The results of the 2016 US election have sent pundits and analysts scrambling to figure out how the Republican sweep will impact the fate of president Barack Obama’s signature reforms, including the Dodd-Frank Act and the Affordable Care Act. But going forward, it will be just as important to track GOP efforts to alter how rules are made in Washington.
For years, the Republican party has pursued changes that would make it harder for federal agencies to write new rules—part of a broader effort to reduce the size and scope of government. The issue rarely gets the same amount of attention as the party’s efforts to wipe out Obamacare or roll back new regulations for Wall Street. Still, GOP lawmakers have introduced a whopping 163 bills since 2011 designed to alter the regulatory process. If they succeed, regulatory agencies could find it considerably harder to put forward standards that are designed to protect people—whether that’s rules for food safety or those governing the mortgage loans we borrow.
Party leaders have already indicated that they will continue to pursue the strategy in the new year, even beyond immediate efforts to repeal so-called midnight regulations the Obama administration completes during its final months in office. In fact, House majority leader Kevin McCarthy declared last month that regulatory reform is a “key element” to economic growth. Controlling the White House and both chambers of Congress will make it easier for the GOP to push such plans, which have repeatedly faltered over the past eight years, though they will still need the support of at least a handful of Democrats in the Senate under current filibuster rules.
Up close, the strategy takes a number of different forms. President-elect Donald Trump has called for a “one in, two out” policy for regulations, which would require agencies to eliminate two rules for every new one that they write.
House Speaker Paul Ryan separately unveiled a detailed set of proposals this summer, called “A Better Way,” that includes a number of changesto the regulatory process. One of the most significant provisions is a bill called the REINs Act, which stands for Regulations from the Executive in Need of Scrutiny. It would require Congress to sign off on all major—or economically significant—regulations slated to cost $100 million or more per year. The second is a proposal to negate so-called Chevron deference, a legal principle based on a 1984 case that suggests courts should defer to agencies in interpreting statutes unless the agency’s interpretation is unreasonable. Both provisions passed the House as standalone bills this term.
“Let’s make the bureaucrats jump through more hoops—and spend less money—for a change,” Ryan says on his website.
Texas House representative Jeb Hensarling, the conservative chair of the Financial Services Committee, has included versions of both proposals in his sweeping financial reform plan. He introduced the Financial CHOICE Act, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, over the summer. The bill would also undo large swaths of Dodd-Frank and is considered a potential blueprint for banking reforms next term.
Among the many proposals in Hensarling’s legislation, the restrictions on regulatory discretion “would have the most far-reaching impacts, by far,” says Justin Schardin, director of the financial regulatory reform initiative at the Bipartisan Policy Center. And Rep. John Shimkus, an Illinois Republican who is campaigning to lead the House Energy and Commerce Committee, has also said he’ll focus on rolling back agency deference in the courts next year.
Taken together, these kinds of provisions would make it significantly harder to pass rules that cost more than $100 million annually, and more likely that the courts would overturn them. And Rep. John Shimkus, an Illinois Republican who is campaigning to lead the House Energy and Commerce Committee, has also said he’ll focus on rolling back agency deference in the courts next year.
At the same time, there’s evidence from both sides of the aisle that agencies are already struggling to put new regulations into place. An analysis last year by the conservative R Street Institute found that federal agencies have missed 1,400 deadlines over the past decade. And a report from June by watchdog group Public Citizen found that the average length of time it takes to finalize an agency rule has been increasing over the course of the past two administrations. Economically significant rules, such as new Department of Transportation standards aimed at preventing oil train explosions, took nearly three and a half years to finish on average.
All this has big implications for our daily lives. These rules, while often technical and wonky, have very concrete effects, ensuring that the water we drink is clean and that the jobs we perform are safe.
In its report, Public Citizen charges that multiple delays to a Department of Transportation rule, designed to improve driver visibility and prevent automobiles from accidentally backing over children, “likely led to hundreds of avoidable deaths and tens of thousands of injuries.” But Amit Narang, a regulatory policy advocate at Public Citizen, says that it can be difficult to whip up support for fights about the regulatory process, particularly when compared to substantive battles over clean air rules, financial reforms and the like.
“The process attacks don’t capture the same attention and pushback as the frontal attacks,” he says.
While the subject matter may be on the drier side, adding hurdles to the regulatory process can mean that the government has a hard time putting into place rules that Congress has already approved and improving upon older statutes. It took the Department of Labor six years from the time of its initial proposal to expand the definition of “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974. The rule, finalized earlier this year despite considerable industry pushback, requires advisors to put client interests first when handling retirement funds.
If process discussions took center stage more often, it would be easier for experts to debate out in the open which mandates are necessary for ensuring an agency does its job—and which are aimed at obstructing even regulations with ample support.
That’s particularly important because changes to the rule-writing process tend to get layered on top of one another. When new hurdles to the regulatory process are instituted, they are rarely ever rolled back. Narang warns: “I’m worried that whatever is put into place now is going to stick around forever.”