Having excoriated the Bush administration and Republicans in
Congress — on this site and elsewhere — for falling short of
principles on
TARP and mortgage
bailouts for irresponsible borrowers and lenders (both
of which have been magnified by the Obama administration), I now
find myself in a strange position of partially defending House
Republicans from conservative attacks on their “Pledge to
America.”
Oh, well, there is a first time for everything!
Unveiled Thursday, the document has been the object of
sharp criticism by RedState’s
Erick Erickson and by my
friends
at TAS for a lack of specifics. This is
true in some areas, as is true for most campaign
documents.
Moreover, the pledge does contain at least one specific
and important policy proposal that would go a long way toward
reining in the regulatory state and restoring constitutional,
accountable government. It is along the lines of recommendations we
at the Competitive Enterprise Institute have made in our
publications such as the biannual Agenda
for Congress and annual
Ten Thousand Commandments by CEI Vice President
Clyde Wayne Crews.
On page 8 of the 21-page document,
in the section entitled “Our plan to end the uncertainty and create
incentives for job growth,” there is an important sub-pledge to
“rein in the red tape factory in Washington.” It makes the
important point — one that CEI and other free-market groups have
long been stressing — that “excessive federal regulation is a de
facto tax on employers and consumers.”
More importantly, this section contains a substantive idea
that would in effect regulate the growth of the regulatory state.
The document states: “We will require congressional approval of any
new federal regulation that has an annual cost to our economy of
$100 million or more. This is the threshold at which the government
deems a regulation ‘economically significant.’ If a regulation is
so ‘significant’ and costly that it may harm job creation, Congress
should vote on it first.”
The principle of “no regulation without representation” is
something Crews and others at CEI have been shouting from the
hilltops for years, usually to deaf ears in Congress, even among
Republicans. But it looks like with this pledge, lawmakers are at
least hearing part of the message that the legislative branch needs
a mechanism of accountability for costly and counterproductive
regulations that stem from the laws Congress passes.
And in this case, the pledge has been preceded by proposed
legislation in the current Congress. Rep. Geoff Davis (R-Ky.)
introduced the REINS Act almost a
year ago containing this very provision of affirmative
congressional approval for major rules. The bill now has more than
70 co-sponsors. This week, Sen. Jim DeMint (R-S.C.) introduced a
Senate companion with 12 co-sponsors.
The issue is not just one of good politics or even good
policy, but of constitutional government as well. Article 1,
Section 1 of the Constitution vests “all legislative powers” in the
U.S. Congress. Yet what most often happens in today’s
administrative state is that regulators in the executive branch,
technically changed to enforcing provisions of laws, actually write
much of the law as applied.
Sometimes this takes place due to creative
interpretations, such as defining a farmer’s wetland the size of a
mud puddle as a “navigable
waterway” under the Clean Water Act. But more often
than not, Congress under the control of both parties has been
deliberately vague so as to pass the buck to regulators and escape
accountability. New York Law School Professor David Schoenbrod has
called this practice — and his critique of it published by Yale
University Press — “Power
Without Responsibility.”
The recently passed 2,500-page Dodd-Frank Act, for
instance, gives the Bureau of Consumer Financial Protection the
power to ban an “abusive” financial product without defining what
“abusive” means. You can bet when the agency defines as “abusive” a
product or service that many constituents like, Congress will wash
its hands of the matter and blame the agency.
Similarly, the Sarbanes-Oxley Act of 2002, passed after
Enron by a GOP-controlled House and signed by President George W.
Bush, required companies to maintain and accountants to sign off on
“internal controls” without defining what these were. The SEC and
Public Company Accounting Oversight Board broadly interpreted the
term to include trivial items such as the number of letters in an
employee’s password.
This broad interpretation has cost
companies a bundle and made it prohibitively expensive
for smaller companies to raise capital by going public, while
serving little purpose for shareholders. Not just Republicans, but
Democrats from Speaker Pelosi to Sen. John Kerry have called these
rules excessive. But in eight years under both parties, Congress
did nothing to provide relief from these rules until this year when
it passed a partial exemption in Dodd-Frank for the very smallest
public companies.
“No regulation without representation” is a simple,
good-government rule that should be embraced by both parties. The
GOP pledge should be commended for recognizing the principle,
although time will only tell if words will be followed through with
actions.
