Effect of New Regulations

Apparently the new Congress is trying to force the executive branch to justify new regulations.  Those in favor of the current executive, or in favor of independence of regulators, do not approve:

Republicans Launch Another Wall Street Gimmie: HR 185, the “Tie Regulators in Knots” Act

Posted onJanuary 14, 2015 by

The Republicans are not wasting any time in their ongoing campaign to make sure nothing stands in the way of Wall Street’s rapacious quest for more profits.

The latest example is a bill that is going largely under the radar was tabled last week, HR 185. It has yet another Orwellian name, “Regulatory Accountability Act of 2015.” It’s basically a requirement that regulators do the research of anti-regulation lobbyists on the public dime. I’m not making that up. From the summary of the bill at the Library of Congress:

The bill requires agencies to publish advance notice of proposed rulemaking in the Federal Register for major rules and for high-impact rules (rules having an annual cost on the economy of $100 million or $1 billion or more, respectively) and for negative-impact on jobs and wages rules and those that involve a novel legal or policy issue arising out of statutory mandates. The notice must include a written statement identifying the nature and significance of the problem the agency may address with a rule, the legal authority under which the rule may be proposed, the nature of and potential reasons to adopt a novel legal or policy position, and a solicitation for written data, views, or arguments from interested persons.

Additionally, the bill: (1) sets forth criteria for issuing major guidance (agency guidance that is likely to lead to an annual cost on the economy of $100 million or more, a major increase in cost or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or ability to compete) or guidance that involves a novel legal or policy issue arising out of statutory mandates; and (2) expands the scope of judicial review of agency rulemaking by allowing immediate review of rulemaking not in compliance with notice requirements and establishing a substantial evidence standard for affirming agency rulemaking decisions.

This is far more sweeping than it appears. The language “those that involve a novel legal or policy issue arising out of statutory mandates” covers almost all of what regulators do in the course of new rulemaking. And notice how in (2) in the second paragraph how it increases the ability of Federal judges, when the Federal bench is increasingly populated with jurists skilled at making strained readings to defend big business interests, to force agencies to go through these hoops and uses these studies and reports as the basis for not implementing new regulations.

Although I am concerned about the end effect of this particular legislation, I don’t think it is bad in concept.  What is missing is the requirement for evidence in favor of the regulations.  That is, the calculations of the good the regulations will do, or citing of past costs incurred due to lack of such regulation.

Shouldn’t someone be thinking hard about every single regulation in this way?  What is the cost to society versus what is the benefit?  Certainly not all benefits can be quantified in dollars.  “This is a value that America wishes to encode in regulation,” is a totally valid justification (think, child labor laws).  Also, costs may be impossible to know (only a portion of unclean air and water costs can be reasonably estimated).  But that doesn’t mean someone shouldn’t think hard about these things and do the math.

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