What's New from the GW Regulatory Studies Center
1/18/17 - Federalist Society Review, Vol. 18, The Risks of Regulating in the Dark, by Sofie E. Miller
1/18/17 - Regulation Digest, Vol. 6 No. 3
1/18/17 - A Tumultuous Inaugural Week in Washington, by Susan E. Dudley
1/14/17 - Washington Post: With days left in office, President Obama ushers in dozens of policies. But will they stay seated?, citing Daniel R. Pérez
1/13/17 - Bloomberg BNA: Total Rules Drop, but Costly Ones Climb Under Obama, citing Daniel Pérez
1/11/17 - Regulation Digest, Vol. 6, No. 2
1/11/17 - A Useful Measure of Regulatory Output, by Daniel R. Pérez
1/10/17 - GW RSC 2016 Highlights
1/4/17 - Regulation Digest, Vol. 6, No. 1
1/9/17 - Bloomberg BNA: Outlook 2017: Reality of Removal Will Temper Trump Dereg Plans, quoting Susan Dudley
New Commentaries from the George Washington University Regulatory Studies Center
A Tumultuous Inaugural Week in Washington
A Useful Measure of Regulatory Output
As a Parting Gift, Obama Administration Releases Final Report on Regulation
Regulatory Reset: How easy is it to undo regulation?
President Obama’s Midnight Regulatory Agenda
Remembering Charlie Schultze
The Midnight Uptick: Hasty Turnaround for Costly Student Loan Rule
Regulatory Review in the Land of Lincoln
Taiwan: Taking Public Participation a Step Further
1/18/17 - The U.S. prides itself on smooth transitions of power, but that doesn’t mean this inaugural week isn’t a tumultuous one. President Obama has until noon on Friday to cement his final legacy; then at 12:01 pm it will be President Trump’s turn to flex his muscle. This commentary provides a quick rundown of the policy changes the lead-up to January 20th has brought, and what to expect on Friday afternoon.
1/11/17 - The Office of Management and Budget recently published its Exit Memo highlighting several aspects of the agency’s work under President Obama. The memo includes quantitative metrics of the administration’s regulatory output to draw comparisons with regulations issued by agencies under Presidents Clinton and Bush. This commentary describes why measuring regulatory output by comparing economically significant rules is a metric that better characterizes an administration's regulatory priorities.
1/3/17 - On the day before Christmas Eve, OMB released its annual Draft Report to Congress on the Benefits and Costs of Federal Regulations, which provides a window into regulatory activity conducted by federal agencies in Fiscal Year 2015. According to the Report, new regulations issued between October 2014 and September 2015 have both higher costs and higher benefits than those issued in FY 2014, and that the Environmental Protection Agency remains by far the largest contributor to both regulatory costs and benefits in this Report.
11/20/16 - President-elect Trump has promised big cuts in regulation, including through a requirement that for “for every one new regulation, two old regulations must be eliminated.” How easy would this be to accomplish? It depends on the circumstances. While regulations cannot be repealed with the stroke of pen (unlike executive orders, which presidents can unilaterally issue and unilaterally revoke), there are procedures for modifying or removing them. In this commentary, Susan Dudley weighs in.
11/18/16 - OIRA released its biannual Unified Agenda of Regulatory and Deregulatory Actions, providing the public with a first glimpse at upcoming regulations in the final days of the Obama administration. The final months of an outgoing presidential administration typically generate a significant amount of regulatory activity, termed “midnight” regulation. With a presidential transition on the horizon, many of the midnight regulations on the Obama administration’s agenda could be subject to disapproval by Congress using the Congressional Review Act.
11/8/16 - George Eads remembers Brookings economist Charles Schultze, author of The Public Use of Private Interest. As Chair of President Carter’s Council of Economic Advisers, Schultze helped to establish the practice of presidential supervision over executive branch regulatory agencies, along with economically informed thinking about regulatory reform.
11/2/16 - The Department of Education (ED) published a final rule concerning its student loan program on November 1, 2016. This rule attracted a great deal of input during its notice and comment period; ED notes that it received comments from over 50,000 parties. The Department completed its review with remarkable speed considering the amount of input received. The final rule could cost taxpayers up to $3.5 billion per year. Notably, the Department published its final rule without making any substantive changes as a result of the public input it received.
10/25/16 - Governor Bruce Rauner recently created the Illinois Competitiveness Council, which is charged with reviewing existing rules to eliminate unnecessary regulatory burdens that stifle competition and burden consumers. Illinois isn’t the first to recognize how outdated rules can negatively affect citizens and businesses, and this initiative builds off of efforts in other states and in the federal government. Retrospective review of existing rules is necessary for a well-functioning regulatory process, and Illinois’s new Competitiveness Council is a step in the right direction.
