Republicans Have Two Terrible Ideas for Regulatory Reform
Republicans, including President-elect Donald Trump, have some eminently sensible proposals for regulatory reform. But the party is also pressing two terrible ideas, which seem to have a significant chance of being enacted in 2017. The irony is that both of them would be damaging to the Trump administration itself.
The first idea, though technical, is exceedingly important. In 1984, the Supreme Court ruled that whenever legislation (such as the Clean Air Act or the Affordable Care Act) is ambiguous, federal courts must respect the interpretation of the federal agency that implements that law -- intervening only if the agency's interpretation is unreasonable. This idea is called the Chevron principle, after the decision that gave birth to it, and it was defended most vigorously by the justice Trump says he most admires, Antonin Scalia.
Proclaiming their commitment to the separation of powers, House Republicans want to outlaw judicial use of the Chevron principle. Go ahead, knock yourselves out -- but only if you like the idea of giving federal courts a big policy-making role, and providing judges appointed by Barack Obama free license to reject the judgments of the Trump administration.
As Scalia emphasized, the Chevron principle is based on the idea that officials who work for the president -- often specialists in the matter at hand -- should be sorting out ambiguities in federal law. The goal is to reduce the power of unelected judges.
If, for example, the Endangered Species Act makes it unlawful for people to “harm” an endangered species, the Department of Interior gets to decide whether the term refers only to injuring or killing members of an endangered species, or whether it also forbids people from destroying habitat on which members of such species depend.
In practice, agencies often use their authority under the Chevron principle to reduce regulatory burdens, and a Republican administration is certainly free to pursue that goal (so long as legislation is ambiguous). That’s democracy in action. Here, then, is the irony: If Republicans enact legislation to reject Chevron, they will transfer policy-making authority to federal judges, who will be authorized to interpret words like “harm” as they see fit.
In the short run, that’s great news for Democrats, because it could stymie a lot of initiatives from the Trump administration. In the long run, it’s awful news for the American people, who would not exactly benefit from rule by federal courts.
The second terrible idea, long a favorite of House Republicans, would require congressional approval of any regulation with an economic impact greater than $100 million. Whether the regulation reduces air pollution, increases highway safety, protects disabled people from discrimination, or combats rape, it cannot become law unless Congress enacts it. Trump supports the measure, and has said he "will work hard to get it passed."
The practical implication is clear. Because Congress has so many issues on its plate, and because interest groups, committee chairs, and legislative minorities often have the power to block legislation, this reform would mean that each year dozens of important regulations would be dead on arrival.
If you are viscerally opposed to regulation, you might think that’s great. But under both Republican and Democratic administrations, health, safety, and other regulations don't get finalized unless they have withstood a lot of internal and external scrutiny, with careful reference to both costs and benefits.
Of course, agencies make mistakes. But in any given year, the net benefits of regulations (many of which save both lives and money) are usually in excess of $10 billion. Most of those savings would be wiped out.
From the standpoint of the Trump administration, that’s a big problem. The president-elect is not a fan of regulation -- but even in his first year, he’s going to want to do some regulating. His Department of Education might want to take steps to reduce the costs of college. His Department of Homeland Security might want to increase security measures at airports and railroads. His Department of Veterans Affairs might want to issue new rules to help veterans to make the transition to civilian life. If majorities of both houses of Congress have to approve all these rules, Trump is going to find himself blocked.
Republicans are right to express concern about excessive regulation, and they can do a lot to reduce it, above all by scrutinizing rules on the books and by putting all new proposals through a cost-benefit filter. There’s room for plenty of creativity here. But two of their favorite ideas are terrible, and they would be smart to abandon them.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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