Regulatory Reform Package
Key Development: House passes Red Tape Reduction and Small Business
Job Creation Act that would halt all pending federal regulations with annual
economic costs of $50 million or more, bar “midnight regulations,” and curtail
Potential Impact: By the Obama administration’s count, at least 140
major rulemakings are under way by agencies including EPA and OSHA.
What's Next: The Democratic-controlled Senate is not expected to take
up the legislation, and the White House has issued a veto threat.
By Dean Scott
The House passed a broad regulatory reform package July 26 to halt all major
federal regulations in the pipeline after approving several Republican
amendments, including one that would broaden the moratorium, which is pegged to
the unemployment rate, to any rule that costs the economy $50 million or more a
year as opposed to $100 million in the original bill.
Cleared on a 245-172 vote, the Red Tape Reduction and Small Business Job
Creation Act would also bar President Obama and future presidents from issuing
“midnight” regulations in the final months of their presidencies and target “sue
and settle” practices used by environmental groups to strengthen environmental
rules in court or force agencies to expedite long-delayed regulations.
But the regulatory moratorium, originally contained in a regulatory freeze
bill (H.R. 4078) introduced by Rep. Tim Griffin (R-Ark.), is arguably the most
far-reaching of the titles. It would block major rules until the U.S.
unemployment rate falls to 6 percent or less.
The White House has threatened
a presidential veto and the bill is considered dead on arrival in the
Democratic-controlled Senate. But the outcome in the House was never in doubt
given the Republican leadership's strong support for the measure.
In two days of floor debate, the House approved all Republican amendments,
which generally imposed additional requirements on federal agencies, and voted
down all Democratic proposals, which generally called for carving out exemptions
for public health and environmental rules (143 DER A-35, 7/26/12).
Among the Republican amendments passed by the House was a proposal by Rep.
David McKinley (R-W.Va.) to change the threshold for determining whether a rule
is significant enough to be halted. While the original regulatory freeze bill
called for halting all major rules that impose annual economic costs of $100
million, McKinley’s amendment, which passed by a vote of 240-178, calls for
lowering that threshold to $50 million a year or more.
The House also passed three amendments by Rep. Bill Posey (R-Fla.) including
one approved 248-171 that would require that any attorney’s fees awarded to
small businesses that sue regulatory agencies be paid out of that agency's
A second Posey amendment, which would specifically bar the Securities and
Exchange Commission from enforcing or issuing an interpretive guidance on
climate change, was approved 245-171. The SEC in 2010 approved guidance to help
publicly traded companies determine the kinds of climate information that may
have to be disclosed under the Sarbanes-Oxley Act, enacted in 2002 to require
reforms that improve financial disclosures from corporations and prevent
Posey’s third amendment, to clarify that the regulatory moratorium would
apply to new Treasury Department regulatory actions regarding financial deposits
by nonresident aliens, cleared the House 251-165.
The House also approved by a vote of 251-166 an amendment by Rep. Michael
Fitzpatrick (R-Pa.) to relieve companies from certain Sarbanes-Oxley financial
requirements if the total value of their publicly held shares is less than $250
million. Another amendment by Rep. David Schweikert (R-Ariz.), approved by voice
vote, would include business revenue in determining the annual costs of rules to
be covered by the bill.
Among the Democratic amendments defeated was a proposal by Rep. Dennis
Kucinich (D-Ohio) to exempt rules that would limit speculation on oil prices. It
failed on a 173-245 vote. Another by Rep. Ed Markey (D-Mass.)--defeated
177-240--would have exempted rules developed to protect the public from drought
and other extreme weather events, which many climate scientists have linked to
rising global temperatures. A bid by Rep. Peter Welch (D-Vt.) to exempt rules
that promote energy efficiency fell 174-242.
Before the bill’s passage, House Republicans were forced to fix technical
miscues that plagued the legislative package and their attempts to keep the
focus on what they argue is a tidal wave of burdensome regulations coming from
the Obama administration.
The first mistake--a typographical error that substituted the word
“employment” for “unemployment,” which could have extended the regulatory
moratorium indefinitely--was fixed with a hastily scheduled meeting of the House
Rules Committee late July 25. But the Rules panel's fix introduced a new
mistake: referencing the wrong procedural rule that underpinned the legislation.
That required a remedy on the floor July 26.
“A mistake was made and then in attempting to correct that mistake, an
extraordinarily minor other mistake was made,” Rep. Virginia Foxx (R-N.C.), a
member of the rules panel, told colleagues on the House floor July 26.
Robert Weissman, president of the consumer advocacy group Public Citizen,
said in a prepared statement that House passage of the bill amounted to a “gift”
to corporate polluters and would block much-needed regulations to protect
against financial risks, workplace hazards, and “far-reaching rules [needed] to
avert catastrophic climate change.”
But business groups including the National Federation of Independent Business
applauded the House action. “As the economy continues to sputter, it is
important to ensure that the nation’s biggest job creators are not strapped with
punishing new rules,” according to a statement from Susan Eckerly, NFIB senior
vice president for federal public policy.
The statement of administration policy on H.R. 4078 is available at http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/112/saphr4078r_20120723.pdf.
A list of the amendments cleared by the House Rules Committee is available at
by clicking on the Rule tab.
Copyright 2012, The Bureau of National Affairs, Inc.