Send In The Regulators

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Last week’s election has restored a measure of political balance in Washington, and in January the newly seated Congress will begin to translate these electoral signals into policy. A politically split Congress will either lead to real compromise, or to legislative gridlock as competing, even irreconcilable proposals cancel one another out. And when the legislative process is deadlocked, as it may well be for the next two years, the most powerful tool in the policymaking arsenal is the arcane, under-the-radar regulatory process, controlled almost singlehandedly by the Executive Branch.

You won’t find any C-SPAN cameras illuminating the deliberations in the conference rooms at the Office of Information and Regulatory Affairs (OIRA) in the Eisenhower Executive Office Building, where regulations are reviewed and coordinated between the agencies. In fact, if you’ve even heard of OIRA, chances are you live in Washington and are part of the cottage industry of economists, statisticians, and lawyers busily filling in the thousands of details Congress leaves blank in every law.

Every Administration through its Executive agencies puts out dozens of new regulations each year. These regulations have the force of law, but require no action by Congress. And many of them, so-called “major” rules are estimated to have economy-wide consequences defined by OIRA as an annual economic impact of $100 million or more. For example, despite the failure of Congress to pass climate change legislation, the EPA is drafting regulations that will regulate greenhouse gas emissions from vehicles for the first time. In addition, the hundreds of regulations required to implement the Health Care and Financial Reform bills will pass through the ether of this process.

To be clear, regulations are not drafted in secret, nor is the process meant to be exclusionary or sneaky. Technically, it’s open and fairly transparent, with a very tightly proscribed set of rules of its own detailing requirements for public input, small business impact analyses, and judicial review. You can go to OIRA’s website, https://www.reginfo.gov, and find a complete list of the regulations under review (14 major rules at the time of this writing), and the Federal Register publishes each proposed rule for public comment before making final changes. But, practically speaking, unless you are a regulatory lawyer or a very determined layman, the process might as well be invisible.

Welcome to the policymaking battlefield of the 113th Congress.

President Obama’s Administration can crank out rules as fast as the process will tolerate, and each one becomes the law of the land on an effective date written into the regulation. Congress doesn’t even need to be in session. However, Congress is not powerless to affect the outcome of this process, but doing so requires unusual vigilance from oversight committees on Capitol Hill, and some serious legislative muscle. Here are some of the tools Congress has at its disposal for intervening in the regulatory process.

1. Appropriations Riders. Congress can defund a regulation through the Appropriations process. Every regulation needs to be implemented and enforced, and Congress has discovered that by pulling funding for day-to-day enforcement of a rule, the rule is, in effect, put on hold. To succeed here, the funding limitation has to make it through both Houses of Congress and the President must sign the bill. Appropriations “riders” so-called because they are small attachments to gigantic funding bills, can become the target of a Presidential veto, or may get a pass depending on the relative importance of the underlying bill. This leaves open the possibility of showdowns over funding bills like the one that shutdown the government in 1996. Appropriations riders are blunt tools for the job, and can carry high political risks.
   
    
2. The Congressional Review Act (CRA). In 1996, as part of the Contract With America, Congress enacted a series of reforms to the regulatory process. One change, commonly referred to as the CRA, allows Congress to disapprove major regulations by a vote of both Houses and a Presidential signature. The process has only been used successfully one time – to repeal a 2001 rule that would have required employers to account for repetitive stress injuries in the workplace by providing ergonomic accommodations. The CRA worked in this case because an outgoing Democratic President left the rule vulnerable by issuing it in the last days of the Administration (the CRA has to be invoked within 60 legislative days of the rule’s publication) and because a Republican took over the White House and his party had both Houses of Congress at the time.
   
   
   
   With split control in Washington, the CRA is much more difficult to invoke successfully. Even if the House approves a resolution of disapproval (ROD), the Senate is still in Democrat hands. And even if a few Democrats can be persuaded to vote with the Republicans on a ROD, the President is unlikely to agree to repeal his own regulation, meaning the Congressional votes need to be veto proof. Lastly, to reinforce just how unlikely it would be for the President to sign a ROD, the CRA says that if a rule is repealed through this process, no substantively similar rule can be issued. That means, in effect, the Administration can’t start over. They are forbidden from regulating in that area without major changes - and no court has mulled the contours of this prohibition.
   
    
3. The REINS Act. The Republicans’ Pledge to America includes a proposal to require Congress to vote to approve each “major” regulation before it becomes effective. Senator Jim DeMint (R-SC) and Congressman Geoff Davis (R-KY) have introduced the REINS Act to do just that. It is likely to be an early priority of the new Republican House next year, but will require a Democratic majority in the Senate to pass it as well, and a Presidential signature. Enacting the REINS Act would be a major shift in the balance of power in Washington and for that reason, it’s probably unlikely the bill becomes law unless a veto is overridden, but it’s a debate very much worth having and the Republicans will not shy from it. In the meantime, however, the regulatory process will continue as it has for decades, and Congress must use the Appropriations process and the CRA to cut red tape while it fights for this new authority.

So Congress does have tools available for influencing the regulatory process, but they are not particularly precise or effective in a divided Congress, and most importantly, they require full-time supervision of the regulatory pipeline. But these procedures are not useless, and Congress should not be shy about building cases against harmful or overbearing regulations. At the very least, Congress should play a more active role in illuminating the regulatory process, because, the Administration will seek to downplay this function. The White House is not going to want to call attention to the rules they write because attention invites scrutiny, which invites confrontation. But ultimately, that’s what we need in Washington - policymakers being held accountable for their actions and their decisions. So pay attention to what’s going on at OIRA, and ask questions. Use the House and Senate Floor to force the regulatory process into the light.

Jess Sharp is a policy consultant in Washington, D.C. who focuses on transportation issues. Mr. Sharp was previously Deputy Assistant for Domestic Policy to President George W. Bush.