What's New from the GW Regulatory Studies Center
8/30/19 - The Ambition of the Administrative State, by Susan Dudley
8/28/19 - Tech firms struggle to police content while avoiding bias, Associated Press quotes Jerry Ellig
8/26/19 - 10 Years of Going Back to School, by Bryce Chinault
8/19/19 - OIRA Wants You…To Schedule Meetings Online, by Jessica Payton
8/14/19 - Deregulation Window Closing 17 Months Before Trump’s Term Ends, Bloomberg quotes multiple RSC scholars
8/12/19 - Eliminating Barriers to Affordable Housing, by Sam Vankevich
8/5/19 - Paradise by the DASHBOARD Act?, by Maxwell Cook
7/31/19 - Clean Power v. Clean Energy, by Brian Mannix
7/31/19 - Testimony: Agricultural Research and 2018 Farm Bill Implementation, by Joe Cordes
7/23/19 - Bounded Rationality in the Rulemaking Process, by Zhoudan Xie
@RegStudies
New Commentaries from the George Washington University Regulatory Studies Center
The Ambition of the Administrative State
10 Years of Going Back to School
OIRA Wants You…To Schedule Meetings Online
Eliminating Barriers to Affordable Housing
Paradise by the DASHBOARD Act?
Bounded Rationality in the Rulemaking Process
A Two-Year Lookback on Trump’s Deregulatory Record
Francisco Franco Still Dead, Naked Alcohol Protectionism Still Unconstitutional
IRS Rule on Charitable Deductions: A Worthy Goal, a Skillful Fix, but Surprisingly Thin Evidence
The Ambition of the Administrative State
8/30/19 -- America’s Founding Fathers strove for a government based on a separation of powers, wherein federal power would be limited, and divided among three branches. Counting on “ambition [to] counteract ambition,” they designed the Constitution to allow each branch to challenge the powers or decisions of another. Over the last century, the executive branch has grown dramatically, raising questions as to how relevant the Framers’ notion of checks and balances is today.
10 Years of Going Back to School
8/26/19 -- Later this Fall, the GW Regulatory Studies Center will celebrate 10 years at the university. The Center’s first decade has been a fulfilling journey to improve regulatory policy through research, education, and outreach, and we look forward to the decade ahead.
OIRA Wants You…To Schedule Meetings Online
8/19/19 -- In an effort to modernize a critical part of the rulemaking process, the Office of Information & Regulatory Affairs recently developed an online platform for individuals and groups interested in a particular proposal to request a formal meeting.
Eliminating Barriers to Affordable Housing
8/12/19 -- Executive Order 13878 creates a council tasked with reducing regulations to make housing more affordable. The multi-agency council will work with all levels of government, and private sector stakeholders to collect information and propose reforms before its termination date of Jan. 21, 2021.
Paradise by the DASHBOARD Act?
8/5/19 -- The DASHBOARD Act would impose several data-disclosure requirements on large companies that monetize online user data. The Act assumes a market failure of information asymmetry, where consumers undervalue their personal data. However, the evidence for this claim is indeterminate, and a lack of clarity on data property rights and liability could make corresponding rules difficult to enforce.
Bounded Rationality in the Rulemaking Process
7/23/19 -- Regulators are humans, not robots. This simple truth reminds us that individual decision-makers responsible for developing and implementing regulations face the same cognitive limitations that consumers face in the marketplace. Institutional reforms to regulators’ choice architecture may help mitigate these biases.
A Two-Year Lookback on Trump’s Deregulatory Record
7/15/19 -- Susan Dudley and her co-panelists discuss the effect of Trump’s Executive Order 13771, repeated losses for the administration in court, the administration’s view of benefit-cost analysis, and more at an ABA Regulatory Policy Committee meeting.
Francisco Franco Still Dead, Naked Alcohol Protectionism Still Unconstitutional
7/3/19 -- The Supreme Court ruling in Tennessee Wine & Spirits Retailers Association v. Thomas confirms that the U.S. Constitution does not allow states to engage in naked economic protectionism just because the product is alcohol.
