'

WASHINGTON -- Sen. Harry Reid challenged Republicans Tuesday over their continuing attacks on federal regulations, saying the idea that government rules are job killers is a "myth" invented to cover up GOP shortcomings on the economy.

Republicans "have yet to produce a single shred of evidence that the regulations they hate so much do the broad economic harms they claim. That's because there is none," said Reid, the Senate majority leader from Nevada.

In a Senate speech, Reid said the Bureau of Labor Statistics has concluded "only a tiny fraction of layoffs have anything at all to do with tighter regulation."

"Last year, only three-tenths of 1 percent of people who lost their jobs were let go principally because of government regulation or intervention," Reid said. "On the other hand, a quarter of them were laid off because of lack of business.

"And in a recent survey by the Small Business Majority, only 13 percent of small-business owners cited regulation as their biggest concern. Half said economic uncertainty was their greatest challenge."

Republicans shot back, noting a Gallup Poll of small-business owners last month who identified "complying with government regulations" as the most important problem facing them.

They also pointed to an Ohio paper mill shutdown that was blamed in part on anti-pollution rules and cutbacks by Abbott Laboratories that the pharmaceutical company attributed to "U.S. health care reform and the challenging regulatory environment."

Sen. John Barrasso, R-Wyo., said the only way regulations stimulate the economy "is by forcing small businesses to hire more people to comply with the rules and regulations and paperwork coming out of Washington."

With Reid's speech, Barrasso said, "The Democrats seem to be embracing red tape coming out of Washington under the Obama economy."

The Republican approach to job creation has focused in part on decreasing the government's influence through what party leaders contend are questionable regulations that add to the cost of doing business and discourage putting more people to work.

House Majority Leader Eric Cantor, R-Va., in an August memo, told GOP lawmakers that committee chairmen "have been investigating and inventorying regulatory burdens to job creators.

"They've found many that have tied the hands of small-business people and prevented job growth," Cantor wrote. "By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers."

Reid, in his speech, referenced Bruce Bartlett, a Republican economist who held positions in the Reagan and George H.W. Bush administrations. Bartlett wrote for the New York Times last month that evidence to support Cantor "is very weak."

"The number of layoffs nationwide caused by government regulation is minuscule and shows no evidence of getting worse during the Obama administration," Bartlett wrote, citing government labor statistics. "Lack of demand for business products and services is vastly more important."

"I believe -- as Bartlett does -- that Republicans are attacking regulation because they don't have a plan to create jobs and turn our economy around," Reid said.

"The Republicans would have you believe that the common-sense rules that check the greed of Wall Street banks, keep huge corporations honest and stop Big Oil's unnecessary risk taking are also causing small businesses great harm," Reid said. "Indeed, that would be a terrible thing -- that is, if it were true."

Contact Stephens Washington Bureau Chief Steve Tetreault at or 202-783-1760.