Ten Things I Hate About Jeb's Antiregulatory Regulatory Reform Plan

Consistent with his ongoing efforts to distinguish himself among the Republican presidential candidates as a serious “policy wonk,” Jeb Bush, “rolled out” his “regulatory reform” plan last week.  The sad truth, though, is that the plan contains little of what might be considered sober or intellectually rigorous.   Rather, it is simply a mishmash of warmed over ideas from candidate Mitt Romney’s 2012 regulatory reform plan and from the various antiregulatory bills that have been festering in Congress the last several years, all served on a wilted bed of misleading data, astounding leaps of logic, and outright falsehoods.

To see why this plan would be such a bad deal for the American people, consider the following 10 points:

1. It relies on unreliable or misleading empirical data. Jeb simply does what countless other regulatory opponents have done before him:  He attempts to create an alternative reality in which our regulatory system is out-of-control by citing data that are either based on flawed accounting or that don’t actually say what he claims they do.  For example, Jeb’s plan cites misleading World Bank data about the apparent difficulty of starting a business in the United States, which Kevin Drum at Mother Jones helpfully debunked.  He also refers to a widely-ridiculed Competitive Enterprise Institute study that purports to calculate the total annual cost of regulation as $1.9 trillion.  The study, which is updated annually, relies on such a flawed methodology to achieve that result, the Washington Post’s Fact Checker assigned the 2014 version a score of “Two Pinocchios” and dismissed it as “misleading.”  
2. It relies on unsubstantiated myths about the relationship between regulations and the economy.  Jeb’s plan attempts to buttress its flimsy empirical evidence with the same tired myths about regulations—namely, that they are fundamentally inconsistent with job creation, economic growth, productivity, profitability, innovation, increased wages, or any other positive economic metric that might spring to mind.  Jeb evidently knows better than to even attempt to cite empirical evidence to support these myths, because nearly all of the available evidence demonstrates just the opposite.  A 2011 CPR white paper summarizes much of this evidence, and still more of it has continued to pile up since.. A 2000 retrospective review that the Occupational Safety and Health Administration (OSHA) conducted for its 1978 Cotton Dust Rule found that the rule had actually lead to an increase in productivity in the textiles industry (from an annual growth rate of 2.5 percent before the rule was issued to an annual growth rate of 3.5 percent after), which led to increased profitability and job growth in the sector.  More importantly, the rule led to a 99-percent decrease in cases of byssinosis (a debilitating and often fatal lung disease) in textile workers.  
3. It is based on a gross misunderstanding of how the regulatory process actually works.  Unfortunately, Jeb’s plan hardly hides its contempt for public servants and the work they do, accusing them of being unelected and unaccountable bureaucrats that impose their freedom-corroding values on an unsuspecting public.  This narrative might make for a nice constituent newsletter, but it is sure to earn an F in every Administrative Law course in every law school in the country.   For starters, regulations don’t spring from the feverish imaginations of agency officials; instead, they are expressly mandated or authorized by Congress in  legislation.  Moreover, before a regulation can take effect, an agency must develop it through an intensive, multi-year process.  Along the way, the agency must satisfy dozens of analytical and procedural requirements and offer several opportunities for public input from interested stakeholders.  And, when this process is all over, a judge can still send the agency back to the drawing board if it is convinced that any of these procedures have not been adequately satisfied, which, of course, provides agencies with all the incentive they need to abide by each and everyone of these analytical and procedural requirements with the utmost rigor.  For a fuller discussion of these issues, please refer to this CPR letter to the Senate Homeland Security and Government Affairs Committee and recent congressional testimony from CPR Board Member Sidney Shapiro.  
4. The plan’s conspicuously inconsistent approach to state/local control reveals what’s really at stake.  Throughout his plan, Jeb makes much of the need to take regulatory authority away from federal agencies and give it to the states.  In doing so, of course, he overlooks the fact that many states have not exactly been doing a bang-up job when it comes to protecting public health, safety, and the environment, as the 2014 coal ash spill into North Carolina’s Dan River clearly illustrated.  It also ignores that many risks that federal regulations address, such as air and water pollution, aren’t contained within state borders, and that many companies would prefer a single nation-wide regulatory solution as opposed to complying with a variety of inconsistent state-based regulations.  (Speaking of which, I wonder where Jeb stands on the leading legislative proposals to reform the Toxic Substances Control Act (TSCA), both of which would deny states the authority to protect their citizens against hazardous chemicals.)  Yet, many of the specific reform proposals contained in Jeb’s plan would have the effect of limiting state authority over regulatory issues.  For example, he would require federal permits for infrastructure projects to be issued within two years.  Much of the delay in federal infrastructure projects, however, results from sorting out issues raised by state and local authorities—not from anything to do with federal agencies.  As a result, putting a firm deadline on federal permits would actually limit state and local input into these kinds of projects.  So how does one explain these apparent inconsistences in Jeb’s views on whether states should have primacy on regulatory matters?  As CPR Member Scholar Rena Steinzor pointed out in her testimony at a congressional hearing last year, it’s hard to ignore that, “as a practical matter, these irreconcilable positions have consistent pragmatic outcomes: they help big business.”  
5. If the reform proposals sound familiar, it’s because you’ve heard them all before.  Some of the reform proposals in Jeb’s plan, such as regulatory pay-go, were lifted directly from Mitt Romneys’ 2011 “Plan for Jobs and Economic Growth.”  Others are based on various antiregulatory bills that have been proposed and re-proposed several times over the last few sessions of Congress.  These include the REINS Act, the Regulatory Improvement Act, the Regulatory Accountability Act, the Sunshine for Regulatory Decrees and Settlements Act, the Principled Rulemaking Act, the SCRUB Act, and the RAPID Act.  For more on the problems with many of these bills, see a collection of legislative analyses here.  
