What's New from the GW Regulatory Studies Center
9/23/16 - Bloomberg BNA: Former Agency Officials Bring Benefits to Regulatory Debate, mentioning Susan Dudley
9/23/16 - GW Today, Experts Discuss Regulatory Cooperation at GW, by Sydney E. Allen
9/21/16 - Regulation Digest, Vol. 5 No. 36
9/20/16 - Reaching Across Borders: U.S. – EU Regulatory Cooperation in Practice, by Daniel R. Pérez
9/20/16 - Forbes: Obama Isn't Yet Done Regulating, interview with Sofie Miller by Jared Meyer
9/19/16 - How Declining Budgets at U.S. Regulatory Agencies Could Improve Performance, by Marcus Peacock
9/15/16 - EVENT: International Regulatory Cooperation in Practice conference, hosted with the EU Delegation to the U.S.
9/15/16 - RegBlog: Independent Regulatory Agencies Are Not Likely to Be Part of President Obama’s Midnight Rulemaking, by Daniel R. Pérez
9/14/16 - Regulation Digest, Vol. 5 No. 35
New Commentaries from the George Washington University Regulatory Studies Center
Reaching Across Borders: U.S. – EU Regulatory Cooperation in Practice
Improving Evaluation of Chemical Regulations
Mobile Home Regulations Threaten Access to Affordable Housing
The Big Squeeze on Regulatory Agencies
Reforms to Student Loans Create More Problems Than They Fix
Regulators' Budget Report: OIRA Shrinks as Responsibilities Grow
Beyond the Speed Bump: The New IEX Stock Exchange, and What Happens Next?
Evolution and Innovation
BIAS at the FCC
9/20/16 - The U.S. and EU continue to improve outcomes for their citizens through successful regulatory cooperation despite the continued political rhetoric against international trade. On Thursday, September 15, 2016, the George Washington University Regulatory Studies Center co-hosted a conference with the EU Delegation to the United States on “U.S.-EU International Regulatory Cooperation in Practice.” The conference brought together senior officials from the European Commission and U.S.
8/31/16 - Ex-ante regulatory impact assessment has a long tradition in many countries but it necessarily depends on unverifiable assumptions and models of how the world would look absent the regulation, and how responses to regulatory requirements will alter those conditions. In essence, ex-ante analyses are hypotheses of the effects of regulatory actions. More consistent and robust evaluation of regulatory outcomes would allow agencies to test those hypotheses. This would be valuable not only for understanding the effect of past actions, but for improving future decisions.
8/22/16 - Manufactured homes—formerly known as mobile homes—are an affordable source of housing for many elderly and low-income households throughout the U.S. Recently, DOE proposed new energy efficiency standards for manufactured homes that would increase prices in exchange for reduced long-term operating costs. However, this tradeoff may not make sense for many manufactured home owners who live in climates where the cost savings don’t add up.
8/9/16 - The latest tally of the amount of money it will take to run federal regulatory programs this fiscal year is $63 billion, a 0.7 percent increase over last year. With the government’s debt held by the public now 75 percent of GDP any increase in spending may seem generous but, for regulatory program managers, it is a reminder that they are living under increasingly tighter budget constraints than in the past. In this commentary, Peacock examines this significant challenge for regulatory agencies and for the next president.
8/3/16 - The Department of Education’s proposed new regulation regarding student loans is getting a lot of attention. It received almost 7,000 public comments on proposed changes to how it administers its Federal Direct Loan Program and its requirements for post-secondary schools whose students pay for tuition using federally funded student loans. Unfortunately, ED has not done its homework. Our comment on the proposed rule finds that is likely to create more problems than it solves. This rule could end up hurting the poor and costing taxpayers up to $4.23 billion per year.
7/19/16 - With the recent release of the George Washington University Regulatory Studies Center’s 2017 Regulator’s Budget, there are increasing concerns surrounding the rate of growth for OIRA staff and budget relative those of other regulatory agencies. OIRA has been regarded as a highly important facet of the regulatory process. Yet, as their responsibilities grow, OIRA is less equipped to handle increased regulatory activity. OIRA’s lack of resources could have a significant impact on the quality of regulatory oversight if the federal budget continues to leave them behind.
6/22/16 - After a lengthy and rancorous public comment period, the SEC on Friday did the right thing in approving the application of IEX to become a full-fledged stock exchange. The use of brief delays, such as IEX’s deterministic delay, promises to improve the economic efficiency of financial trading. The Commission also did the right thing in committing to study developments over the next two years. While the internal logic of the IEX exchange is straightforward, the interactions among 13 stock exchanges, each with a different microstructure and timing, will inevitably be complex.
