REGULATION NATION: Obama rule-making seen as deeply flawed

In the national debate over regulations, there is one thing upon which all sides can agree: The federal rule-making system is deeply flawed.

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Over the years, Congress and presidents have tinkered with the inner workings of the regulatory apparatus, placing new restrictions on agencies charged with writing rules and ordering them to root out those that are outdated or overly burdensome.

Despite those tweaks, the current system lacks any institutional mechanism to expunge unneeded federal restrictions. 

There are no strict time limits requiring administrations to either issue or withdraw proposed rules aside from those specifically set by laws or the courts. And both advocates and critics of stronger regulations complain of a lack of transparency to the process.

“It’s totally broken,” said Peg Seminario, the AFL-CIO’s longtime director of Occupational Safety and Health. “The system is basically a poster child for how government doesn’t work.”

Yet when it comes to potential solutions, there is little consensus.

Republicans and industry groups, who have bemoaned what they view as overly aggressive federal agencies, want more restrictions on the rule-making process and a greater reliance on economic analysis in decisions regarding new regulations.

Democrats, unions and public interest groups, meanwhile, say agencies are already hamstrung by existing restrictions on their authority, and argue that open-ended White House reviews have led to a pattern of delays in important protections.

“It’s definitely the way you approach the issue,” said Diana Carew, an economist at the Progressive Policy Institute, which aligns itself with pro-business New Democrats. 

“So what’s basically happened is that nothing’s happened, and now we see this massive buildup of regulation over time, and it is actually causing a hindrance on business and business growth, and for small businesses.”

In response to the accumulation of federal rules, congressional Republicans have been busy drafting a host of bills meant to lighten the burden of federal red tape on businesses.

The Regulations from the Executive in Need of Scrutiny (REINS) Act, for instance, which requires Congress to approve regulations expected to have an economic impact of more than $100 million a year, passed the House in August with support from just six Democrats.

Its prospects going forward, however, appear dim.

The White House has threatened to veto the bill, characterizing it as a “radical departure” from traditional separation of powers.

Its supporters, however, call it critical to make sure legislators are responsible for regulations stemming from the laws they approve.  

“Essentially, Congress passes laws and many of the hardest issues, most difficult politically, are delegated to unaccountable, unelected government workers to figure out the details on,” the bill’s author, Rep. Todd Young (R-Ind.), told The Hill.

Other House GOP bills would empower the Energy Secretary to essentially veto certain regulations if they are deemed too costly and force more agencies to conduct cost-benefit analyses before putting new rules in place. 

Altogether, there are almost two dozen regulatory reform bills before Congress, according to the Regulatory Studies Center at George Washington University. 

Defenders of stronger rules decry the GOP legislation as a thinly veiled effort to gum up the works of the regulatory system at the behest of big business.

Regulations, particularly the most significant ones, can take eight to 10 years to enact. Consumer groups point to lengthy delays at the Office of Information and Regulatory Affairs (OIRA), the White House’s clearinghouse for major regulations.

Under a 1993 executive order signed by then-President Bill Clinton, OIRA rule reviews are supposed to take 90 days, with the possibility of a 30-day extension. 

Yet the deadline is not binding, and many rules languish at OIRA for much longer than that, as was the case for a contentious draft rule to limit construction workers from harmful silica dust.

That rule sat at the White House for well over two years before it was formally proposed last week. It will take months or more before the rule can be finalized.

Of the 130 rules currently under review at OIRA, 70 have been there longer than 90 days.

Seminario, who supports strict deadlines for OIRA, said the office has gotten involved with too many rules, creating a logjam.

“You can’t have an effective regulatory system when you have one small straw that everything has to go through,” said Seminario, who called upon the Government Accountability Office (GAO) to initiate a study looking at ways to reform the system.

She and other critics decried the government’s growing reliance on cost-benefit analysis in regulatory decisions. They note that there is no accepted science for the practice and argue that costs are easily exaggerated, while benefits are more difficult to quantify.

University of Maryland law professor Rena Steinzor questioned how the government could put a price tag on an IQ point lost to unhealthy conditions — or on a human life.

“Cost-benefit analysis is a black box, no matter who is practicing it,” said Steinzor, president of the Center for Progressive Reform.

Michael Greenstone, a professor of economics at the Massachusetts Institute of Technology, agreed that any regulation that doesn’t properly account for benefits “distorts the picture.”

But Greenstone suggests that the system’s flaws are rooted in its basic structure: namely that there is no systematic process to rid the government of regulatory dead weight.

While new rules are continuously added, “we don’t take them off the books,” he said.

Since Jimmy Carter, presidents have asked agencies to review their own rules and get rid of the useless ones.

But a 2007 report from the Government Accountability Office highlighted a number of problems with those reviews, including lack of funding, time constraints and evaluations that sometimes overlap.

President Obama revisited the issue in 2011, ordering a more aggressive governmentwide search for regulations that could be consolidated, scaled back or repealed. The White House has said that those efforts have led to hundreds of new regulatory reform ideas, just a handful of which would save up to $10 billion.

Greenstone called the initiative, “an incredibly important and revolutionary first step,” but suggested it be taken further via establishment of a new nonpartisan panel to review regulations. 

Akin to the Congressional Budget Office, the body would be removed from politics and would offer an alternative to the “self-evaluation” of regulations taking place at the agencies.

Greenstone, who pitched the plan during recent testimony before the Joint Economic Committee, estimated it would cost less than $20 million to enact.

“We’re talking about a very small amount of money,” he told The Hill. “It just seems like a good investment.”

Carew, of the Progressive Policy Institute, is pressing lawmakers to embrace a similar plan.

Her organization has been in contact with Sens. Angus King (I-Maine) and Roy Blunt (R-Mo.), who have introduced a bill that would create an independent commission to review old rules.

Under the legislation, known as the Regulatory Improvement Act, the panel would then send to Congress a list of regulations to consolidate, streamline or repeal. As part of the legislation, lawmakers would be unable to amend the recommendations before voting on them.

But that proposal, too, has its detractors.

Amit Narang, a regulatory policy advocate with the pro-regulation Public Citizen, said that the outside commission would likely just be a way to kill old rules without strengthening current ones.

“It is just kind of a one-way ratchet to repeal rules rather than look at areas, demonstrated by recent deregulatory failures, that need strengthening,” he said, noting events like the recent explosion of a fertilizer facility in West, Texas, might have been prevented by extra regulations.

Chances for regulatory reform, he admitted, seem bleak.

“It is a very politically charged, kind of partisan area of public policy, and I don’t think that there exist very many consensus ideas to improve the regulatory process because agreement on what needs to be improved is hard to reach, frankly,” he said.