The Hechinger Report
January 18, 2011
By Joanne Jacbos
PALO ALTO, CALIF. - Omid Khofasani wants to be a pharmacist - without taking on huge student loans. So the 35-year-old is paying about $1,700 for a nine-month course at nearby Foothill College that leads to a pharmacy technician certificate and a chance to earn a solid middle-class wage of up to $60,000 a year as he works his way through pharmacy school.
"It's short, it's fast and it's cheap," says Khofasani, who earned an engineering degree in Iran but now works at a carpet store.
Labor economists and some educators believe career-driven degrees should become an increasingly common choice and are advising students to pursue skills-oriented fields of study they feel offer better job opportunities.
Fueling the trend is the worst economic decline in more than 70 years and a slowly falling unemployment rate of 9.4 percent. Add to that the staggering total of $830 billion in student debt nationally.
"The recession has brought in clear focus the value of a career versus a job," said Willis Holcombe, chancellor of Florida's fast-growing community college system. A new report based on the state's employment data shows that students who earn certificates or associate of science degrees make more money in their first year out of college than four-year graduates of Florida's university system.
The unemployment numbers are "a powerful case for some postsecondary credential, not just going to classes, but completing a credential,"
Holcombe said. "If you want to insulate yourself against unemployment, you need a career."
The national unemployment rate for four-year college graduates is 4.8 percent, compared to 9.8 percent for those with only a high-school diploma.
Goal: 1 year-plus of postsecondary education President Barack Obama wants the United States to lead the world in college degrees by 2020, with all Americans completing at least one year of postsecondary education, which is seen as the dividing line between living in poverty and a shot at a middle-class lifestyle.
Nationally, 27 percent of people with licenses and certificates also earn more than the average bachelor's degree recipient, according to Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce.
Carnevale's newest data show that at least half of all anticipated job opportunities in the next seven years will be open to "middle-skill" workers like pharmacy technicians - what Khofasani will be after he passes a certification exam. Training for such jobs is offered at both community colleges and for-profit career and trade schools.
Middle-skills jobs require more than a high-school diploma but less than a college degree, along with significant education and training - and they make up roughly half of all U.S. jobs, according to the Urban Institute, a nonprofit policy research organization based in Washington, D.C.
Carnevale says higher education needs to shift its focus to producing workers with degrees and certificates that the workforce needs, although he acknowledges that ultimately, "the higher your education level, the more you'll earn."
By 2018, the United States will need 22 million new employees with postsecondary degrees of some kind.
Middle-skill workers in demand will likely include plumbers, electricians, health-care workers, legal assistants, machinists and police officers. Such jobs require strong math, communications and science knowledge, in addition to "soft skills" like the ability to solve problems in teams. They do not necessarily require a four-year, or even a two-year, college degree.
Targeted training for specific jobs
Students "are choosing lower-level alternatives that may have a high yield in the workforce," said Julian Alssid, founder and executive director of Workforce Strategy Center, a nonprofit think tank that works to develop effective education and employment policies. "People can get good jobs with targeted training. Targeted credentials are as good as broader, generalized degrees, especially at the entry level."
And nationally, enrollments have surged 17 percent since last year at community colleges, which charge far less than most four-year institutions, showing that more students are aware of the risks of incurring debt, said Alssid.
Certificates aligned with specific skills can take less than a year and be "trajectory-changing" for average and below-average students, said Brian Bosworth, president of FutureWorks, a consulting and policy development firm based in Seattle, and author of the 2010 report "Certificates Count."
Bosworth said completion rates for certificates are twice or even three times as high as graduation rates for two-year degrees.
"I would not advise a student to go to a four-year college if they're not confident about their skills and the family is under economic pressure," he said.
Some community college students are finding out their degrees are in high demand.
At Los Medanos College in Pittsburg, Calif., students who complete a two-year associate of science degree in the Power Pathways program can qualify for a job as an apprentice electrician at Pacific Gas & Electric, starting at $64,418 per year.
