While President Donald Trump has launched a noisy crusade to slash regulations that constrain American businesses, Republicans in Congress have embarked on a less prominent but potentially more lasting effort to make it much harder for federal agencies to create new regulations in the future.
There is a flurry of anti-regulatory legislation floating around Capitol Hill, but it is becoming clear that the key Republican vehicle to rein in rulemaking will be Ohio Senator Rob Portman’s Regulatory Accountability Act. A 16-page draft of the legislation obtained by POLITICO was significantly less radical than several aggressive bills recently passed by the House of Representatives, but industry groups have pinned their hopes on this one attracting support from enough moderate Democrats to overcome a Senate filibuster and make it to Trump’s desk. And even if the Portman bill won’t automatically ensure “the deconstruction of the administrative state” promised by White House adviser Steve Bannon, it could still dramatically curtail the power of government regulators in the long run.
Portman has not yet introduced the bill, but behind the scenes in Washington it is already the subject of furious lobbying by more than 150 public interest groups that oppose it as well as more than 600 business groups that support it. It is much narrower than a bill the House passed last month with the same name, but would still revamp and insert new bureaucratic hurdles into the federal regulatory process, which the Obama Administration used to enact tough new restrictions on coal plants, Wall Street banks, for-profit colleges and other corporate entities. The Portman bill would add new obstacles for agencies to overcome before enacting economically significant rules, require them to choose the most cost-effective alternative, and give judges more discretion to block regulations when the regulated interests object.
“When I visit a factory or small business in Ohio, one of the complaints I hear most from employers is that there are too many costly and unnecessary regulations that limit their ability to invest in their business,” Portman said. “We need a smarter regulatory process that promotes job creation, innovation, and economic growth.”
Portman and the Washington business community are portraying his reforms as a pragmatic approach to burdensome red tape, hoping to distinguish them from more extreme Republican bills that would give Congress a veto over all major rules, eliminate the deference that courts traditionally give to federal agencies, and even forbid those agencies from implementing rules until every lawsuit against them is resolved. House Republicans have passed five regulatory reform bills this year, and have introduced a dozen more, but insiders say most of them are doomed to die in the Senate, where 60 votes are required to overcome a filibuster. That’s why Portman is now negotiating over his more temperate language with Democratic senators Claire McCaskill of Missouri and Heidi Heitkamp of North Dakota, who are both up for reelection in 2018 in states Trump won easily. Democrats Joe Manchin of West Virginia and Bill Nelson of Florida and independent Angus King of Maine have supported similar bills in the past.
Still, left-leaning public interest groups in a new “Coalition for Sensible Safeguards” say that even the Portman bill would shred the government’s ability to protect the environment, consumers, workers, and public health, by making the administrative gauntlet for new rules nearly impossible to run. They warn that if Portman’s proposed changes to America’s 70-year-old regulatory procedures had been in place decades ago, rules requiring toys to be safe, passenger jets to have two pilots in the cockpit, and factories to limit their pollution would never have seen the light of day.
Environmental Working Group vice president Scott Faber calls regulatory reform “the one fight we can’t lose”-a battle that isn’t particularly sexy, but could paralyze a process that has helped prevent millions of accidents and illnesses. He has argued to wavering Democrats that while the next president can easily reverse Trump’s executive order calling for the elimination of two old rules for every new rule, as well as his efforts to kill specific regulations and defang regulatory agencies, an actual piece of legislation that enshrines procedural changes could linger for generations, strangling the regulations of the future in their cradles.
“Trump is temporary. Regulatory reform is forever,” Faber said.
Supporters of reform argue that rulemaking has spiraled out of control, with agencies exploiting the deference of the courts to ignore the potential damage to businesses and the economy. The Chamber says the number of rules on the books imposing at least $1 billion in economic costs has soared from just three in 2001 to 34 in 2015. The government now issues several thousand new rules every year, but while the House version of the Regulatory Accountability Act would apply to just about any rule that could affect jobs or wages in just about any industry, Portman’s version would only apply to the small fraction with costs exceeding $100 million.
