A Thousand Paper Cuts

Oregon businesses face death by a thousand paper cuts. When taken independently, individual government regulations might seem fairly innocuous. But when layered with the cumulative regulatory burdens they face, businesses find themselves buried alive by paperwork and fees.

Two cases in point:

At the state level, dairy facilities are regulated by the Oregon Department of Agriculture’s Confined Animal Feeding Operation program, which inspects every operation annually. Since 2009, the Department of Environmental Quality also inspects the containment ponds on dairies, duplicating the ODA’s inspection and adding additional fees.

A second example is the new Internal Revenue Service reporting requirement included in the health care reform law passed earlier this year. The IRS now requires every business to issue a 1099 form to every service provider to whom it pays more than $600 per tax year. This will cover virtually all business transactions and increase burdensome paperwork, pulling resources and time away from core business functions.

All levels of government must identify and remove duplicative and unnecessary regulatory impediments, so that businesses once again can do what they are meant to do, instead of wrestling with a stack of paperwork that does nothing but burden their bottom line. There isn’t a silver bullet to improve the business climate in Oregon, but lessening the bureaucratic stranglehold on businesses would improve their outlook significantly.


Karla Kay Edwards is Rural Policy Analyst at Cascade Policy Institute. She has held positions of leadership in numerous organizations focusing on agricultural and rural industries and issues, including the Fresno (California) Farm Bureau, Washington Cattlemen’s Association and the Oregon Department of Agriculture.

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Posted by at 06:00 | Posted in Measure 37 | 19 Comments |Email This Post Email This Post |Print This Post Print This Post
  • eagle eye

    Reagan significantly reduced government regulations, to the applause of most. I personally knew Washington bureaucrats — people whom I respected, by the way — who said that while they hadn’t voted for Reagan, they were surprised and impressed by what he did, and how much better things worked in their programs.

    That was the most recent high water mark for the prestige of government and the view of the public of how well government worked. In other words, it was good for government to streamline regulations!

  • John in Oregon

    The death of enterprise by 1,000 paper cuts is the ultimate in sadistic government torture.

    Consider this example of a power generating plant built in California in the late 1950’s. At 40 years of age the plant is expensive to operate, hard to maintain, inefficient, and pollutes more than newer plants.

    Three different California agencies regulated the plant. California Land Use planning (Cal Land), California Air Quality board (Cal Air), and the California Public Utilities commission (Cal Utility).

    The power company considered all three possible solutions for the plant.

    1] Upgrade the plant in stages refurbishing parts of the plant over time.
    2] Completely rebuild the plant to current technology.
    3] Shut the plant down and buy replacement power.

    Option 1 received approval from Cal Land, and Cal Utility. That solution looked good until Cal Air said NO. Any upgrade work must include all of the upgrade work. All or none, no half measures were allowed.

    Option 2 received approval from Cal Air and Cal Utility. Cal Land said NO, a permit to rebuild would not be approved for the location.

    Option 3 was approved by Cal Land and Cal Air. Cal Utility said NO. The company would not be allowed to abandon the rate payer capital investment in the plant.

    So the company found there was an option 4. Continue to operate the plant, pay fines for pollution and be picketed by enviro groups protesting the location and pollution.

    Government regulation compounded upon its self creating Catch 22 squared becoming Catch 484 and no one can do anything.

    John Galt, where are you?

    • Anonymous

      John is in his hidey hole, waiting for the rest of us.

  • Rupert in Springfield

    >The IRS now requires every business to issue a 1099 form to every service provider to whom it pays more than $600 per tax year.

    Yep, and if Republicans are smart they will eliminate this provision if they gain majority.

    If they do and Obama refuses to sign it, Republicans should hang it around his neck.

    Nothing symbolizes the Democrats antagonism to people engaging in productive behavior more than this regulation. It would be smart not to let people forget who foisted this absurd burden upon them. Republicans should keep this one front and center if they cannot get rid of it.

    There is no reason for the 1099 regulation as there is no productive use of the information. It was done simply out of spite and hatred. Republicans need to make Democrat hatred of small business a centerpiece, the 1099 regulation is a good starting point, the failure to renew the Bush tax cuts would be a second stepping stone.

    • sybella

      You have to admit though, it gives all those new IRS agents something to do. JUst think, “Job Creation”. I hope they choke on it.

  • valley p

    “Reagan significantly reduced government regulations, to the applause of most.”

    Yes, especially polluters. But lets also credit Carter for deregulating the airlines and trucking. And when I worked for the feds in the 1990s, Clinton-Gore significantly reduced the paperwork we bureaucrats had to fill out for simple purchases. That act probably saved millions of hours of wasted employee time.

