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Conyers: REINS Act Would Undermine Health and Safety, While Handing the Regulatory Keys to Big Business

Washington, DC, January 24, 2011

Today, House Judiciary Ranking Member John Conyers, Jr. (D-Mich.) issued the following statement at the Subcommittee on Courts, Commercial and Administrative Law hearing on the REINS Act, Regulations from the Executive in Need of Scrutiny.

At the first hearing of the reconstituted Subcommittee on Courts, Commercial and Administrative Law, we are being asked to focus on a newly introduced bill known as the Regulations From the Executive in Need of Scrutiny Act, or the “REINS Act.” This proposed legislation would dramatically change the way rules are promulgated, by requiring all new major regulations to be affirmatively approved by both houses of Congress and the president before they can take effect. Federal regulations affect virtually every aspect of our lives, including regulations that impact the environment in which we live, the products we buy and consume, the economy, and the health and safety of our citizens. In recognition of the critical role federal regulations play, most rules are subject to a very length vetting process involving the agency, the administration and the public, through notice and hearing.

While the legislation we will discuss today may be well-intentioned, it simply misses the mark. It suffers from three fatal flaws I would like to describe today.

First, the proposed REINS Act is constitutionally infirm. The United States Constitution explicitly assigns various responsibilities to the different branches of the federal government. The drafters of the REINS Act assert that the Constitutional authority for this legislation can be found in Section 1 of Article 1 of the Constitution, which grants all legislative powers to the Congress. The drafters fail, however, to take into consideration an equally important provision; namely, Article II, Section 1, which grants the executive power to the president. It is a fundamental constitutional precept that while Congress is charged with making the laws, the Executive Branch has the responsibility to “take care that the laws be faithfully executed.”

This fundamental notion of the separation of powers is the essence of what our founding fathers envisioned in the Constitution of this great nation. I am particularly concerned that the REINS Act “unduly trammels on executive authority” under the separation of powers doctrine that the Supreme Court upheld in the 1988 case, Morrison v. Olson, 487 U.S. 654 (1988), and that it is constitutionally infirm.

Second, the REINS Act is not tailored to the problems it purports to address. Supporters of the REINS Act argue that Congress has delegated too much authority over the years to unelected bureaucrats in the Executive Branch, creating a lack of accountability among federal agencies and resulting in burdensome regulations. While I appreciated these concerns, I do not believe the REINS Act addresses the disease it purports to cure. Some might argue that there is a legitimate need to strike a balance between protecting the safety and health of all Americans, and fostering economic growth, job creation, and competitiveness. I believe President Obama has already anticipated this need with his issuance last week of the Executive Order on Improving Regulation and Regulatory Review, which directs the agencies to consider these concerns in promulgating rules.

The REINS Act, however, would not help to achieve that balance. Rather, it will distort the rulemaking process. It will hamper the implementation of EVERY single law on the books! By changing the presumption in the Congressional Review Act, and requiring affirmative congressional approval (as opposed to disapproval) for all major rules, this act will serve as a chokehold, and stifle regulatory review, which I am afraid is the real intent of this legislation.

We must recognize how critical federal regulation is to this country. Every year, federal regulatory agencies create thousands of new rules that affect virtually every aspect of our lives, including the environment in which we live, the products we buy and consume, the economy, and the health and safety of our citizens. Requiring all new major rules to be affirmatively approved by both houses of Congress and the president before taking effect would make it virtually impossible to implement critical new legislation, including the Patient Protection and Affordable Care Act (health care reform) and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Indeed, financial experts have attributed the cause of the financial collapse in this country to the lack of adequate regulations.

I have been a member of Congress for a very long time, and I am extremely proud of our process. But I will be the first to admit that passing legislation is neither easy, nor a speedy process. If we start to require major rules to be passed by both Houses of Congress and signed by the president, as the REINS Act would require, the invariable delays in the lengthy process could jeopardize the health and welfare of our nation. Some proponents of the REINS Act have expressed concern that some statutory language is no longer current with respect to certain regulations. If that is the case, the appropriate solution is to amend the statute in question, not to stifle the rulemaking process, which is already rather cumbersome and laborious. There are also practical concerns we must consider with a legislative approval requirement for agency rulemaking. Congress would risk undertaking piecemeal examination of particular rules in isolation from an agency’s program as a whole, without the benefit of the experience and specialized knowledge that may have shaped the elements of that program. Also, the volume and complexity of the rules that would be subject to the proposed approval process would be time-consuming and drain already limited congressional resources

To put it simply, the REINS Act would create more problems than it would cure.

Third, the REINS Act is based on incomplete economic analysis, as it solely addresses the costs of regulation, while failing to account for the tremendous cost benefits that regulations yield.

Proponents of the REINS Act raise concerns about the financial costs imposed by regulations, and they cite eyebrow-raising figures that are troubling, especially in our current economic climate. What you will hear from at least one witness today, however, is that the sources of these numbers are not impartial parties. Indeed, many reputable scholars and economists have criticized the problems with the assumptions and methodologies underlying these cost estimates. These experts also cite contrary reports. For example, the Office of Management and Budget recently reported that the cost of major rules from the Executive Branch agencies is significantly lower than the figure cited by proponents of the REINS Act. You will also hear what I think is of the utmost importance. A discussion solely of the cost of federal regulation fails to paint the whole picture; we must assess both the costs and the benefits of federal regulation. The Office of Management and Budget (OMB) — in both the current administration and in the Bush administration — has found that the benefits greatly exceed the costs of major federal regulations. For example, major regulations promulgated over the ten-year period between 1998 through 2008 are estimated to have cost between $51 and $60 billion.

Notably, the benefits associated with these very same rules are estimated to be $126 to $663 billion, that is, more than ten times their cost! I look forward to hearing more about the full picture, the cost benefit analysis of federal regulation, and all of these issues and concerns today.

I also think it is of the utmost importance that we have the opportunity to fully examine these issues, and that we hear from the administration. I only just received testimony from Mr. McIntosh a few hours ago today. I would like to hold another hearing or forum on this issue, so that we have adequate time to explore the troubling Constitutional and other implications of this bill, and hear what the Administration has to say.

I look forward to more discussion of this issue. Thank you.