Consumer Advocates: Regulatory Reform Bill Considers Cost to Industry but Not Public Benefit

Consumer Advocates: Regulatory Reform Bill Considers Cost to Industry but Not Public Benefit
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January 15, 2015

The Regulatory Accountability Act (RAA) would undermine the country's environmental, public health, workplace safety and consumer financial protections, say consumer groups that are urging Congress to oppose the bill.

Proposed and passed in the House earlier this week, the RAA would require that federal agencies analyze and justify a proposed regulation's cost and impact to the affected industry.

While touted as a way to clean up government red tape and increase transparency, consumer advocates say that it would add more procedural requirements for agencies –74 by one estimate - and could delay protective regulations for at least 10 years.

The bill would require federal agencies to estimate the direct and indirect costs and benefits of a proposed legislation, including the impacts on jobs and wages. Agencies must examine every alternative to the proposed rule along with the alternative's direct and indirect costs. Indirect costs, however, are not defined in the bill. These mandatory guidelines as to how estimates are calculated would be created by the White House Office of Management and Budget (OBM). Additionally, any rule that has a $1 billion or greater cost must have a formal trial-like hearing. Anyone that objects to a rule that has a cost of $100 million or more can petition the agency for a hearing as well.

The White House Office of Information and Regulatory Affairs (OIRA) would be responsible for development guidelines for assessing risk, "despite the fact that OIRA's small staff, which includes only a handful of scientists, lacks the scientific and technical expertise that federal agency scientists possess," wrote Celia Wexler in an Op-Ed for Live Science.

Wexler, a senior representative for the Center for Science and Democracy at the Union of Concerned Scientists, goes on to write that the process requires agencies to estimate the short term costs to the industry, but not the long term benefits or savings to the public. "The EPA would be much more vulnerable to legal challenges of its rules based on their costs, even if those rules were crucial to protecting air and water and safeguarding public health — indeed, even if those rules have enormous long-term economic benefits or savings," she wrote.

In a letter to Congress, Consumer Federation of America general counsel Rachel Weintraub, points out that safety requirements for cribs under the Consumer Product Safety Improvement Act (CPSIA) may have been delayed or may have never been implemented.

Between 2007 and 2011 the Consumer Product Safety Commission (CPSC) recalled 11 million cribs following 1,703 injuries and 153 deaths. "As a direct result of the CPSIA, CPSC promulgated an effective mandatory crib standard that requires stronger mattress supports, more durable hardware, rigorous safety testing, and stopped the manufacture and sale of drop-side cribs," she wrote.

Along with the opposition, the RAA does have a number of supporters. The U.S. Chamber of Commerce voiced its support of the bill during its State of American Business Address Tuesday.

"Business recognizes the need for smart regulations," said Chamber president Thomas Donohue. "But with a $2 trillion price tag in compliance costs imposed by a virtual fourth branch of government, it's time to bring the system into the 21st century."

In a statement from the American Farm Bureau Federation, president Bob Stallman wrote, "This legislation would require agencies to be more open and transparent on data justifying a rule. The most costly rules would be subject to on-the-record hearings. Agencies would be required to consider such rules' impact on jobs and the economy."

Having passed through the House, the bill moves on to the Senate where it could get full support of the Republican majority. The bill, however, does not have support from the White House.

A statement from the Office of Management and Budget said the bill, "would make the regulatory process more expensive, less flexible, and more burdensome -- dramatically increasing the cost of regulation for the American taxpayer and working class families."

President Barack Obama Tuesday said that he would veto the bill if passed by the Senate.