    John writes: The power company considered all three possible solutions for the plant. ”

    I guess a question back would be, do you want Cal land to issue air pollution permits when they have no expertise in that area? Or do you want Cal air issuing land development permits when they lack that expertise? One stop shopping would be nice, but it gets unwieldy to house all expertise under one roof.

    “John Galt, where are you? ”

    Where he has always been. Nowhere. He is a fictional character. As such he can always remain the perfect icon for libertarians and your make believe world.

    Rupert writes: “Yep, and if Republicans are smart they will eliminate this provision if they gain majority.”

    Should they also repeal the health care bill provisions that make it easier for them to buy pooled insurance while they are at it?

    • eagle eye

      Kind of loaded to say:

      “Reagan significantly reduced government regulations, to the applause of most.”

      Yes, especially polluters

      Actually, what you mean is “any activity that produces pollution” e.g. landscaping a garde, building a locomotive, etc etc.

      The question is whether he reduced regulations in a way that did or did not lead to an increase of pollution (or perhaps even led to less pollution.)

      It’s true that others before and after Reagan got into the deregulation of business. Yes, Clinton continued many of the Reagan policies including low taxes. What Reagan also did, more than others, in my experience, was reduce wasteful and useful paperwork. Things were never as good after.

      I would claim that there is at least a plausible connection between this and the esteem in which the federal government was held at the end of the Reagan years. After a long period of decline, in which people were giving up on the federal government.

      Hey, maybe what we need is a new Reagan!

    • Rupert in Springfield

      >Should they also repeal the health care bill provisions that make it easier for them to buy pooled insurance while they are at it?

      Truly an idiotic comment. I never addressed the pooling issue. My comment was about the 1099 provision.

      • Steve Plunk

        valley p keeps wanting to mix the only possibly good thing in the health care reform to all other aspects of it. An especially irritating way to debate.

    • Steve Plunk

      They should eliminate the entire health care reform bill and start fresh. Instead of one immense comprehensive bill that no one can understand they should pass a series of smaller bills that can be evaluated for success over time. Pooled insurance? Sure, but judge the effectiveness over time.

      The problem I see with the current reform is the failure to address costs. How do we control costs? Until that’s answered the problems will continue.

      Oh, and John Galt. Sure he’s fictitious but what he represents is becoming more real every day.

      • valley p

        “The question is whether he reduced regulations in a way that did or did not lead to an increase of pollution (or perhaps even led to less pollution.)”

        That is a good way to frame it. The point of regulations is to have less pollution, not just to have more paperwork. If you can find market based ways to lower pollution, all to the good. But if my aging memory serves. Reagan had not much interest in lessening pollution and did not introduce market methods for pollution reduction. Those he appointed to the cabinet in charge of EPA, Department of Interior, and so forth seemed to do all they could to make pollution, in all its manifestations easier. I wish it had been otherwise.

        But in spite of Reagan and in spite of 20 of the past 30 years under Republican presidents, 12 of the last 16 under Republican congresses, and in spite of all the ridicule environmentalists have been subjected to over these years, “progress” on most environmental issues seems to have marched ahead anyway. Also true for social issues, the latest being the ability of gay people to marry. I can see why “conservatives” are so angry and frustrated. No matter who they elect or don’t elect, society seems to move in a progressive direction. (I remind my students of this when they get frustrated at what seems to be glacial progress).

        I don’t know that the esteem of the federal gov was higher after Reagan. We did enjoy a recovery from a scary and deep recession, we were at peace, and compared to now times were pretty good. Morning in America and all that. But the same was true through most of the 90s. Clinton left things in quite good shape, or so it seemed at the time. If we recover from the current mess, I suppose Obama will leave office a very popular president as well. Time will tell.

        “My comment was about the 1099 provision. ”

        Yes Rupert, I know what your point was. My counterpoint was that the 1099 provisions are related to the other provisions in the bill that make it easier for small businesses and individuals to buy affordable health insurance. The problem with your accounting system is you focus on the liabilities (more time needed to fill out 1099s) and ignore the benefits (better health insurance options). Its like taxes and spending. You want to cut taxes but you don’t actually give a rip about balancing that with cutting spending. Its the sort of thinking that your party is locked into. Broken calculators that can subtract but can’t add.

