Regulatory Policy
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Supreme Court's Mercury Decision Did Not Usher in Sunstein's 'Cost-Benefit State'

In Michigan v. EPA, handed down two weeks ago, the Supreme Court waded into the decades-long debate over the use of cost-benefit analysis (CBA) in agency rulemaking.   The decision struck down EPA’s limits on mercury emissions from power plants for the agency’s failure to consider costs, and so appears, superficially at least, like a win for the pro-CBA camp.  Indeed, Professor Cass Sunstein of Harvard—President Obama’s former “regulatory czar” and one of CBA’s most prominent cheerleaders—has been crowing about the opinion, hailing it as “a rifle shot,” ringing in the arrival of “the Cost-Benefit State.” 

But Sunstein’s celebration is a bit premature; his so-called “cost-benefit state” remains mostly in his imagination.  In fact, there is good reason to believe that the Court remains quite skeptical of the particular brand of CBA that Professor Sunstein advocates.  And that’s very good news for the rest of us.

 

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More Fun Than Escaped Llamas: House GOP to Hold Yet Another Antiregulatory Hearing

In keeping with an apparent effort to hold an antiregulatory hearing on any and all days ending in “y,” Congressional Republicans have teed up yet another humdinger for Monday, March 2. That’s when the House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Administrative law will take a closer look at three more antiregulatory bills that have been recycled from previous congresses, including the Responsibly and Professionally Invigorating Development Act of 2015 (RAPID Act), the Sunshine for Regulatory Decrees and Settlements Act of 2015 (SRDSA), and the Searching for and Cutting Regulations that are Unnecessarily Burdensome Act of 2015 (SCRUB Act).  And by “take a closer look,” I mean “recite tired free market platitudes en route to their predetermined conclusion that the passage of these three bills is the only way to prevent regulation-induced economic disaster.”

Others and I have written about all three of the bills in the past, so there’s no need to rehash all of the gory details here.  But, in approaching the hearing, a few thoughts are worth keeping in mind on each of these absurd bills:

The SRDSA.  Last week, I blogged about the SRDSA—a bill that its supporters claim is necessary to prevent so-called “sue and settle” agreements that lead to environmental regulations—to highlight how a recent Government Accountability Office (GAO) report had thoroughly demolished the “sue and settle” myth.  In fact, every claim made by the lead House and Senate sponsors of the SRDSA in their joint press release announcing the bill was directly refuted by the GAO.  Hopefully, this GAO report will be discussed at great length on Monday.   There is, however, a real “sue and settle” problem that is quite distinct from the fallacious one that congressional Republicans are constantly complaining about.  This one involves industrial polluters urging conservative state governments to sue them for their environmental violations, as a means of forestalling citizen suits that seek to hold companies liable for the same environmental violations.  The state dutifully steps in, blocks the citizen suit, and then settles with the company with a slap on the wrist.  The most infamous example of this maneuver took place just before the Duke coal ash spill in North Carolina last year. Any guesses on whether the Republicans will bring that up on Monday?

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What Should be Discussed at the Senate Homeland Security's Hearing on the U.S. Regulatory System (But Probably Won't)

A clock hangs in Room 342 of the Dirksen Senate Office Building—the room where tomorrow at 10:00 am the Republican leadership of the Senate Homeland Security and Government Affairs Committee will convene its first antiregulatory circus hearing of the new Congress.  Below that clock, the hearing will play out according to a now-familiar script:  the Republican members will cite vague constituent concerns about the regulatory system harming their families and businesses; the three industry shills invited by the majority will rehash the same tired and unsubstantiated arguments about how regulations are a drain on the economy; and, by the hearing’s end, a consensus will emerge among the Republican members and their hand-picked witnesses that drastic reforms of the regulatory system are in order.  Along the way, hands will be wrung, fists will be pounded, and vitriol will be spewed.  Something must be done, they’ll exclaim.  That something will assuredly involve more rulemaking procedures that would increase corporations’ already tight grip on the rulemaking process and more lookback procedures for existing regulations that will tie up agencies in knots and waste their dwindling resources.

Meanwhile that clock in Room 342, the one looming just over the Republican members’ heads, will keep ticking.  Tick tick tick.  As each second passes, the country’s most pressing problems will remain unaddressed.  We’ll be no closer to securing funding for transportation infrastructure, which is due to run out in May.  We’ll be no closer to tackling the existential threat of global climate change or the stagnant wages that are holding back millions of American families.  Most astonishingly of all for the members of the Senate Homeland Security Committee, with each tick, we’ll be one second closer to a shutdown of the Department of Homeland Security set to take place this Friday when the agency’s funding officially expires.  Tick tick tick.

