Regulatory Oversight and Congressional Horse Trading
Appointing Richard Cordray on Jan. 4 to head the Consumer Financial Protection Bureau, President Obama said that he was stepping in to remedy a delay that "hurts our economy and puts people at risk." The Cordray situation is just one example of how obstructionism and other tactics have led to difficulties and delays in protecting the American people and the economy.
The best that can be said about Obama’s use of the recess appointment in Cordray's case is that it may have been the least-bad option out of a set of terrible choices. Such appointments circumvent the important role of the Senate in evaluating the president’s nominee and short-circuit the public’s opportunity to learn about and comment on the choice. However, in this instance, Republicans were not questioning the qualifications of the proposed commissioner; they were protesting the powers of a commission established by law three years ago and had pledged to continue to filibuster any nomination vote.
The Consumer Financial Protection Bureau (CFPB) has operated without a formal director since it was established by Congress in 2009. Without a director for the commission, the Secretary of the Treasury is empowered to enforce existing consumer protections but not establish new ones. According to Cordray, his appointment will allow the CFPB to “exercise the full authorities granted” by Congress, including regulating “nonbank financial institutions” like payday lenders and mortgage services.
Preventing the nomination from coming to a vote in December, Senate Republicans explained that they wanted to replace the director with a commission, allow the CFPB to be overseen by other agencies, and fund the CFPB through congressional appropriations. That is to say, they wanted to rewrite the law that instituted some financial system reforms.
While Senate Republicans were trying to reopen the debate over the CFPB and delay Cordray's nomination, Republicans in both chambers were working to force the administration to make a final decision on the Keystone XL oil pipeline, issuing or denying a permit within 60 days. This expedited timeline would make it virtually impossible for the administration to make a full analysis of the environmental, health, and safety impacts that would typically be considered. In effect, the legislators were insisting that analyses, which are typically required by law, should not be part of the decision about the pipeline.
Of course, these two high-profile cases are not the only instances of legislative meddling in the regulatory process. In 2000, EPA found that it was "appropriate and necessary" to regulate coal- and oil-fired electric utilities under the Clean Air Act (CAA), which triggered a requirement for the agency to propose regulations to control air toxics emissions from these facilities by Dec. 15, 2003. However, it took more than a decade before a standard was finalized.
In 2005, the Bush administration issued the Clean Air Mercury Rule, which actually increased the amount of pollution allowed. In 2008, the D.C. Circuit Court of Appeals vacated the rule and required EPA to develop standards consistent with the CAA’s mandate to protect public health and the environment.
In March 2011, EPA issued an air toxics standard to limit mercury, acid gases, and other toxic pollution from power plants, which was finalized in December. The standards will prevent between 4,200 and 11,000 premature deaths by 2016.
Environmental and public health groups applauded the “long overdue” standards, but the House passed legislation to stop the rule in its tracks and impose even more delays. In addition, the House went further, passing a series of bills in late 2011 to try to prevent the implementation and enforcement of environmental and public health rules that would strengthen our economy and protect American families from harm.