IRS Rule on Charitable Deductions: A Worthy Goal, a Skillful Fix, but Surprisingly Thin Evidence
6/17/19 - The IRS prohibits individual taxpayers from deducting charitable contributions on their federal taxes if they received a state or local tax credit in exchange for the contribution, but allows them to count such donations as state or local tax payments subject to the $10,000 cap on state and local tax deductions.
Research
David Versus Godzilla: Bigger Stones
By: Jerry Ellig & Richard Williams
For nearly four decades, U.S. presidents have issued executive orders requiring agencies to conduct comprehensive regulatory impact analysis (RIA) for significant regulations to ensure that regulatory decisions solve social problems in a cost-beneficial manner. Yet experience demonstrates that agency RIAs often fail to live up to the standards enunciated in executive orders and OMB guidance. We suggest four managerial changes that could increase OIRA’s leverage.
Codifying the Cost-Benefit State
By: Brian F. Mannix & Bridget C.E. Dooling
In this article we focus on the executive’s authority to write a cross-government “rule-on-rules” to govern regulatory analysis, including benefit-cost analysis and the courts’ authority to enforce such a rule.
OIRA Past & Future
By: Susan E. Dudley
While some of the Office of Information and Regulatory Affair’s functions are statutorily granted, others—notably those related to regulatory policy—derive from presidential executive orders. This paper reflects on OIRA's evolution over the almost 40 years since the Paperwork Reduction Act created it in 1980 to understand what has made it so durable.
Clean Power v. Clean Energy
By: Brian F. Mannix
The Environmental Protection Agency (EPA) recently issued three final regulatory actions governing greenhouse gas emissions from electric power plants. These rules will face new legal challenges based on both the economic analysis and the statutory authority for EPA’s actions. Mannix briefly reviews some of the major issues likely to be in contention.
Testimony: Agricultural Research and 2018 Farm Bill Implementation
By: Joseph J. Cordes
On June 13, 2019, the U.S. Department of Agriculture (USDA) released what it describes as a “Cost-Benefit Analysis” of the proposed relocation of NIFA and ERS from Washington DC to Kansas City. Based on its analysis the USDA concludes that relocation of these two agencies would save $19 million per year which could be reinvested in other USDA programs. This written testimony accesses the agency's benefit cost analysis under Circular A-94 standards.
Nudging the Nudger: Toward a Choice Architecture for Regulators
By: Susan E. Dudley & Zhoudan Xie
Recognizing that “bounded rationality” also occurs in the regulatory process and building on public choice insights that focus on how institutional incentives affect behavior, this article explores the interaction between the institutions in which regulators operate and their cognitive biases. It attempts to understand the extent to which the “choice architecture” regulators face reinforces or counteracts predictable biases. Just as behavioral insights can help design a choice architecture that frames individual decisions in ways that encourage welfare-enhancing choices, designing the institutions that counter regulators’ cognitive errors could lead to more public-welfare-enhancing policies.
IRS's Safe Harbor Notice on State and Local Tax Credits
By: Jerry Ellig
The IRS seeks comment on a guidance notice that allows taxpayers to count contributions for which they received a state or local tax credit as a payment of state or local taxes, subject to the $10,000 SALT cap. This notice corrects a problem created by a regulation issued on June 11, 2019, which prohibits taxpayers from taking a charitable deduction if they received a state or local tax credit in exchange for the contribution. Without this notice, the regulation is overly broad, because it takes away the deduction for taxpayers below the SALT cap even though they are not a cause of the tax avoidance problem the regulation seeks to solve.
Privacy Research: The Need for Evidence in the Design of U.S. Privacy Policy
By: Daniel R. Pérez
This regulatory policy insight details the importance of using evidence to inform the development of U.S. privacy policy and identifies the kinds of evidence that would be particularly useful for policymakers to consider.
Public Interest Comment: FDA's Proposed Rule on Mammography Standards
By: Bridget C.E. Dooling
Early detection of breast cancer can save lives, and mammography is one of the screening tools that has contributed to reductions in breast cancer mortality. The FDA has a unique role in mammography and should be commended for proposing to update its rules, however, the proposed rule’s breast density notification raises issues of state preemption; lessons that can be learned from testing, evaluation, and assessment of prior state action; and analysis of distributional and equity effects.
