Welcome to Congress. Get to work.
The wave of voter unrest over massive spending hikes and looming tax increases crashed violently on Tuesday. Voters made clear their desire to restrain the historic pace of government spending and stop tax hikes that would prove equally historic in their power to cripple economic growth. But now that the votes have been cast, it’s time to start legislating.
The political footballs of health care and the 2001 and 2003 tax cuts will likely consume the lion’s share of attention, but Republicans eager to limit expansive government should remember their oversight of regulatory agencies. The Environmental Protection Agency (EPA), the Federal Communications Commission (FCC), and the Securities and Exchange Commission (SEC) are all driving to implement onerous new regulations.
While Congress has been on a remarkable spending spree recently, its efforts have been matched by the regulatory overreach at the EPA. New carbon control mandates and higher Corporate Average Fuel Economy (CAFE) standards are scheduled for 2011.
After cap-and-trade died in the 111th Congress, the EPA continued its regulatory march toward control of carbon output. Starting January 2, 2011, the EPA plans to implement Step 1 of an attempt to regulate carbon under the Clean Air Act. “Major” CO2 emitters will be required to obtain EPA permits that contain emissions limitations and compliance requirements. Step 2 will begin next July and expand to other sources.
The EPA has also been busy mandating new fuel efficiency requirements. Last month, EPA Administrator Lisa Jackson announced an expansion of CAFE standards. In addition to a 24 percent CAFE increase for cars, which the industry estimates will cost $100 billion, the EPA proposed an expansion of fuel efficiency regulations for trucks.
But don’t ignore the FCC. The Commission received 113,307 comments on net neutrality, their plan to regulate how private networks manage bandwidth decisions. Congress didn’t act on compromise net neutrality legislation, but the FCC, despite unfavorable court rulings, continues to push for control over the Internet. A final rule is expected soon.
Finally, the SEC and the Commodity Futures Trading Commission (CFTC) have started to extend the regulatory reach of the financial reform legislation that passed Congress this year. The two agencies have promulgated at least eight major regulatory actions since September. Total regulatory costs are unknown, but the reporting of security-based swap transactions will cost the industry at least $56 million.
Rather than stare at the oncoming train, Congress could employ a little-known power that gives members the opportunity to challenge these rules.
The Congressional Review Act (CRA) was passed in 1996 and crafted to “redress the balance [between the branches], reclaiming for Congress some of its policymaking authority.” The CRA was designed to provide Congress with the power to disapprove of and vacate regulations.
During its history, close to 50,000 rules were reported and became law. Of those, Congress only rarely used the CRA, and was successful just once, in response to OSHA’s ergonomics rules.
The CRA, however, is not a magical sword that Congress alone can wield to strike down regulations. While it provides for expedited review of major regulations and can’t be filibustered, the president must sign any disapproval, an unlikely scenario next year.
But now that Republicans control at least 46 seats in the Senate and hold the House, they have enough votes to pass a CRA disapproving of the EPA’s carbon regulations. Amending the CRA could also enhance Congress’s oversight.
For example, Congress could work to amend the CRA to subject all major regulation to a joint resolution of approval, rather than the current disapproval framework. Or, Congress could require that major legislation sunset for a review period. This proposal would mandate that agencies conduct a study one year after enactment to determine the economic impact of regulations. A new CRA could examine the unintended consequences of new regulations and control regulatory overreach.
Now that the voters have spoken, it’s time for Congress to deliver on its promises. Butting heads will have political value, but it won’t deliver lower taxes or fewer regulations. If Congress wants to limit the administration’s new regulatory regime, a stronger CRA could succeed where legislative endeavors have failed.
Doug Holtz-Eakin is president and Sam Batkins is coordinator – regulatory issues at the American Action Forum.
This article originally appeared in The Hill on November 4, 2010.