        “valley p keeps wanting to mix the only possibly good thing in the health care reform to all other aspects of it. An especially irritating way to debate. ”

        Yes Steve, I “mix” those things because the legislation was comprehensive. It tackled a very big problem and created a coordinated set of policies intended to balance out. If you start snipping out all those parts that are objectionable and leave all the good stuff, you end up with all benefits and no costs, much like Bush’s Medicare Part D, which was deficit financed at $400 billion. Obama and the democrats balanced costs and benefits. Whatever you think of health care reform, you Republicans need to learn a lesson here before you further bankrupt the nation. Long term tax cuts should be balanced by expenditure cuts, unless you are arguing for a “permanent stimulus”.

        Yeah, it is intended to be irritating. I’m on a one man crusade to get a few of you to go back to being the sort of realists conservatives once were.

        • eagle eye

          Again,

          “The question is whether he reduced regulations in a way that did or did not lead to an increase of pollution (or perhaps even led to less pollution.)”

          What was the actual record under Reagan? e.g. in reducing pollution. I need data, real performance. For the most part, I don’t have the information in front of me.

          I do know that Reagan signed the biggest wilderness bill in history. He also greatly increased the cut in the national forests in Oregon. So, I would say it was a mixed record.

          I really don’t see much “progress” lately on the environment. Protection of natural areas has fallen by the wayside. Instead, there is the obsession with the “crisis” of global warming. And of course, monstrous environmental mistakes like the forsaking of nuclear energy and the imposition of wind power, with its brutish ugliness and other environmental damage.

          Society is moving in a “progressive” direction mostly because of impositions by the courts and other institutions.

          And you wonder why conservatives are angry?

          • Steve Plunk

            The lack of “progress” on the environmental front is likely explained by the law of diminishing returns. The easier improvements cost society little for large returns. Cleaning up litter and stopping large industrial polluters yielded us a much cleaner environment without forcing layoffs of impeding economic growth the way we see today.

            We now see extreme measures like banning of incandescent light bulbs or idling tickets for trucks that while they sound good we get little in return. I expect more public backlash as this continues.

            We all want clean air and water but it’s now down to a question of how clean and how much does it cost? I think the environmentalists have pushed too far.

          • valley p

            “What was the actual record under Reagan? e.g. in reducing pollution.”

            I don’t know. I suspect if you measured “pollution” before and after Reagan, you would see more progress than regress. We seem to have made continuous progress since the Nixon Administration, which signed most of the major federal environmental bills into law. A lot of the progress, in my opinion, has been due to the gradual if grudging implementation of the initial big laws: clean water act, endangered species act, clean air act, and national environmental policy act among others.

            Reagan also signed the Columbia Gorge Scenic area into existence. He said he did so “under protest.” In retrospect, he was a pragmatic deal maker who settled for most of what he wanted and gave up things in return. The wilderness bills reflect that part of him.

            I disagree with you about current progress. I know Kitzhaber gets a lot of grief here, but he established the Oregon Watershed Enhancement program, and that has resulted in significant improvement to our streams and rivers. Bonneville has changed dam management, and we are seeing the largest salmon returns in many decades. Our oak woodlands and prairies, once on the edge of extinction, are coming back. And we have more old growth forest today than we did 20 years ago. This progress is across the nation and much of the world by the way. Even school kids today know about invasive species, ecological restoration, and water conservation. Its insidious.

            On global warming, if the worst predictions come true, all the progress we are making will be for naught. That’s the risk we are running by arguing over paying a few cents extra for fossil fuels.

            Do I wonder why conservatives are angry? Not really. I think it is because they realize that no matter what they do or how hard they try society will continue to move past them. They had power for 6 years and could not make a dent in conservation policy. The best they can do is delay the inevitable. That would be a frustrating position to be in. I’m glad I am not among them frankly. I have a lot of respect for old fashioned conservatives who were cautious about change, but accepted it once it arrived. The modern bunch, much in evidence here, can’t accept basic reality. They get madder and madder the farther behind they get, so they pick a point even further back on the calendar as the good ole days. It used to be that everything was great before the 60s. Then it was the 30s. Then the progressive era of Woodrow Wilson and Teddy Roosevelt. And now I think it is 2 days after the ink on the constitution was dry. At this pace we will be aiming for the early Roman empire in short order.

        • Steve Plunk

          valley p, Read my other post about the folly of ‘comprehensive’ reform. It’s too complex to know if it has any chance of working. The right way is small measurable steps that can be repealed if faulty or built upon if effective.

          The 1099’s have nothing to do with health care reform and were inserted for reasons unknown. Both sides of the political aisle see this requirement as onerous and want it reformed but the congressional leadership can’t seem to accomplish anything these days.

