As a practical matter, government largely functions through bureaucratic regulations. But controversy is growing around the seemingly benign requirement that regulators consider costs and benefits when adopting new rules. Despite the rationality implied by the words “costs and benefits,” those who champion greater attention to these factors are, in fact, mounting an insidiously dangerous attack on government.
Regulations are subject to review by the courts, and in the first instance this means the District of Columbia Court of Appeals. The New York Times recently reported on the stunning instances of judicial activism by the D.C. Circuit in which SEC rules implementing the Dodd-Frank Act were struck down for insufficient consideration of costs and benefits by the Agency. Republican judges dominate the D.C. Circuit, primarily because Obama’s efforts to fill three vacancies (out of eight positions) have been frustrated by Congress. Their ideologically motivated decisions require quantitative analysis of outrageously remote circumstances that could arise under the new rules.
In parallel, legislation has been proposed to require multiple independent agencies (the SEC and NLRB, for example) to submit new rules to the Executive Branch’s Office of Information and Regulatory Affairs (“OIRA”) for cost/benefit analysis. First of all, this is a dramatic shift of authority from Congress to the Executive. The whole point of “independent” regulatory agencies is that they function beyond the direct control of the Executive, overseen instead by Congress. But the practical motivation is to inject quantitative analysis into the consideration of costs and benefits. That is what OIRA does, after all.
The not-so-subtle motivation for requiring quantitative analysis is that it impedes the process of rulemaking. Analysis will require a lot of work and regulatory resources are more limited than ever because of budgetary cuts by Republicans bent on “starving the beast.” Legislative dysfunction works to further conservative ideology. Why not apply the tactic to the bureaucracy?
