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Senate Committee Hears Regulatory Reform Testimony

| Jul 7, 2011 | News

The Senate Committee for Homeland Security and Government Affairs convened a lively hearing last week on the effectiveness of the U.S. system of regulation. A number of Senators testified on their own regulatory reform legislation, and then their colleagues questioned Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein about the Obama Administration’s vision of the regulatory state.

Thumbnail image for Legislation.jpg Senator Olympia Snowe (R-ME) argued that burdensome regulation increases the cost of manufacturing goods in the U.S. firms. She advocated passage of her Small Business Regulatory Freedom Act, which would authorize judicial review of agency analyses of their rules even while these rules are in the proposal stage.

Senator David Vitter (R-LA) promoted his Small Businesses Paperwork Relief Act as a way to alleviate the cost of doing business in the U.S. This Act, he noted, would “direct federal agencies not to impose civil fines for a first-time violation of their agency’s paperwork requirements by a small business.”

Also advocating passage of legislation he is sponsoring, Senator Pat Roberts (R-KS) urged that his Regulatory Responsibility for our Economy Act would “add some teeth” to President Obama’s Executive Order 13563 on regulatory review.

Committee Chair Joseph Lieberman (I-CT) questioned Executive Order 13563’s requirement that agencies consider what he considered rather vague policy criteria, such as “equity, human dignity, fairness, and distributive impacts.”

Administrator Sunstein responded that all of the phrases listed in the order –except human dignity – have been part of the regulatory calculus called for by executive orders in effect under both Presidents Bush and Clinton. Sunstein argued that agencies should consider dignity because it is an important consideration even if one difficult to quantify.

Sunstein was uncomfortable with the broader regulatory reform legislation advanced by Senators Snowe, Vitter, and Roberts. He particularly cautioned against increased judicial review of agency rulemaking because a judge’s “skill set is not well-designed to deal with economic complexity and there’s a risk that judicial review would get courts into areas which Congress and the executive branch are much better suited to. There’s also a risk that [regulation] would be tied up in litigation for years.”

Senator Ron Johnson (R-WI) questioned Sunstein about the length of the three-million page Federal Register. He told Sunstein that “[y]ou’re on notice” when the Environmental Protection Agency fails to take into account estimates that the Clean Air Mercury Rule “would put 17.6% of [U.S.] coal-fired electrical generation out of commission.”

Senator Rand Paul (R-KY), advocating his proposed REINS Act, asserted that each time an agency engages in burdensome rulemaking, they improperly seize authority from Congress.  In response, Sunstein asserted that no rule enacted since Obama took office has been struck down as against the will of Congress.

The hearing also featured testimony by Senator Mark Warner (D-VA), who advocated more effort to engage in retrospective reviews of regulation as well as that the Senate consider adopting a regulatory PAYGO proposal. Under regulatory PAYGO, agencies would need to eliminate an existing regulation before adopting a new one with comparable economic impacts.



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