10/20/16 - Recently, the Executive Yuan of Taiwan issued a directive to extend the duration of the comment period in administrative rulemaking from 14 days to 60 days. This was a welcome move as the longer comment period provides greater opportunity for public participation. In this commentary, Prasad examines the challenges of operationalizing the notice and comment process and possible areas of improvement.
Latest Research from the GW Regulatory Studies Center
By Sofie E. Miller in the Federalist Society Review, Volume 18
“Midnight” regulations are those issued after the November presidential election but before Inauguration Day as the outgoing administration attempts to finalize its regulatory policy priorities with a surge of rulemaking activity. Scholars have theorized that midnight rules are problematic because they short-circuit important procedural safeguards that ensure high-quality regulatory outcomes, like rigorous analysis, internal and external review, and public input in the rulemaking process. Stepping beyond theory, recent examples—such as the Department of Energy’s energy efficiency standards for clothes washers—illustrate that midnight rules impose real burdens.
President-elect Trump has promised to “reform the entire regulatory code to ensure that we keep jobs and wealth in America.” To that end, scholars at the George Washington University Regulatory Studies Center offer a list of 10 reforms to regulatory processes that could be accomplished through executive action. While other potential reforms could be achieved through the courts or by working with congress, these reforms focus on actions that are within the purview of the executive branch.
By Marcus Peacock
President-elect Trump endorsed “a requirement that for every new federal regulation, two existing regulations need to be eliminated” or what could be called a “two-for-one” requirement. This working paper addresses how such a process might work including its scope; what to measure; additional workload; and whether it outlasts a Trump administration.
Public Comment on NHTSA’s Federal Automated Vehicles Policy: Accelerating the Next Revolution In Roadway Safety
By Sofie E. Miller, Howard Beales and Daniel R. Pérez
This comment on the National Highway Traffic Safety Administration’s (NHTSA) recent Federal Automated Vehicles Policy considers the impact of regulating driverless car technology on innovation and social welfare. NHTSA is correct to be cautious of the effects that a federal policy could have on innovation, particularly because the safety gains from highly automated vehicles (HAV) could be significant. As a result, the agency should avoid any type of premarket approval authority for HAV technology, which could potentially delay the adoption of life-saving innovations and result in thousands of traffic fatalities.
By Marcus Peacock, Sofie E. Miller and Daniel R. Pérez
Scholars at the GW Regulatory Studies Center show how the U.S. could make regulations more evidence-based in a comment to the Commission on Evidence-Based Policymaking. Evidence-based regulations plan for, collect, and use evidence to predict, evaluate and improve societal outcomes throughout the rule’s life. This comment lays out a process for producing such rules and provides over a dozen specific recommendations on how the U.S. could better adopt and implement such a system.
Utilizing Behavioral Insights (without Romance): An Inquiry into the Choice Architecture of Public Decision-Making
By Adam C. Smith
To justify regulations that reduce consumer choice, policymakers are increasingly relying on observations from behavioral economics suggesting that people don’t always make rational decisions. However, behavioral economists generally neglect a complementary examination of public decision-makers. Through a public choice lens, Smith compares two public agencies influenced by behavioral economics, the U.S. CFPB and U.K Behavioral Insights Team, and finds that their different institutional structures lead to divergent policy outcomes. He concludes that for policies to be welfare-improving, they must be based on an understanding of public choice architecture as well as private choice architecture.
By Daniel R. Pérez
The Department of Homeland Security’s proposed rule would expand the use of its discretionary authority to parole individuals into the United States for reasons of “significant public benefit” to include foreign entrepreneurs looking to start a business in the U.S. DHS recognizes that “the full potential of foreign entrepreneurs to benefit the U.S. economy is presently limited since many…do not qualify under existing nonimmigrant and immigrant classifications.” The rule proposes several criteria for approving applicants on a case-by-case basis. This comment proposes several changes that DHS could make to its proposed rule to maximize its potential benefits.
Chapter by Sofie E. Miller and Brian F. Mannix
Federal regulations restrict the energy that everyday products can use, for everything from cars to microwaves. While these rules impose significant costs on consumers, the benefits are harder to identify. Agencies claim that restricting consumers’ choices provides consumers with large benefits, but this reasoning is hard to reconcile with the fact that consumers have many legitimate reasons to prefer the appliances they buy and the cars they drive. This chapter explores the reasoning behind energy efficiency regulations and why these reasons are insufficient to support the large costs they impose on consumers, especially low-income consumers.
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 Arthur G. Fraas and Randall Lutter in the Journal of Benefit-Cost Analysis
Government mandates to disclose information are a standard response to problems of asymmetric information. Fraas and Lutter examine recent major U.S. regulations issued between 2008 and 2013 to identify disclosure mandates and look for quantitative assessments of their effectiveness in improving comprehension. The authors find that although mandated disclosures underpin a number of major federal regulatory initiatives, agencies infrequently issue such mandates based on scientifically valid, controlled studies of the improvements in comprehension from such disclosure and recommend reforms to improve federally mandated information disclosure.
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.