Frankly, the timing of this hearing couldn’t be worse for the congressional Republicans who are singularly responsible for the unnecessary game of chicken with the Department of Homeland Security’s funding.  But, if they are going to go through with it, at least they should endeavor to not make it a complete waste of everyone’s precious time.

The Republican committee members are right that the regulatory system is not functioning as well as it could, but their diagnosis of the problem—and the remedies they prescribe as a result—are grossly off the mark.  Over the last 30-plus years, the rulemaking process has become increasingly captured by corporate interests that are intent on avoiding any public accountability, including through compliance with any regulatory safeguards they find inconvenient to their bottom line.  For example, while the rulemaking process was intended to follow a pluralistic model in which agencies would develop new rules based on input from a variety of public stakeholders, industry has been able to leverage its superior resources to dominate these public input processes with the result of diluting and marginalizing the public’s voice.  While regulations are supposed to be grounded in the best available science, industry has succeeded in degrading the scientific method into something more reminiscent of “Calvinball,” manufacturing uncertainty to suit its own ends by keeping the rules of the game in a constant state of flux.

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But Wait, There’s Less! The GOP Has a 'Sue and Settle' Bill They Would Like to Sell You

Last week, Rep. Doug Collins (R-Ga.) and Sen. Chuck Grassley (R-Iowa) continued the parade of anti-regulatory bills resurrected from past sessions of Congress by introducing in their respective chambers the Sunshine for Regulatory Decrees and Settlements Act of 2015 (SRDSA).  While all of these anti-regulatory bills are categorically terrible, the SRDSA really needs to be singled out for special condemnation.  After all, it is the only one of the lot that purports to take on a problem—so-called “sue and settle” litigation—that no less than the Government Accountability Office (GAO) has debunked as a myth.  Nevertheless, Messrs. Collins and Grassley have pressed ahead with the bill—versions of which they introduced previously in 2013—despite the pressing real problems confronting their constituents and our country.

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At Last, the Obama Administration Acknowledges Need for Urgency on Advancing Regulatory Agenda

At last, the Obama Administration is articulating a sense of urgency about moving vitally needed health and safty regulations through its pipeline. Here’s Howard Shelanski, White House Office of Information and Regulatory Affairs, in a Bloomberg BNA story this week:

“So we are working now, here in January of 2015, on getting priorities lined up, so that we do not find ourselves at some point in 2016 with really important policy priorities unexecuted,” Shelanski said.

Later in the interview:

Still, the reason OIRA is working hard with agencies in early 2015 is so they can bring the most important rules through the process this year and finalize them sometime in early 2016, Shelanski said.

It’s about time. Last November, CPR released an Issue Alert calling on the Obama Administration to seize the opportunity offered by its remaining time in office and complete a slate of 13 essential regulatory safeguards that would deliver long-lasting protections for public health, safety, and the environment.  In particular, the Issue Alert urged the Administration to immediately begin taking steps toward charting a course for these and other safeguards that would ensure their completion “by no later than June 30, 2016,” which would ensure that they are not swept up in any political riptides in the months leading up to the 2016 presidential elections and to otherwise insulate them against potential repeal under the Congressional Review Act.

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Department of Transportation’s Crude-by-Rail Safety Standards Keep Chugging Along

According to the Office of Information and Regulatory Affairs’ (OIRA) records, the Department of Transportation submitted its draft final crude-by-rail safety rule for White House review late last week.  OIRA’s review of draft final rules represents the last hurdle in what can be a long and resource-intensive rulemaking process; just about any rule of consequence cannot take effect without OIRA’s final approval.  Once completed, the crude-by-rail rulemaking would help to avoid train derailments and crashes involving the more than 415,000 rail-carloads of flammable crude oil traveling across the United States each year, and to minimize the consequences of such catastrophes if and when they do occur.  A recent CPR Issue Alert featured the rulemaking as among the essential 13 regulatory actions that the Obama Administration should commit to completing during its remaining time in office.

OIRA’s centralized review can be a highly contentious and politically charged process, as it allows corporate interests to attack rules they find inconvenient behind closed doors out of the public view.  A 2011 CPR White Paper found that industry lobbyists dominate these closed-door meetings, with 65 percent of the meetings’ participants representing regulated industries.  In these meetings, industry lobbyists typically find an audience—often made up of the conservative economists that comprise much of OIRA’s staff as well as political operators from the West Wing—that is sympathetic to their pitch.  This White Paper and other academic research has shown that industry dominance of the OIRA review process has its desired antiregulatory effect, resulting in rules being delayed, watered down, and sometimes blocked altogether.  

