Government and Public Protections Under Attack in 2011
Big Business lobbyists and their allies in Congress waged systematic attacks against regulations in 2011, attempting to undermine the protections that keep our environment clean, our products and workplaces safe, and our economy prosperous. Underlying the charge against basic protections is an attack on government's role in safeguarding the general welfare of its citizens and in addressing the negative effects of irresponsible corporate behavior.
2011 did not see the large-scale corporate catastrophes witnessed in 2010 – the BP oil spill disaster, the explosion at a Massey Energy mine that killed 29 workers, and the recall of millions of Toyota vehicles, to name a few – but the individuals and families who lost loved ones from faulty children's products, workplace safety problems, and foodborne contaminants bear witness to ongoing hazards. However, despite this evidence and strong public support for a variety of health, safety, and environmental safeguards, large corporate interests and their allies in Congress intensified their attacks on public protections.
The assault on public protections is decades old, but recently, the attacks have become more extreme, designed to block rulemaking entirely through regulatory moratoria and endless litigation.
The Legislative Assault on Regulations
The current assault on regulations started after the 2010 elections when the House switched from Democratic to Republican control.
Environmental regulations and the U.S. Environmental Protection Agency (EPA) have been the primary targets of these legislative attacks, especially those rules that would affect climate change. For example, the House approved H.R. 910, the Energy Tax Prevention Act of 2011, sponsored by Rep. Fred Upton (R-MI), chair of the Committee on Energy and Commerce. Upton's bill would strip EPA of authority under the Clean Air Act (CAA) to "promulgate any regulation concerning, take action relating to, or take into consideration the emission of a greenhouse gas to address climate change." Ironically, Congress has failed to enact climate change legislation in any form, leaving the EPA no choice but to follow the requirements of the CAA and the U.S. Supreme Court by seeking to control emissions through regulations.
The Transparency in Regulatory Analysis of Impacts on the Nation (TRAIN) Act (H.R. 2401), which passed the House on Sept. 23, would require an interagency panel of non-experts to review EPA regulations before they are issued and to submit a report to Congress on the costs of proposed regulations. This requirement is redundant and unhelpful for two reasons: first, the EPA and the Office of Management and Budget (OMB) already conduct extensive cost-benefit analyses on proposed rules. Second, under the TRAIN Act, the panel's report would have to consider "cumulative costs" of proposed and final regulations, a highly speculative analysis that would artificially inflate costs and stack the deck against issuing safeguards.
Like the TRAIN Act, the EPA Regulatory Relief Act of 2011 (H.R. 2250) and the Cement Sector Regulatory Relief Act of 2011 (H.R. 2681), both of which passed the House in October, were suspect on both substantive and procedural grounds. The bills' sponsors contend that they merely provide additional time for EPA to establish, and for industry to comply with, new emissions standards for boilers, incinerators, and cement plants. In fact, they would make substantial alterations to the Clean Air Act and to EPA's long-standing practice of establishing emissions standards for hazardous air pollutants. Attempts to rewrite major legislation like the Clean Air Act, if they occur at all, should be done through open and transparent processes in which the public can have a voice, not through backdoor procedural stunts.
The Coal Residuals Reuse and Management Act (H.R. 2273 and S. 1751) would require the EPA to allow states to regulate coal combustion residuals, or coal ash, and limit federal oversight. Most states do not have standards in place to protect against the dangers of uncontrolled coal ash.
Beyond specific attacks on environmental and public health rules, many of the anti-regulatory proposals in Congress call for adding more procedural hurdles to a rulemaking process that is already riddled with legislative and administrative obstacles. Adding redundant analyses, expanding options for congressional rejection of agency actions, and overriding important health, safety, and environmental statutes are just some of the ways regulatory opponents are trying to short-circuit the process. The most extreme proposals include:
- The Regulatory Accountability Act (RAA) (S. 1606 and its House companion, H.R. 3010) is an attempt to fundamentally rewrite and expand the Administrative Procedure Act (APA), a sixty-five-year-old statute that is the guidepost for administrative agencies and the regulatory process. The RAA would add more than 60 new procedural and analytical requirements. These requirements would grind to a halt the rulemaking process at the core of implementing the nation's health, safety, and environmental standards. Rules that somehow make it through the RAA's process would tilt against the public interest and in favor of powerful special interests.
- The Regulations from the Executive in Need of Scrutiny (REINS) Act (H.R. 10 and S. 299) would require congressional approval of all major federal rules within 70 legislative days. Without approval, the rules would be nullified. If enacted, the bill would mire rules in congressional gridlock and endanger the commonsense standards that protect our food, air and water quality, and consumer products. The bill could also undermine new laws regulating Wall Street and expanding access to health care. Congress passes laws that direct agencies to implement them because agencies have the expertise to deal with these complicated problems; the REINS Act would turn that process on its head.
