Budget Calls for Strict Oversight Of Industry, in Shift From Bush Era

Published on February 26, 2009

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Budget Calls for Strict Oversight Of Industry, in Shift From Bush Era

Wall Street Journal, February 26, 2009 By ELIZABETH WILLIAMSON and MELANIE TROTTMA

WASHINGTON- President Barack Obama’s budget calls for billions of dollars in new spending to enforce stricter controls on business, signaling a decisive end to the era of deregulation under President George W. Bush.

The Obama budget plan would spend more on the agencies that enforce environmental and workplace-safety rules, more for food and drug regulators and more on consumer protection. The budget plan’s figures are accompanied by policy statements backing various moves to put industry under closer scrutiny.

The Environmental Protection Agency budget would rise by 34%, to $10.5 billion, money that would empower the agency to crack down on industrial polluters. Included is $3.9 billion–the most money ever–for the EPA’s operating budget, “which is at the heart of EPA’s environmental protection function and includes funds for research, regulation and enforcement.”

Business interests have argued that in a weak economy money spent complying with federal rules is money not spent creating jobs. The blueprint Mr. Obama released Thursday sought to dismiss such arguments.

“We need to put tired ideologies aside, and ask not whether our government is too big or too small…but whether it is working for the American people,” the president wrote in his preface to the budget document.

Mr. Obama’s budget outline allocates $1 billion to the Food & Drug Administration for stepped up safety surveillance, inspections and testing.

In a move that promises a major fight even with some Democrats, the budget backs development of an FDA plan enabling Americans to buy cheaper medicines abroad, an effort pharmaceutical manufacturers have protested for years.

At the Department of Housing and Urban Development, an undisclosed portion of a $7.4 billion increase is destined for effort to fight predatory lending, enforce fair housing laws and improve disclosure of mortgage terms and fees.

The Department of Commerce will get more money to monitor ocean acidification and implement regulations that are part of the Magnuson-Stevens Act requirement to eliminate overfishing by 2011.

Even at the National Aeronautics and Space Administration, money to keep America in space is accompanied by more money for research and regulations on aviation safety, aircraft performance and reducing noise.

The president seeks more money for the Occupational Safety and Health Administration, to allow it to “vigorously enforce” workplace-safety laws and whistleblower protections. He is likewise proposing increased enforcement resources for the Wage and Hour Division to ensure workers get the wages due them. Increased funding is also slated for the Office of Federal Contract Compliance Programs, which is supposed to pursue equal employment opportunity and a fair and diverse federal contract workforce.

The budget suggests a sea change at the Department of Labor. One of Mr. Obama’s biggest funding highlights: A plan to establish automatic workplace pensions. This plan would require employers that don’t offer a retirement plan to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems.

The Obama administration says this should repair a system in which they estimate roughly half of working Americans lack employer-based retirement plans. They say experts estimate this will increase the savings participation rate for low- and middle-income workers to about 80% from the current 15%.

“This budget is a welcome departure from the ‘starve the beast’ policies of the last eight years that sought to deprive government agencies and programs of the resources they needed to carry out their missions on behalf of the American people,” said John Gage, president of the American Federation of Government Employees.

But the proposals for increased federal oversight didn’t sit well with some private-sector interests, who object to a bigger government role in business.

“The president’s disappointing budget proposal appears to move in exactly the wrong direction. More taxes, heavy-handed regulations and command-and-control government will not hasten recovery,” said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. “You don’t build a house by blowing up its foundation.”

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