The Relationship Between Regulatory Form & Productivity: An Empirical Application to Agriculture
Under a cooperative agreement with the United States Department of Agriculture, the George Washington University Regulatory Studies Center produced this four-chapter report detailing the findings of its research on the relationship between regulation and agricultural productivity. This report does not represent an official position of the GW Regulatory Studies Center, the George Washington University, or the United States Department of Agriculture.
Organizational Process, Rulemaking Pace, and the Shadow of Judicial Review
By: Christopher Carrigan & Russell W. Mills (Published by the Public Administration Review)
Scholars have long understood that structuring internal work processes into more hierarchical or team‐based arrangements has consequences for organizational outputs. Building on this insight, this research examines the relationship between how agencies organize their rulemaking routines and the resulting rules. Tracking the job functions of rule contacts for economically significant rules proposed over a four‐year period, the analysis demonstrates that expanding the breadth of personnel types closely involved in a rulemaking is associated with a reduction in the time it takes to promulgate the rule. However, increasing the pace at which rules are finalized is not without cost, as those completed faster appear more likely to be overturned when challenged in court. The article not only adds another dimension to empirical scholarship studying rulemaking, which has largely focused on how forces originating outside the agency affect rules, but also suggests the importance of considering competing priorities in designing rulemaking processes.
Restoring Internet Freedom as an example of How to Regulate
By: Jerry Ellig
Thomas Lambert’s How to Regulate contains some simple but critical pieces of advice for regulators: (1) Diagnose the problem before settling on a solution, (2) Compare the merits (benefits and costs) of alternatives, and (3) Recognize that regulators, like the rest of us, respond to the incentives created by the organization in which they are embedded. The FCC’s Restoring Internet Freedom order presents an example of how to apply those principles in practice. The 2017 order’s decisions on blocking and throttling, paid prioritization, and the general conduct rule are informed by an extensive diagnosis of the problems the regulations are intended to solve and an assessment of the merits of alternative solutions. The decision to reclassify broadband from Title II to Title I takes into account the public choice incentives that could lead regulators to behave in a less-than-optimal way.
Expanding OIRA Review to IRS
By Bridget C. E. Dooling
Executive Order 12866 describes U.S. policy on regulatory planning and review. It directs agencies to identify the nature and significance of the problem they are trying to solve with regulation, to identify alternative solutions, to assess the quantifiable and non-quantifiable costs and benefits of each alternative, and then to choose the option that maximizes net benefits to society, taking into account distributional effects and other considerations. That policy, which has governed U.S. regulation for several decades, is managed by the Office of Information and Regulatory Affairs (OIRA). It is also subject to several exemptions. In April 2018, the U.S. Department of Treasury and the Office of Management and Budget signed a historic memorandum of agreement (MOA) narrowing one of those exemptions. The MOA expands the number of Internal Revenue Service (IRS) regulatory actions for which IRS must comply with EO 12866. This action moved tax rules out of the “presidential tax-policy blind spot” as described by Professor Clint Wallace. This working paper offers a close study of the MOA and reveals six striking features that not only affect tax regulation, but also offer intriguing possibilities for (1) scholarly understanding of OIRA as an institution and (2) the future of regulatory review of independent agencies, which is the largest remaining exemption from OIRA review.
Testimony: From Beginning to End: An Examination of Agencies’ Early Public Engagement and Retrospective Review
Susan Dudley testified before the U.S. Homeland Security and Governmental Affairs Regulatory Affairs and Financial Management Subcommittee on May 7, 2019, commending the Subcommittee’s bipartisan regulatory reform legislation. By 1) engaging public input earlier in the regulatory development process and 2) providing for retrospective review of regulations to evaluate whether they are achieving their objectives, the two bills can help ensure that regulations are based on the best evidence available and that they are working as intended for the American people.
Public Interest Comment: DOE's Energy Conservation Program for Appliance Standards
By: Mark Febrizio
The Department of Energy is proposing to update and modernize its current rulemaking methodology for establishing new or revised energy conservation standards and test procedures, called the “Process Rule.” While the agency has adhered to internal procedures for years, the notice of proposed rulemaking seeks to make those procedures binding on the agency. The proposed rule includes many important provisions and is largely a step in the right direction. This public comment focuses on eight areas of interest in the revised Process Rule, highlighting both beneficial changes and additional areas for improvement.
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