The Problem With The White House Threat To Veto The REINS Act
The House this week, and later the Senate, will take up legislation to require that Congress approve all big federal agency regulations, those with $100 million in annual economic impact. Called the REINS Act, or Regulations from the Executive In Need of Scrutiny, President Barack Obama promised a veto of the bill.
Versions of the legislation go back more than 20 years. Back when it was dubbed the Congressional Accountability Act, the measure was actually more aptly named.
That’s because Congress never should have delegated to unelected bureaus the sweeping lawmaking power they now possess, and this legislation shouldn’t even be necessary. But it did improperly delegate, and it is necessary.
Meanwhile, the claims about the regulatory enterprise made by the administration in objecting to this bill need to be set straight. Below is the White House “Statement of Administration Policy” on the REINS Act (H.R. 367), and some quick observations in response.
The Administration is committed to ensuring that regulations are smart and effective, and tailored to further statutory goals in the most cost-effective and efficient manner.
The administration is committed to no such thing. Over 3,000 rules and regulations are issued each year, and what does the administration know about their overall cost-effectiveness? Not much. The 2015 Draft Report to Congress on the Benefits and Costs of Regulation is months overdue. The final 2014 edition claims benefits of $81 billion for that year’s executive agency rules, but is highly misleading since only seven rules have Office of Management and Budget reviewed cost-benefit analyses. The year before that? Just fourteen. Independent agency rules — like the hundreds coming from the Dodd-Frank financial law, and sweeping industrial and communications policy like the Federal Communications Commission’s net neutrality order — aren’t reviewed at all by the Administration for cost-effectiveness; on the contrary, they are pushed in spite of such concerns.
Accordingly, the Administration strongly opposes House passage of H.R. 367, the Regulations From the Executive in Need of Scrutiny Act of 2013, which would impose an unprecedented requirement that a joint resolution of approval be enacted by the Congress before any major rule of Executive Branch agencies could have force or effect.
What is unprecedented in our constitutional republic is the sweeping delegation and abdication of power from the elected to the unelected. Both parties are culpable. Philip Hamburger, in his book Is Administrative Law Unlawful?, sees the modern administration state as a reemergence of the absolute power practiced by pre-modern kings, exactly the kind of untethered power our Constitution was specifically designed to rid Americans of forever.
In calendar year 2014, Congress passed and the president signed 224 laws, while agencies issued 3,554 rules and regulations. The REINS Act would remedy what I like to refer to as this “Unconstitutionality Index.”
This radical departure from the longstanding separation of powers between the Executive and Legislative branches would delay and, in many cases, thwart implementation of statutory mandates and execution of duly-enacted laws, create business uncertainty, undermine much-needed protections of the American public, and cause unnecessary confusion.
This gets it exactly backwards, but nice try. The departure from the separation of powers was the delegation of legislative power to executive agencies, not that some object to the executive branch doing as it pleases and making law as if it were the legislative branch. On “unnecessary confusion,” employment data show that uncertainty is exactly what entrepreneurs and potential employers are experiencing now. REINS would change the way Congress goes about making law in the first place, stopping the torrent of rules and whims, boosting predictability. This is called rule of law.
There is no justification for such an unprecedented requirement.
The justification is simple: people who make laws should be the people who we elect; not unelected, untouchable bureaucrats. Reporters covering this issue need to ask the president why he believes the opposite.
When a Federal agency promulgates a major rule, it must already adhere to the particular requirements of the statute that it is implementing and to the constraints imposed by other Federal statutes and the Constitution.
The president doesn’t believe that with respect to Obamacare waivers of statute. On the contrary, he believes in the pen and phone and acting with or without Congress. So, first, he doesn’t stand in a position to make this statement with respect to REINS; and second, REINS doesn’t require agencies to violate statute anyway.
Indeed, in many cases, the Congress has mandated that the agency issue the particular rule.
He got that right. The over-delegation problem is bipartisan, and a major part of regulatory liberalization is revisiting many big-government, anti-liberty statutes. Republicans used to talk about eliminating federal agencies entirely, but they rarely do that anymore. That’s a problem.
The agency must also comply with the rulemaking requirements of the Administrative Procedure Act (5 U.S.C. 551, et seq.).
