Consumer groups pounce on senators' regulatory relief effort

Sen. Mark Warner, D-Va. Sen. Mark Warner, D-Va. Carolyn Kaster/AP

Bipartisan legislation to require independent agencies to submit new rules for enhanced cost-benefit review has drawn attacks from several consumer groups, which warn of politicization of health and safety issues.

The Independent Agency Regulatory Analysis Act (S. 3468), introduced in early August by Sens. Mark Warner, D-Va.; Rob Portman, R-Ohio; and Susan Collins, R-Maine; would adopt a recommendation from the President’s Jobs Council for minimizing the burden of regulations on the economy.

Government Accountability Office data show that of 17 major final rules that independent agencies issued in 2011, none was based on a complete cost-benefit analysis, according to the senators. From 1996 and 2011, 200 major regulations from those agencies were exempt from the cost-benefit framework that applies to other federal agencies.

Under the bill, agencies such as the Securities and Exchange Commission, the Commodity Futures Trading Commission, the National Labor Relations Board, the Federal Communications Commission and the Consumer Financial Protection Bureau would for the first time be required to submit proposed rules to the White House Office of Information and Regulatory Affairs.

“It is important to strike the right balance between protecting vital public safeguards and imposing costly regulations,” Warner said. “However, we all agree that basic cost-benefit principles should apply to all regulators. This bipartisan legislation will help to ensure that all agencies only advance major regulations with a firm understanding about their impact on the economy.”

Portman said the “independent agencies exercise vast power over major sectors in our economy -- from telecom to agriculture to financial services -- but they are exempt from common-sense requirements, including cost-benefit analysis of major regulations, to ensure they do more good than harm.”

The bill, which sits with the Senate Homeland Security and Governmental Affairs Committee, comes at a time when House Republicans have passed several measures to cut back on regulatory output by all agencies, citing harm to small businesses.

The Obama administration, under former regulatory chief Cass Sunstein ( replaced on an acting basis by Boris Bershteyn ), has tasked all agencies with reviewing regulations for redundancies and obsolescence.

No firm schedule for considering the bill has been set, a committee spokeswoman said. But the nonprofit OMB Watch on Wednesday posted a blog expressing worry that the panel may rush to consider the bill, without hearings, that would dramatically increase executive branch control over independent agencies.

“A requirement that all rules pass a cost-benefit test can yield absurd -- even dangerous -- results,” OMB Watch analysts wrote. The Federal Aviation Administration, which is an executive agency already subject to OIRA's comprehensive cost-benefit analysis requirements, “has been remarkably successful at protecting the flying public, meaning that there have been relatively few airplane accidents over the past decade. That very success has made it more difficult for the agency to modernize its safety standards because under a purely economic cost-benefit analysis requirement too few people have died to justify any improvements over the status quo. Subjecting independent agencies to this same type of mandate would limit their ability to protect Americans from nuclear meltdowns, keep lead paint off children's toys and stand guard against another mortgage fiasco.”

A similar critique came from Americans for Financial Reform, a coalition of 250 consumer, civil rights, labor, faith-based and business groups, whose leaders on Friday sent the senators a letter saying the bill “would give Wall Street lobbyists another powerful set of tools to delay and derail the implementation of financial safeguards that are needed to protect our economy. Independent financial agencies already face extensive requirements for economic analysis, as well as mechanisms of appeal for those requirements. This legislation would add an unnecessary, costly and time-consuming additional layer of requirements to the process of completing oversight rules for our largest banks.”

Rena Steinzor, president of the Center for Progressive Reform and a University of Maryland law professor, wrote in a blog just after the bill was introduced that “Congress created independent agencies exactly so that they’d have some room to resist presidential political meddling. Subjecting these agencies to executive order requirements -- especially oversight by the Office of Information and Regulatory Affairs, which is without question the most potent conduit for presidential influence over new rules -- defeats the whole point of making the agencies independent at the outset.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
JOIN THE DISCUSSION
Close [ x ] More from GovExec
X CLOSE Don't show again

Like us on Facebook