Beyond the competing sets of spin about the success or failure of Donald Trump’s first hundred days, even the most committed liberal partisan can admit that he has allowed corporate America to run wild.
A regulatory freeze on day one delayed every final rule awaiting its effective date. Many got pushed back further by federal agencies after the freeze lifted, including life-saving measures to prevent cancer-causing dust and toxic beryllium in workplaces. Lawmakers used a their power under the Congressional Review Act, which requires only a majority vote, to nullify 13 other rules. And now, the administration is venturing into rolling back regulations already in place, from new food product labeling to a ban on arbitration clauses in nursing home agreements to net neutrality, to name only a few.
But as Wayne Crews of the right-wing Competitive Enterprise Institute recently wrote, “Even with all these actions from the executive branch, there is still one large barrier to regulatory reform that remains: the U.S. Senate.” Only enough senators to break the 60-vote filibuster threshold would realize Steve Bannon’s dream of deconstructing the administrative state permanently.
Last week, that dream nudged closer to reality when Sens. Rob Portman (R-OH) and Heidi Heitkamp (D-ND) reached a bipartisan deal to introduce the Regulatory Accountability Act. Like a number of House bills passed this year, it attacks the agency rulemaking process, inserting additional hurdles to make it harder to get regulations done, and easier for industry to use courts to throw them out. Unlike the House bills, Portman-Heitkamp could actually pass the Senate. “The short version is it would shut down rulemaking,” said Rob Weissman, president of consumer advocacy group Public Citizen.
Before I explain what’s in the bill, you need to understand how enormously difficult it already is for federal agencies to complete a regulation. Take a look at this insane flowchart Public Citizen helpfully constructed, listing the hundreds of requirements facing any agency that wants to do its job. “To be legible it has to be blown up to 6 feet by 8 feet,” Weissman noted.
The Administrative Procedure Act of 1946 created the basic rulemaking structure, but since then, Congress and the executive branch have added tons of restrictions. The Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, the Congressional Review Act, the National Environmental Policy Act, the Federal Advisory Committee Act, three executive orders and two court rulings all play a role. Costs to small businesses, cities, states and affected industries must be analyzed. Public comments must be solicited, read and considered. The centralized executive branch review at the Office of Information and Regulatory Affairs can clog a rulemaking for years. And even after that gauntlet, Congress can disapprove of the rule, or industry could argue in court that one of these endless steps was not followed correctly.
Put it this way: If a Last Man on Earth-style virus methodically began to kill U.S. citizens, and we knew the cause, we’d still have to wait a couple years for a formal rule to counteract it.
People assume that old whipping boy, government bureaucracy, is responsible for this mess. Actually, big business encouraged Congress to create these hurdles, solely to frustrate the regulatory process. At no point did policymakers ever streamline the old rules when they layered on new ones. Rulemaking just became this giant, unwieldy beast, entirely by design, so corporations could continue imperiling workers and consumers, and so agencies would shrink at the very thought of climbing the regulatory mountain. “We have stories of rules we’re worked on for 20 years,” said Weissman, of Public Citizen.
No honest observer could look at this and think that we need another set of cost-benefit analyses. But that’s what Portman-Heitkamp would do, for any rule costing over $100 million or with significant impact on the economy. These cost-benefit analyses, which in recent years have become “cost-cost” since benefits to the public are no longer really accounted for, would need to be completed at every stage of the process — before drafting a proposed rule, after determining its significance, before finishing the proposal and after public comment. After that tsunami of analysis, the agency must choose the “most cost-effective approach” that still accomplishes the goals of the rule (“most cost-effective” should read “least obtrusive on business”).
Incidentally, these cost studies end up mostly using industry data, since such cost detail doesn’t exist elsewhere. So Portman-Heitkamp would force the federal government to effectively let industries decide when it’s viable to regulate them.
In addition, agencies would have to reach out for public comment before a major rule gets proposed. The “best reasonably available” economic, scientific and technical information would need to be acquired, adding another vague but time-consuming legal step. “High-impact” rules would require an administrative hearing, where businesses could challenge the agency directly. And all rules would be automatically reviewed once every 10 years, in case corporations didn’t strike it down the first time.
Portman and Heitkamp claim they’re just putting into statute a process already established through presidential executive orders, as a more moderate counterpoint to extreme efforts by House Republicans. But the purpose of codification is to expand judicial review. “In the off chance an agency decides to regulate despite the endless gauntlet, and if after that the industry is unhappy, they can sue and say the study was wrongly conducted,” said Weissman.
In fact, Portman-Heitkamp would increase the legal standard on federal agencies, subjecting regulations to a “substantial evidence review.” And since it’s mostly the industry’s evidence, they can almost always claim that it was used improperly. Courts have proved sympathetic to industry whining on cost-benefit analyses in the past. The extra volume of requirements here just makes it more likely that a court would find some pretense to throw out a rule.
The bottom line is that Portman-Heitkamp would eat up time and money to produce new rules, making the already onerous agency compliance almost impossible. The duo already has Sen. Joe Manchin (D-WV) as a co-sponsor, and would only need six more Democrats to pass the Senate. With the House extremely likely to follow suit, this would create a brick wall around rulemaking lasting long beyond Trump.
That’s why several liberal groups are pushing Democrats to not collaborate. But the U.S. Chamber of Commerce’s overwhelming support for Portman-Heitkamp will likely lead local business affiliates, whose regulatory concerns are largely about moves at the city and state level, to pressure senators. The local auto dealer or restaurant provides cover for the polluting and worker-harming behemoths that really want rulemaking crippled.
This effort by Portman to set the regulatory process in concrete has flown below the radar of Trump tweets or health care bumbling. But it would have a massive effect, which is why hundreds of lobbyists have pinned their hopes on it (and given big to Portman to make it reality). The goal is nothing less than to prevent the government from ensuring clean air and water, safe workplaces, consumer protection or a host of other aims. Citizens who like any one of those things need to engage on this before it’s too late.