After three years of hyper-regulation, the Obama Administration has noticeably slowed its rulemaking in recent months. A variety of major rules have been parked in prolonged “review” by the White House, while the regulatory agenda required by statute has failed to materialize—twice. This flouting of the law is disturbing enough, but it’s made worse by the mounting regulatory uncertainty that has ensued.
Congress mandated a regulatory agenda from each agency in 1980, under the Regulatory Flexibility Act. The statute calls for release every April and October of a summary of all rules likely to have a “significant economic impact” on a substantial number of small firms. Subsequent executive orders extended the requirements to all regulations under development or review by some 60 departments, agencies, and commissions.
President Obama has ignored both the April 2012 and October 2012 agenda deadlines. The last agenda from the Administration, with 2,676 regulations, was published in fall 2011. The President’s neglect of the law contradicts his promise of an “unprecedented level of openness in government transparency.”
Notice of upcoming regulatory actions is an essential tool of government transparency and accountability. The agenda enables citizens to participate in the rulemaking process, businesses to plan, and Congress to engage in oversight. The stakes are especially high now because of the hundreds of rules yet to be finalized relating to the Dodd-Frank financial regulation statute and Obamacare.
The Administration has postponed action of late on some of its most ambitious regulations. For example, stricter standards on ozone emissions have been shelved until 2013. The original proposal by the Environmental Protection Agency would cost $90 billion or more annually and, potentially, jeopardize millions of jobs.
Also on hold are various regulations to control power plant emissions of so-called greenhouse gases that would dramatically increase energy costs, as well as the designation of coal ash as a “hazardous substance”—estimated to cost $79 billion to $110 billion and thousands of jobs in Pennsylvania, West Virginia, Missouri and Ohio.
There is ample reason to believe that this recent “draw-back” of rulemaking portends a regulatory tsunami in the coming year. Of particular note is the large number of proposed regulations that are piling up at the Office of Information and Regulatory Affairs (OIRA), the department within the Office of Management and Budget which reviews rules before they are published in the Federal Register.
According to OIRA data, a whopping 78 percent of the 151 regulations awaiting review have been pending at the office for more than 90 days—thus exceeding the maximum time allotted under executive order.
Among the most costly:
- A Department of Transportation rule to require a rear-view camera and video display for all new cars and trucks, at an estimated cost of up to $2.7 billion.
- Revisions to the so-called Boiler MACT rules that impose stricter limits on industrial and commercial boilers and incinerators. The EPA pegged the cost of its original proposal at $9.5 billion, but independent analysts estimated the cost to be as much as $20 billion.
- Energy conservation standards for walk-in coolers and freezers as well as commercial refrigeration, which would apply to virtually all equipment used in retail food stores. This is estimated by the Department of Energy to increase manufacturing costs by $500 million over four years.
- Department of Labor restrictions on worker exposure to crystalline silica (fine particles of sand common to mining, manufacturing and construction). One analysis submitted to OIRA by engineering and economic consultants estimated compliance costs would be $5.5 billion annually, the loss of 17,000 “person-years” of employment, and $3.1 billion of economic output each year.
It would be good news for both the economy and consumers if the rulemaking delays are a result of more thorough cost analysis or consideration of regulatory alternatives. But there’s no indication that the Administration has embraced a newfound skepticism toward red tape. The evidence instead suggests that a multitude of major rules are simply awaiting release next year.
No one knows for certain, of course. But that very uncertainty is itself damaging to the economy. That is one important reason Congress requires the Administration to disclose its regulatory intentions in semi-annual agendas. President Obama should follow that law.
Read the full report: Obama’s Regulatory Agenda: Calm Before the Superstorm
Diane Katz is Research Fellow in Regulatory Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
This article was originally published at Heritage.org
The Moral Liberal recommends Thomas Sowell’s Basic Economics: A Common Sense Guide to the Economy