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Your Up-to-Date 10-Day Forecast for Capitol Hill: A Blizzard of Antiregulatory Bills

While meteorologists’ recent doom-laden predictions of an apocalyptic blizzard hitting the mid-Atlantic may not have exactly panned out, I have a forecast that you can take to the bank:  A large mass of conservative hot air has recently moved into the Washington, DC, region where it is now combining with a high pressure zone of intense industry lobbying.  As a result, we can expect over the next several days a heavy downpour of bills aimed at eviscerating our nation’s regulatory safety net with long-lasting, if not irreversible, damage to the public health, financial security, and the environment.  The powerful corporate interests that find compliance with these safeguards to be inconvenient to their bottom lines, however, stand to reap a windfall from this storm if any of these bills are enacted into law.

I have already highlighted one of these bills—the Small Business Regulatory Flexibility Improvements Act (SBRFIA)—in this space earlier.  As I explained there, the bill—which the House Judiciary Committee marked up today without the benefit of a formal background hearings—would further entrench big businesses’ control over rulemaking institutions and procedures that are ostensibly intended to help small businesses participate more effectively in the development of new regulations.  As it stands now, the Small Business Administration’s (SBA) Office of Advocacy already wastes taxpayer money by working on behalf of powerful corporate interests to block or delay regulatory safeguards to the detriment of both small businesses and the general public.

But the antiregulatory members of Congress aren’t stopping there.  They have several other bills teed up that are similarly aimed at weakening the ability of regulatory agencies—such as the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the Consumer Financial Protection Bureau—from carrying out their statutory missions of protecting the public.

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In Their Rush to Help Big Business, Antiregulatory Members of Congress are Trampling Small Ones Along the Way

Just as The Sixth Sense makes more sense when you realize that Bruce Willis’s character has been dead the whole time, the Small Business Regulatory Flexibility Improvements Act (SBRFIA)—the latest antiregulatory bill being championed by antiregulatory members of the House of Representatives—makes more sense when you realize that it has nothing to do with helping small businesses at all.  Rather, it’s all about helping powerful corporate interests increase their profits at the expense of public health, safety, and the environment.   The twist ending to this nightmare of a bill is that real small businesses—the very entities the bill’s sponsors claim to be helping—are left in a worse position than if the bill were never enacted at all.

Conservative members of Congress have long pretended to care about small businesses—at least, insofar as it helps advance their broader antigovernment campaign.  To this end, these lawmakers have succeeded in building a complex legal apparatus that purports to strengthen the voice of small businesses in the rulemaking process.  Under a series of laws starting with the Regulatory Flexibility Act, agencies must undertake various analyses of their rules’ impacts on small businesses, and their compliance with these requirements is overseen by a powerful agency known as the Small Business Administration’s (SBA) Office of Advocacy.  As first detailed in a 2013 CPR white paper, however, the dirty secret behind this Potemkin’s village is that these institutions serve the interests of the large corporations that already dominate the rulemaking process to the exclusion of both small businesses and public interest advocates.

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Modernization? The Regulatory Accountability Act of 2015 Adds 74 New Steps to the Rule-Making Process

This week, House Republicans re-introduced the “Regulatory Accountability Act of 2015,” (H.R. 185).

Proponents of the bill are claiming that it would “modernize” the rule-making process and streamline government inefficiencies.

In fact, the RAA would bog down attempts by federal agencies to protect our health, safety and environment in red tape by adding over 74 new requirements to the rule-making process, including over 29 new “documentation” requirements. 

Center for Progressive Reform Senior Analyst James Goodwin compiled a list of all the potential requirements for agency rule-making included in the bill. Goodwin notes that, “most of the requirements are nonsensical that at best add nothing to the rulemaking process—and at worst distract agencies from those considerations that would lead to better quality rules.”

The full, damning list is copied below.  Adding extensive paperwork and bureaucratic burdens to the rule-making process would threaten the President’s initiative to move forward on his clean energy plan and could prevent agencies from issuing crucial safeguards to protect workers and the public health.

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Obama’s Path to Progress: Preventing Train Derailments

We are closing out the “Path to Progress” series for this year with a potential bright spot. In its Fall 2014 Regulatory Agenda, the Obama Administration set a target date of March 2015 for finalizing new rules designed to prevent and minimize the consequences of derailments in trains carrying crude oil and other highly hazardous materials. If the Department of Transportation is able to accomplish that feat, it would beat even our own proposed schedule—a welcome achievement. We are looking forward to seeing that entry on our arrivals board turn over to “arrived.”

We’re looking forward to it because crude shipments by rail continue to expand, and millions of us are living in a blast zone.

As our 13 Essential Regulatory Actions explains, domestic crude production is booming (at least for now) because of this administration’s regulatory acquiescence to—and the oil industry’s unbridled advances in—fracking and horizontal drilling. In North Dakota and elsewhere, oil companies are simply sucking so much oil out of the ground that the producers are looking for any possible way to transport it to refineries. One of the non-conventional methods is to load the crude oil on trains. But because the shipments originate in shale formations that are far removed from refineries, the risks of derailment are significant.

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