REINS Act: Hogtie the Executive Branch!

When Republicans took control of the House of Representatives last January, Democrats put their faith in the boomerang theory of politics—any newly ascendant party overreaches and alienates the moderates who elected them. So far, though, the GOP is proving a good deal smarter than some expected. Republican policies may be as radical as Democrats say, but they're cloaked in seductive rhetoric. And some are becoming law.

In Wisconsin and Ohio, Republican governors have used budget deficits as a justification for stripping public unions of collective bargaining rights. On Capitol Hill, 32 Republican senators have joined with an equal number of Democrats to pressure President Barack Obama into leading a bipartisan initiative to slash the nation's debt. And now, just as the disaster in Japan is forcing the world to reconsider the safety of nuclear energy, a new conservative idea is rising to the top of the Republican agenda in Washington—one that could thwart federal regulation of atomic power and just about any other industrial activity.

The latest innovation, known as the REINS Act, seeks to rein in the power of the federal government's estimated 680,000 managerial-level bureaucrats. The acronym stands for Regulations from the Executive in Need of Scrutiny. It's a brilliant bit of legislative strategy that would impede oversight not just of nuclear reactors but also of oil and coal facilities, food processing plants, pharmaceutical factories, and all manner of transportation. From a packaging perspective, the bill's genius is that it sounds so reasonable. All it would require is that Congress hold itself responsible, via a prompt up-or-down vote, for every major new federal regulation. Why would anyone oppose political accountability?

A Tea Party favorite, the REINS Act also has strong backing from mainstream Republicans. A House subcommittee held uneventful hearings in early March, and passage by the full House this spring appears likely. In January, Speaker John Boehner (R-Ohio) called the bill "one of the first steps House Republicans are taking to fulfill our obligations to the American people." It would require every major rule—defined as any with an annual economic impact of $100 million or more—to be approved by both houses of Congress before it can take effect. This would have to happen within 70 legislative business days, and the President would then have to add his signature. Any hiccup along the way and the regulation dies.

Noah M. Sachs, an associate professor at the University of Richmond School of Law who is tracking the REINS Act, estimates that it would apply to 50 to 100 major regulations a year. Illustrations range from rules the Federal Communications Commission announced last December intended to keep the Internet an open network to new standards, proposed by the Environmental Protection Agency this month, to restrict emissions of mercury and other pollutants from coal-burning power plants. As a practical matter it would give House Republicans unilateral power to kill any important rule issued by, say, the Nuclear Regulatory Commission, the Food and Drug Administration, or the Occupational Safety and Health Administration. "When liberals can't pass legislation, they enact regulations," said Senator Jim DeMint (R-S.C.), a co-sponsor of the Senate version, in a written statement. "As we have seen at the EPA and FCC, unelected bureaucrats can advance a radical, liberal agenda when it loses legislatively or in the courts."

REINS will face resistance in the Democratic-controlled Senate, and Obama will surely veto it if it passes, but Senate Republicans—from Tea Party-supported freshman Rand Paul of Kentucky to party stalwarts Chuck Grassley of Iowa and Orrin Hatch of Utah—signal that they'll fight for it. Hatch argued in a statement in February that "Americans across the nation are tired of this Administration putting too much power in the hands of unelected and unaccountable bureaucrats who are intent on sinking our economy through promulgating job-killing, anti-competitive and anti-business regulations."

The bill's chief sponsor in the House, Geoff Davis (R-Ky.), tells Bloomberg Businessweek he got the idea for it in 2009 from a constituent who was angry over an EPA-ordered storm water surcharge. "He had a hard time accepting that a federal agency, unaccountable to the public, could require such a costly mandate without Congress voting on it," says Davis. "It is a good governance bill."

The roots of the bill go deeper than that. Congress once enjoyed the ability to nullify regulators' rulemaking—after all, the lawmakers argued, they simply delegated those powers to the executive branch. That ended in 1983, when the Supreme Court ruled in INS vs. Chadha that Congress cannot use a one-house "legislative veto" to intrude on executive prerogatives. In 1983, as The Wall Street Journal's online editorial page puckishly pointed out in January, "an alternative to the legislative veto was first proposed by Stephen Breyer, of all people, now a Supreme Court justice" appointed by Bill Clinton.

That's true, to a point. In October 1983, Breyer, then a federal appellate judge, delivered a lecture at Georgetown University Law Center in which he suggested that Congress could condition the exercise of delegated authority on enactment of a confirmatory statute, passed by both houses and signed by the President. The REINS Act appears to conform to constitutional separation-of-powers principles, as interpreted by Breyer.

What the Journal did not mention is that Breyer qualified his analysis with what he called "a strong note of skepticism" as to whether Congress needed this kind of maneuver to second-guess regulators. Breyer argued that lawmakers would be better off using traditional procedures for influencing executive branch employees—tools such as public hearings, legislation to set agency priorities, and spending bills.

Congress, as Breyer noted, already has considerable power to oversee regulators. In 1996 that authority was enhanced by the Congressional Review Act, under which lawmakers created expedited procedures for rejecting administrative rules before they become final. James Gattuso, a senior research fellow at the Heritage Foundation, says lawmakers have acted under the Congressional Review Act only once, a decade ago, when they rejected a Labor Dept. ergonomics rule. Gattuso points out that a "resolution of disapproval" under the Review Act must be signed by the President, and Presidents generally don't like to reverse their own appointees.

"The REINS Act changes the default position so that congressional inertia would mean that regulations don't go through," says Gattuso. "It's an incentive for Congress to do its job." Critics are exaggerating the potential effect of the proposed law, he adds. "We're talking about a few dozen major regulations" each year, he says. "Is that asking too much of Congress?"

Perhaps not, if members of Congress operated independently on questions of regulating industry. Of course, they often do not. The REINS Act would give lobbyists representing powerful corporate interests a backdoor opportunity to smother regulation merely by persuading the House or Senate to sit on its hands for two months and a week—not a tall order for K Street influence peddlers.

David Goldston, director of government affairs for the Natural Resources Defense Council, testified about the REINS Act on Mar. 8. The law "may seem benign and appealing on the surface," he told the House subcommittee on courts, commercial, and administrative law. Before joining NRDC, Goldston worked as a senior legislative aide to former Representative Sherwood Boehlert, a New York Republican. "In fact," Goldston added, the Act "is radical in concept and would be perilous in execution. The bill could, in effect, impose a slow-motion government shutdown, and it would replace a process based on expertise, rationality, and openness with one characterized by political maneuvering, economic clout, and secrecy."

That's a rosy view of regulatory sausage making. And as President Obama has conceded, many federal rules become obsolete and eventually need revision or elimination. Bureaucrats eyeing the revolving door to high-paying lobbying jobs can be captured by the industries they regulate just as thoroughly as congressmen hungry for campaign financing. Still, as the Japanese assess their radioactive fallout and the U.S. approaches the one-year anniversary of the Deepwater Horizon oil spill, this hardly seems the right time to tie the hands of federal employees charged with protecting consumers—and business itself—against the inevitable human tendency to cut corners. More broadly, voters should not confuse anti-government ideology with the sensible-sounding language in which it may sometimes be wrapped.

    Before it's here, it's on the Bloomberg Terminal.