6/14/16 - Government regulations would benefit from a greater appreciation of the ecosystem-like nature of economies and a greater respect for the evolutionary pressures stimulated by competition, choice and decentralized decision-making. We live in a diverse society made up of individuals with varied circumstances and preferences. Regulatory approaches at the national level that reduce competition, choice and feedback disrupt evolutionary processes, protect favored interests from challenge and make the economic ecosystem as a whole less able to adapt and innovate.
6/6/16 - Regulatory requirements should not create artificial distinctions between competing firms, technologies, or business models. Doing so inevitably distorts competition, inhibits innovation, and harms consumers. Unfortunately, that is precisely what the Federal Communications Commission’s proposed rules governing privacy practices of broadband Internet access service (“BIAS”) providers would do. This commentary examines the impacts of the proposed rules on consumers and the economy and explains how privacy protection should put consumers first.
Latest Research from the GW Regulatory Studies Center
By Marcus Peacock
Although spending on U.S. regulatory programs has doubled in the last 20 years, that trend is unlikely to last. How these programs manage budget cuts will determine whether downsizing harms or helps regulatory performance. Leaders of regulatory agencies must avoid satisfying tighter budgets with temporary “mindless austerity” measures that anger workers. Instead managers should use scarcity to find, with workers, “frugal innovations” that can significantly and permanently improve program value. In this working paper, Peacock examines how agencies can get budget cuts to help rather than harm.
By Marcus Peacock
What can regulatory reformers learn from past government-wide reform efforts? Two previous Regulatory Insights describe eight major U.S. government initiatives that failed to improve accountability. This Insight identifies a lack of leadership and unfaithful execution by agency personnel as barriers to success. These problems could be addressed by: (1) codification of reform; (2) adopting modest reform proposals (incrementalism); (3) creating third parties to implement/enforce reform; and (4) establishing competition between regulatory programs such as through a regulatory budget.
By Sofie E. Miller
The Department of Energy’s proposed rule would establish new energy efficiency standards for manufactured housing (formerly known as mobile homes). Due to anticipated price increases, the rule would have a regressive effect on low-income and elderly households, who are the primary occupants of manufactured homes. DOE’s analysis doesn’t take into account resale market obstacles that could prevent homeowners from recouping the higher upfront costs of efficient units, especially in Southern states with high poverty rates that bear the highest costs from the rule.
Public Comment on The Department of Education’s Proposed Rule on Student Assistance General Provisions, Federal Student Loans Programs and Teacher Education Assistance for College and Higher Education Grant Program
By Daniel R. Pérez
The total outstanding balance of student loans is currently estimated to be $1.35 trillion, and default rates among borrowers have reached their highest levels in 20 years. The rule proposed by The Department of Education (ED) would make several amendments to regulations governing its Federal Direct Loan Program, including: 1) an expansion of the conditions wherein ED forgives borrowers’ loan balances, 2) additional provisions that broaden its ability to recover losses from institutions, and 3) expanded financial requirements for postsecondary schools. ED estimates this rule could have annual federal budget impacts of up to$4.23 billion.
Structure vs. Process: Examining the Interaction between Bureaucratic Organization and Analytical Requirements
By Stuart Shapiro
Attempts by politicians to control bureaucratic decisions include both structural organization and procedural rules. But how do these interact? This article examines the relationship between bureaucratic structure and the requirement that agencies conduct an analysis of their decisions prior to their issuance in the context of two types of analysis: cost-benefit analysis and environmental impact assessment. The research finds that conduct of analysis is affected by where analysts are placed in agencies. In particular independence of analysts has a tradeoff. Despite this, analysts expressed a clear preference for independence.
By Sofie E. Miller and Daniel R. Pérez
The final months of presidential administrations are accompanied by a significant increase in regulatory output as the executive branch relies increasingly on unilateral activity in a rush to implement its remaining policy priorities. This has come to be known as the “midnight period.” This report contains two robust, quantitative models that contribute to the scholarship in this area by: predicting the number of economically significant rules likely to be issued during the Obama administration’s final months, and finding that independent regulatory agencies do not increase their regulatory output during presidential transitions.
Public Comment on EPA’s Proposed Renewable Fuel Standards for 2017 and Biomass-Based Diesel Volume for 2018
By Sofie E. Miller
EPA’s latest Renewable Fuel Standard proposal would increase the mandated total renewable fuel production to 18.8 billion gallons in 2017. Although it was intended to improve the environment, availability of new scientific, technical, and economic information shows that the RFS program is likely causing significant environmental harm through increased greenhouse gas emissions and damage to waterbodies and ecosystems. Given the environmental damage and the large economic impact of the standards, EPA should update its benefits analysis and consider using its waiver authority to further reduce the standards.
