The Regulatory Cliff

Among the outgoing Senate’s graveyard of stalled budgets, authorizations, and other urgent measures are some 36 regulatory-reform bills passed by the House with bipartisan support. These bills are needed to rein in a regulatory spree that is crushing business activity and unnerving investors. They deserve first priority in the new Senate — but the newly elected body, with two fewer GOP members than its predecessor had, is likely not interested.

Senate majority leader Harry Reid has denied all these bills access to the Senate floor. Many, if not most, of these bills address the Obama administration’s “regulatory cliff,” as Senator Rob Portman dubbed the situation in Wall Street Journal op-ed.

The president quipped in his State of the Union address last February that he had issued fewer rules in his first three years than did his predecessor in a comparable period. Although technically correct, the president’s numbers omit the most important factor: cost. According Wayne Crews of the Competitive Enterprise Institute, President Obama issued 953 “major regulations” (meaning regulations with a cost of $100 million or more, or an impact the federal government deems otherwise significant) in his first three years, while President George W. Bush issued 30 such regulations during the similar period. According to the federal government, 3,807 new final rules were issued in 2011, and 4,128 more rules are now in the pipeline. Take just one agency, the EPA. In 2010, EPA rules accounted for $23 billion in federal regulatory costs. Once just a peripheral source of pesky but absorbable costs, the EPA is now Ground Zero for regulatory damage. Seven of the ten House bills now in Senate limbo aim to restrain the EPA.

Once promulgated through the formal rulemaking process, the EPA’s rules are not easily unwound. Any attempt to reverse course will inevitably result in a protracted legal battle, and even a successful resolution to a legal challenge (whether through court victory or settlement) often means only that the EPA must begin the rulemaking process again. There is little that even a determined Congress can do by itself to stop agency rulemaking.

The EPA may estimate compliance costs, but the full costs borne by the economy and individual consumers are cumulative and indirect. New EPA regulations come one at a time, with staggered effective dates, typically with specific impacts for each particular region or economic sector, through a thousand pages of technical bureaucrat-speak.

Read more at National Review Online. By Kathleen Hartnett White.

Photo credit: MyEyeSees (Creative Commons)


  1. time to teach civics in school again.

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