Recruiters descended upon the class that graduated on Dec. 20, said Katie Romans, a spokesperson for PG&E.
Preparing for immediate employment
Change is already under way in some areas. At Tennessee's technical colleges, all students work to earn certificates rather than associate degrees, and 75 percent go on to middle-skills jobs, Bosworth said. All programs prepare students for immediate employment.
"Quick-win certificates can be the first step on a degree ladder to associate and bachelor's degrees," said James Rosenbaum, a professor of education and social policy at Northwestern University in Chicago.
It should be no surprise that certificate-holders can earn as much or more than those with bachelor's degrees, said Richard Vedder, an economist and founder of the Center for College Affordability and Productivity, a nonprofit research center in Washington, D.C.
"These certificates are targeted to vocations, usually in demand," he said.
"The huge earning gains people associate with four-year degrees are dissipating."
Nursing, medical technology and other health-care jobs are growing rapidly, according to the Bureau of Labor Statistics. Even in Michigan, where the unemployment rate is 12.4 percent - tied with California for the second-highest nationally - those with associate degrees in nursing and allied health fields can find jobs, said James Jacobs, president of Macomb Community College in Warren, Mich.
Carnevale of Georgetown notes that while "plastics" was the word for jobs of the future in the 1967 film "The Graduate," today's equivalent term is "health care," including nursing, medical technology, dental hygiene and other health-care support jobs.
Nursing 'the closest thing there is to a sure thing'
An associate degree in nursing, at a time when Baby Boomers are retiring, is now "the closest thing there is to a sure thing," Carnevale said.
Advanced manufacturing and engineering technicians with a certificate or associate of applied science degree are in demand too, said Alssid of the Workforce Strategy Center. And middle-skill workers also are finding jobs in high-tech manufacturing, construction and the energy industry, says Rachel Unruh of the National Skills Coalition, based in Washington, D.C.
But hurdles to degree and certificate completion remain.
Some two-thirds of community-college students aren't ready for college-level courses, and 69 percent of those placed in remedial math never move beyond it, according to the Community College Research Center at Columbia University's Teachers College. The three-year graduation rate is just 28 percent for community-college students, data from the National Center for Education Statistics show.
"Huge numbers of people who go to community college get nothing out of it,"
said Bosworth of FutureWorks. Students are far more likely to succeed if they start by earning a certificate and then return for more training when they're ready, Bosworth said.
A vocational certificate is a more realistic goal than a bachelor's degree for students with mediocre grades, advises Rosenbaum of Northwestern. In one research study, just 19 percent of high-school seniors with a C average or below went on to earn a postsecondary credential of any kind.
"They've been told everybody can go to college," said Rosenbaum. "But not everybody can take college classes when they get there."
Vedder agrees. While A students should go for a bachelor's degree, "most C students won't make it through to a four-year degreem but they probably could make it through a one-year or two-year course" that would lead to a decent job, he said.
Liz Willen contributed to this story, which was produced by The Hechinger Report. Beth Hawkins will return to The Learning Curve on Wednesday.
Direct link to article: In a tough economy, new focus on job-oriented certificates
The Chronicle of Higher Education: Carnegie Classification Update Shows Boom in For-Profit and Professional Education
The Chronicle of Higher Education
January 18, 2011
By Scott Carlson
The Carnegie Foundation for the Advancement of Teaching released an update on Tuesday of its Carnegie Classification of Institutions of Higher Education that it says shows a few shifts in the higher-education landscape:
significant growth in the number of for-profit institutions, more institutions that offer professional degrees, and more traditional two-year colleges offering four-year degrees.
"The rise of the for-profit sector is not new, but with this classification update in particular, we see a pretty significant increase in that sector,"
said Chun-Mei Zhao, a senior scholar at the Carnegie Foundation who directs the Carnegie Classification project. "Those areas that are in high demand are the more professional and career-focused fields."