6. The plan would put a cap on safeguards that protect people and the environment.  One of the reforms called for in Jeb’s plan is something known as “regulatory pay-go.”  This proposal would put a tight cap on the total regulatory costs that the federal government could impose, and require agencies to remove space under this cap by eliminating existing regulations before they can issue new ones.  In other words, the costs of a new regulation would have to be offset by removing an old one that has the same or greater costs.  This reform is such a bad idea CPR published an entire Issue Alert laying out the problems with it.  The most obvious problem with this proposal is that it blatantly disregards the very economic principles that Jeb and other regulatory opponents claim to be upholding.  Every honest economist would tell you that as long as a regulation is a net positive (i.e., its benefits outweigh its costs), then there should be no cap on regulations—every such regulation literally makes America better off.  Evidently, Jeb cares more about saving corporate interests money and protecting their bottom line than he does about making America better off.  
7. The plan would replace agency expertise with congressional politicking and dysfunction.  Another destructive proposal that Jeb’s plan specifically calls for is the REINS Act, which would prevent the most important regulatory safeguards from taking effect unless both chambers of Congress affirmatively vote in favor of them within an unreasonably short time span.  Needless to say, no regulation would garner such a vote, and the rulemaking process would for all intents and purposes be irrevocably destroyed. Our rulemaking process is built on the foundation that those decisions about the highly complex technical and scientific matters that inform regulatory design should be made by experts at agencies who are largely shielded from undue political influence and have time to study these matters in great detail.  The REINS Act would throw that all away and replace it with a system where these sorts of decisions would be left to be sorted out in the hyper-politicized and hyper-dysfunctional environment that is our current Congress.  In short, the REINS Act would remove the best part of the rulemaking process and replace it with the worst part of Congress.  
8. The plan would actually prevent citizens from holding agencies accountable.  Jeb’s plan also takes aim at the dreaded menace of “sue and settle” lawsuits by calling for something like the Sunshine for Regulatory Decrees and Settlements Act.  Here’s the thing, though, the Government Accountability Office (GAO) thoroughly debunked the whole “sue and settle” myth in a report it issued last December.  In fact, the GAO’s report systematically dismantles every talking point that has been offered in support of the Sunshine for Regulatory Decrees and Settlements Act.  In reality, these suits are nothing more than an exercise of citizens’ statutory rights to hold agencies accountable for failing to implement congressionally-enacted law in accordance with Congress’s clear mandates.  Throughout his plan, Jeb talks of augmenting public accountability over government agencies.  One wonders, then, why he would remove one of the most critical tools for doing so.  
9. The plan would add unnecessary lookback procedures for existing agency rules.  Jeb’s plan calls for numerous new retrospective review mechanisms, including regulatory pay-go, an independent regulatory review commission, and a new review process conducted by the White House Office of Information and Regulatory Affairs (OIRA).  All of these would be completely one-sided in that they would focus on eliminating costs to industry and not improving protections for the public by identifying gaps in regulatory safeguards.  These reviews threaten to prevent agencies from carrying out their missions of addressing new and emerging risks, and they risk the elimination of existing rules that remain vital to protecting the public interest.  These proposals also ignore that numerous regulatory review requirements of all shapes and sizes already exist, and that when they are carried out agencies tend to find that existing rules need to be strengthened rather than weakened or eliminated.  Despite all of these requirements, agencies even go above and beyond by conducting voluntary lookbacks of their existing rules.  Significantly, an auditor with the GAO testified before Congress last year that these voluntary lookbacks generate more meaningful changes to existing rules than is the case with required lookback procedures.  For more on the existing regulatory lookback procedures that already exist, see here.  
10. The plan would ensure unprecedented White House interference in the decision-making of independent regulatory agencies such as the Nuclear Regulatory Commission, the Consumer Product Safety Commission, and the Federal Trade Commission.  For nearly four decades, presidents have exercised intrusive oversight into the regulatory decision-making of executive branch agencies through a centralized regulatory review process.  Currently, this process is carried out by OIRA, which has clear track record of operating to weaken, block, and delay pending safeguards.  This oversight does not extend to independent regulatory agencies, however, because Congress specifically designed these bodies to be insulated against political interference from the White House.  Significantly, the Senate has considered several bills that would undermine that design by authorizing the president to issue an executive order that would extend a form of centralized oversight for independent agency regulatory decision-making that is similar to what currently exists for executive branch agencies.  Ignoring the apparent legal barriers involved, Jeb would simply assert his oversight authority over independent regulatory agencies via executive order even if these bills are not enacted into law.  This proposal raises serious policy concerns as well.  After all, Congress designed independent agencies to be insulated from political interference for good reason:  They often deal with very complex and technical matters that have critical implications for the public interest.  Intrusive oversight would prevent these agencies from applying their unique expertise to these matters in a timely and effective manner.  The proposal also ignores that these agencies are designed with alternative accountability mechanisms in place, rendering White House oversight—even in its most salutary form—unnecessary.  For more on the policy problems with Jeb’s proposal on White House oversight of independent agencies see here.