Cut Down On Unfunded Mandates, Part III

In my last post, I discussed the ways in which Rep. Virginia Foxx’s (R-N.C.) Unfunded Mandates Information and Transparency Act (UMITA) updates and improves upon the Unfunded Mandate Reform Act of 1995 (UMRA).

But that post wasn’t comprehensive. There are several other ways in which UMITA fills in holes left by UMRA.

For example, UMRA allows for representatives to make a point-of-order to protest the consideration of unfunded mandates exceeding $50 million (which, adjusted for inflation as UMRA permits, now comes to $73 million). However, it only applies to intergovernmental mandates. UMITA would change house rules to ensure that members could use the same point-of-order accountability mechanism for private sector mandates.

UMRA has certain requirements for disclosing the costs of regulatory mandates.  But it isn’t very hard for regulatory agencies to ignore them, or exploit loopholes that render UMRA requirements obsolete. UMITA would attempt to solve this problem by providing for judicial review of mandates subject to UMRA’s cost disclosure requirements. This will create an independent, nonpolitical judicial check on the action (or inaction) of affected regulatory entities.

UMITA also requires ongoing UMRA compliance. This is critical for adapting to changing circumstances that affect the initial UMRA cost estimates. Ongoing cost analysis has also been identified as a priority in executive orders by presidents Democratic and Republican alike.  For example, decades-old financial regulations have become obsolete thanks to the advent of the internet. An ongoing assessment of unfunded mandate costs could identify wasteful burdens like these, and recommend updates to the laws and regulations that create them.

Finally, UMITA has a solid plan for improving the quality of unfunded mandate cost estimates. Here is a list of UMITA requirements that ensure high-quality estimates:

  • Agencies shall identify the problem they intend to address, and assess the significance of that problem
  • Agencies shall examine whether existing regulations have created or contributed to the problem, and if they can be modified to achieve the goal more effectively
  • Agencies shall identify and assess available alternatives to direct regulation
  • If an agency determines that regulation is best, it shall design it in the most cost-effective manner possible.
  • Agencies shall assess both costs and benefits of intended regulation, and only adopt regulation upon determination that the benefits outweigh its costs
  • Agencies shall base decisions on best reasonably obtainable information
  • Agencies shall identify and assess alternative forms of regulation and specify performance objectives, rather than specifying the behavior or manner of compliance that the regulated entities must adopt
  • Agencies shall avoid regulations that are inconsistent, incompatible, or duplicative with other regulations
  • Agencies shall tailor regulations to minimize costs
  • Agencies shall draft regulations to be simple and easy to understand.

Filling in UMRA’s gaps is a crucial step in lessening the regulatory burden that unfunded mandates place on the already down-trodden economy. UMITA, which will likely be debated on the House floor this week, would be a strong positive step in the right direction.