Since 2005, when the foundation last made major revisions in its classification system and updated its list, it has added 483 institutions, for a total of 4,633. Of those new institutions, 77 percent were private, for-profit entities, while 4 percent were public and 19 percent were private, nonprofit. (The vast majority of the new for-profit institutions were two-year colleges.) Those numbers, however, might give an inflated sense of the growth in the for-profit sector. That's because the Carnegie Foundation lists individual campuses of the Art Institute, DeVry University, ITT Technical Institute, the University of Phoenix, and other multicampus for-profit entities as separate institutions.
In Carnegie's index of new institutions, campuses from those giants are listed alongside relatively little-known institutions, like the Won Institute of Graduate Studies, which specializes in alternative medicine, and postsecondary offshoots of well-established organizations, like the Hazelden Graduate School of Addiction Studies.
Supply and Demand
Some observers of higher education were cool on the significance of the new numbers. Barmak Nassirian, associate executive director of external relations at the American Association of Collegiate Registrars and Admissions Officers, said the Carnegie Classification update did not necessarily show a growth in demand for for-profit education.
"Sometimes things are supply driven, not demand driven," he said.
Richard H. Ekman, president of the Council of Independent Colleges, said it was no surprise that there were more for-profit institutions. "This is a worrisome thing," he said, because "many of these for-profit institutions are doing a bad job. But it is a fact that the enrollments have increased."
A breakdown of the numbers seems to reveal some notable growth in select fields. Of the new institutions, 6.2 percent were in the health professions, split between private for-profit and nonprofit. Nearly 6 percent were in business and management, almost entirely in the for-profit realm. And 5 percent were seminaries or Bible colleges, all of them not-for-profit.
The Carnegie Foundation noted that there had been a 17-percent increase in institutions that awarded more than 60 percent of their degrees in professional fields over the past five years, while there was a 5-percent drop in institutions that awarded more than 60 percent of their degrees in the liberal arts.
More two-year colleges were also offering four-year degrees, with growth since 2005 of 23 percent to 49 percent, depending on the type of institution. Mr. Ekman said that the increase in the number of institutions awarding of professional degrees and four-year degrees was also no surprise.
"A lot of bachelor's institutions are offering master's, and a small number of master's institutions are offering doctorates," he said. "There is an appetite for more education at higher levels, and that's not a bad thing."
Direct link to article: Carnegie Classification Update Shows Boom in For-Profit and Professional Education
January 18, 2011
By Scott Carlson
The Carnegie Foundation for the Advancement of Teaching released an update on Tuesday of its Carnegie Classification of Institutions of Higher Education that it says shows a few shifts in the higher-education landscape:
significant growth in the number of for-profit institutions, more institutions that offer professional degrees, and more traditional two-year colleges offering four-year degrees.
"The rise of the for-profit sector is not new, but with this classification update in particular, we see a pretty significant increase in that sector,"
said Chun-Mei Zhao, a senior scholar at the Carnegie Foundation who directs the Carnegie Classification project. "Those areas that are in high demand are the more professional and career-focused fields."
Since 2005, when the foundation last made major revisions in its classification system and updated its list, it has added 483 institutions, for a total of 4,633. Of those new institutions, 77 percent were private, for-profit entities, while 4 percent were public and 19 percent were private, nonprofit. (The vast majority of the new for-profit institutions were two-year colleges.) Those numbers, however, might give an inflated sense of the growth in the for-profit sector. That's because the Carnegie Foundation lists individual campuses of the Art Institute, DeVry University, ITT Technical Institute, the University of Phoenix, and other multicampus for-profit entities as separate institutions.
In Carnegie's index of new institutions, campuses from those giants are listed alongside relatively little-known institutions, like the Won Institute of Graduate Studies, which specializes in alternative medicine, and postsecondary offshoots of well-established organizations, like the Hazelden Graduate School of Addiction Studies.
Supply and Demand
Some observers of higher education were cool on the significance of the new numbers. Barmak Nassirian, associate executive director of external relations at the American Association of Collegiate Registrars and Admissions Officers, said the Carnegie Classification update did not necessarily show a growth in demand for for-profit education.
"Sometimes things are supply driven, not demand driven," he said.
