The current debate over regulatory reform describes a problem comprised of a massive number of regulations—which are deemed laws—that are costly, often incomprehensible and easily issued by government agencies.
To address this uncontrollable lawmaking machine, opponents of regulation advance solutions including regulatory budgets or requirements, such as repealing two regulations for every new regulation issued. In short, the debate becomes a numbers game of how many regulations are enough.
Confusing the American public with statistics like the number of pages of regulations is misplaced since many regulations are mandated by Congress or within the broad discretion delegated to agencies. Moreover, many of the rules are needed to protect the public. These regulations cannot—and should not—be eliminated as part of an accounting game. So what is regulatory reform about?
Regulatory reform is an institutional debate between the branches of our government. It concerns separation of powers and checks and balances, principles that are essential to our democracy. Entering this debate, Congress needs to abandon political agendas and focus on its institutional role under Article I of the U.S. Constitution, which gives it “all legislative powers.”
Regulatory reform is about the role Congress plays in our constitutional system. For Congress to be a real check on agency overreach it needs to reclaim its full legislative authority by establishing clear standards for agency rulemaking and court review of the regulations. These standards are necessary to ensure agencies implement the intent of Congress, not the intent of the agency.
The House of Representatives has started down the path of restoring its institutional integrity with the passage of the Regulatory Accountability Act (RAA) sponsored by Congressman Bob Goodlatte (R-Va.). A similar bill was introduced in the Senate by Rob Portman (R-Ohio). Hopefully the Senate will act on it in the next Congress.
The RAA is the first attempt to substantively amend the Administrative Procedure Act, the guidebook of the regulatory state, since its enactment in 1946.
The key to the RAA is that it does not dismantle the regulatory state. Rather, the bill divides it between general regulations that are needed to keep society functioning and high-impact or transformative regulations that cost $100 million to billions of dollars a year and that have a nationwide impact on jobs and the economy.
The U.S. Chamber of Commerce’s analysis of the regulatory state found that of the approximately 4,000 regulations published annually only a few—under 25 regulations—would be deemed transformative.
By focusing only on high-impact, transformative regulations, Congress can control overreaching regulations while allowing the day-to-day operations of agencies to function. Under the RAA, the public would get an earlier opportunity to participate in shaping the most costly and transformative regulations.
When an agency first decides to write a high-impact rule, it would be required explain to the public why the regulation is necessary, how it will affect business, jobs and the economy, and why the rule is the best available alternative.
After evaluating the impacts of the proposed rule, agencies should select the least costly regulatory alternative that achieves congressional intent. Independent federal agencies would be held to the same standards of transparency and accountability as executive agencies.
The RAA would also allow the American people the right to verify that high-impact proposed rules are feasible, cost-effective, and well-supported by good scientific and economic data. Finally, before awarding deference to agency decisions, a court must find that the agency addressed all standards mandated on the agency by Congress.
This is why the U.S. Chamber of Commerce spearheaded an effort this month that garnered support from 380 business associations urging swift action on the RAA in the 115th Congress.
In a divided government, it is unlikely a president of one party would cooperate with a Congress of another on reforming agency power. But that situation is about to change.
It is time for Congress to present a regulatory package to the president that restores its ability to place limits on agency rulemaking. If regulatory reform cannot happen when Congress and the president are of the same party, it is unlikely to ever happen and the ability of Congress to control agency overreach will continue to diminish.
It is time for impactful regulatory reform, which the RAA can deliver.
William L. Kovacs is the senior vice president for environment, technology and regulatory affairs at the U.S. Chamber of Commerce.