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FACT CHECK: Regs not a huge jobs killer

FACT CHECK: Contrary to Republican claims in debate, regulations are not a huge job killer. By The Associated Press

WASHINGTON (AP) ' Is regulation strangling the American entrepreneur? Several Republican presidential candidates say so. The numbers don't.

The anti-regulatory fervor was in evidence Tuesday night in the latest GOP debate, but rhetorical flourishes, on that and other issues, masked far more complex realities.

A look at some of the claims and how they compare with the facts.

MITT ROMNEY: "All of the Obama regulations, we say no. It costs jobs."

RICK PERRY: Regulations "are strangling the American entrepreneurship out there."

RICK SANTORUM: "Repeal every regulation the Obama administration put in place."

THE FACTS: Labor Department data show that only a tiny percentage of companies that experience large layoffs cite government regulation as the reason. Since Barack Obama took office, just two-tenths of 1 percent of layoffs have been due to government regulation, the data show.

Businesses frequently complain about regulation, but there is little evidence that it is any worse now than in the past or that it is costing significant numbers of jobs. Most economists believe there is a simpler explanation: Companies aren't hiring because there isn't enough consumer demand.

The conservative National Federation of Independent Business asks its small-business membership each month to name the single most important problem they're facing. Last month, the most common response was "poor sales," cited by 28 percent. Government regulation came in second, at 18 percent.

Concerns over regulation have increased in the past two years ' only 11 percent cited it in April 2009, not long after Obama entered the White House. But the rise hasn't been outside historical norms. More small businesses complained about regulation during the administrations of President Bill Clinton and the President George H.W. Bush, according to an analysis of the federation's data by the liberal Economic Policy Institute.

High levels of economic uncertainty are another drag on business, but economists say that's less due to regulation than to fights over government spending and taxes. Both consumer and business confidence fell in August, for example, as the White House and Congress wrangled over the nation's borrowing limit. But that was a bipartisan dispute that can't be solely pinned on Obama.


REP. MICHELE BACHMANN: "I think if you look at the problem with the economic meltdown, you can trace it right to the federal government, because it was the federal government that demanded that banks and mortgage companies lower platinum-level lending standards to new lows. It was the federal government that pushed the subprime loans."

THE FACTS: It might be argued that the government pursued policies under both Democratic and Republican presidents to promote home ownership, such as setting up mortgage giants Fannie Mae and Freddie Mac to make more affordable mortgages possible, and the tax deduction for home mortgages. But it's a stretch to suggest that federal regulators forced banks to make mortgage loans to people who could not afford them. And neither Bachman nor most other Republican presidential contenders are calling for a repeal in the home-mortgage deduction.

Her argument also seems to run counter to the GOP themes that there should be less regulation, not more regulation. The absence of strong regulation was widely seen by economists as a primary cause of the financial crisis that produced so much financial pain and job losses.


Associated Press writer Tom Raum contributed to this report.

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