Richard H. Ekman, president of the Council of Independent Colleges, said it was no surprise that there were more for-profit institutions. "This is a worrisome thing," he said, because "many of these for-profit institutions are doing a bad job. But it is a fact that the enrollments have increased."
A breakdown of the numbers seems to reveal some notable growth in select fields. Of the new institutions, 6.2 percent were in the health professions, split between private for-profit and nonprofit. Nearly 6 percent were in business and management, almost entirely in the for-profit realm. And 5 percent were seminaries or Bible colleges, all of them not-for-profit.
The Carnegie Foundation noted that there had been a 17-percent increase in institutions that awarded more than 60 percent of their degrees in professional fields over the past five years, while there was a 5-percent drop in institutions that awarded more than 60 percent of their degrees in the liberal arts.
More two-year colleges were also offering four-year degrees, with growth since 2005 of 23 percent to 49 percent, depending on the type of institution. Mr. Ekman said that the increase in the number of institutions awarding of professional degrees and four-year degrees was also no surprise.
"A lot of bachelor's institutions are offering master's, and a small number of master's institutions are offering doctorates," he said. "There is an appetite for more education at higher levels, and that's not a bad thing."
Direct link to article: Carnegie Classification Update Shows Boom in For-Profit and Professional Education
Bloomberg News: For-profit colleges fight aid limit
Bloomberg News
January 18, 2011
Contact the Omaha World-Herald newsroom
For-profit colleges are urging Congress to change a law that threatens their access to billions of dollars in federal student aid, the companies' biggest source of revenue.
Education companies that get more than 90 percent of their revenue from the Education Department's student grants and loans for two years in a row may lose eligibility for the money under the law. Apollo Group Inc. - operator of the University of Phoenix, the biggest U.S. for-profit college - and Santa Ana, Calif.-based Corinthian Colleges Inc. have said they may violate the limit next year.
For-profit college revenue already is being threatened by slowing new-student enrollment amid government investigations of sales practices and the use of federal funds. The companies are lobbying Congress to strike down the revenue cap, called the 90/10 rule, or extend an exemption that would help them comply for the next fiscal year.
Changing the rule will be the industry's most important battle in Congress, said Jarrel Price, an analyst with Height Analytics in Washington.
"If the industry fails to push Congress beyond gridlock, several schools are at risk" of violating the rule, Price said. "There's great urgency."
The 90/10 rule, enacted in 1998, requires for-profit colleges to get at least 10 percent of their revenue from sources outside the Education Department. The law is meant to ensure quality and discourage fraud at for-profit colleges by requiring students to invest some of their own money in tuition.
"University of Phoenix believes 90/10 is not a good measure of quality, which is better assessed through graduation rates, default rates, compliance audits, financial ratios, etc.," the for-profit college said.
Federal student grants and loans made up about 88 percent of the college's revenue in the year ended Aug. 31, Apollo said in October.
For-profit colleges are approaching the 90 percent cap as the Education Department has increased the availability of student loans and Pell Grants, said Harris Miller, president of the Association of Private Sector Colleges & Universities, a Washington-based trade group. Congress needs to act so the schools can continue to operate and students can stay in class, he said.
Strayer Education Inc., a for-profit college based in Arlington, Va., said Jan. 7 that enrollment for new semester dropped 20 percent from a year ago.
Apollo said Jan. 10 that new student enrollment for the three months ended in November dropped 42 percent from the year earlier to 56,500.
Congress granted an exemption to the 90/10 rule of up to $2,000 per student during the global financial crisis when unemployed workers needed job training. The exemption expires at the end of June.
Sen. Tom Harkin, D-Iowa, is chairman of the Senate education committee and investigated student recruitment, job-placement claims and use of government funds by for-profit colleges. He called the 90/10 rule "one of the few protections students at these schools have."
"Given the abuses that my committee has documented - alarmingly high dropout rates and crushing debt loads for students - the 90/10 rule clearly isn't enough," Harkin said in an e-mail. "I intend to look at ways to make it work more effectively to ensure that for-profit colleges put a renewed focus on the success of their students rather than the profits of their shareholders."
