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One of the first legislative actions out of the 115th Congress this year was the passing the Regulatory Accountability Act (RAA) through the House of Representatives. The bill, which restructures the administrative state, ensures that federal agencies execute the intent of Congress and not the intent of an agency.
Now, just yesterday, Senators Portman (R-Ohio) and Heitkamp (D-N.D.) introduced the Senate companion of the RAA, looking to make sense of our outdated regulatory system. While congressional control of executive branch agencies may seem like a common sense objective, it is a feat achieved only one other time in our nation’s history —with the enactment of the Administrative Procedure Act in 1946 — and only after decades of congressional debate. Senators Portman and Heitkamp now have the opportunity to enact a law that will likely last for decades.
Why is something as important as ensuring that agencies implement the intent of Congress so difficult for Congress achieve?
The answer lays in the fact that Congress creates regulatory agencies to implement laws designed to solve the myriad of problems that impact citizens. When Congress enacts a statute, it delegates broad powers to agencies to find ways to solve matters of concern to citizens. But as society changes, agencies often use past delegated authorities to address new concerns. Over time the powers delegated to agencies accumulate, and this “bucket” of accumulated and reinterpreted powers is used by agencies to address matters a past Congress may have never imagined.
While most federal agencies exercise regulatory self-restraint, there are at times agencies that use these delegated powers as if the agency was the elected legislature. And Congress can sometimes find itself unable to control the conduct of that agency. More troubling are those situations when the courts fail to scrutinize agency action by granting deference to agency overreach, causing the checks and balances in our system of government to fail.
In an effort to control agency overreach, Congress passed the Administrative Procedure Act in 1946 to formalize public participation, ensure agencies regulate in a rational manner, and provide for court review of agency action. Agencies were given discretion to operate in an informal manner, i.e. proposed rule, public comment, agency final rule and court review.
For most of the hundreds of thousands of regulations issued by agencies, federal agencies get them right. But as the nation grew in size so did the complexity of regulations. Unfortunately federal agencies have continued with the informal rulemaking process for all regulations, meaning the smallest and least impactful regulation went through the same rigorous process as the most complex and most costly. This is the point where the informal rulemaking process breaks down and the genius of the RAA is able to shine.
The RAA divides the regulatory universe into two big categories – general day-to-day regulations and regulations that have a high impact on society (i.e. being transformational and having an annual cost of over $100 million annually). The U.S. Chamber’s report Taming the Administrative State, Identifying Regulations that Impact Jobs and the Economy, analyzed the 32,882 final regulations issued between 2008 and 2016 and identified only 140 regulations in that time period that could be characterized as high-impact or transformational. Or simply, less than one-half of one percent of all final regulations between 2008 and 2016 fall into a category of regulations needing enhanced scrutiny to ensure they implement the intent of Congress, not the intent of the agency.
Therefore, the genius of the RAA is that it leaves in place the parts of the regulatory system that keep the proverbial trains running on time while requiring agencies to do more homework on the most costly and transformational rules.
Finally, the RAA requires that agencies pay sufficient attention to detail so they avoid harming jobs, businesses, or communities. In essence the RAA requires that the agency gets the rules right and implements what Congress intended. Specifically, for the most costly regulations RAA would require agencies to:
- involve the public in the process at the beginning of its deliberations so the agency can have the privilege of hearing all sides of an issue before deliberating;
- disclose to the public the information that forms the basis of its regulations so the public knows what information the agency is relying upon;
- allow the public to challenge agency information to ensure the agency uses the best available information;
- prepare a cost-benefit analysis for the most costly proposals so the public appreciates the costs and benefits of what the agency is proposing;
- select the most cost-effective regulatory alternative; and
- allow the public to question the facts, economics and science relied upon by the agency as a reason to regulate.
The nation needs a regulatory process that fosters transparency, enhances public participation, imposes accountability in agency decision making, and ensures that agencies implement the intent of Congress.
It’s time for history to be made. Let’s enact the RAA!