House and Senate Republicans have proposed legislation (HR 10, S 299) intending to substantially change federal regulatory practice. The proposed Regulations From the Executive in Need of Scrutiny Act of 2011 (The “REINS Act”).
What is the bill supposed to do? What is it likely to do?
The proposed REINS Act is a procedural bill that would not alter the criteria federal regulatory agencies use to make decisions. Those criteria are established in organic legislation.
The REINS Act would change the default procedure for Congressional review of regulations. Those procedures, established by the Congressional Review Act of 1996 (5 USC 801-808), permit Congress to pass a “resolution of disapproval” that, if signed by the President (or if vetoed by the President and overridden by Congress) render a duly promulgated regulation having “no force and effect.” The law provides expedited procedures specific to the House and Senate for expedited consideration. For example, resolutions of disapproval cannot be kept from the floor, they cannot be amended, and in the Senate they cannot be filibustered. Nevertheless, this procedure has been exercised to completion only once.
The REINS Act would change the default such that Congress would be required to affirmatively vote to approve regulations before they become effective. The findings and purpose are described in Section 2:
(2) Over time, Congress has excessively delegated its constitutional charge while failing to conduct appropriate oversight and retain accountability for the content of the laws it passes.
(3) By requiring a vote in Congress, this Act will result in more carefully drafted and detailed legislation, an improved regulatory process, and a legislative branch that is truly accountable to the people of the United States for the laws imposed upon them.
Only rules defined as “major” would be subject to the new procedure. In a typical year, there may be about 50 such rules, though in recently the number has been more than twice as large.
The bill raises several interesting technical questions, including:
1. Will agencies and/or OMB behave strategically in designating rules as “major” or “nonmajor”?
If only “major” rules are subject to stricter Congressional scrutiny, the Executive branch will have a new incentive to deem “major” rules as “nonmajor” if it wants to avoid this.
Conversely, the Executive branch will have a new incentive to deem “nonmajor” rules as “major” if it wants to compel Congressional scrutiny (and a vote).
Since 1981 when centralized regulatory review was first established, “major” and “nonmajor” rules have been subjected to vastly different levels of scrutiny. For this reason, agencies have always had an incentive to break up a “major” rule into smaller parts, each of which is below the “major” rule threshold.
The REINS Act would intensify this incentive, and cause Congress to rely even more heavily on OMB’s Office of Information and Regulatory Affairs to catch and overrule the practice.
2. How will Congress discover material errors in agencies’ estimates of benefits, costs, and other effects?
Current law provides that agencies submit final rules and their supporting analyses to the Government Accountability Office (GAO), which reduces this often substantial amount of information into a very brief summary for submission to Congress. GAO lacks both substantive expertise and the authority to challenge the information agencies provide.
For their part, regulatory agencies are monopoly providers of regulatory analysis to GAO, and they have inherent conflicts of interest. Regulatory agencies are in the business of regulating, so there is ample reason for concern that their estimates are not, in fact, objective. Nonetheless, the current Congressional Review Act makes Congress dependent on agencies with conflicts of interest for information relevant to the exercise of their legislative duties. There is no “consumer protection bureau” whose job is to ensure that the information Congress receives is objective.
The REINS Act would not change this. Indeed, it would likely exacerbate the problem. Under current law, GAO’s reports are largely ignored because joint resolutions of disapproval are rarely proposed. Under the REINS Act, these reports would be consulted all the time. Congress, the consumer of these reports, would have a much greater need for a “consumer protection bureau.”
One final note: The Office of Information and Regulatory Affairs has the last word on the designation of rules as “major” or “nonmajor,” which means these decisions will be subject to political calculation as well as economic analysis. OIRA does not make its own analyses public, so Congress cannot know the extent to which OIRA’s professional staff disagree with agencies’ portrayals of economic effects.
(B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
(C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
The term does not include any rule promulgated under the Telecommunications Act of 1996 and the amendments made by that Act.