Tag: regulatory review

Reviewing Regulations from Independent Agencies

On Monday, President Obama ordered independent regulatory agencies to promote the goals of Executive Order 13563 related to cost-benefit analysis issued in January. That order suggests that independent agencies should consider conducting retrospective review of existing regulations.

Independent Agencies like the Securities and Exchange Commission (SEC), Federal Communications Commission (FCC) and the Consumer Product Safety Commission (CPSC) have now been given a strong nudge to conduct retrospective analyses of their regulations to determine whether any should be modified or repealed. The NAM applauds this action and urges independent agencies to engage in meaningful regulatory review that yields a thoughtful cleanup of outdated and unnecessarily burdensome regulation.

The President’s Order is heavily qualified by phrases seeking to make sure that the Administration not be accused of exceeding its authority over independent agencies. We believe the President has far greater authority than has been asserted. In the absence of stronger direction from the President, Congress must make clear the President’s authority in this regard.

The President’s Office of Management & Budget (OMB) already has been given authority by Congress to review the paperwork burden imposed by independent regulatory agencies. Congress should give the President the same authority to review regulations and the burdens they impose. This would promote greater uniformity in our regulatory system and improve our economy by imposing the same kind of broader thinking already applied to the regulations of agencies in the rest of the Executive Branch.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

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EPA’s ‘Analysis’ of Clean Air Act Casts Doubt on Regulatory Review

In President Obama’s Executive Order, “Improving Regulation and Regulatory Review,” he instructed executive branch agencies to begin retrospective analyses of their existing regulations. The goal is to determine whether rules “may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.”

For that process to have any value, agencies must undertake it in good faith and engage in serious self-scrutiny. Unfortunately, bureaucracies are usually more interested in justifying their existence and activities, and the regulatory review is likely to be misused for that purpose.

The Environmental Protection Agency recent “analysis” of the benefits of the Clean Air Act provides a clear case in point. Last week the agency issued a news release, “EPA Report Underscores Clean Air Act’s Successful Public Health Protections/Landmark law saved 160,000 lives in 2010 alone“:

WASHINGTON – A report released today by the U.S. Environmental Protection Agency (EPA) estimates that the benefits of reducing fine particle and ground level ozone pollution under the 1990 Clean Air Act amendments will reach approximately $2 trillion in 2020 while saving 230,000 people from early death in that year alone. The report studied the effects of the Clean Air Act updates on the economy, public health and the environment between 1990 and 2020.

Diane Katz at the Heritage Foundation delves into the flawed assumptions, methodological gimmicks, and general spinning in a Webmemo, “Coming Clean on Regulatory Costs and Benefits“:

The report is astonishing for a variety of reasons—not the least of which is the enormous discrepancy between the Obama Administration’s numbers and those of a similar previous study by the Clinton Administration EPA, which pegged the economic benefits of the act to be $170 billion (or 91 percent less than the Obama EPA’s estimates). This magnitude of difference is explained by the unreliable assumptions underlying the Obama EPA’s wildly inflated claims.

Nevertheless, newspaper headlines across the country—and throughout the blogosphere—trumpeted the new cost–benefit calculation as proving regulation to be unquestionably beneficial. The media’s lack of scrutiny is particularly troublesome because, in this instance, the EPA is evaluating itself. Indeed, for every step beyond the agency’s press release, the questionable methodology and leaps of logic are painfully obvious.

As Katz summarizes: “The benefit estimates in the report range from $250 million to $5.7 trillion—a vast difference that indicates vast uncertainty about the EPA’s claims.” This from an Administration that has pledged itself to “sound science.”

Today’s  Washington Examiner reports that Chairman Fred Upton (R-MI) and leaders of the House Energy and Commerce Committee are holding the EPA to account, working to stop the agency from exceeding its authority and misusing the Clean Air Act to establish a national regime of greenhouse gas regulation. The committee’s Energy and Power Subcommittee holds two hearings this week that offer an opportunity to examine the EPA’s activities, including ginned-up analyses: Tuesday on Climate Science and EPA’s Greenhouse Gas Regulations, and Friday on the EPA’s budget.

For now, the EPA’s report suggests the limits of the Administration’s regulatory review:

  • White House to agencies: Go back and review all your old regulations.
  • Agencies to White House: Wow! They’re so much better than we ever thought!
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Circumnetting Manufacturers on Competitiveness, Jobs, Taxes

As President Obama promotes his new emphasis on economic competitiveness and regulatory reason and in preparation for tonight’s State of the Union, reporters have been touching bases with the National Association of Manufacturers for comment. Those are core issues for manufacturers, after all. 

