Since 1994, Congress has taken modest steps toward
improving the federal regulatory system through such laws as the
Unfunded Mandates Reform Act of 1995, the Small Business Regulatory
Enforcement Fairness Act, the Congressional Review Act (CRA), and
Office of Management and Budget (OMB) Regulatory Accounting
Reports. Yet, despite these good intentions, the number of final
rule documents published in 1996 in the Federal Register was the
highest since 1984.
Even
worse, between April 1, 1996, when the U.S. General Accounting
Office (GAO) began to track the final rules issued by federal
agencies under the CRA, and April 30, 1998, Congress received 8,675
new final rules for review. But even though the CRA allows Congress
to review each new rule and consider a joint resolution of
disapproval to overrule it, only a handful of such resolutions were
introduced, and none came close to a floor vote. The result: Not
one new rule was disapproved. In addition, 126 of these 8,675 rules
qualified as "major" rules, each of which would impose a cost of at
least $100 million annually on the American economy. These 126
major rules--only 1.0 percent of all final rules crafted during
this period--will cost American consumers, employers, employees,
and taxpayers at least $12.6 billion.
In
many cases, the only information on a new rule that is available to
Members of Congress is provided by the agency that is promulgating
the rule. The limited information that currently exists about the
costs and benefits of regulation, and the sheer volume of final
rules issued, have led several legislators to demand that Congress
do a better job of carrying out its constitutional responsibility
of full regulatory oversight. But Congress is at a disadvantage:
The current federal regulatory system encompasses more than 50
federal agencies, more than 126,000 workers, and annual spending of
$14 billion; at best, Congress employs only a handful of people to
monitor federal regulatory activity. Moreover, the federal agencies
have the pertinent information that Congress needs, and Congress
must rely on the information that each agency is willing to
provide. Obviously, no federal agency with an interest in seeing a
particular rule instituted is going to be inclined to maximize the
availability of information that might bring that rule into
question.
Congress needs reliable mechanisms to
facilitate a balanced and informed discussion of the merits of each
rule as early as possible, preferably before the rule is issued.
But Congress has failed to put in place any structure, such as a
coordinated committee review mechanism, or set aside any resources
to help it carry out the requirements of the Congressional Review
Act. As a result, many Members remain unaware of, or ill-informed
about, the volume and types of rules that federal agencies have
generated since 1996. Members often engage in the costly and
time-consuming exercise of submitting detailed requests to agencies
for basic information about their rulemaking activity, and
responses may not come for years, let alone weeks or months. This
puts Congress at an inherent disadvantage in trying to oversee
federal regulatory activity.
To
address this problem, Representatives Sue Kelly (R-NY) and James
Talent (R-MO) and Senators Richard Shelby (R-AL) and Christopher
Bond (R-MO) have introduced the Congressional Office of Regulatory
Analysis Creation Act (H.R. 1704/S. 1675). These bills would
establish a nonpartisan Congressional Office of
Regulatory Analysis (CORA) to bring balance to the regulatory
review process and break the virtual monopoly on regulatory
analysis that federal regulatory agencies now enjoy. CORA's sole
priority would be to monitor the federal regulatory system for
Congress. Currently, higher priority budget and program audit
activities often prevent the Congressional Budget Office (CBO) and
GAO from focusing effectively on the federal regulatory system.
H.R. 1704/S. 1675 would transfer the functions of the GAO under the
Congressional Review Act, and certain functions of the CBO under
the Unfunded Mandates Reform Act, to CORA. Together, the functions
of the CBO and CORA would become the congressional counterparts of
the existing budget and regulatory functions of OMB.
As
an nonpartisan research arm of Congress, the Congressional Office
of Regulatory Analysis would:
-
Receive copies of all rules issued by
federal agencies;
-
Undertake an independent analysis of
each major rule;
-
As resources permit, undertake analyses
of other rules requested by Members; and
-
Produce an annual report on the total
costs of regulation to the U.S. economy. This report would be the
legislative version of the White House OMB report required by
Congress in 1997 and 1998.
Despite providing such detailed
assessments of regulatory costs, the Congressional Office of
Regulatory Analysis Act could be improved to require that CORA
report on the benefits of each regulation as well as its costs. The
bill authorizes funding for CORA through FY 2006 at $5.2 million
annually, an amount roughly equivalent to funding for the Office of
Information and Regulatory Affairs (OIRA) in FY 1998. The CBO
reported that H.R. 1704 would not affect direct spending or
receipts and that pay-as-you-go procedures would not apply.
After receiving more than 8,600 new rules
in the two years since passage of the CRA, Congress cannot possibly
assure the American people that it is able to address the substance
of each rule effectively. The establishment of a Congressional
Office of Regulatory Analysis--whether as a free-standing office,
as proposed in H.R. 1704/S.1675, or as part of the CBO--represents
the next logical step in Congress's efforts to improve the
regulatory system and foster sensible rulemaking based on facts.
The information provided by such an office would help legislators
understand the financial and economic impact of their decisions
before they approve each rule or pass a new law.
Angela Antonelli is former Director of The
Thomas A. Roe Institute for Economic Policy Studies at The Heritage
Foundation.