Washington and business brace for an Obama wave of regulations

President Obama has begun to wield the power of the executive to press forward with a second-term agenda that delights the left and terrifies the right.

When he said "we must act" in his inaugural address last week, liberals cheered him on and conservatives saw that the electoral earthquake of November is likely to be followed by a tsunami of executive orders and regulations.

ADVERTISEMENT
Lawmakers, lobbyists and policy groups say they are expecting a deluge of new rules from agencies across the federal government.

“They’re going to try to do with regulation what they cannot do with legislation,” said Mike House of Hogan & Lovells, a law and lobbying firm whose clients include businesses and trade groups.

Advocacy groups and liberal lawmakers are drawing up wish lists of new regulations that would cover everything from air pollution to vehicle safety to labor protections. And that doesn’t include a torrent of forthcoming rules required by the healthcare law and the Dodd-Frank financial reform act.

Congressional Republicans and industry groups, meanwhile, are marshaling forces to oppose a regulatory onslaught that they fear will bring the private sector to its knees.

“When you consider all the new rules now pouring through the regulatory pipeline, and those still to come, it is staggering,” U.S. Chamber of Commerce President Tom Donohue said this month during a speech on the state of American business.

While there is precedent for presidents adopting aggressive regulatory agendas in their second terms, some fear that Obama could go further than any has before in wielding his executive authority over the country.

“There are certainly concerns about what is coming down the pipe now that the election is over," said Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform.

Lobbyists who track federal regulations closely say rulemaking slowed to a crawl in the lead-up to the November election, and are expecting activity to ramp back up now that Obama’s second term is secure.

“The administration basically put the hammer down in July,” said Rich Gold, head of the public policy and regulation practice for Holland & Knight. “What that meant was that there were no major regulations.”

High-profile rules involving air quality and an Occupational Safety and Health Administration proposal to limit crystalline silica were kept on hold as Obama ran for reelection, as was a decision on whether to support the Keystone XL oil sands pipeline.

The fate of those rules became a major issue in the presidential campaign, with GOP nominee Mitt Romney promising to dial back regulations, approve Keystone and issue waivers from Obama’s signature healthcare law.

Had Romney won, many expected the Obama administration to issue a flurry of rules in the “midnight period” between the election and Inauguration Day. Instead, the White House has been given four years to roll out regulations on its own terms.

“There’s no real incentive to rush things when they’ve got all the time in the world,” said Sam Batkins, director of regulatory policy for the American Action Forum, a conservative-leaning think tank that tracks federal rules.

On the group’s radar are some 40 big-ticket proposals now working their way through the regulatory pipeline, including ozone standards and rules involving greenhouse gas emissions from power plants. Together, those measures could cost more than $130 billion, the Forum said.

Proponents say the costs of proposed new regulations are outweighed by the public health and safety benefits they create.

Obama appears ready to act.

Earlier this month, the president announced nearly two dozen presidential directives meant to reduce gun violence in the wake of December’s school shooting in Newtown, Conn. While the directives did not address many of his gun-control priorities, which will require legislation, the sheer number of actions taken indicates Obama is comfortable using the power of the Oval Office to further his policy goals.

Another signal came in last week’s inaugural address, where Obama made plain his desire to take action on climate change. Liberal lawmakers cheered the president’s forceful approach and rushed to get their proposals on his desk.

“Progress in Congress [on climate change] may be so difficult or protracted that you should not hesitate to act,” Sen. Sheldon Whitehouse (D-R.I.) and Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) said in a letter to Obama that outlined executive actions he could take.

Republican attempts to limit Obama’s executive authority have thus far been rebuffed. Last week, House Republicans reintroduced legislation that would give Congress power of approval for any regulations that cost more than $100 million. The Regulations from the Executive in Need of Scrutiny (REINS) Act passed the House in the last Congress, but stalled in the Democrat-controlled Senate.

“The Senate likes the increase of regulation and doesn’t want to do anything to limit executive power,” said Rep. James Lankford (R-Okla.).

Even if Congress approved the legislation, Obama has promised a veto.

Lankford, chairman of the House Oversight Subcommittee on Energy, Health Care and Entitlements, said he and other GOP watchdogs would hold hearings to shed light on the costs of new regulations and demand that the administration allow input from all sides.

But ultimately, Lankford said, those adversely affected may have little recourse but to fight the new regulations in court.

“Really, the business community has no other place to go,” he said.

The Chamber’s Donohue said the group is poised to expand its law firm, the National Chamber Litigation Center, to fight onerous federal rules.

“Our preference is always to work within the legislative and regulatory processes, and we do that on a daily basis. But when rights have been trampled on, or regulators have overstepped their bounds, we’ll take the necessary legal action.”

Just how aggressively Obama’s White House will push its regulatory agenda remains to be seen. One major clue will be the person he selects to take the helm of the White House Office of Information and Regulatory Affairs (OIRA) — a position often described as the gatekeeper of federal rules.

An acting administrator has filled the regulatory post since the departure of Cass Sunstein in August. Sunstein, an academic, put large stock in cost-benefit analysis and was seen as cautious in his approach to federal rules — much to the frustration of Obama’s liberal supporters, who felt action was too slow.

Whatever the philosophy of the next permanent administrator, a slew of new rules — particularly on Dodd-Frank and healthcare — are already in motion, and all sides will be watching closely to see how far they go.

“On healthcare there’s a fair amount of concern,” Holland & Knight’s Gold said. “That’s going to be very real in the next few months.”