Robb Mandelbaum, New York Times (blog), “Rewriting Regulation? Small Businesses Have Suggestions“: 

[The] National Association of Manufacturers would like to see regulations come with an expiration date, according to its vice president of regulatory policy, Rosario Palmieri. “We believe that there is value in regulations having an end date, as technology changes, as the markets change, as products change,” he said. “Regulations put in place three or four decades ago might no longer be necessary or might be out of date.” 

From Tory Newmayer, Fortune, a piece that’s not as snarky as its headline, “How Obama turned fat cats into his best friends:

Aric Newhouse, a top lobbyist for the National Association of Manufacturers, says the White House has sent some “great signals,” in recent weeks, and he’ll be tuning into the State of the Union hoping to hear Obama build on them with more specific plans for taxes, trade, energy and regulatory policy. But he says the question will remain: “What actually happens over the next three, to six, to nine months? Do we see an aggressive growth agenda that will create jobs and turn this economy around?”

Indeed. Caution seems a reasonable position to take before a speech, especially when the President has been signaling a change in his Administration’s positions.

Derek Thompson, The Atlantic (blog), “Does the White House Know How to Make a Job? (continue reading…)

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Circumnetting the President’s Executive Order on Regulations

Federal News Radio’s report, “Obama’s regulatory reforms draw mixed reviews,” provides a thorough round-up of the reaction to President Obama’s new positioning on federal regulations, including the Executive Order, “Improving Regulation and Regulatory Review.” It’s informative to read the comments Cass Sunstein, the head of the Office of Information and Regulatory Affairs.

“The Executive Order makes clear that the look back process will occur with full understanding of the agency’s priority settings and resource constraints in a tough budgetary environment. So we expect the agencies will take this process very seriously but do so in way that recognizes resources are not unlimited.”

Sunstein said agencies will have to find a way to do the look back based on the resources they have already.

“I don’t anticipate any additional budgetary assistance for the look back,” he said. “We do anticipate a rule of reason where agencies will be expected to make their own choices about how to balance the cost because in many of the agencies there either is some process of look back and because of all agencies there is considerable expertise about the existing set of programs, we don’t think this will require huge resources to be invested.”

Phew, exhaled the EPA officials. We have so many pending regulations that we really don’t have the budget and personnel to go back a look at the old ones. Carry on!

And at least one activist sees the new review process as an opportunity for MORE regulations. Gary Bass, head of OMBWatch, commented: “Bass said by looking back at existing regulations agencies may find not only outdated policies, but also gaps where new ones are needed.” (continue reading…)

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Circumnetting the President, Business and Regulations

Wall Street Journal, “Obama Courts Business Support“:

Among the rules targeted by business and trade groups are proposed EPA regulations governing ozone and greenhouse-gas emissions, and emissions from industrial boilers; a Transportation Department rule limiting trucking-industry working hours; and an Occupational Safety and Health Administration rule that could require factory owners to install comprehensive noise-reduction technology, instead of issuing protective gear for workers.

“We want to take full advantage of this opportunity to encourage the administration to change course on a variety of proposals,” said Rosario Palmieri, vice president of regulatory policy at the National Association of Manufacturers.

Greenwire, via New York Times, “Obama Issues Executive Order to Cut Red Tape“:

Obama has recently reached out to businesses, meeting with corporate CEOs last month to ask how the government could help them create jobs and rebuild the economy. Industry groups were pleased by today’s announcement.
(continue reading…)

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Can You Believe President Obama is Asking Business about Regulations?

From President Obama’s Wall Street Journal op-ed, “Toward a 21st-Century Regulatory System“:

As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens.

Why, why, even lobbyists might be able to comment. Outrageous!

OMB Director Jack Lew doubles down on the President’s message, writing in a blog post:

[We] need to follow a smarter, more effective approach to regulating to ensure that these necessary protections work without stifling America’s growth and competitiveness. We believe that it is particularly critical now, as our economy continues to recover and create new jobs, that our regulatory strategy be as evidence-based, predictable, cost-effective, and carefully targeted as possible to enable American businesses to continue to grow and innovate.

Just turning the Administration’s regulatory process over to Big Business. It’s unconscionable.

Earlier coverage…

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