- The Regulatory Flexibility Improvements Act (H.R. 527 and S. 1938) would force any action an agency proposes – even a guidance document designed to help a business comply with a rule – to be subjected to a lengthy review process. By requiring additional and wasteful analyses, this bill would make it extremely difficult for federal agencies to protect the public from new and emerging hazards. This bill also makes the Small Business Administration's Chief Counsel for Advocacy a kind of "super-regulator," vesting him or her with new powers to review proposed agency actions and suggest alternatives.
Another legislative strategy employed to cripple regulatory agencies is to cut agency budgets and defund certain actions. For example, House Republicans have tried to load the 2012 spending bill for the Department of the Interior and the EPA with dozens of policy riders that would hamper efforts to protect our health, air, water, and wildlife. Some provisions would block regulations intended to protect streams and communities from mountaintop-removal coal mining, prohibit EPA from regulating coal ash as a hazardous waste, and prevent EPA from limiting toxic air pollutants from a number of sources. The appropriations bill, H.R. 2584, would reduce Interior spending by $720 million and cut EPA funding by $1.5 billion, 18 percent below current levels. The bill has been debated on the floor but has not yet passed the House.
Similarly, the chairman of the Labor-Health and Human Services-Education Appropriations Subcommittee, Rep. Denny Rehberg (R-MT), introduced a funding measure that targets programs within the Department of Labor and that would weaken important worker protections. Both the Obama administration and the Democratic leadership in both chambers have opposed the inclusion of these political and ideological policy riders in the 2012 appropriations bills, but the result will not be clear until the process is completed.
Regulations and the Economy
Underlying these and other attacks on our system of standards and safeguards is the unfounded argument that deregulation is a job creation vehicle in a weak economy. This misguided notion has begun to attract attention on both sides of the aisle, as Sens. Claire McCaskill (D-MO) and Susan Collins (R-ME), as well as Sens. Mark Warner (D-VA) and Jerry Moran (R-KS), have recently introduced "job creation plans" with anti-regulatory components included in their text. (Read about the bills here and here, respectively.)
However, an exhaustive review of years of careful research studies by the Economic Policy Institute (EPI) in April showed that regulations don’t kill jobs, and killing regulations doesn’t create jobs. Rather, EPI's research showed that compliance costs of regulations are a negligible part of the overall economy, and many standards often lead to business innovations and job growth. Additional EPI research examined specific environmental standards at EPA and debunked a widely cited regulatory cost figure used by those opposed to strong public protections.
In addition to research debunking pointed anti-regulatory rhetoric, a number of surveys of small business owners have found that economic uncertainty and lack of demand are the key reasons small businesses are struggling; the regulatory climate is not an important factor in their hiring and/or expansion decisions. The National Association for Business Economics (NABE) even found in an August survey that a large majority of business economists have a positive perspective on the current regulatory environment.
These independent studies and surveys reinforce an argument that public interest advocates have made for decades: government standards and public investments in clean energy protect health and safety and encourage job creation.
The Obama Administration Struggles to Find a Clear Voice on Regulation
At the same time that Congress was leading the charge against crucial public safeguards, the Obama administration was struggling to find a clear voice on public protections. In a Jan. 18 Wall Street Journal op-ed, President Obama repeated conservative messaging about regulation impairing job creation. The op-ed announced a new executive order that instructed agencies to review existing regulations and eliminate outdated rules that could impair growth, reinforcing the unsubstantiated relationship between job creation and deregulation (see below for details).
In his State of the Union address a few weeks later, Obama sent a mixed message by reiterating his earlier points but then assuring Americans, "I will not hesitate to create or enforce commonsense safeguards to protect the American people." He also defended our nation's system of public protections, pointing out that "[i]t's why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It's why we have speed limits and child labor laws."
Executive Order on Regulatory Review
Obama's Executive Order 13563 on "Improving Regulation and Regulatory Review" reaffirms the principles established in President Clinton’s E.O. 12866 and emphasizes the importance of public participation, integration and innovation, flexible approaches, and scientific integrity in rulemaking. Most importantly, E.O. 13563 requires executive branch agencies to conduct periodic retrospective reviews of rules, directing agencies to develop plans for the ongoing review of existing regulations to identify rules that are "outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them."