Harkin doesn't favor extending the exemption, said Justine Sessions, a spokeswoman.
Rep. John Kline, R-Minn. and chairman of the House education committee, said he is "not thrilled" with the 90/10 rule. Job placement and student loan repayment rates are better indicators of program quality, he said.
To avoid violating the 90/10 rule, education companies sometimes raise tuition above federal financial-aid limits, forcing students to pay the difference out of pocket or find the money elsewhere, said Miller, of the trade group.
An Obama administration proposal known as "gainful employment" encourages for-profit colleges to lower tuition so students won't default on loans, said Mark Kantrowitz, publisher of FinAid.org, a website that provides information on student aid.
"If they increase tuition to comply with 90/10, they're going to have problems with the gainful employment rule," he said. "They're going to be between a rock and a hard place."
Direct link to article: For-profit colleges fight aid limit
Contact the Omaha World-Herald newsroom
Copyright ©2011 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
January 18, 2011
Contact the Omaha World-Herald newsroom
For-profit colleges are urging Congress to change a law that threatens their access to billions of dollars in federal student aid, the companies' biggest source of revenue.
Education companies that get more than 90 percent of their revenue from the Education Department's student grants and loans for two years in a row may lose eligibility for the money under the law. Apollo Group Inc. - operator of the University of Phoenix, the biggest U.S. for-profit college - and Santa Ana, Calif.-based Corinthian Colleges Inc. have said they may violate the limit next year.
For-profit college revenue already is being threatened by slowing new-student enrollment amid government investigations of sales practices and the use of federal funds. The companies are lobbying Congress to strike down the revenue cap, called the 90/10 rule, or extend an exemption that would help them comply for the next fiscal year.
Changing the rule will be the industry's most important battle in Congress, said Jarrel Price, an analyst with Height Analytics in Washington.
"If the industry fails to push Congress beyond gridlock, several schools are at risk" of violating the rule, Price said. "There's great urgency."
The 90/10 rule, enacted in 1998, requires for-profit colleges to get at least 10 percent of their revenue from sources outside the Education Department. The law is meant to ensure quality and discourage fraud at for-profit colleges by requiring students to invest some of their own money in tuition.
"University of Phoenix believes 90/10 is not a good measure of quality, which is better assessed through graduation rates, default rates, compliance audits, financial ratios, etc.," the for-profit college said.
Federal student grants and loans made up about 88 percent of the college's revenue in the year ended Aug. 31, Apollo said in October.
For-profit colleges are approaching the 90 percent cap as the Education Department has increased the availability of student loans and Pell Grants, said Harris Miller, president of the Association of Private Sector Colleges & Universities, a Washington-based trade group. Congress needs to act so the schools can continue to operate and students can stay in class, he said.
Strayer Education Inc., a for-profit college based in Arlington, Va., said Jan. 7 that enrollment for new semester dropped 20 percent from a year ago.
Apollo said Jan. 10 that new student enrollment for the three months ended in November dropped 42 percent from the year earlier to 56,500.
Congress granted an exemption to the 90/10 rule of up to $2,000 per student during the global financial crisis when unemployed workers needed job training. The exemption expires at the end of June.
Sen. Tom Harkin, D-Iowa, is chairman of the Senate education committee and investigated student recruitment, job-placement claims and use of government funds by for-profit colleges. He called the 90/10 rule "one of the few protections students at these schools have."
"Given the abuses that my committee has documented - alarmingly high dropout rates and crushing debt loads for students - the 90/10 rule clearly isn't enough," Harkin said in an e-mail. "I intend to look at ways to make it work more effectively to ensure that for-profit colleges put a renewed focus on the success of their students rather than the profits of their shareholders."
Harkin doesn't favor extending the exemption, said Justine Sessions, a spokeswoman.
Rep. John Kline, R-Minn. and chairman of the House education committee, said he is "not thrilled" with the 90/10 rule. Job placement and student loan repayment rates are better indicators of program quality, he said.
