Regulatory Review in Anti-Regulatory Times: Congress

by Daniel Farber

January 17, 2019

Originally published on Legal Planet.

In theory, cost-benefit analysis should be just as relevant when the government is deregulating as when it is imposing new regulations. But things don't seem to work that way. This is the second of two blog posts analyzing how costs and benefits figured in decisions during the past two years of unified GOP control of the federal government (read the first post here). Today, I focus on Congress.

For the first time in history, Congress made aggressive use of the Congressional Review Act (CRA) to roll back federal regulations. It had only been used once before, but in 2017, Congress overturned fifteen government regulations in short order. Liberals decried these regulatory rollbacks as a mass attack on the environment and the public interest more generally. Conservatives applauded Congress for cutting the heavy cost of government regulation and boosting the economy. It appears, however, that neither perspective was right. Congress's actions do not seem to fit any coherent regulatory philosophy, good or bad. In a new paper, I analyze the role of costs and benefits in the decision to overturn regulations. The paper examines all the regulations for which CRA resolutions were introduced in Congress, comparing those regulations that were ultimately overturned with those that were not.

Neither costs nor benefits seemed to have had any significant relationship with a regulation's fate. From all the talk about reducing economic burdens on industry, you might have expected the focus to be high-cost regulations. But such regulations were a minority of those considered by Congress, and most of those were not overturned. Furthermore, there were many high-cost regulations that were not even the subject of disapproval resolutions in the first place.

Neither adverse cost-benefit analysis nor public controversy accounted for many congressional decisions. Cost-benefit analysis was performed only in about a third of the regulations they considered, largely because in most cases, the benefits could not be reduced to dollars and cents. Many of the regulations had not been considered sufficiently controversial by the Obama administration to be classified as "significant."

It remains a mystery why Congress overturned some regulations and not others, or how regulations were singled out for consideration by Congress in the first place. I hope to explore these issues in further research. But three things seem clear: First, cost-benefit analysis played little role in the process. Second, reducing regulatory costs was not Congress's dominant purpose. And third, in most cases, public controversy was also not a driving factor. This suggests that special interests in specific geographic areas may have been involved, although there is not yet direct evidence to support this hypothesis.

There have been proposals to expand congressional control over regulations, such as the so-called REINS Act, a tortured acronym for the Regulations from the Executive in Need of Scrutiny Act. Congress's seemingly arbitrary decision-making under the CRA suggests that these proposals may be quite ill-advised. They also suggest that serious consideration should be given to repealing the CRA.

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Daniel A. Farber is the Sho Sato Professor of Law and Director of the California Center for Law, Energy and the Environment at the University of California, Berkeley.

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