In July, Obama issued another executive order, E.O. 13579, asking all independent regulatory agencies to conduct retrospective reviews and develop review plans in compliance with E.O. 13563. Although independent regulatory agencies are not legally bound by the order, most started developing retrospective review plans by soliciting information and public comments on the review efforts.
Many in the public interest community initially expressed concern that the retrospective review process would have a chilling effect on agencies and cause them to repeal or weaken health and safety regulations. A majority of the public comments agencies received on their review plans targeted specific rules that industry groups oppose. OMB Watch's analysis of specific agency plans, however, found that agencies used the review to look for cost savings but protected their primary missions. These agencies identified ways to eliminate redundancies and streamline procedures through improving coordination and updating technology and reporting requirements.
Political Interference in Rulemaking
One of the most blatant Obama-era examples of political interference in agency rulemaking came at the tail-end of the summer. On Sept. 2, the president ordered the EPA to withdraw a rule establishing a new standard for ground-level ozone pollution. EPA Administrator Lisa Jackson had pursued the rule as recommended by the agency's scientific advisory panel, even in the face of intense opposition from business interests and some of their allies in Congress, because the ozone standard set during the George W. Bush administration failed to meet the legal standard required by the Clean Air Act.
According to a New York Times article describing the inner workings of the White House's decision process on the ozone rule, Jackson was pitted against William Daley, then-Chief of Staff and Obama's liaison to the business community, and Cass Sunstein, the administrator of the Office of Information and Regulatory Affairs (OIRA). In a statement, Obama justified the decision to kill the rule by saying that "[w]ork is already underway to update a 2006 review of the science that will result in the reconsideration of the ozone standard in 2013. Ultimately, I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered."
The ozone rule is not an isolated incident of political interference with agency rulemaking. Other rules, including two from the Department of Labor (one to require the reporting of musculoskeletal injuries and another proposing an occupational noise standard), have been delayed or killed, and many advocates continue to criticize OIRA for delaying important rulemakings. A study released in November by the Center for Progressive Reform (CPR) charged that OIRA "routinely substitutes its judgment for that of the [agency experts]," and that the internal review process is tilted in favor of industry interests.
The report studied all OIRA meetings with interested outside parties conducted during a period of almost ten years between 2001 and 2011 and revealed that industry lobbyists were the lone participants in 73 percent of the meetings. The report also looked at 501 regulatory reviews at OIRA during this 10-year period; 12 percent of the rules under review were delayed beyond the 120-day review deadline required by E.O. 12866, with some delayed for over six months.
OMB Watch’s assessment of all OIRA reviews conducted during the Obama administration found the time taken to review rules increased over the first three years of the administration: in 2011, more than 50 of the reviews OIRA completed were overdue, compared to only five in 2009, and of the roughly 150 rules currently under review, about 30 have exceeded the 120-day deadline. An example of an important public protection that is currently past due is EPA’s proposed Chemicals of Concern List rule, which would identify chemicals that may present unreasonable human health risks. The rule would have important health and safety benefits and is not economically significant, yet it has been stalled at OIRA for well over a year.
|OIRA Reviews, 2009-2011|
|Year||Total E.O. 12866 Reviews||Economically Significant Reviews||% Economically Significant Rules Reviewed||Average Review Time in Days||Rules under Review 120 Days or More|
|2011 (through 11/30)||659||107||16%||59||≥50|
Recent Administration Actions in Defense of Public Protections
Although the administration has sent mixed messages about its stance on the importance of regulations and has weakened or delayed many agencies' rules, in the past couple of months, the president has issued Statements of Administration Policy threatening vetoes or signaling opposition to the most damaging anti-regulatory bills before Congress.
In addition, the administration issued a statement opposing the Coal Residuals Reuse and Management Act and has threatened vetoes of the TRAIN Act, as well as other bills that target specific EPA actions.
In 2012, the Senate will be under pressure from anti-regulatory forces to vote on bills passed by the House. The RAA, the REINS Act, and other legislation could be offered as amendments to other bills the Senate debates. In an election year, these pressures will probably be greater than usual, and the anti-regulatory rhetoric will be even sharper, as the battle for control of the Senate plays out.
The anti-regulatory meme has been perpetrated by corporations and their political allies for decades, even during periods when jobs and the economy both were experiencing strong growth and in the face of evidence that undermines the industry narrative. Indeed, cost-benefit analyses consistently show that the benefits of public protections far outstrip their costs, both in terms of dollars and Americans' quality of life.
The evidence is clear: the American people do not have to choose between job creation and protecting their families and communities from environmental, workplace, and consumer product hazards. Attempts by Congress to dismantle the regulatory system will do nothing to create jobs now and could cost American businesses the jobs and industries of the future.