In this administration, agencies don’t have to do anything they don’t want to do and they aren’t held accountable. We already saw that cost-benefit analysis doesn’t exist, in any real sense of the term. The APA process is broken and agencies fail to even issue a Notice of Proposed Rulemaking for a substantial portion of their rules, according to the Governmental Accountability Office. Meanwhile, the reports on major rules that agencies are supposed to send to Congress and to the GAO per the requirements of the Congressional Review Act often don’t happen, according to the Administrative Conference of the United States.
When an agency issues a major rule, it must perform analyses of benefits and costs, analyses that are typically required by one or more statutes (such as the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and the Paperwork Reduction Act) as well as by Executive Orders 12866 and 13563.
Agencies do not have to perform such analysis; it is simple to declare that costs and benefits are not monetizable and to be right about that; in fact, the inability or disinclination to tabluate costs is a reason REINS is needed. Besides, it’s easy to look at the agendas of recent congresses and see the many bills attempting to address the shortcomings of each of these laws, which in turn were themselves attempts to address shortcomings in the APA. Obama promises vetos of such reforms, too. As for the executive orders the Obama statement mentions, they aren’t binding; moreover, E.O. 12866 weakened a regulatory review executive order of President Reagan by giving “primacy” to agencies rather than OMB overseers.
Here’s an idea for Congress: codify Obama’s own executive orders on regulatory review and see if he will veto himself.
Can we see a list of these? The website on Retrospective Regulatory Review isn’t very illuminating or encouraging. A few billion in purported savings over five years is not significant compared to the scope of the regulatory state in finance, health, retirement, banking and finance, communications, labor and energy. Such reviews work around the edges and don’t confront the misguided nature of central command regulation as such compared to local and private orderings.
…and to ensure that all major regulations are designed to maximize net benefits to society. Executive Order 13563 requires careful cost-benefit analysis, public participation, harmonization of rulemaking across agencies, flexible regulatory approaches, and a regulatory retrospective review. In addition, Executive Order 13610 further institutionalizes retrospective review by requiring agencies to report regularly on the ways they are identifying and reducing the burden of existing regulations.
It’s been mentioned already, but claiming net benefits for seven rules when thousands exist does not clarify, it obscures. In fact if one goes back over a decade, out of over 46,000 rules issued, only 140 illustrate both benefits and costs. That should shock people. The shortcomings of the APA — the public can hardly participate if there aren’t even notices of proposed rulemakings– and the misrepresentations about net benefit analysis actually taking place are grave enough to require that Congress reassert its authority over lawmaking and end “regulation without representation.”
Agencies and the administration don’t get to make up their own benefits whether for individual regulations, or for the entire regulatory enterprise as this White House statement attempts to do. Benefits are what Congress must have in mind before passing enabling legislation. Then we don’t need agency editorializing, they just carry out the laws of the elected Congress.
Finally, agency rules are subject to the jurisdiction of Federal courts.
There is that; and guess what, the administration’s regulations do sometimes get knocked down, as this tally by the American Action Forum shows. But like the retrospective reviews, this gets at a few billions in a very large regulatory enterprise.
Moreover, for the past 17 years, the Congress itself has had the opportunity, under the Congressional Review Act of 1996, to review on an individual basis the rules – both major and non-major – that Federal agencies have issued.
So if Congress passes Resolutions of Disapproval for regulations, as the CRA law allows, President Obama will sign them rather than veto them? He just vetoed a ROD on the National Labor Relations Board’s ambush union election rule. Presidents will not support RODs concerning rules coming out of their own agencies; the CRA only operation during transitions between agencies.
By replacing this well-established framework with a blanket requirement of Congressional approval, H.R. 367 would throw all major regulations into a months-long limbo, fostering uncertainty and impeding business investment that is vital to economic growth.
It is the current hyper-regulatory environment — dozens per week, thousands per year — that is creating uncertainty. There is no need for months long limbos for anything as rules can be approved en bloc, like many ordinary legislative calendar items are. Moreover, in a REINS environment, Congress will pass very different kinds of laws.
Maintaining an appropriate allocation of responsibility between the two branches is essential to ensuring that the Nation’s regulatory system effectively protects public health, welfare, safety, and our environment, while also promoting economic growth, innovation, competitiveness, and job creation.
If the President were presented H.R. 367, his senior advisers would recommend that he veto the bill.
The action on REINS now moves to the Senate; it is incumbent upon that body to have the president follow through on this veto and explain himself.