President Barack Obama vowed in his State of the Union speech to cut regulations so businesses can more easily create jobs.

But at the same time, the government's gushing fire hydrant of reform rules continues to pour in to the three biggest sectors of the economy, finance, health and energy.

This comes as many in Congress have not fully read these reform bills, much less the rules created by federal agencies and or advocated by countless czars,  bypassing Congress.

The President knows he is in a race against time. He knows he needs businesses to unlock the $2 trillion plus in cash on the balance sheets to create jobs. Because if unemployment rate stays above 9% in 2012, (it's now at 9.4%), it may ruin his re-election chances. Excessive and unnecessary rules act like a gravitational drag on job growth, and such instability is largely why businesses remain on a capital strike and are sitting on that pile of cash.

President Obama said in his speech last night: "To reduce barriers to growth and investment, I've ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people." The President also said he'd like to lower the corporate tax rate, too.

The vow to cut rules on businesses comes as the president invoked the ‘60s era race to outer space as our "Sputnik moment," to frame the remaining two years of his first term, which historically in past presidencies have not produced significant legislation.

Whether the line our "Sputnik moment" has as much of a resounding ring as FDR's "rendezvous with destiny" or President George W. Bush's "axis of evil" remains to be seen.

More importantly, this Sputnik moment may largely depend on whether the Administration has in the genetic code of its operation the faith and the willingness to finally pass the baton to the private sector—a baton that looks more like a stick of dynamite to businesses, with new rules fizzing out of the top.

Deficit spending by its very nature creates new government rules. But the president vowed to freeze federal spending and veto any legislation that contained an "earmark," or pork spending.He made the same vows in last year's State of the Union address in January 2010. Since then, the President has vetoed only two bills, one on notarizations. 

The amount of promised cuts here: $400 billion over the next decade, or $40 billion, a thimbleful versus the trillions of dollars in deficit spending already underway, and a sum half of which would get eaten up by the $20 billion in new spending promises from the president's speech last night, says the National Taxpayers Union.

Meanwhile, on his watch the government has added the equivalent of the size of the economy of Russia in deficit spending. From February 2009 to December 2010, the federal government has spent $6.71 trillion. During that period, the government has only taken in $4 trillion in revenue.

To get private sector job growth back on track, the government needs to apply a saw, not a scalpel, to both the federal rulemaking machine and the nation's budget. Or the bond market will enact our fiscal austerity for us—the biggest bond vigilante of all being China (We've got an Asian carp czar, a weatherization czar--so where is the U.S. deficit czar?)

Businesses remain skeptical, as the animating spirit of this Administration is evident in the fact that the federal regulatory workforce has grown 16% in the last two years, to more than 276,000 federal workers.

Since 1985, administrations have enacted 30 to 40 "major" regulations, with an economic impact of $100 million or more, the Wall Street Journal Reports. The White House has doubled that, with 59 in 2011 and 62 in 2010, the paper says. It adds that there are nearly 200 more "major" regulations in the works, "many of them based on little more than a vague Congressional order." An estimated 243 are coming from Dodd Frank over the next decade or so.

Overlapping rules and rules without scientific data to justify them are among the complaints filed with the office of California Republican Congressman Darrell Issa, who has made this issue one of his top priorities on his legislative agenda for 2011.

Citizens for Ethics in Government has letters to Rep. Issa's office noting these criticisms about federal rules from more than a dozen industry groups, including the American Chemistry Council, the American Hospital Association, the National Community Pharmacists Association, the Business Roundtable, the National Association of Chain Drug Stores, and the National Association of Manufacturers, as well as various housing and construction groups.

The Business Roundtable, a business lobby group representing top companies, says in its letter that federal "regulations are like taxes," that customers, investors and workers pay for these rules, not companies, and excessive rules have a "negative" impact on "job creation."

But the new rules keep pouring in.

Yesterday, the Securities and Exchange Commission issued major new rules enacting new shareholder say on executive pay, and forcing hedge fund and private equity fund to curtail systemic risk, both prompted by the Dodd-Frank financial reform law.

The government has already moved to launch new health reform rules, too—rules even the President now wants yanked.

For example, the President won a resounding ovation when he asked Congress to start "correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses," the onerous new 1099 form in the health reform law which requires small businesses, charities and government entities to issue 1099s if they purchase goods or services worth $600 or more.

But California Democratic Senator Dianne Feinstein and Illinois Democratic Rep. Jan Schakowsky recently introduced a bill to stop health insurance companies from enacting "unfair premium rate increases." The insurance industry does need to be reined in, critics say, but the insurance industry says such bills are price controls by another name, and also carry a built-in inequity of the government deciding what is "unfair."

Health reform's tax on medical devices to pay for the bill takes effect in 2013, but Rep. Erik Paulsen (R-Minn.) just introduced legislation to repeal this part of the bill.

Meanwhile, the National Community Pharmacists Association sent a letter to Rep. Issa, which noted problematic new federal proposals that would force drugstores to bid against each other on diabetic testing supplies. The group warns the new proposal could deplete such inventory on their store shelves and hurt consumers, including homebound diabetics.

And businesses threaten they may drop health coverage altogether if health reform is enacted because it's too costly. According to a new "Health Care Reform 3600 " survey of 1,065 employer health benefit executives by Market Strategies International, a research organization in Livonia, Mich. founded in 1989, shows that health reform may trigger a "possible net 10% reduction in access to employer-sponsored health benefits."

Susan McIntyre, senior vice president in Market Strategies' health care division notes: "The results are eye-opening and could severely impact a sizeable number of U.S. workers and their families."

McIntyre adds: "While our study design does not allow us to estimate a precise number, we're talking about potentially 10 million people no longer having access to health benefits through their employers in 2014. A significant number of employers are telling us that, with health care reform, it may not benefit them competitively to offer employee health care benefits. The reality is that companies of all sizes are reviewing their options and considering reductions."