Congressional Review of Rulemaking Begins

Published June 1, 1997

Though little noticed at the time, the 104th Congress did succeed in passing legislation–later signed into law by President Clinton–that holds out the real prospect of a vastly improved regulatory climate in the years to come.

In approving the Small Business Regulatory Enforcement Fairness Act (SBREFA) last spring, Congress effectively gave itself the power to execute a line-item veto over regulations it finds unacceptable. SBREFA grants members of Congress sixty days to review major new regulations before they can become effective. It also establishes expedited procedures through which Congress may even enact joint resolutions to disapprove such rules (the “line-item veto”).

The pressing need for reform of America’s top-heavy, command-and-control regulatory structure has been recognized by the regulated community and even by many state regulatory agencies for many years. But even with SBREFA, critics say, fixing the system will be no easy task.

“Proposed rules must be routinely accompanied by good descriptions of their potential outcomes–both favorable and unfavorable–and good estimates of their likelihood of occurrence for anyone to make a responsible judgement on their merits,” notes Heather Ross, visiting scholar at Resources for the Future.

“Since regulatory merit is principally substantive, not procedural” she adds, “useful regulatory review is also necessarily substantive.”

How can Congress make good use of its new oversight authority? Ross points out that good oversight is not easy in a regulatory system “whose principle failing is a lack of adequate information upon which to base good decisions in the first place.”

She suggests that one way to attack the problem is the establishment of a Congressional Regulatory Office (CRO), much smaller but modeled after the Congressional Budget Office (CBO). The CRO would take the lead in handling Congressional oversight of federal regulations.

One of the first issues a CRO would face, Ross says, “is the degree to which bad rules are legislative driven.” “From limiting the ability to balance costs and benefits to specifying inefficient command-and-control mechanisms to micro-managing myriad administrative processes,” she explains, “Congress itself is easily the single greatest source of costs in the system.”

PF: The complete text of Heather Ross’s comments on regulatory reform are available from PolicyFax. Call 847/202-4888 and request document #????????