A Check on the Regulatory State

All legislative powers herein granted shall be vested in a Congress …

The Constitution
Article I, Section 1

WASHINGTON – Having cleared its throat with the Preamble, the Constitution buckles down to business with those words, which Republican Rep. Geoff Davis of Kentucky takes seriously. He is retiring from Congress, leaving behind excellent legislation that could claw back from the executive branch responsibilities the Founders intended for the government’s first branch.

His Regulations From the Executive in Need of Scrutiny Act (REINS) would redress constitutional imbalance and buttress the rule of law by compelling Congress to take responsibility for the substance that executive rulemaking pours into the sometimes almost empty vessels that Congress calls “laws.”

The 165,000 pages of the Code of Federal Regulations contain tens of thousands of rules promulgated by largely unaccountable agencies that churn out more than a thousand new mandates a year. According to the Small Business Administration, regulations cost the economy about $1.75 trillion, almost twice the sum of income tax receipts. Davis says small businesses are spending $10,500 per employee on regulatory compliance. REINS would require Congress to vote on a resolution of approval concerning every “major” ($100 million economic impact) regulation. There are 212 such among the 4,128 regulations currently in the pipeline from unelected executive agencies. If the vote REINS requires did not occur within 70 days, the regulation would die.

John Marini of the University of Nevada-Reno writes in the Claremont Review of Books that the 2,500-page Obamacare legislation exemplifies current lawmaking, which serves principally to expand the administrative state’s unfettered discretion. Congress merely established the legal requirements necessary to create a vast executive branch administrative apparatus to formulate rules governing health care’s 18 percent of the economy.

The Hudson Institute’s Chris DeMuth, in an essay for National Affairs quarterly, notes that Congress often contents itself with enacting “velleities” such as the wish in the 900-page Dodd-Frank financial reform act that “all consumers have access to markets for consumer financial products and services … (that are) fair, transparent, and competitive.” How many legislators voting for the bill even read this language? And how many who did understood that they were authorizing federal rulemakers to micromanage overdraft fees? In Dodd-Frank, Obamacare and much else, the essential lawmaking is done off Capitol Hill by unaccountable bureaucratic rule making.

Fish gotta swim, birds gotta fly and regulators, too, have a metabolic urge to do what they were created to do. Hence, DeMuth says, they often pursue their missions beyond the point of diminishing marginal returns with health, safety, environmental and other standards “with costs exceeding any plausible measure of their benefits.”

Regulatory power is executive power, which can be checked and balanced only by the other two branches. But, DeMuth notes, although courts can, under the Administrative Procedure Act, block regulations that are “arbitrary, capricious,” or “an abuse of discretion,” courts are usually deferential to regulators, partly because courts are usually without requisite scientific or other expertise.

What, then, about Congress, which, as DeMuth says, “has been deeply complicit in fostering regulatory power”? One proposal is to defer all new “major” regulations until unemployment falls to 7.7 percent, just below what it was when Barack Obama was inaugurated. But this would leave the regulatory state in place and poised for action on a backlog of major rules.

Another proposal is for a “regulatory budget” limiting the costs each regulatory agency could impose. But cost estimates would come from the executive branch, and therefore not be constraining. This defect also infects the proposal (from Virginia’s Democratic Sen. Mark Warner) for “regulatory pay-go,” under which agencies could issue new regulations only by rescinding existing rules that impose the same cost, or some fraction of the cost, of new ones. Indeed, any “enforceable” cost-benefit standard will merely empower executive agencies to enforce their preferences.

Hence the importance of Congress and the indispensability of Davis’ REINS Act. It passed the House last December. But the Democratic-controlled Senate, which will not even take responsibility for producing (as the law requires) a budget, has no desire to restrain the administrative state or to ratify what it does by approving, with statutes, major regulations.

Barack Obama says he would veto REINS. Mitt Romney says that with or without REINS, he would submit such regulations for congressional approval. Here, then, is the distilled essence of the 2012 choice:

Obama promises the progressive agenda – more executive aggrandizement, more marginalization of Congress, more latitude for unaccountable experts to supervise our lives, more regulatory suffocation of society. Romney promises the reverse.

The Patriot Post® · A Check on the Regulatory State