Regulations costing millions of dollars are created without congressional approval
By Jeff Rosen and Susan Dudley
August 9, 2010
Every year, more than 60 federal agencies issue thousands of new regulations covering every sector of the American economy. The Small Business Administration estimates the cumulative costs of these regulations at more than $1 trillion annually, or more than $10,000 per household per year. These regulations are legally binding, yet they emerge from unelected officials in regulatory agencies; Congress never has to vote to approve them.
Over the last few decades, on average, between 30 and 40 of the new final regulations issued each year have been considered “major,” with impacts of more than $100 million. In the past year-and-a-half, federal agencies have issued 94 major final rules (59 in 2009, and another 35 already this year). The costs of many of these are measured in the billions and even tens of billions of dollars.
For example, last year the Department of Energy issued costly regulations restricting certain kinds of light bulbs, as well as standards for clothes washers, while the Department of Interior issued rules on alternate energy uses of the Outer Continental Shelf. The Department of Transportation issued a $10 billion rule requiring railroads to use “positive train controls,” and another $1 billion rule requiring stronger car roofs (despite the DOT’s analysis indicating the benefits would not justify the increase in consumer prices). This year, the DOE added another rule setting standards for pool heaters and water heaters, while DOT and the Environmental Protection Agency issued a $60 billion regulation increasing auto fuel economy, and the Federal Aviation Administration issued a $7 billion rule to change aircraft equipage requirements. And the EPA issued rules to begin to regulate most of the economy to try to limit global warming.
Regardless of whether these rules are good or bad, there is no question they involve very significant costs for our economy, possibly slowing the recovery and hindering job creation.
Moreover, the Obama administration’s current “Regulatory Agenda” identifies almost 4,000 regulations under development, 191 of which involve more than $100 million each. The costs of these mandates sometimes dwarf the budgets of the regulatory agencies that produce them, yet these “off-budget” rules are not subject to the same scrutiny as on-budget spending. Congress had to vote to approve the nearly $13 billion used to fund the Department of Labor in 2009, for example, but did not vote with regard to any of the 10 major final rules the department issued in the last year and a half. Throughout our government, regulatory agencies cannot hire staff or spend money without approval from Congress, but they routinely issue regulations that impose huge costs without any congressional approval.
Our government was built on the dual principles of separation of powers — with “all legislative powers … vested in a Congress of the United States” — and checks and balances. Over the last century, Congress has delegated more and more legislative authority to the Executive Branch, but it need not give up accountability for these administrative laws.
A procedural change where Congress would have to vote to approve high-impact regulations could restore a system of checks and balances to federal regulation. Sixty-eight members of Congress have proposed legislation that would accomplish this, requiring congressional approval under expedited procedures before major regulations can go into effect.
Critics of the bill, known as the “REINS Act,” are concerned that Congress would not have enough time to vote on every major rule, and that the requirement would produce gridlock. However, over the last 18 months, Congress has found time to enact 210 new laws, including 58 votes to name Post Offices and other federal buildings. Surely a Congress that has time to vote on the names of 58 federal buildings could make the time to vote on 59 important federal regulations that have the force and effect of law.
Not only would this give Congress more accountability and control over the implementation of the legislative powers it delegates, but it would encourage fuller transparency and informed debate on these significant regulations that have the power of law.
Susan Dudley, former administrator of the Office of Information and Regulatory Affairs at the White House Office of Management and Budget under George W. Bush, is director of the Regulatory Affairs Center at The George Washington University. Jeff Rosen, former general counsel and senior policy advisor at the OMB, is a partner at Kirkland & Ellis LLP.