By Sofie E. Miller
To improve its ongoing retrospective review efforts, this public comment recommends that the Department of Energy incorporate plans for retrospective review into its economically significant or major rules, and provide enough time between energy efficiency standards to allow for an effective review of each rule before increasing the stringency of its standards. DOE should also consider surveys or other measures of actual consumer behavior to ensure that its assumptions about household appliance energy use are accurate. Finally, DOE should commit to measuring whether its standards negatively affect competition in regulated industries.
Improving the Accountability of Federal Regulatory Agencies, Part II: Assessing Eight Government-wide Accountability Reforms
By Marcus Peacock
Greater accountability at regulatory agencies is desirable because (1) the public has a right to know how government affects society and (2) greater accountability improves agency performance. As described in the last Insight in this series, the U.S. attempted eight major government-wide initiatives to increase accountability at federal agencies, including regulatory agencies. This Insight reviews public and expert opinion, which indicate these initiatives failed to improve accountability. New proposals to improve accountability at regulatory agencies could benefit from understanding why previous efforts fell short.
Improving the Accountability of Federal Regulatory Agencies, Part I: A Review of Government-Wide Efforts
By Marcus Peacock
Given the broad interest in improving regulatory accountability, especially by learning from the actual results achieved by previous regulations, it is ironic that little has been done to learn from the results of past regulatory reform efforts. Before mandating further requirements, Congress and the President should examine past government-wide accountability initiatives to assess their outcomes. This first Regulatory Policy Insight in a series of three on improving regulatory accountability identifies eight major past initiatives. Future Insights will examine the relative success of these eight reforms and what lessons they offer.
By Richard J. Pierce, Jr.
For 35 years OIRA has used benefit-cost-analysis to review major rules issued by executive branch agencies. Generally, OIRA reviews major proposed agency rules to determine whether their expected benefits to society exceed their expected costs to society. If the estimated costs of a proposed rule exceed its estimated benefits, OIRA urges the agency to change the rule in ways that will increase its benefits and reduce its costs. For almost as long as OIRA has been applying BCA, some of the smartest and most productive progressive scholars have criticized the role of OIRA generally and OIRA’s use of BCA in particular. It is time for those scholars to stop wasting their energy tilting at windmills and put their extraordinary talents to use in more promising endeavors.
By Susan E. Dudley
Despite efforts to ensure that new regulations provide net benefits to citizens, the accumulation of regulations threatens economic growth and well-being. As a result, Congress is exploring the possibility that applying fiscal budgeting concepts to regulation could bring more accountability and transparency to the regulatory process. This Essay in the NYU Journal of Legislation and Public Policy examines the advantages and challenges of applying regulatory budgeting practices and draws some preliminary conclusions based on successful experiences in other countries.
By Sofie E. Miller
In testimony before the House Energy and Commerce Subcommittee on Energy and Power, Senior Policy Analyst Sofie E. Miller explains that one-size-fits-all energy efficiency standards can deprive consumers of the ability purchase the appliances that best suit their unique circumstances and constraints. As a result, these regulations cost consumers rather than benefiting them, as the Department of Energy posits. In addition, these standards disparately impact low- and median-income households, and current analyses of their effects suggest that these populations bear significant costs as a result.
Public Comment on Protecting the Privacy of Customers of Broadband and Other Telecommunications Services
By J. Howard Beales III
The FCC has proposed detailed rules governing privacy practices of broadband Internet access service (“BIAS”) providers. The rule would establish new, and different, privacy standards, beyond those that apply to other Internet companies. This comment argues that the FCC’s rationales for treating BIAS providers differently are flawed and the proposed separate regulatory regime for broadband providers would inhibit innovation, reduce competition, and harm consumers. If it feels it must regulate, the FCC should adopt a functionality based approach to privacy regulation to maximize consumer welfare.
The Federal Government on Autopilot: Delegation of Regulatory Authority to an Unaccountable Bureaucracy
By Sofie E. Miller
In testimony before the House Task Force on Executive Overreach, Senior Policy Analyst Sofie E. Miller explains that retrospective review is a key component of an effective regulatory process because it allows agencies to review whether existing rules are accomplishing their intended goals and to determine what effect they have on the regulated public. Miller argues that writing rules at the outset to facilitate this measurement can improve outcomes and enable policymakers to learn from what has worked and what hasn’t.