U.S. Chamber of Commerce Advances the Attack on Regulations

6/14/2011

The U.S. Chamber of Commerce (the Chamber) continues to attack public protections and will advance the anti-regulatory community’s agenda with a series of planned public events across the country later in 2011.

To help spread its message, the Chamber has enlisted former Sen. Evan Bayh (D-IN) and former Bush White House chief of staff Andrew Card for a national "roadshow" of "speeches, events, and media appearances," said Chamber president Tom Donohue in a June 2 memo. Bayh, who now works for lobbying/law firm McGuireWoods and serves as a Fox News commentator, will join Card in carrying out "a bipartisan message of regulatory reform." The Chamber is expected to officially announce Bayh’s involvement and provide more details on the tour later in June.

Donohue also applauded the Chamber's efforts to "persuasively" link "over-regulation" to job loss and credited the group with helping delay or destroy several rules promulgated by the Occupational Safety and Health Administration (OSHA) and the U.S. Environmental Protection Agency (EPA). Bayh and Card will take part in an expansion of the Chamber’s communications campaign, speaking about the dangers of the so-called "regulatory overload" facing the nation.

The Chamber also criticized the Obama administration’s regulatory record at a hearing held June 3 by the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce. Following up on a Jan. 26 hearing on "The Views of the Administration on Regulatory Reform," the hearing examined how the White House Office of Information and Regulatory Affairs (OIRA) is implementing President Obama’s Executive Order 13563, Improving Regulation and Regulatory Review.

The order, among other things, directed agencies to conduct retrospective reviews of existing significant regulations to determine whether they should be "modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives." In response, federal agencies submitted preliminary plans for conducting these reviews to OIRA. (See the June 1 issue of The Watcher for a summary of agency plans.)

William Kovacs, Senior Vice President of Environment, Technology & Regulatory Affairs, testified on behalf of the Chamber. While the Chamber has expressed tepid support for Obama’s executive order and the release of the review plans, Kovacs called for greater reform of what he characterized as "the bloated regulatory state."

OIRA Administrator Cass Sunstein testified that agencies "have already eliminated hundreds of millions of dollars in annual regulatory costs" and could produce over $1 billion in future savings. But according to Kovacs, the administration’s retrospective review effort is "not nearly enough."

Kovacs, echoing a sentiment expressed by many opponents of public protections, told the committee that regulatory agencies are overstepping their bounds. Agencies now have the ability to "'legislate by regulation' and possess legislative power nearly equal to that of Congress," he said. Sunstein defended agencies, noting that statutory intent is the administration’s guiding principle and that agencies cannot act without first being authorized by Congress to regulate.

Kovacs asserted that regulatory compliance costs are now up to $1.75 trillion a year, a number cited often by the Chamber and other regulatory opponents. This cost estimate comes from a heavily criticized report prepared by economists Nicole Crain and Mark Crain for the Small Business Administration. The report fails to consider the benefits of regulations, uses a series of flawed methods, and reaches cost estimates that differ dramatically from those reported by the Office of Management and Budget (OMB), which issues annual reports that consistently show that the economic benefits of regulation far outweigh compliance costs.

The $1.75 trillion figure "is the result of secret calculations, an unreliable methodology and a presentation calculated to mislead," said Professor Sidney Shapiro of the Center for Progressive Reform. The Congressional Research Service conducted its own assessment of the report and also identified serious problems with assumptions made in Crain and Crain’s estimates. The Economic Policy Institute (EPI) also criticized the report in an assessment of regulations released in April. Under questioning during the hearing, Sunstein noted that he disagreed with the Crains' analysis.

The Chamber also attacked the volume of existing regulations. Based on numbers compiled by Wayne Crews of the conservative Competitive Enterprise Institute, Kovacs stated that 170,000 rules accumulated from 1976 to 2009. The Chamber prepared a chart illustrating the "growth of federal regulations." At a glance, it appears that regulations grow in number every year, but the numbers in the table show that fewer final rules were promulgated in 2009 than in any other year after 1976. In stacking up the finalized rules year by year, these calculations exclude actions that clarify, modify, repeal, or phase-out regulations. (View Kovacs’ testimony.)

Kovacs also affirmed the Chamber’s support for the Regulations from the Executive In Need of Scrutiny (REINS) Act, a bill that would require congressional approval for all major regulations, as well as amendments to the Regulatory Flexibility Act that would require agencies to consider the indirect impacts of rules on small entities. In addition, the Chamber recommended that the "arbitrary and capricious" standard for agency rulemaking in the Administrative Procedure Act be replaced by a "substantial evidence test," which would impose a higher burden on agencies in defending against challenges to both major regulations and guidance.

Advocates for health, safety, and environmental protections oppose most of the regulatory "reform" proposals the Chamber and its congressional allies are pushing and take issue with some of the data the Chamber uses to bolster its arguments. For example, in February, 72 public interest organizations wrote to Congress asking representatives to oppose the REINS Act. On June 9, the Coalition for Sensible Safeguards asked senators to vote against the Snowe amendment, which would have burdened agencies and made it more difficult for them to write and enforce rules. (The amendment was defeated the same day.) Additionally, new research by EPI shows that the claims that regulations harm the economy and cost jobs, the crux of the Chamber's arguments, are unfounded.

Image in teaser by flickr user NCinDC, used under a Creative Commons license