Sofie E. Miller
Regulation is one of the primary vehicles by which federal policy is formulated, and it affects every household, employee, and business in the United States. Recognizing the importance of the regulatory process, the U.S. Senate Homeland Security and Governmental Affairs Committee recently released a report, “Direct From the Source: Understanding Regulation From the Inside Out,” which features some practical solutions for regulatory reform submitted by the GW Regulatory Studies Center and other sources.
Reporting on the Effects of Regulation
The Committee’s 1,036-page report contains a wealth of information from businesses, advocates, non-profits, and academics on the effects of regulation in general and specific rules in particular. While recognizing the important role of regulations in public policy, the submissions list rules implementing the Clean Water Act, Clean Air Act, and Dodd-Frank Act among those that merit reform.
In response to a request from the Committee, in May 2015 the GW Regulatory Studies Center submitted several recommendations for improving the regulatory process. Our recommendations for improving regulatory analysis, retrospective review, congressional oversight, and judicial review are described below.
Improving Analysis & Retrospective Review
Presidents of both parties for more than 30 years have supported ex ante impact analysis of regulations. Executive Order 12866 established the philosophy that before issuing regulations agencies should identify a compelling public need, evaluate the likely effects of alternative regulatory approaches, and select the alternative that provides the greatest net benefit to Americans. However, EO 12866 does not have the power of law, and courts cannot enforce it. Codifying these requirements would have several advantages; one of which is that it would make these standards applicable to independent agencies which are not currently subject to executive orders.
Institutionalizing retrospective review also has the potential to improve ex ante analysis in addition to improving ex post regulatory outcomes. Reviewing the effects of existing rules provides regulators—and the public—with important information about how policies work, and can also verify whether assumptions that went into the ex-ante analysis were realistic. One major impediment to review is that agency rules are not designed at the outset to be reviewed. Congress could consider several options for encouraging better retrospective review, including establishing an independent body to make recommendations and requiring agencies to write their rules with an eye toward review.
Legislative Oversight & Judicial Review
Executive branch oversight of regulatory actions has proven valuable, but it isn’t sufficient to ensure that regulation reflects Congress’ intent. To that end, Congress may want to consider legislation that would strengthen its own ability to control regulation. This could take many forms, including a new body within the legislative branch charged with reviewing regulation, similar to the role of the Office of Information and Regulatory Affairs in the executive branch. Developing this regulatory expertise in Congress may be particularly important during presidential transitions, when regulatory activity tends to increase.
Judicial oversight provides an important Constitutional check, but courts defer to agency expertise when evaluating regulatory records, and requirements in presidential executive orders are not enforceable by law. Judicial review could be valuable not because the courts have a particular expertise in regulatory analysis but because agencies tend to take more seriously aspects of their mission that are subject to litigation. Like executive and Congressional oversight, judicial oversight would likely make regulatory agencies more accountable for better decisions based on better analysis
Focus on Reform
The Committee should be commended for undertaking the important work to identify areas ripe for regulatory reform. With the benefit of public input and feedback from stakeholders in all sectors, the Committee is well-equipped to address ineffective regulations and inadequate oversight by reforming the rulemaking process.
Download the report, Direct from the Source: Understanding Regulation from the Inside Out, released by Senator Ron Johnson, Chairman of the U.S. Senate Homeland Security and Government Affairs Committee, January 15, 2016