          And please, don’t speak about Republicans bankrupting the country. Obama and the Dems have full responsibility for that. They make Republican deficits look like kid’s stuff.

          • valley p

            I get your point. And small incremental steps would take the low hanging fruit first. The hard stuff would be left to the end, meaning never. As an example, cutting Medicare by $500B over the next 10 years would have been impossible as stand alone legislation. It could only be done to help pay for extending insurance to 35 million non elderly Americans. A requirement for everyone to buy insurance would never work as a stand alone. They had to include subsidies and the cross state pools. The list goes on.

            Yeah…its complex. But changes can be made as we learn how it is working or not working. A simple legislation would have been to adopt the French system. Medicare for all as the base, then add whatever private insurance people want for the extras. There is no way your party would have allowed us to adopt that very simple system, which would need about 10 pages of text. The current bill is complex because the Democrats had to gerrymander this together to get just enough votes.

            “The 1099’s have nothing to do with health care reform and were inserted for reasons unknown.”

            The reason is not unknown. it is to better track business activity so fewer self employed people can evade both taxation and inclusion into the system. I know about 1099s. I was self employed for 19 years. And I hate paper work. I also hated the few options I had on health insurance. Is the tradeoff worth it? Yeah, I think it is.

            “And please, don’t speak about Republicans bankrupting the country. Obama and the Dems have full responsibility for that. They make Republican deficits look like kid’s stuff. ”

            Well, we go round and round on this. When Republicans had control they turned a Democratic surplus into a Republican deficit. They passed a $400B entitlement with zero taxes to pay for it. They funded 2 wars on a credit card. They cooked the books on their tax cut, giving it a 10 year expiration date to avoid having to deal with future deficits through the roof. Now that the future has arrived they insist that Obama extend the tax cuts they themselves designed to expire. Their “Pledge” offers an unspecified $100B worth of cuts to a $1.4 trillion deficit even while they insist on a $4 trillion tax cut. Its beyond irresponsible. A broken calculator is a generous interpretation

  • Ricky

    If government did not regulate what would happen to the little people, like myself? We would be harmed by the evil corporations who only want profit.
    I, for one, am glad Oregon keeps its boot on the neck of these bastards.
    I feel safe and protected now.
    Thanks Oregon.
    You’re the best.
    And you love dreamers, which means you love me!

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  • John in Oregon

    Above I provided a simple example of how regulations compound to produce incomprehensible barriers to economic activity. As usual the defense of more complex regulation is a false choice. Would you rather that > *Cal land … issue air pollution permits when they have no expertise in that area?*

    No. I would rather there be NO state planners. Such agencies serve only to inject the administrative state into the daily lives of people, usually to the advantage of one group over another and to the detriment of the people. Ultimately the purpose of such agencies becomes to serve them selves and groupies, supplicants, sycophants, crony capitalists and other parasites. Massive regulations interpreted to support what ever might be the popular social policy of the day.

    To the extent that government intervention is actually needed, the *state* legislature has the ability to pass laws limiting, for example, pollution to some specific standard determined by lawmakers. Police have the authority to investigate under the rule of law, while courts have all of the tools necessary to adjudicate any violations.

    John Galt is a fictional character, yet far more. We have had all along a small group that chose to disconnect. Some farmed, others camped out under bridges. As unworkable as a barter economy might be some have migrated that direction. Sufficiently noticed by Hollywood to be found in a Tony Randall and Debbie Reynolds movie.

    Historically we have had a fairly consistent number that choose to cut loose from the system, at least to the extent possible. Lately that trend has been growing among both low and high income groups. Hence the wealth confiscation laws targeting any leaving the US. Of course the powerful hedge fund operators kept their wealth out of the reach of the US government from the get go. The massive 1099 requirements are intended to snare the little guy operating below the radar.

    John Galt has had enough.

    Again justification for massive complex regulation is offered as a false choice. > *Should they also repeal the health care bill provisions that make it easier for them to buy pooled insurance while they are at it?*

    Lets evaluate that supposed advantage. Obamacare it is claimed will make insurance pools more available. Forget for the moment that state insurance administrators who manage state risk pools have said the legislation can not work. Just look at what has actually happened.

    The first shoe to fall was child health care insurance. Generally the cheapest and most available insurance Obamacare mandates have forced the elimination of the product. Next came minimeds which are hanging by a thread. Now PFG has withdrawn from the adult market choosing to quit providing coverage. Another million without coverage.

    That so called popular provision is worth the same as the food not on the shelves of the soviet government stores. The shelves are bare, you can’t buy any.

