‘Round Midnight, Regulations

By October 31, 2008General

The White House is pushing back against the campaign to (pre)delegitimize its agencies’ regulations as “midnight regulations” (see our post here). At today’s press briefing, Deputy Press Secretary Tony Fratto described the Administration’s thorough, well-documented process for promulgating regulations in the final months of the President’s term in office. Excerpt:

And go back to early this year, the current Chief of Staff, Josh Bolten, issued a memorandum to the heads of departments and agencies on how to deal with regulations. In fact, what the Chief of Staff wanted to avoid was this very charge that we would be trying to, in the dark of night in the last days of the administration, be rushing regulations into place ahead of the incoming, next administration.

So what he did is he set out a timetable for the consideration of regulations, when they could be approved, when final regulations should be brought forward for regulatory review, and to do it in a way that preserves all of the integrity of the regulatory review process — all the transparency, the public comment period, the internal agency review, the ability to listen to interested parties who have concerns over the regulation to come in and voice their concerns and express their points of view on proposed regulations, and then to issue them in a timely and orderly way. That’s exactly what we’re doing.

So just to hammer home the point on this, we’re trying to avoid that situation where there is a rush of regulation, or the regulation is being put forward in a way that is counter to the very appropriate goals of a system that’s characterized by integrity and transportation and public — I’m sorry, transparency and public comment and agency review of the regulations.

Thus, the Bush Administration is going to be a stickler about process and integrity, restraining itself and not doing any last minute regulatory favors for its supporters in the business community. Unlike the Clinton Administration that rolled out the monkey-fun barrels of regulations for its environmentalist and activist allies.

Seems so …fair.

We’ve put the rest of Fratto’s comments on the topic in the extended entry. The reporters ask good and fair questions, too.

MR. FRATTO: Some stories today — I think one in The Washington Post this morning, and I’ve seen some others here and there, talking about the administration’s efforts to put in place regulations, and some of the language being used — “midnight regulations” or we’re trying to rush regulations at the end of the term —

Q — trying to remove regulations.

MR. FRATTO: To what? Or to remove regulations. We’re hearing all kinds of things about it. And it’s put in the context of “just like every other administration,” this administration is trying to rush regulations at the end and get them in place before they leave. So I just want to take a minute to talk about exactly what we are doing with regulations and give you a little bit of background.

Back in May — actually, let me back up even further and go back to January 21st of 2001, when then OMB Director Mitch Daniels issued an order after the President was sworn in to halt action on what was, in fact, a flood of regulations that had been put in place at the very end of the previous administration. This was done because a lot of these regulations have not received the full regulatory review in regular order as this administration coming in thought they should have. And in fact there was a rush of regulations.

I haven’t had a chance to look back at administrations that preceded the end of the Clinton administration, but certainly at the end of that administration in the post-election period, November to January, there was in the end of 2000 and January 2001 a more than 50-percent increase in the number of regulations that were issued, compared to the November-to-January period in the previous years of the administration. So there was a really dramatic increase.

We’re not doing that in this administration. The number of administration — the number of regulations under review has remained fairly constant. There’s no great increase in the number of regulations that we’re reviewing right now over — if you go back six months or 12 months or 18 months, the numbers stay pretty much steady.

And go back to early this year, the current Chief of Staff, Josh Bolten, issued a memorandum to the heads of departments and agencies on how to deal with regulations. In fact, what the Chief of Staff wanted to avoid was this very charge that we would be trying to, in the dark of night in the last days of the administration, be rushing regulations into place ahead of the incoming, next administration.

So what he did is he set out a timetable for the consideration of regulations, when they could be approved, when final regulations should be brought forward for regulatory review, and to do it in a way that preserves all of the integrity of the regulatory review process — all the transparency, the public comment period, the internal agency review, the ability to listen to interested parties who have concerns over the regulation to come in and voice their concerns and express their points of view on proposed regulations, and then to issue them in a timely and orderly way. That’s exactly what we’re doing.

So just to hammer home the point on this, we’re trying to avoid that situation where there is a rush of regulation, or the regulation is being put forward in a way that is counter to the very appropriate goals of a system that’s characterized by integrity and transportation and public — I’m sorry, transparency and public comment and agency review of the regulations.

So that’s what we’re trying to do. If you look at these stories or if you have interest in further looking at how we’re dealing with regulations, feel free to come to us. I know there’s some from — you get a little bit from Wendell’s quote about removing regulations — some of the bias in reporting of what we plan to do with regulations — the sense is that we would try to — that we’re trying to weaken regulations that have a business interest.

Some of the regulations that are coming through I think are not — maybe not particularly welcomed by members of the business community. I’m not saying one way or the other whether that’s a goal or not, but we’re implementing regulations and we’re trying to do them in the best way that protects the interest of the nation. And we’re trying to do it in the appropriate way and in regular order.

So I hope you notice that, and if you have more questions feel free to come back to us on that.

[Unrelated question and response]

Q So let’s get back to those stories about deregulation, or new regulation. What is — you talk about the goals —

MR. FRATTO: See?

Q I’m just quoting the headline from the Post. When you talk about the goals and philosophy, what are the goals and the philosophy of what’s being done right now, whether you’re modifying existing regulations, proposing news ones, or trying to overturn?

