Myths about De-regulation

pollutionRob and Bob have been spending a lot of time promoting and voting for various de-regulation efforts. And, de-regulation as a topic is a winner–not controversial like building a wall or getting rid of people’s healthcare. It’s also wonky enough that most people don’t look too much further than the glib assurances that it’s a good thing.

But, as boring as this topic might be, it’s really important, so let’s take a few minutes to look at a couple of initiatives these guys are really proud of that aren’t quite what they seem.

The Myths

Whenever the topic of government regulations comes up on the right, the message is this:

  1. Fewer regulations are always better (get the government out of my life!)
  2. Regulation cost business money, and it’s always better to save money for businesses.

Certainly, the government shouldn’t intrude unnecessarily in people’s lives or business — for example, the Indiana law that criminalizes disposing of fetal remains as medical waste has lead to a host of regulations on hospitals that seem pretty intrusive.

But there are also a lot of regulations that protect consumers, the environment, and others who are marginalized and less powerful from unfair treatment and powerful systems like large corporations.

For example, it’s thanks to decades of regulations that we have much cleaner air to breathe and water to drink.  And sometimes these regulations were not that comfortable for businesses, but they certainly served a greater good.

So, streamlining government processes can be a good thing, and it is important to think about the impact of new regulations, but suggesting that all regulations are bad and that the only stakeholder to worry about is corporate America is the wrong way to approach this issue.

The Wrong Way to Approach this Issue

Speaking of the wrong way to approach this issue… One of the President’s first Executive Orders was a nonsensical approach to deregulation that stated 2 regulations had to be eliminated for every new 1 created. There’s lots of reasons why this is a bad idea.

So, are Rob and Bob doing any better?

Rob’s Regulatory Accountability Act

Sen. Portman has been championing the Senate version of the Regulator Accountability Act, a bill that would require a cost-benefit analysis for major new regulations that originate in executive branch departments (education, EPA, HHS, etc.). If this analysis shows the regulation is too expensive, then the agency would have to come up with a “reasonable alternative.”

Sounds okay, right? And it seems like good sense — if something is going to have a major impact economically or cost jobs, it should be studied. But these things are studied as the regulations are developed, and the provision that rules that “adopt a novel legal or policy position” would also be examined under this act sounds suspiciously political — who decides what is “novel” policy?

And just a few minutes of thought raises even more troubling questions:

  • too expensive for whom?
  • who decides how to calculate a financial cost for businesses against an abstract value like worker safety or environmental harm?
  • how many “reasonable alternatives” do agencies have to dream up and test?

Basically, it seems like any regulation challenged through this law would never come to pass; there could be endless demands to show that the rule is the best one, and it would be impossible to speculate about all possible alternatives, especially if a certain special interest or industry has a specific outcome in mind.

The Coalition for Sensible Safeguards has spoken out against this bill (which was introduced in the House in January) and they make some good points.

Now that Rob Portman is planning to introduce the Senate version,  it’s a good idea to contact him and let him know what you think about it.

Bob and the SCRUB Act

Meanwhile, Bob is excited about the SCRUB Act. This is another bill that can sound very sensible — it’s full name is the “Searching for and Cutting Regulations that are Unnecessarily Burdensome” Act. Who wouldn’t be in favor of that?

What isn’t as clear from this laudatory name is that the “burden” is solely related to costs borne by industry.

The bill would create a commission to evaluate existing regulations and identify which to cut. Though the commission would be bipartisan, I’m sure you can imagine the scramble by various corporations to have a seat at that table, openly or through influence.

Also, the bill, much like that stupid executive order mentioned before, demands that the cost any new regulation be offset by repealing a similar cost existing regulation. This is an absolutely silly way to think about regulations. Consider this analogy, adapted from an example proposed by a citizen’s group opposed to the bill:

  • A research study finds that a certain substance commonly used in making children’s toys is harmful to children.
  • The Consumer Product Safety Commission wants to move swiftly to protect children by enacting a rule to prohibit the use of this substance in any toys made or sold in the US.
  • Unfortunately, this rule must clear the SCRUB commission, and they note that the dangerous substance is also the cheapest substance used for this purpose: it’s going to cost toy companies money to make this change.
  • Before the rule can be enacted, the Consumer Product Safety Commission has to repeal another rule that would save companies a comparable amount of money. [It’s not clear if the cost reduction would have to affect the same industry that would bear the “burden” of the new reg]
  • Sorry, kids!

Unfortunately, the SCRUB Act is already through the House, but you can still let Bob know what you think about his enthusiastic support for this bill, and what you think about his ideas on deregulation in general.

The Moral

The moral of this story is that regulations are not always intrusive and bad; often they exist to protect consumers, the environment (more on that soon), and other public interests. Corporations often bristle against the idea of regulation, but sometimes the public good is worth the cost.