fb tracking

Invisible Tsunami of Regulation

We’ve all heard allusions to a “tsunami” of regulations battering U.S. businesses. The reality is there is no “tsunami” and, even if there were, it would be reduced to standing water once the federal rulemaking process is done with it.

Federal agencies are late on completing nearly 80 percent of the rules by congressionally mandated deadlines, a new Public Citizen report finds.

The report outlines several reasons for the delays, including cumbersome requirements upon federal agencies, lengthy reviews by the administration, industry pressure, political interventions, and, sometimes, agencies simply dragging their feet.

Several statutes and executive orders that created procedural obstacles for agencies to issue regulations were added to the rulemaking process in the 1980s and 1990s. For example, Executive Order 12866, signed by President Bill Clinton in 1993, requires agencies to craft the “most cost-effective rule,” not the rule that most effectively serves public health and safety.

The executive order also requires rules deemed “significant” to be sent to Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) for review. This step creates delays on top of delays. Although the executive order calls on OIRA to complete its reviews of rules within 120 days, it often does not. For example, the data set for Public Citizen’s study — consisting of rules included in OMB’s fall 2011 semi-annual report — included 14 rules that are currently under review at OIRA. Each has been there for longer than 120 days.

Consider Congress’s call to improve rearview mirror standards to eliminate the dangerous blind-spot behind vehicles. Congress passed a law calling for the change in response to a well-known incident in which two-year-old Cameron Gulbransen was backed over and killed by his father in the family’s driveway. The blind-spot rule has yet to be enacted, more than a year past the deadline set by Congress. A draft version of the rule is under review at OIRA, where it has been since November.

The agency assigned to implement the rule, the National Highway Traffic Safety Administration (NHTSA), conducted an extensive cost-benefit analysis and determined that the rule would save about 112 lives a year and prevent as many as 8,000 injuries by mandating that new cars include rearview cameras as standard equipment. But the administration is quibbling over whether the proposed rule would be “cost effective,” even as automakers already are including the cameras as a standard feature on nearly half of their models.

Also, four food safety rules called for in the Food Safety and Modernization Act of 2011 have been under review by OIRA for the past six months and have either missed their statutory deadlines or are on the brink of doing so. Last year, 48 million Americans suffered foodborne illnesses, many of which could have been prevented. Consumer advocates and the food industry came together to successfully lobby for passage of the law. The rules to implement it remain on hold with little explanation.

Likewise, an important environmental rule called for in the 2007 energy bill is three-and-a-half years overdue. The legislation required the Department of Energy to create energy-efficiency performance standards by 2008 that would steeply reduce the amount of fossil fuel-generated energy that could be used by new and significantly renovated federal buildings. The new standards have yet to be published.

This year, an amendment proposed by Rep. Rodney Alexander (R-La.) to prohibit future funding of the federal building energy-efficiency standards rule was approved by the House Appropriations Committee. The oil and gas industry is one of the top five donors to Alexander’s campaign committee, contributing $27,750 just in the 2012 election cycle. The rule now languishes at OIRA and may be stripped of funding if Alexander has his way.

Industry lobbying is another cause of delay. Take the “conflict minerals” provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The provision was intended to reduce sales of five minerals from the Democratic Republic of Congo (DRC) that have financed years of war in the region. Congress mandated that the Securities and Exchange Commission (SEC) issue the rule by April 2011. More than a year past the deadline, the SEC not only has yet to issue a final rule, but is now considering implementing it through a gradual phase-in process. Mega-corporations such as Best Buy, GM, Panasonic, and Wal-Mart have lobbied the SEC to scale back the proposal.

These delays, coupled with recent data indicating that President Obama’s administration has issued fewer rules thus far than President George W. Bush had at this point in his administration, prove that the invisible tsunami is at a standstill.

Negah Mouzoon is a researcher for Public Citizen’s Congress Watch.