Several elements of the Portman bill echo previous executive orders signed by Democratic presidents-including a required public notice before a rulemaking, an opportunity for a public hearing once it’s underway, mandatory cost-benefit analyses, and a legal assurance that any new rule is based on “the best reasonably available scientific, technical, or economic information.” Supporters say that these additional requirements are not anti-regulation, just pro-common sense, and that the Portman bill has little in common with the House’s alphabet soup of anti-regulatory bills with acronyms like REINS, SCRUB, ALERT, POWERS and REG. In fact, some of the bill’s backers are privately irritated that House Republicans slapped the same name on a more ideological bill with no chance in the Senate, a move that could scare off Democrats who share their concern about regulatory excess but do not want to be associated with the broader GOP assault on the regulatory state.
Bill Kovacs, a senior vice president at the Chamber, says it shouldn’t be a partisan issue to add transparency and certainty to a process that hasn’t really changed much since the 1940s. “The Regulatory Accountability Act does not dismantle the rulemaking process,” Kovacs said. “It simply flags the most expensive rules to make sure the agencies do the review needed to get them right.”
The opponents acknowledge that Portman’s bill would be less explosive than the better-known REINS, which would require congressional approval for all major rules, but they say it fits perfectly with the larger Republican project of handcuffing regulators. Trump has repeatedly complained that regulations are “out of control,” vowing to eliminate 75 percent of them and “maybe more.” He has already moved to delay several major Obama rules, including a crackdown on financial advisers with conflicts of interest and a broad effort to protect wetlands, and he is expected to announce efforts to stop several others in the coming days, including Obama’s strict fuel-efficiency standards for automobiles and his climate rules for power plants.
By the same token, congressional Republicans just spent eight years denouncing Obama’s “job-killing” financial rules for banks, net neutrality rules for the Internet, and especially his EPA rules limiting mercury, ozone, soot, carbon and other air and water pollutants. The critics believe the Portman bill would finally put that rhetoric into action, using innocuous-sounding bureaucratic jargon to create endless do-loops for regulators and endless litigation chokepoints for industry, while injecting a huge bias towards cheap alternatives into a supposedly objective process. At the same time, by shifting the burden of proof away from agencies, it could encourage judges to second-guess their choices about which studies to use, how to calculate costs and benefits, and whether regulation is necessary in the first place.
“These things don’t seem like a big deal, because they’re about process rather than substance,” says Lisa Gilbert, a vice president at Public Citizen. “But really, it’s a backdoor way to make it impossible for agencies to protect the public.”
This combination of low profile and high stakes tends to scramble the politics of this kind of issue, with intense engagement by lobbying groups on both sides but relatively little from ordinary voters. Several Democrats from Trump-friendly states hope to support a bill that would somehow please their local business interests and demonstrate independence from their party leaders without alienating their liberal base. For example, McCaskill’s office said she “will continue to work with Senator Portman and others on ways to reduce overburdensome regulations without compromising the safety of Missouri families.” Industry groups want to portray the Portman bill as relatively uncontroversial middle ground, the kind of compromise legislation that might eventually attract overwhelming support across the aisle. Portman hopes to introduce the bill soon, but right now the talks are in such flux that it was added to a Senate committee’s calendar for next week on Wednesday-and then removed from the calendar on Thursday.
“Historically, regulatory reform has always been a bipartisan proposition,” said Rosario Palmieri, a National Association of Manufacturers vice president. “This is no different in 2017.”
Of course, a lot is different in 2017. There isn’t much bipartisan cooperation on Capitol Hill, and regulatory issues are already a subject of partisan warfare. The Congressional Review Act, a mechanism that allows the quick elimination of rules passed late in a presidency, had only been used once before 2017; Republicans have already used it to kill four obscure Obama rules on predominantly party-line votes, including one restricting coal companies from burying streams and another requiring oil companies to disclose payments to foreign governments. As Trump’s agencies begin to take aim at earlier and more important Obama rules, the battles will only get more ferocious.
That’s because the only way to get rid of those rules is through the same rulemaking process used to create them. And it’s already a pretty onerous process.