House Embraces Regulatory Reform

Published March 9, 2015

Responding to a wave of regulations issued or proposed by the Obama administration, the U.S. House of Representatives moved to rein in the White House by increasing congressional scrutiny of federal regulations.

By a 19-8 margin, the House Judiciary Committee approved the Small Business Regulatory Flexibility Improvements Act in January.

The bill would amend the Regulatory Flexibility Act (RFA), expandingthe number of rules it covers, requiring agencies to perform additional analyses justifying the costs of regulations affecting small businesses.

The bill is expected to pass the full House and be sent to the Senate. Identical House-approved legislation in the two previous sessions of Congress died without receiving a vote in the then-Democratic-controlled Senate. With Republicans now in charge of the Senate, sponsors expect to get a vote on the measure.

Regulatory Accountability Act Extended

Action on the small businesses regulatory relief amendment came two weeks after the House passed the Regulatory Accountability Act (RAA). Sponsored by Bob Goodlatte (R-VA), the RAA requires agencies to consider additional factors when making a rule.

First, the agency must base all factual determinations on evidence and consider whether it has the legal authority to propose the rule. Second, the agency must cite the specific nature and significance of the problem the agency is attempting to solve, any reasonable alternatives to the proposed rule, and the potential costs and benefits of these alternatives.

In addition, the RAA expands the scope of judicial review by allowing immediate review of rulemaking not in compliance with notice requirements and establishing a “substantial evidence” standard for affirming agency decisions.

“Too many regulations stifle job creation and economic growth,” Rep. Paul Cook (R-CA) said in a statement. “The Regulatory Reform Act includes strong reforms that correct this problem. That is smart reform and addresses excessive regulatory costs in a commonsense way.”

Regulations as a Tax

“The choice is not whether ‘regulation’ happens, but whether the bureaucracy performs as claimed. Congress should continue to identify where bipartisan support for relaxing needless burdens on today’s entrepreneurs and job-seekers exists,” said Clyde Wayne Crews, vice president of the Washington-based Competitive Enterprise Institute. “Not every legislator is going to want to go to the mat for President Obama’s ‘pen and phone’ agenda for expanding Washington’s influence over our lives.”

Crews added, “Obama just unveiled his 2016 budget proposal to spend $4 trillion and raise taxes. What we now recognize is regulations are a tax, too, a hidden one. Only seven rules out of thousands in the past fiscal year sported cost-benefit analysis. Unlike federal spending, Congress approved none of our ‘regulatory’ budget. That’s why we now see the reforms now underway, and upcoming ones such as passage of the [Regulations from the Executive Need Scrutiny] Act are necessary.”

Even if both bills pass the Senate, they face a veto threat from President Obama. Even so, they would put members of Congress on record and set the stage for regulatory reform after Obama leaves office.

Bonner R. Cohen, Ph. D. ([email protected]) is a senior fellow at the National Center for Public Policy Research in Washington, D.C.