To avoid violating the 90/10 rule, education companies sometimes raise tuition above federal financial-aid limits, forcing students to pay the difference out of pocket or find the money elsewhere, said Miller, of the trade group.
An Obama administration proposal known as "gainful employment" encourages for-profit colleges to lower tuition so students won't default on loans, said Mark Kantrowitz, publisher of FinAid.org, a website that provides information on student aid.
"If they increase tuition to comply with 90/10, they're going to have problems with the gainful employment rule," he said. "They're going to be between a rock and a hard place."
Direct link to article: For-profit colleges fight aid limit
Contact the Omaha World-Herald newsroom
Copyright ©2011 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
The Wall Street Journal | Opinion: If the FDA deems saccharin safe enough for coffee, then the EPA should not treat it as hazardous waste.
The Wall Street Journal | Opinion
January 18, 2011
By: Barack Obama
For two centuries, America's free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.
But throughout our history, one of the reasons the free market has worked is that we have sought the proper balance. We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse.
>From child labor laws to the Clean Air Act to our most recent strictures against hidden fees and penalties by credit card companies, we have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.
Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.
Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.
This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.
Where necessary, we won't shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws. But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.
For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.
But creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.
We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for—and reduce—the burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.
One important example of this overall approach is the fuel-economy standards for cars and trucks. When I took office, the country faced years of litigation and confusion because of conflicting rules set by Congress, federal regulators and states.
The EPA and the Department of Transportation worked with auto makers, labor unions, states like California, and environmental advocates this past spring to turn a tangle of rules into one aggressive new standard. It was a victory for car companies that wanted regulatory certainty; for consumers who will pay less at the pump; for our security, as we save 1.8 billion barrels of oil; and for the environment as we reduce pollution. Another example: Tomorrow the FDA will lay out a new effort to improve the process for approving medical devices, to keep patients safer while getting innovative and life-saving products to market faster.
Despite a lot of heated rhetoric, our efforts over the past two years to modernize our regulations have led to smarter—and in some cases tougher—rules to protect our health, safety and environment. Yet according to current estimates of their economic impact, the benefits of these regulations exceed their costs by billions of dollars.
This is the lesson of our history: Our economy is not a zero-sum game. Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.
Mr. Obama is president of the United States.
Direct link to article: If the FDA deems saccharin safe enough for coffee, then the EPA should not treat it as hazardous waste.
January 18, 2011
By: Barack Obama
For two centuries, America's free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.
But throughout our history, one of the reasons the free market has worked is that we have sought the proper balance. We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse.
>From child labor laws to the Clean Air Act to our most recent strictures against hidden fees and penalties by credit card companies, we have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.
Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.
Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.
This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.
Where necessary, we won't shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws. But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.
For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.
But creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.
We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for—and reduce—the burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.
One important example of this overall approach is the fuel-economy standards for cars and trucks. When I took office, the country faced years of litigation and confusion because of conflicting rules set by Congress, federal regulators and states.
The EPA and the Department of Transportation worked with auto makers, labor unions, states like California, and environmental advocates this past spring to turn a tangle of rules into one aggressive new standard. It was a victory for car companies that wanted regulatory certainty; for consumers who will pay less at the pump; for our security, as we save 1.8 billion barrels of oil; and for the environment as we reduce pollution. Another example: Tomorrow the FDA will lay out a new effort to improve the process for approving medical devices, to keep patients safer while getting innovative and life-saving products to market faster.
Despite a lot of heated rhetoric, our efforts over the past two years to modernize our regulations have led to smarter—and in some cases tougher—rules to protect our health, safety and environment. Yet according to current estimates of their economic impact, the benefits of these regulations exceed their costs by billions of dollars.
This is the lesson of our history: Our economy is not a zero-sum game. Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.
Mr. Obama is president of the United States.
Direct link to article: If the FDA deems saccharin safe enough for coffee, then the EPA should not treat it as hazardous waste.
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