MR. FRATTO: I don’t think you can do — I don’t think there’s sort of a broad philosophy that I could say on lots of these. I think we do believe that — if you want to know what our general philosophy is on regulation it’s that you should have the lightest touch to be effective, and effective in meeting the statutory goals that require the regulation.

So the legislation gets passed by Congress, the statute — after it’s signed by the President it becomes statute, and regulation has to be written to meet the spirit of the legislation passed by Congress. You don’t want to do more than what Congress required because Congress had a specific intent that would have been debated and certainly considered by the administration and both sides of the aisle, and then the administration’s job is to execute that statute and put it into place. You don’t want to do more; you want to do the lightest touch that meets the law and the spirit of the regulation.

So that’s a broad philosophy for all of the regulations that we’re looking at right now. I couldn’t tell you — pick out one or two that way.

Q I guess the conversation — and I assume what you’re always sort of sensitive to is the idea that whatever you’re proposing in terms of regulation has to do with the concept of stripping away protections. Is that what concerns you with sort of the rush of stories you’re seeing?

MR. FRATTO: Well, that’s just one part of the stories. One part of it is content, the other part is process. Clearly on process, we’ve been very up front about this, about how we’re going to deal with regulations and that we’re going to do it in an open and transparent way and make sure that the public is involved and that everyone can review the regulations that we put forward.

On content, we take the job very seriously. And you’re right, there is a sense out there that we are always looking to simply remove regulations and let the business community or others go unfettered. But it’s like, for example, one thing we’re working on right now that’s gone through regulatory review are putting in place CAFE standards and the regulations for how automakers will have to build more fuel-efficient vehicles going forward. It’s certainly not something that’s welcomed by some automakers maybe. It’s going to impose challenges for them in being able to put those vehicles out into the market, but we need to do it in a way that, again, respects the integrity of the legislation that was passed by Congress — and, by the way, just as a reminder on that subject, we, the administration, posed more aggressive CAFE standards than was actually passed by — than were actually passed by Congress.

Q One more follow. I guess because right now with the financial crisis, the buzzword for — in a lot of quarters — explanation for what happened is deregulation or not having — the touch was too light. And are you concerned about this? Because people are seeing that the administration is trying to get involved with the regulatory process when the concern is for the financial crisis that you weren’t involved enough.

MR. FRATTO: A couple things on that. I hear that charge thrown around that we deregulated the markets, and the evidence of that out there is scant. And if you could name one or two regulations that the administration proposed to — that led to the financial crisis, then maybe we’d have something to talk about.

But most of the evidence, actually, is that we were trying to strengthen regulation for the one part of the financial markets that did contribute to the crisis, and that was with respect to Fannie Mae and Freddie Mac. And we’ve told the story a number of times before that we tried for six years to put in place a strong, independent regulator that would have the authority to control the portfolios of Fannie Mae and Freddie Mac, and not let them do the risky kind of lending, or backing of lending, that helped to contribute to the housing crisis.

So the one big effort where we did have a great deal of involvement was actually to increase — try to increase regulation and oversight and supervision of the two housing government-sponsored enterprises. And there isn’t a whole lot of evidence out there of places where we tried to weaken regulation for the financial markets.

Now, the financial markets do have regulators and they have a job to do, and we always hope that they be as aggressive as possible in looking for things that pose systemic risk, and I think there will be a lot of history written on this, whether they did a sufficient job on that or not. But I think there’s — lacking evidence as to whether we try to strip away regulation that caused problems in the financial markets.

Q Tony, let me follow that if I can. Whenever regulatory changes are made at the end of an administration, there is an appearance at least that you’re either doing things that were politically unpopular beforehand that you can now do, or that you’re preempting the incoming President, as very much appeared to be the case at the end of the Clinton administration. So absent the financial crisis that we’re dealing with now, why are we facing regulations that could — it seems to be — have been made much earlier in the administration?

MR. FRATTO: I wouldn’t say that. I think we’ve had a fairly steady pace. In fact, that’s exactly the point I’m trying to make, Wendell. The first point is this, is that the administration does run until January 20th, 12:00 p.m., of 2009. We still are the administration. We have the constitutional authority to do everything that we’re supposed to do in leading the nation. So we have the right to put regulations in place.

I never faulted the Clinton administration or any previous administration for actually putting their policies in place. They have the right, and not just a right, an obligation, to do that. What we faulted on was the process. And what we have done in a very deliberate way is to have a very open, transparent process, and a timely process, so that everyone can see exactly what we’re doing and that we are doing it in a responsible way.

Q Same subject?

MR. FRATTO: Okay.

Q You’ve said the regulations have been coming up pretty steady pace. Well, how would the number of regulations during any three-month period of this administration compare in terms of the last three months?

MR. FRATTO: I’m sorry, of this administration?

Q Yes, I mean, you’re saying maybe 90 in the last three months. How does that compare to any other three-month period, when you put out 90 —

MR. FRATTO: It’s been fairly steady.

Q — 90 every three months?

MR. FRATTO: In that range. I think it’s averaged at about 90 — 93 or so. You could check in with OMB. They have the statistics for you; they’d be happy to share them.

 

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