Putting the REINS on Regulation

AP Photo/J. Scott Applewhite

House Speaker Paul Ryan holds the gavel after being re-elected to his leadership position, January 3, 2017.

The House hit the ground running last week on regulatory reform, passing two pieces of legislation that would fast-track the demise of Dodd-Frank financial controls, public health safeguards, and worker and consumer safety protections. Engrossed in confirmation hearings, the Senate has yet to turn its attention to regulatory reform. But as you read this, hundreds of lobbyists representing industries of every stripe are swarming both bodies and Majority Leader Mitch McConnell’s determination to trash every vestige of the Obama regulatory regime shows no signs of abating.

The first and most drastic plan to up-end the federal regulatory framework is coyly entitled “Regulations from the Executive in Need of Scrutiny” or the REINS Act, as in pulling a galloping horse to a grinding halt. Under this plan, no “major” rule imposing costs on the economy of $100 million or more annually can take effect unless Congress passes a “resolution of approval” to allow the measure to move forward. If Congress does not act within 70 legislative days, the rule is blocked.

The legislation’s statement of purpose is self-deprecating: “Over time, Congress has excessively delegated its constitutional charge while failing to conduct appropriate oversight and retain accountability for the content of the laws it passes.” This clever wordsmithing puts members who oppose the bill in the unenviable position of speaking out against their own prerogatives and responsibilities. Yet the REINS Act would plunge federal rulemaking into a deep freeze. Rulemaking typically takes many years, but even after a rulemaking process has inched its way to completion, a small group of senators could join forces to defeat a proposed rule. Agency heads must now ask why career bureaucrats should begin work on proposed regulations when the future is so uncertain.

In addition to curbing executive branch powers to control bad actors across the American economy, the REINS Act destroys a guiding principle that has animated the executive branch actions for more than 100 years, namely that trained experts are better qualified to make complex decisions about highly technical, scientific, and engineering matters. REINS garners support from industry lobbyists not because they think politicians are better equipped to solve complex problems but rather because they want Congress to gut burdensome financial controls and pollution prevention requirements.

Meanwhile, anticipating this scorched earth campaign, President Obama has been on a regulatory spree, allowing every agency with a near-final rule to send it forward for approval. Had Hillary Clinton been elected, many of these “midnight regulations” may well have awaited review by incoming administration officials. Confronting the prospect of having his legacy dismantled, the president decided that the more he gave Congress to do, the less it would actually accomplish.

Agitated by Obama’s regulatory activism, House Republicans have zeroed in on a 1996 law known as the Congressional Review Act, passed as a part of former House Speaker Newt Gingrich’s Contract with America. The law says that Congress is entitled to strike down any “midnight” regulation that the president issues within 60 legislative days before he leaves office. If a “resolution of disapproval” passes by a simple majority in both houses and is signed the new president, the rule dies. Even more damaging, the law says that any agency responsible for a rule that has been nixed cannot issue a “substantially similar” measure at any point in the future without first receiving approval from Congress. 

Over the last two decades, Congress has used the law only once, in response to a highly controversial rule to prevent ergonomic injuries in a broad swath of workplaces issued at the end of the Clinton administration. The Occupation Safety and Health Administration interprets the prohibition on “substantially similar” rules to mean it can never again regulate such injuries. This position, likely an over-interpretation of the law, leaves unaddressed a major cause of chronic disability, human suffering, and escalating health-care costs.

Republican leaders are actively exploring the idea of using the Congressional Review Act to mow down every rule finalized since June 13, 2016. The only friction in the system is that Democratic senators can demand debate on each resolution, giving them the time to explain what’s at stake and, not incidentally, consume scarce floor time, thereby limiting the number of rules that can be shoved through the process. Unwilling to put up with these irritating limitations, the House Republicans passed legislation to allow the bundling of rules into big packages subject to a single vote to disapprove. 

President-elect Trump has yet to opine on the mechanics of regulatory reform and he is likely only dimly aware of these issues. If he continues to make decisions on the basis of broad rhetorical strokes—“all regulations are bad”—and signs the REINS Act or a similar bill, he would be the first president since the New Deal to oversee the transfer of enormous powers from the executive branch to Congress. Should this seismic change happen, though, Republicans may well look back on this juncture as a time when they hated government so much that they made sure they would not only own it, but break it.

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