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Would shifting regulatory power to Congress usher in a lobbying bonanza?

at 11:06 AM ET, 12/07/2011

Republicans are trying to shift regulatory power from the executive branch to Congress in a bill that’s expected to pass the House today. The REINS Act would send any “major rule” that’s estimated to cost the economy more than $100 million to Congress — or have adverse effects on consumers, the business climate and individual industries — for an up-or-down vote. If Congress doesn’t approve the regulation in 70 days, it won’t take effect. The bill is dead-on-arrival in the Senate, but it underscores some of the GOP’s biggest anti-regulatory talking points.


(Jeffrey MacMillan - The Washington Post)
Speaker John Boehner argues the bill would curb overreaching federal regulations that hurt small businesses and job creation. But giving Congress that authority could also usher in a lobbying bonanza from industry and other special-interest groups that could use campaign donations and other election spending to help shape the regulatory environment.

Even after Congress passes major legislation, federal agencies are often tasked to “write” the specific rules that implement the biggest changes. So interest groups routinely spend massive sums of money to persuade federal regulators to make changes or carve-outs, or block rules from being enacted, whether over Wall Street reform, the Affordable Care Act, or the Environmental Protection Agency’s coal ash regulations.

But federal regulators heading up that process don’t have campaign coffers to fill. Shifting the approval of such rules to Congress would, accordingly, shift their lobbying over to elected lawmakers who rely on campaign contributions. So although Republicans argue that the status quo lets “major decisions to be made by unelected, unaccountable bureaucrats,” their alternative accordingly makes more regulations vulnerable to deep-pocketed contributors who shape the electoral cycle.

That said, the REINS Act essentially leaves it to the executive branch to decide which regulations to send to Congress. Under the bill, officials from the White House’s Office of Information and Regulatory Affairs and Office of Management and Budget are supposed to determine which regulations are subject to a congressional vote, based on their cost to the economy and adverse impact on consumers and the industry. And there isn’t broad-based consensus about how to measure this impact.

In its case for the REINS Act, the House GOP cites a study commissioned by the Small Business Administration that estimates that regulatory compliance costs were $1.75 trillion in 2008. But liberal critics dispute the very methodology behind the study, pointing out that such estimates also disregard the economic benefits of regulations that the OMB routinely calculates as well.

 
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