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Obama’s Regulatory Rampage

Fasten your seatbelts, because the courts and Congress won’t be able to slow it down much

Jan 28, 2013, Vol. 18, No. 19 • By ADAM J. WHITE
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But even the administration’s account of its “major rules” understates the cost of regulations. First, it includes only the “executive” agencies, and not the “independent” agencies, such as the Federal Reserve, the National Labor Relations Board, the Securities and Exchange Commission, and other agencies that are run by the president’s appointees yet partially shielded from his direct oversight. Those agencies have grown increasingly active in recent years, partly as a result of the financial crisis and subsequent enactment of Dodd-Frank, but they are subject to fewer or no cost-benefit analysis requirements—a point highlighted by an awkward interaction between Federal Reserve chairman Ben Bernanke and JPMorgan’s Jamie Dimon in 2011. When Dimon asked Bernanke, at a public event, “Has anyone bothered to study the cumulative effect of all” the Fed’s new rules, to ensure they did not unduly burden the economy, Bernanke responded with remarkable candor: “Has anybody done a comprehensive analysis of the impact on credit? I can’t pretend that anybody really has. You know, it’s just too complicated. We don’t really have the quantitative tools to do that.”

A second cause of underestimation is that the White House’s statistics cover only regulations, and not the myriad enforcement actions, permit application reviews, and other non-rulemaking activities. They do not include the administration’s rejection of the Keystone XL pipeline, for example, or the undeclared “permitorium” that blocked and delayed offshore drilling permit applications in the aftermath of the Gulf of Mexico oil spill, long after the federal courts struck down the administration’s officially declared moratorium.

In the absence of comprehensive government statistics stating the cost of regulations, critics have offered their own estimates. The American Action Forum, for example, estimates that the Obama administration’s regulations have cost $467 billion. Whether $467 billion or “merely” $32.1 billion, the Obama administration proved itself adept at imposing regulations in the first term. And it was just getting warmed up.

What, then, does the Obama administration have in store for the second term? Until recently—that is, until Election Day—the administration tried very hard not to tip its hand. Although longstanding executive orders require the administration to publish a “Unified Regulatory Agenda” semiannually, the administration refused to issue either a spring report or autumn report during the election year—an “unfortunate precedent,” according to the American Bar Association’s Administrative Law Section. 

Only after Election Day did the White House finally release a 2012 regulatory agenda—and then only in a “news dump” on the Friday before Christmas. It identified 128 “economically significant” rulemakings, but took care to applaud once more the “remarkably high” benefits that the administration’s regulations allegedly have achieved.

The Unified Regulatory Agenda was not the only thing withheld until after Election Day. According to various reports, many agencies withheld controversial regulations until after the election. National Journal reported shortly before the election that “federal agencies are sitting on a pile of major health, environmental, and financial regulations that lobbyists, congressional staffers, and former administration officials say are being held back to avoid providing ammunition to Mitt Romney and other Republican critics.”

Once those concerns were mooted by the president’s reelection, the regulatory pipeline quickly reopened. On December 14, the Environmental Protection Agency issued a new “soot” rule, to limit pollution from automobiles and smokestacks. The EPA estimates the rule’s costs as ranging from $53 million to $350 million per year, leading Politico to ask whether the “significantly tightened” pollution limits are “a sign for the second term?”

A week later, EPA issued a new rule limiting mercury, acid gas, and other emissions from industrial boilers. The EPA estimates the rule’s costs at $1.4 billion to $1.6 billion per year.

Furthermore, in the weeks after the election, the EPA abruptly banned BP from bidding for new offshore drilling leases, an unexpected action that left Senators Mary Landrieu, Lisa Murkowski, and others grasping for answers. “I can’t figure out where this directive came from, what precipitated it, on what grounds it was issued,” said Landrieu, a Democrat. 

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