Bipartisan Bill Would Make Independent Regulatory Agencies Less Independent

Monday, September 10, 2012

A radical bill to abolish the independence of regulatory agencies like the Federal Communications Commission, Consumer Product Safety Commission and Consumer Financial Protection Bureau is currently making a stealthy journey toward passage by Congress.

 

The Independent Agency Regulatory Analysis Act (IARAA) was introduced on August 1 by Sens. Mark Warner (D-Virginia), Rob Portman (R-Ohio), and Susan Collins (R-Maine). The bill will be considered by the Senate Homeland Security and Governmental Affairs Committee (HSGAC), which is chaired by ex-Democratic Sen. Joe Lieberman (I-Connecticut). Lieberman is said to favor putting the bill on a fast-track to passage, which would eliminate the opportunity for hearings where critics of the legislation could voice their reservations—and advocates would have to explain their support.

 

The IARAA would fundamentally change the way independent regulatory agencies operate in two crucial ways by (1) giving the president the power to force independent agencies to submit proposed and final rules to the Office of Information and Regulatory Affairs (OIRA) for approval and (2) requiring agencies to conduct a so-called “cost-benefit analysis” of such rules. Although Executive Order 12866 requires federal agencies under presidential control to complete these steps, independent regulatory agencies are bound by no such rule.

 

If enacted, the bill would eliminate the independence of independent agencies because they would no longer have the power to enact rules without approval from OIRA, which is part of the Office of Management and Budget in the White House. Since Congress created the first independent agencies more than 100 years ago, they have been tasked with protecting the public interest and given a degree of political autonomy to advance the priorities set forth in their foundational statutes. The IARAA would end that autonomy by making these agencies unable to act on their own.

 

Equally momentous is the rule requiring cost-benefit analysis (cba), which would force independent agencies to subordinate the broader public interest to the economic impact of its proposed rules as defined by the narrow terms of cba. The Federal Aviation Administration (FAA), for example, is an executive agency already subject to OIRA’s cost-benefit analysis requirements. These have made it difficult for the agency to modernize its safety standards because cba—which puts a dollar value on human life—yields the result that too few people are dying to justify spending money to improve air safety. Subjecting independent agencies like CPSC and CFPB to this sort of mandate would undermine their ability to protect Americans from unsafe children’s toys or prevent another mortgage bubble and financial meltdown.

 

As Senator Collins, an opponent of IARAA before she became a co-sponsor, argued in May 2009, “If you bring these independent agencies within the regulatory purview of OIRA, you defeat the whole purpose of having them be independent agencies. You’re treating them as if they’re members of the [president’s] cabinet.” Collins has not explained her 180-degree reversal on this issue.

-Matt Bewig

 

To Learn More:

Sponsors of the Independent Agency Regulatory Analysis Act Try To Slip Bill in Under the Radar (OMB Watch)

Consumer Groups Pounce on Senators’ Regulatory Relief Effort (by Charles S. Clark, Government Executive)

Comments

Coalition for Sensible Safeguards 1 year ago
Dozens of public interest, consumer, good government, labor, and other nonprofit groups from across the country have come together to oppose this bill. Read our letter to Senators about why this bill is so damaging, and why we need to preserve independent regulatory agencies, free from political pressures and industry influences: http://sensiblesafeguards.org/assets/documents/s-3468-sign-on-letter.pdf
OMB Watch 1 year ago
Thanks for your interest in this bill! OMB Watch recently released an analysis of some of the negative effects that this bill would have on our public protections. If this bill passes, we’ll see more delays in protecting American children from dangerous or toxic toys and other hazardous products. And that’s just one of the unforeseen consequences of this bill. Read more here: http://www.ombwatch.org/indep-agency-reg-analysis-act-under-radar

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