The REINS Act -- What a Mess

Continuing our look at how H.R. 10, the REINS Act, would screw up the regulatory process by subjecting all major rules to a vote in Congress before they become effective, we will today look at an example that shows how REINS could cause great uncertainty for businesses (and everyone else).

Uncertainty has become the new watchword of the anti-regulatory crowd. Uncertainty over regulations, they say, is preventing businesses from hiring workers. Businessmen or women are just too dull to plan ahead and consider what agencies are going to do, or so regulatory detractors would have you believe.

But how is not knowing what, say, the EPA is going to do any different than not knowing how Congress is going to vote? And won't all the politicking in Congress actually make it more difficult for businesses to prognosticate?

To answer my own questions: It isn't, and Yes. The REINS Act is so full of tricks, triggers, and loopholes that it is feasible that a rule could bounce back and forth between effective and not effective.

Consider this Department of Health and Human Services rule that set up a program to pay incentives to Medicaid and Medicare providers who use electronic health records. The rule and the payments were authorized by the Recovery Act and went into effect Sept. 27, 2010. Here's a purely hypothetical situation for how the rule would have fared had REINS been law, with times the rule is in effect (and providers able to receive incentives) in blue and times the rule is not in effect in yellow.

Date Action Reason (Under REINS)
7/13/10 HHS submits rule to Congress Agencies are already required to notify Congress, so this step actually happened
7/19/10 Resolution of approval introduced in the House and Senate House and Senate leaders have 3 legislative days to introduce
8/10/10 Obama declares the rule in effect for the next 90 days The president can put a rule into effect for 90 days for a variety of reasons, including health and safety. It would be a stretch to say this rule meets one of those criterion, but not absurd.
9/14/10 Resolution discharged from Senate committee The resolution is automatically discharged after 15 leg. days if the committee hasn't acted
9/22/10 Resolution discharged from House committee Resolutions also automatically discharged after 15 leg. days
10/15/10 Senate votes on, approves resolution The Senate must vote within 15 leg. days of committee approval or discharge
11/9/10 The rule is no longer in effect Obama's 90-day period ends
12/7/10 House votes on, approves resolution The House must vote within 15 leg. days of committee approval or discharge
12/13/10 President Obama signs the resolution Resolutions are subject to presidential signature or veto, just like bills

Dates based on Congressional calendars

That doesn't appear too confusing: Obama used his authority to make the rule effective temporarily; then his authority to do so expired, meaning the rule was not effective; but finally, both the House and the Senate approved the rule and sent their resolution of approval to Obama for his signature, rendering the rule effective once again. It was a tumultuous period for health care providers looking for a little extra cash, but the situation has been resolved.

But not so fast. Under another section of the REINS Act, rules finalized 60 or fewer legislative days before Congress adjourns are subject to review by the next Congress, even if they were approved by the prior Congress (based on my reading). Those rules are treated as though they were submitted on the 15th legislative day of the new Congress.

So then the process would start over: A resolution of approval would automatically be introduced by the 18th legislative day; the resolution would be automatically discharged on the 33rd legislative day; and a vote would occur no later than the 48th legislative day. All the while, the rule would be in effect, and health care providers using electronic records would have received incentives.

But this time, Republicans are in control of the House. No friends of the Recovery Act or health care reform, House Republicans vote against the rule. Because it takes both chambers to approve a rule, that means it only takes one chamber to disapprove - so we won't even consider the Senate.

So now the rule is dead, right? Under REINS, agencies can't submit the same rule to Congress if Congress doesn't approve it; but with a new Congress reconvening in less than two years, an agency whose rule has been disapproved may begin to rewrite it and try again. The rulemaking process can take years to navigate anyway, so there is no incentive for agencies to simply give up.

How can proponents of the REINS Act, many of whom also say that business needs certainty to create jobs, justify this mess?

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