    Credit where credit is due, > *The point of regulations is to have less pollution, not just to have more paperwork.* A very astute observation, that is precisely what ought to happen. Which brings us to the intersection of Imagination Avenue and Reality Street. In other words, what really happens. One such intersection was the Gulf Oil spill.

    With the Federal Government responsible for the cleanup by law, the bureaucracy rushed into inaction. After investing millions of his own money Kevin Costner was stonewalled by the Coast Guard / EPA.

    Costner offered technology that would remove oil and return much cleaner water to the ocean. Costner’s skimmers would ship watery oil to refineries for processing. For the sole goal of enforcing the rules the Coast Guard / EPA decreed that only 99.9985% pure water could be returned to the ocean. All that oily water must be transported to be processed as waste.

    Meanwhile Genoil a Canadian company with sand decontamination technology pressed hard to block skimers as not state of the art technology which does not comply with United States Coast Guard regulations. Genoil used the regulations for a competitive advantage which promoted its product over that offered by Costner.

    The point of regulations is to have less pollution. The regulations created more pollution.

    An industrial process generates a residual of pollution. Reducing that process pollution takes effort. Meanwhile pollution is multiplied by economic activity. For the regulator the equation is simple. The most effective way to reduce pollution is to suppress economic activity.

    Thus in California and Oregon water is turned off, dust levels are set at that of indoor filtered air and farming is eliminated. Magically, pollution is now zero. The regulator passes congratulations all around never looks back at the wreckage in the rear view mirror, moving on to the next industry to devastate. A plague of locusts feasting upon the people.

    So the massive and conflicting regulations are justified by the claim that > *When Republicans had control they turned a Democratic surplus into a Republican deficit. They passed a $400B entitlement with zero taxes to pay for it. They funded 2 wars on a credit card. They cooked the books on their tax cut, giving it a 10 year expiration date to avoid having to deal with future deficits through the roof.*

    *Facts*
    Author of the part D entitlement, Senator Edward M Kennedy, Democrat Massachusetts.
    Author of the tax rate increase, Senator John McCain, progressive Republican.
    Average deficit under President Bush (2001-2008): $251 billion
    Deficit in last fiscal year of GOP majority Congress (2007): $161 billion
    Largest deficit under Bush (2008): $459 billion
    Author of big government spending, Speaker Pelosi, Senator Reid, President Obama.
    Deficits under President Obama (2009) $1.48 Trillion.
    Deficits under President Obama (2010) $1.5 Trillion (projected, no 2010 budget)
    Deficit paid by Obama Medicare reductions $5 Trillion.
    Average annual Obama deficit, 2009 through 2020: $1.056 trillion
    Smallest expected Obama annual deficit: $724 billion (in 2014)
    Expected Obama deficit in 2020: $1.254 trillion

    But then further justification of massive conflicting paralyzing regulation is needed. > *Do I wonder why conservatives are angry? Not really. I think it is because they realize that no matter what they do or how hard they try society will continue to move past them. They had power for 6 years and could not make a dent in conservation policy.*

    Aside from being intensely patronizing, this view presents false Frankenstein painting of the American people.

    Gallop Facts
    Americans identified as conservative …………. 42%
    Americans identified as moderate …………….. 34%
    Americans identified as liberal / progressive … 21%
    Americans identified as progressive ……………. 9%
    Conservatives Outnumber Liberals in All 50 States

    But the facts are even more complex. Zogby International determined the percentage of unenlightened (patently false) by respondents of various political philosophies. The results.

    Libertarians incorrect answers ………………… 15.7%.
    Very conservatives incorrect answers ………… 17.6%
    Conservatives incorrect answers ……………… 22.3%
    Liberals incorrect answers ……………………… 60.1%.
    Very liberal / progressive incorrect answers … 67.6%

    So are people angry, yes. Are people in a rage, no. The people are busy trimming the progressive rot and damage from the great ship Republic. Like the Pearl Harbor ship yards who returned the Yorktown to sea in days, the Republic has maneuvering power restored. The people have pruned the Specter, the Crist, the Bennett, the Murkowski, and stormed and sacked the Castle. The great ship Republic has put to sea to join battle in defense of her people.

    The people have said stop intervening, stop nationalizing, stop spending, stop taking over, stop bailing out. Just STOP!!

    Meanwhile in a 2004 detailed study of New Deal policies economists Harold L. Cole and Lee E. Ohanian found the cause of the Great Depression. Based on US government data Cole and Ohanian identified the cause as Franklin Delano Roosevelt.

    “Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. *”We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”*

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