The Truth About “Regulatory Reform”

June 22, 2011 http://www.citizen.org
Public Citizen, 1600 20th Street,N.W.,Washington, D.C. 20008 (202)588-1000

Critics of regulation characterize the regulatory process as an opaque, anti-democratic exercise of power by unelected bureaucrats who are not beholden to the public. Nothing could be further from the truth.
The rulemaking process provides numerous opportunities for public input. The final implementation of a regulation is the result of a lengthy deliberation that includes numerous opportunities for public participation by all small businesses, private industries, state and local governments, and members of the public subject to the regulation.

 Small businesses have multiple chances to influence regulations.

o The Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act1 assure small business involvement at two stages of the regulatory process when regulations are proposed that would impact small business interests. Agencies must prepare an initial and final regulatory flexibility analysis which determines the number of smabusinesses affected, compliance requirements for them, and any alternatives to minimize economic

o Three agencies, Occupational Safety and Health Administration (OSHA), Environmental Protection Agency (EPA), and the Consumer Financial Protection Bureau (CFPB), must give small businesses a preview of new proposals and receive extensive feedback from small businesses by convening special panels before even giving notice to other affected groups and the broader public.
o
The Chief Counsel for Advocacy of the Small Business Administration is specifically designated to represent small business interests in the regulatory process by consulting and providing input to the Office of Management and Budget (OMB).3

 Corporate Interests have unparalleled access to influence regulations. As part of the Cost-Benefit Analysis stage of the regulatory process, mandated by Executive Order 12,866,4 private
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1 5 U.S.C. §§ 601‐612 (2011).

2 5 U.S.C. § 603(a)‐(c) (2011). 3 Id. regulations the OMB deems ‘major’. This analysis must quantify both the costs of implementing the regulation (including compliance costs for impacted entities) and the benefits that would accrue from the regulation. Then, OMB subjects this analysis to its own intensive review process including another layer of cost‐benefit analysis. Finally, OMB either approves the rule without changes, approves the rule contingent upon certain changes requested by OMB, or returns the rule to the issuing agency for reconsideration. Cost‐benefit analyses have been criticized for being unduly deferential to a riance costs while underestimating potential benefits.
regulation’s implementation and complh
http://www.progressivereform.org/costBenefit.cfm Executive Order 12,866 § 6(b)(4)(B). 44of a Key Public Safety Rule,” Public Citizen (April 2011) available at redirect.cfm?ID=3317
“Cranes and Derricks: The Prolonged Creation http://www.citizen.org/pressroom/pressroom.
4 H.R. 10 sponsored by Rep. Geoff Davis (R‐KY).
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industry and affected stakeholders are often given a first chance to review and influence proposed rules in private meetings with the Office of Information and Regulatory Affairs staff at the OMB.5 These non-transparent meetings result in business interests having disproportionately greater access and ability to influence final rules compared to the general public.

 Public comments are encouraged and highly valued. Once a proposed regulation is published, agencies encourage commenters to provide criticism and suggestions for improving the proposed regulation. The public comment period is a critical feature of the regulatory process that agencies take very seriously as an opportunity to benefit from the additional expertise that many members of the public possess. They thoroughly review all comments submitted to determine how best to improve the proposed regulation.
Incorporating public input is time-consuming. Agencies typically take care in soliciting, responding to, and incorporating public input, which unfortunately can result in long delays of much-needed public protections. For instance, the Cranes and Derricks Rule: It took a dozen years for the OSHA to finalize a non-controversial regulation that was badly-needed to prevent workers from the dangers posed by cranes at construction sites and actually solicited by industry. 6
Many recent “regulatory reform” proposals are misguided and dangerous. These reform proposals would place more burdens on resource-strapped agencies, in turn potentially dissuading agencies from undertaking implementation of essential regulations.

 The REINS Act (H.R. 10/S 299) kills any final rule not explicitly approved by Congress and the president within 70 legislative days, no matter how important or uncontroversial the rule.7

 Small business “regulatory reform” bills introduce judicial review earlier in the rulemaking process, require agencies to determine ‘indirect’ costs of proposed rules, and tie up resource-strapped agencies with periodic reviews of existing rules, all of which lead to more regulatory uncertainty.8
The Bottom Line: “regulatory reform” legislation would touch all agencies and would delay or kill even non-controversial protections.
We should not risk bringing public protections to a grinding halt when the current regulatory process offers abundant opportunities for public participation.
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4 See S. Amdt. 390 sponsored by Sen. Snowe (R‐ME). 4 58 Fed. Reg. 51,735 ( Sept. 30, 1993). Executive Order 12,866 requires both the agency issuing the regulation, as well as the Office of Information and Regulatory Affairs (OIRA), located within the Office of Management and Budget (OMB), to conduct reviews of the proposed regulation. First, the issuing agency must conduct a Regulatory Impact Analysis for all regulations the OMB deems ‘major’. This analysis must quantify both the costs of implementing the regulation (including compliance costs for impacted entities) and the benefits that would accrue from the regulation. Then, OMB subjects this analysis to its own intensive review process including another layer of cost‐benefit analysis. Finally, OMB either approves the rule without changes, approves the rule contingent upon certain changes requested by OMB, or returns the rule to the issuing agency for reconsideration. Cost‐benefit analyses hferential to a regulation’s implementation and compliance costs while
ave been criticized for being unduly deu
nderestimating potential benefits. http://www.progressivereform.org/costBenefit.cfm Executive Order 12,866 § 6(b)(4)(B). 56of a Key Public Safety Rule,” Public Citizen (April 2011) available at ct.cfm?ID=3317
“Cranes and Derricks: The Prolonged Creation htp
t://www.citizen.org/pressroom/pressroomredire .
7 H.R. 10 sponsored by Rep. Geoff Davis (R‐KY). 8 See S. Amdt. 390 sponsored by Sen. Snowe (R‐ME).