House gears up for votes on far-reaching regulatory reforms

By Charles S. Clark

November 22, 2011

The House is expected after Thanksgiving to take a series of votes on bills to revamp the federal regulatory process, raising expectations among pro-deregulation business groups as well as dire warnings from consumer and environmental advocates.

On Nov. 3, the House Judiciary Committee approved the Regulatory Accountability Act (H.R. 3010), which would require agencies to assess the costs and benefits of regulatory alternatives and, in most cases, adopt the "least-costly alternative" to achieve the regulatory objectives of Congress.

A major reworking of the 1946 Administrative Procedures Act, the bill would codify requirements on agencies to pursue earlier public outreach, improved scientific data, less closed door regulating, more built-in cost benefit analysis and more formal reviews of evidence of the effects of proposed "high-impact rules" costing more than a $1 billion.

A version of the bill was introduced in the Senate in September by Sen. Rob Portman, R-Ohio, and is pending in the Homeland Security and Governmental Affairs Committee.

"Government regulation has become a barrier to economic growth and job creation," House Judiciary Chairman Lamar Smith, R-Texas, said in a press release. "Federal regulations cost our economy $1.75 trillion each year. And the Obama administration seeks to add billions more to the cost. By its own admission, the administration is preparing 200 regulations that each will affect the economy by $100 million or more."

House votes also are expected on what Republicans have dubbed the REINS Act (H.R. 10), for Regulations From the Executive in Need of Scrutiny, which would require congressional approval for government regulations that have an economic impact of at least $100 million. And a vote is likely on the Regulatory Flexibility Improvements Act (H.R. 527), which would require federal agencies to identify and reduce the costs new regulations would impose on small businesses.

Together, the coming votes represent a climax to House Republicans' yearlong push for deregulation, and the measures have provoked an increasingly vocal campaign to block them.

"The bills are aimed at bringing the regulatory process to a complete halt," said Rick Melberth, director of regulatory policy at the nonprofit OMB Watch. "It would affect every Cabinet-level agency that produces regulations costing $100 million or more," including regulations related to public health, workplace safety, the environment, the Health and Human Services Department's implementation of the Affordable Care Act, and the Labor Department's wage and hour division, he said.

"REINS would require all regulations to be approved by a dysfunctional Congress, while the RAA gives all the power to the Office of Management and Budget and the courts," Melberth said. He said the changes to the Administrative Procedures Act would involve 110 approval requirements and 60 new analytical procedures. "It's a process by which special interests can seek review of all elements and tie things up in courts for years," he said.

OMB Watch, as part of a coalition co-chaired by Public Citizen, on Nov. 16 released a critique of RAA, assembling a list of well-established health and safety standards the groups say would have been blocked had the act been in effect decades ago.

Scott Slesinger, legislative director for the Natural Resources Defense Council, warned of "paralysis by analysis." He said, "the nefarious nature of RAA is that it uses terms that sound reasonable but tie up the process." His example was the phrase "least-costly alternative," which is something that "everyone wants and is already in" the 1976 Toxic Substances Control Act. Slesinger said the Environmental Protection Agency would have to spend millions of hours of analysis just because "someone who went to law school or who works for a K Street law firm recommends it."

There are people who don't like the 1970 Clean Air Act or the 2010 Dodd-Frank Financial Reform law, he added. "It's one thing to have to vote to repeal it, but it's another to use the APA to virtually repeal it without putting your fingerprints on it," he said.

OMB has taken notice of the RAA and REINS bills. "We have not issued a statement of administration policy . . . at this time," spokeswoman Meg Reilly told Government Executive. "That could change."

The Obama administration has embarked on its own version of regulatory review to improve cost-benefit analysis.

The U.S. Chamber of Commerce calls RAA the "much-needed modernization" of the Administrative Procedures Act that is "long overdue."

"By creating more transparency and public participation, and holding agencies accountable for the nature and quality of their data, the act requires better process for today's rule-makings," wrote Chamber blogger Bill Kovacs. "The act requires agencies to justify the need for new rules and show that their proposal is actually the best alternative for achieving congressional intent. By compelling agencies to do their homework and show the public the data that supports their action early in the process, the act will result in better rules."

Similar enthusiasm was offered by Rosario Palmieri, vice president for infrastructure, legal and regulatory policy at the National Association of Manufacturers, though his group is equally anticipating the vote on the Regulatory Flexibility Improvements Act. "We see both as a critical update to basic process and framework to how regulation is developed in this country," he said. "Agencies have found ways to escape the analytical requirements of finding the true impact of their regulations on small business and applying them to fewer regulations than Congress intended. Under current law, agencies get to decide for themselves which regulations are covered by the [1980 Regulatory Flexibility Act], and we want to standardize them across the government."

One reason small businesses object to regulations, Palmieri said, is that their costs are not scalable -- the same regulation applies to a business employing 10 workers as one employing 10,000. "The RFIA couples nicely with the RAA," he said, "which takes everything we've learned in the past 30 years in executive orders from Reagan to Clinton to Obama" and codifies it so a future administration can't simply undo them. "Most important," he added," it applies them to independent regulatory agencies."


By Charles S. Clark

November 22, 2011

http://www.govexec.com/oversight/2011/11/house-gears-up-for-votes-on-far-reaching-regulatory-reforms/35479/