The Hill News

There's "absolutely" a risk that the White House and congressional Democrats' policies could end up overregulating the economy, a top White House economic adviser said Thursday.

National Economic Council Director Lawrence Summers said that while the Obama administration was treading carefully to make sure businesses didn't face too much regulation, correcting previous lapses in regulation of business could result in overregulation.

"We had a massive failure of inadequate regulation that led to a financial crisis that was a disaster for almost every business in this country," Summers said on CNBC in response to a question about whether the White House and congressional Democrats run a risk of overcorrecting the previous lack of business regulations.

"Is there a risk that overregulation could take place? Absolutely," Summers said. "That's why every regulation has to be reviewed separately by the Office of Management and Budget in terms of ! its impact on the economy."

Republicans have complained that the administration, led on the economic front by Summers and Treasury Secretary Tim Geithner, have put overly strict controls on business, especially via the administration's Wall Street reform package.

The new rules in that bill are in the process of interpretation by regulators, which has sparked a flurry of lobbying by businesses affected by the rules.

Summers said the most important thing was to "strike a balance" between the new rules and making sure businesses aren't facing too tough a burden.

"Yes, of course, these questions involve striking a balance, and, of course, some people are upset that attention is being paid to consumer protection once again," he explained. "We do have to be very attentive to these issues.

"But that is not an argument for a return to the policies of near-total deregulation that we've seen at some points in the past," Summer! s said.