The Relief Report®

A newsletter covering regulatory reform efforts in Washington and across America, published by The National Center for Public Policy Research, 300 Eye St., NE #3, Washington, D C 20002, 202/543/1286, Fax 202/543/4779, E-Mail [email protected], Web http://www.nationalcenter.org.

Issue #50 * January 14, 1997 * David A. Ridenour, Editor

Hill Watch - Regulatory Relief Initiatives on Capitol Hill

Power of Two New Common Sense
Regulatory Laws to Be Tested

Two potentially powerful weapons in the battle for regulatory common sense will likely be tested early in the 105th Congress: The Congressional Review Act and the Small Business Regulatory Enforcement Fairness Act. Both were passed by the 104th Congress as part of legislation to increase the debt limit.

The Congressional Review Act gives Congress as much as half a year or more to review a new regulation issued by a federal agency to determine whether or not it is consistent with congressional wishes. If not, Congress can approve a "motion of disapproval" which would -- if signed by the President -- send the regulation back to the issuing agency. The CRA would essentially return a little of the power to legislate -- which has gradually been taken over by the Executive Branch since the New Deal -- back to Congress where it belongs. But as John Shanahan of the Alexis deTocqueville Institution has noted in a recent paper, "Unless Congress takes some specific steps... this law could become a paper tiger." The specific step he refers to is the creation of a joint House-Senate Committee that could oversee the review process on a more systematic basis.

The Small Business Regulatory Enforcement Fairness Act (SBREFA) promises to face an earlier test, however. The SBREFA strengthens the 1980 Regulatory Flexibility Act -- which requires federal agencies to conduct special reviews of regulations for impact on small businesses and farmers -- by adding the enforcement mechanism of judicial review. Its first test will be the EPA's proposed new standards for ozone and particulate matter (the National Ambient Air Quality Standards) which promise to have a significant -- and possibly catastrophic impact -- on many small businesses. The EPA issued these standards without conducting the Regulatory Flexibility analyses required by law. In a letter to the EPA Administrator, Senators Christopher Bond (R-MO) and Dale Bumpers (D-AR), the Chairman and ranking Democrat, respectively, on the Senate Committee on Small Business, warned, "We would caution that compliance with SBREFA is not a matter for an agency to pursue on a 'voluntary basis.'"

The outcome of this dispute and others may well determine whether these two new laws are powerful weapons in the battle for common sense or simply paper tigers. For more information, contact John Shanahan of the Alexis deTocqueville Institution at 703/351-4969 or Kenneth Bricker of the Senate Committee on Small Business at 202/224-8584.

Congressional Review Act: Brief Description

This law permits a more thoughtful and deliberate approach to regulations by slowing the pace at which major rules are promulgated to allow a more thorough review of the benefits and costs of regulations and their impact on communities and small businesses. The Act also permits Congress to vote to disapprove any agency regulation that it deems inconsistent with congressional intent.

Among other things, the law:
  1. Requires federal agencies to submit every new rule to Congress and the GAO
  2. Requires agencies to submit to the head of the GAO such relevant information as any cost-benefit analyses conducted on proposed rules and a summary of any action on the rule under the Regulatory Flexibility Act and the Unfunded Mandates Act.
  3. Requires publication of proposed major rules in the Federal Register 60 days before they are permitted to go into effect. This by itself effectively adds 30 more days to the rule promulgation process.
  4. Permits Congress 60 days in which both Houses of Congress are in session to review the rule and -- should Congress be so inclined -- approve a motion of disapproval under special expedited procedures to send the regulation back to the issuing agency if it determines that the regulation violates the intent of Congress. Should Congress have less than 60 days to review any rule in any given session of Congress, Congress would have a new 60 days to review the rule beginning on the 15th day of the new Congress. Given this definition of "days," Congress may be able to review some agency rules for six months or more.
  5. Bars agencies for reissuing rules in essentially the same form rejected by Congress in previous reviews.

Small Business Regulatory Enforcement
Fairness Act: Brief Description

This law strengthens the 1980 Regulatory Flexibility Act -- which requires federal agencies to conduct special reviews of regulations for impact on small businesses and farmers -- by adding the enforcement mechanism of judicial review.

Among other things, the law:
  1. Allows small businesses to challenge federal rules in court if they believe agencies have failed to comply with the Regulatory Flexibility Act.
  2. Requires that federal agencies work with an ombudsman at the Small Business Administration who will be responsible for cataloguing complaints from small businesses about agency enforcement practices.
  3. Establishes citizen boards tasked with collecting and keeping confidential complaints from small business owners about their dealings with federal regulators.
  4. Permits small business owners to sue for legal fees in certain disputes with federal agencies.
  5. Requires federal agencies to produce forms and rule guides written in "plain English."

Congress Should Learn Economic Growth Lesson
of Low-Regulation Mariana Islands

Congress should pay close attention to a new study released by the Competitive Enterprise Institute, "Promoting Free Markets in the Commonwealth of the Northern Mariana Islands" by syndicated columnist Doug Bandow, for a better-than-textbook case of what happens to an economy when regulations are kept to a minimum, income and capital gains taxes are slashed and inheritance, property and sales taxes are nonexistant: The Marianas' gross revenues are up 605% since 1986, per capita island product has quadrupled since 1980, and unemployment has declined from 15% to 4%. Unfortunately, says CEI, some members of Congress and the Clinton Administration have pressuring this U.S. possession to bring its tax laws and some regulations in line with those of the mainland. For a copy of the CEI study contact Marlo Lewis at (202) 331-1010 or [email protected]

All correspondence to The Relief Report should be directed to: The National Center for Public Policy Research * 300 Eye Street, NE Suite 3 * Washington, D C 20002 * Tel 202/543/1286 * Fax 202/543/4779 * E-mail [email protected] * (C) 1997, The National Center for Public Policy Research. Coverage of meetings, activities or statements in The Relief Report does not imply endorsement by The National Center for Public Policy Research. Reprints of material in the Relief Report permitted provided source is credited.

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