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Reining in the Executive Branch Bureaucracy, Part 9: Congress Must Affirm Final Agency Rules before They Are Law

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

To improve regulatory cost accountability, the 104th Congress passed the Congressional Review Act (CRA). That law sets up a 60-day period following agency publication of a regulation during which the rule will not take effect. That 60-day pause affords Congress an opportunity, should it desire, to pass a resolution of disapproval to halt the regulation.

It rarely has that desire. The CRA was a symbolic nod toward congressional accountability for regulations. But it amounts to a 2/3 supermajority requirement to strike a law that Congress never made in the first place when the president vetoes a disapproval resolution. And since Congress benefits from delegation and no rollback reaches the president’s desk anyway, the law doesn’t work. (Well, OK, the CRA did halt an “ergonomics” rule, on repetitive motion injuries.)

The superior approach to ensuring congressional accountability is to require that no major or economically significant agency rule (or controversial rule) becomes law until it receives an affirmative vote by Congress. An expedited approval process along with en bloc voting on regulations could suffice.

The REINS Act (Regulations from the Executive In Need of Scrutiny) that passed the House would established such a procedure, but no Senate action occurred and the president promises a veto. Its sponsors are Rep. Todd Young, R-Ind., and Sen. Rand Paul, R-Ky.

The rationale for positive approvals is the constitutional stipulation that “All legislative Powers herein granted shall be vested in a Congress of the United States.” Regulatory decisions today are not made by elected representatives—officials whom voters can hold accountable at the ballot box; nonetheless, agency mandates are laws.

While the executive branch overreaches and act unilaterally in defiance of separation of powers doctrine, "REINS" is a bit of a misnomer; Regulations from the executive are in need of scrutiny, but so is Congress’ propensity to delegate.

Congressional over-delegation of powers to bureaucrats has created a disconnect between the power to establish regulatory programs and responsibility for the results of those programs. In what I like to call the "Unconstitutionality Index," I show how agencies' regulations far outnumber the number of laws Congress passes each year.

As federal power grows, popular appeal of a campaign to end “regulation without representation” might also. Requiring Congress to approve major and controversial mandates before they become binding law affirms a bedrock principle of accountable government, and embodies a superior regulatory reform than any enhanced cost-benefit or risk assessment. Accountability also avoids the ever-present demagogue’s effort to caricature cost-benefit analysis as an attempt to put a price tag on human life.

Congressional accountability also addresses another otherwise intractable problem ignored in regulatory reform proposals; that of agency tunnel vision. Agencies make no cross-agency comparisons of rules for the sake of setting priorities. Only Congress can set government-wide priorities and tradeoffs; there is no way individual agencies can do this acting within their square.

Lessening regulation without representation would also respond to the concern that for many regulations “quantification or monetization is not feasible” or “is highly speculative.” (OMB, 2013 Draft Report on the Costs and Benefits of Federal Regulation, p. 4) As long as accountability controls policy, even where cost (or cost-benefit) analyses cannot be conducted, or appear impossible to construct, every elected representative will be on record as either either supporting or opposed to a particular regulation.

OMB’s yearly efforts at presenting a snapshot of the regulatory burden as embodied in the Draft Report (the final 2013 report remains unavailable, yet the 2014 draft is nearly due: Congress should demand both) would be dramatically aided by congressional accountability, since regularly returning rules to Congress for approval would provide both agencies and Congress with powerful incentives to ensure that (implied) benefits exceed costs.

In environment of accountability, agencies may be more inclined to ensure that rules meet a reasonable cost-benefit standard before proposing them and sending them to OMB in the first place. Meanwhile a Congress directly accountable for the sweep of regulatory costs may be less likely to approve questionable rules.

Where today there is little incentive to perform cost-benefit analysis, accountability could “force” agencies and Congress to take those very considerations into account. Accountability belongs in the “necessary but not sufficient” category with respect to accuracy of costs.

Even if Congress were required to approve every agency regulation, OMB’s Draft Report cost tallies remain essential for the same purposes of simple disclosure and elemental governance that the United States formally budgets tax revenues and outlays. Regulatory transparency reporting will always be needed. Moreover, since imposing taxes and imposing regulations can substitutes for one another, pressures to balance the budget can increase pressures to regulate, underscoring the urgency of congressional accountability, regulatory cost accountings and disclosure.

Next Time: Congress Should Establish an Annual Regulatory Reduction Commission to Streamline Regulation

Also in The “Reining in the Executive Branch Bureaucracy” Series:
Part 1: Measure Regulatory Costs
Part 2: Regulatory Benefits? Maybe Not
Part 3: Make Regulations Transparent Like the Budget
Part 4: Put a Spotlight on Economically Significant Rules
Part 5: Categorize Regulations by Impact
Part 6: Deal With The Deadweight Cost Of Regulation
Part 7: Recognize and Reduce Indirect Costs of Regulation
Part 8: Create a Culture of Repealing Regulations