Regulation should be more accountable
Oct 11, 2012 -
SUSAN E. DUDLEY
SHOULD GOVERNMENT regulators think through the likely effects of proposed regulations to see whether they’ll do more good than harm?
Every president for more than 30 years has thought so and has required executive branch agencies to analyze regulatory effects before imposing new requirements and to send them for review by the Office of Information and Regulatory Affairs in the Office of Management and Budget.
However, because of their historical designation as “independent,” some agencies have been exempt from these common-sense requirements, making their regulations less accountable and well-reasoned than others.
New legislation introduced by Sens. Rob Portman, Mark Warner, and Susan Collins would close that loophole.
The Independent Agency Regulatory Analysis Act would require independent regulatory agencies (such as the Securities and Exchange Commission, the Federal Communications Commission and the Consumer Product Safety Commission) to follow the same principles other agencies have long followed, with a goal of improving outcomes by understanding possible consequences before businesses, workers and individuals are asked to comply with new regulations.
This bill is gaining support across the political spectrum. A letter signed by former chief regulatory officials from the past four presidential administrations states: “As former OIRA Administrators from Democratic and Republican administrations, we hold varying views on regulatory reform. But we are unanimous in our view that independent agencies should be held to the same good-government standards as executive agencies, and S. 3468 admirably advances that goal.”
Independent regulatory agencies are considered independent not because their method of regulation differs from executive agencies but because Congress has limited the president’s power to remove their top officials (either by statute or tradition).
Legal advisers to presidents from Ronald Reagan to Barack Obama have concluded that presidents have the constitutional authority to extend analytical and executive oversight requirements to independent agencies’ regulations, but presidents have been reluctant to do so out of deference to Congress.
This legislation would remove that hesitation by reaffirming Congress’ agreement that federal regulations, from whatever source, should follow accepted principles of sound decision-making and be accountable to the president.
Despite the fact that regulations issued by independent agencies have broad social impacts, the analysis supporting them tends to be less robust because they have not been covered by the regulatory executive orders.
According to available government data, roughly half of the rules developed by independent agencies over the past 10 years provided no information on either the costs or the benefits expected from their implementation.
Over the past three years, not one of the 47 major rules (with effects of $100 million or more per year) issued by independent agencies was based on a complete benefit-cost analysis.
According to the bipartisan letter from former OIRA administrators, the proposed act “will improve regulatory analysis while preserving a degree of flexibility for future presidents to refine the requirements over time.”
The administrators said the bill also “adopts a balanced approach to accountability by providing for OIRA review of every proposed and final economically significant regulation, followed by a public exchange of views between OIRA and the independent agency concerning the quality of the agency’s benefit-cost analysis and other important considerations.” Under this bill, “OIRA’s assessment and the agency’s response will form part of the rulemaking record.”
For years, experts across the political spectrum have urged greater transparency, analytical rigor and accountability for regulations issued by independent agencies. The Independent Agency Regulatory Analysis Act is a welcome step in that direction.
Susan E. Dudley, who was head of the Office of Information and Regulatory Affairs during the George W. Bush administration, is director of the George Washington University Regulatory Studies