After a rule is issued by any federal agency, any person, firm, or organization whose activities would be impeded by the rule or whose costs would increase because of it may challenge the rule in federal court. Federal courts will subject the agency rule to a thorough and independent analysis, making sure that the agency has reasonably interpreted its statutory authority, proceeded on the basis of rational fact-finding, and taken reasonable account of arguments both for and against its regulatory approach. Courts show agencies far less deference than they would show to Congress if Congress enacted the very same regulations, but in the form of a statute.
What congressional Republicans would like to do is to virtually shut this process down. Offered under the label of regulatory “reform,” what is being contemplated is complicating the rulemaking process even further so that the machinery of public administration produces few new regulations and courts have even more power to rebuff those rules that do emerge. This campaign against regulation comes chiefly in the form of two proposed statutes that hardly any non-lawyer knows about.
The shorter and easier-to-read of the two bills is called the “Regulations from the Executive in Need of Scrutiny Act of 2017,” or REINS Act, which passed the House in early January. If enacted, no agency could issue a new regulation unless it amended or repealed some other rule or rules “to completely offset any annual costs of the new rule to the American economy.” In other words, if implementing a new safety rule imposes costs on the economy of $10 million per year, then the agency would have to rescind enough existing rules to offset those costs fully. But—and this is significant—it must do so even if the social benefits of the new regulation, say, $50 million in annual savings from reduced health-care costs, far outweigh the costs of rule compliance. This is cost-benefit analysis without due attention to the benefits.
Arguably even more consequential is a requirement in the REINS Act that any regulation that falls under the category of a “major rule” would not go into effect at all unless Congress adopted a subsequent statute specifically approving the rule. In other words, before an agency could issue a rule that could result in “a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions,” Congress would have to legislate twice—once to authorize an agency’s rulemaking process and once to approve its output.
Finally, and most radically, the law envisions that, every year, each agency that makes rules would designate 10 percent of its existing regulations to be treated under the REINS Act as if they were newly promulgated. Within 10 years, Congress would have to approve every major regulation currently on the books, and any rule not so approved would no longer be in effect. Even assuming a Congress intent on evaluating all existing regulations in good faith, there is not even a remote possibility that Congress would complete this work on time. Under its current procedures, Congress, for example, is supposed to enact just 12 appropriations bills by October 1 of each year. In the last four decades, it has managed to meet that deadline exactly four times. It’s highly unlikely that Congress could or would conscientiously review all the major regulations of over 100 federal agencies on a timely basis.