Peeling Back the ‘Cover of Darkness’ on Obama’s Regulatory Agenda
Red tape that could cost the public $123.2 billion was a (late) Christmas gift to lawmakers leaving town.
January 9, 2013 - 12:08 pm
WASHINGTON – The Obama administration’s long-delayed laundry list of the federal regulations it intends to pursue this year, released under what one lawmaker described as the “cover of darkness,” looks to contain proposals that are more costly than those offered by the president’s immediate predecessors.
If fully implemented, the regulatory agenda as it is popularly known could wind up costing the public $123.2 billion, according to an analysis by the American Action Forum, a conservative, Washington-based think tank. The 2,387 tenders also are projected to result in at least 13 million paperwork burden hours.
“The totals are higher than those found in other administrations,” said Sen. Rob Portman (R-Ohio), a critic of the federal government’s regulatory system. “Generally speaking, there are more economically significant rules than were offered not just in the (George W.) Bush administration but also in the Clinton administration.”
The White House has not commented on the agenda. One administration official noted that the list contains rules that are being studied and that most will never be implemented. Executive agencies have finalized only 43 out of the 132 economically significant active rulemakings contained in the fall 2011 agenda.
Regulations, which carry the force of law, are created by the executive branch to implement the laws adopted by the legislative branch. Regulations essentially detail how the administration intends to interpret the law, a process that frequently leads to conflict with lawmakers who maintain proposed rules differ with legislative intent.
Beginning in 1994, as part of the Regulatory Flexibility Act, the executive branch was required to issue two reports annually, traditionally in April and October, outlining the “economically significant” regulations it intends to develop — generally defined as those having an annual economic impact of $100 million or more. Subsequent changes now require notification of all regulations under consideration by about 60 departments, agencies and commissions.
The Environmental Protection Agency usually provides the thickest – and most expensive – folder. The departments of Health and Human Services, Labor, Energy and Transportation also usually contribute a substantial number.
Portman said release of the agenda helps the public and regulated parties understand new rules under development, including their potential compliance costs and effect on small businesses. Yet in 2012 the Obama administration all but ignored the law, snubbing the April report altogether and delaying the release of the October report until Dec. 21 – the Friday preceding the four-day Christmas holiday when few were around the nation’s capital to notice. The release came little more than a month after the successful conclusion of President Obama’s re-election campaign.
The administration has offered no rationale for its fast-and-loose treatment of the Regulatory Flexibility Act. The closest it came was a letter last summer to Rep. Fred Upton (R-Mich.), chairman of the House Energy & Commerce Committee, explaining that it was waiting for several agencies to forward their proposed regulations.
Sen. James Inhofe (R-Okla.), ranking member on the Senate Environment & Public Works Committee, said Obama refused to issue the agenda in a timely fashion “because he doesn’t want the American public to know the terrible cost of the regulatory barrage he plans to unleash in a second term.”
Inhofe accused the administration of intending to “move forward with a slew of rules that will destroy hundreds of thousands of jobs and dramatically raise the cost of energy on American families” as the result of clean air initiatives. He cited a report from the National Economic Research Associates projecting that new regulations under development by the Environmental Protection Agency could lead to the elimination of 887,000 jobs, mostly in the nation’s coal fields.
Portman said he also has been seeking an explanation from the administration to no avail. He believes the White House was hoping to avoid news about the administration approaching “the regulatory cliff” of higher costs and more red tape leading up to the November election.
“A lot of rule-making was put off until after the election and we now starting to see some of those,” Portman told PJM. “It was irresponsible of the administration not to follow the law and follow previous practice. They chose not to do a regulatory agenda for spring at all and in the fall they put it off as long as possible, under cover of darkness right before Christmas. It’s pretty obvious they were trying to hide the agenda.”
Over the last four years the president has consistently voiced support for limiting the number of regulations emanating from the administration. In a letter to House Speaker John Boehner (R-Ohio), dated Aug. 30, 2011, Obama said that “it is extremely important to minimize regulatory burdens and to avoid unjustified regulatory costs, particularly in this difficult economic period.” The president listed several initiatives taken by the administration to reduce the regulatory burden and he has occasionally boasted that his White House has adopted fewer new rules than his predecessors.
Portman countered by asserting the Obama administration has imposed more economically significant rules from 2009 through 2012 than during the first three years of any other presidency since such records were kept. The more than 160 economically significant rules issued from February 2009 through February 2012 marked a 40 percent increase over the same three-year period in the George W. Bush administration and a 20 percent increase over the Clinton Administration.
Several of the 2,387 proposed regulations listed in the December 2012 agenda have already drawn scrutiny:
- The EPA has proposed a water intake rule that would affect manufacturing and power plants that draw significant amounts of water to negate the overheating of equipment. Opposed by the utility industry, the regulation would require industries to use the best technology available to minimize the environmental impact of withdrawal. Portman said implementation of the regulation could cost energy consumers $4.5 billion per year. The administration’s estimate is considerably less.
- The EPA also is proceeding with a controversial regulation regarding emissions of ozone, which combines with other pollutants to form smog, contributing to a variety of health issues ranging from asthma to heart problems. Outgoing EPA Administrator Lisa Jackson attempted to implement the rule, lowering the regulation of 75 parts per billion set during the Bush administration to a stricter 60 to 70 parts per billion standard, in 2011. That effort was nixed by the White House under pressure from industrial interests before the 2012 election. Portman said the proposal carries “a massive price tag” and will particularly affect Midwestern states like Ohio that rely on coal-fired power plants.
- The Department of Labor wants to redefine the term “fiduciary” to include stock appraisers in privately held companies who are involved in employee stock ownership plans and trusts. Portman said the proposal tightens restrictions and extends risk to anyone who offers investment advice performed on a commission basis.
- The Department of Health and Human Services is looking to adopt rules on the administration of the Independent Payment Advisory Board (IPAB) created as part of the Patient Protection and Affordable Care Act, popularly known as Obamacare. The goal of the 15-member panel is to implement savings in the Medicare program without affecting coverage or quality. These rules are receiving special scrutiny because IPAB is the commission that some opponents of the healthcare reform law refer to as the “death panel” that will decide who is worthy of medical care. The claim has been debunked but the regulations are in for close scrutiny.
The White House has issued an executive order announcing its intention to offer regulations that “protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.”