Congress is Taking Back the Power

In the first few weeks of the new Congress, as the Senate focuses on the President’s Cabinet, the House has focused on agency rules and regulations. Everything from how an agency formulates rules, to what goes into agency analysis, and the role of Congress in agency policy-making.

For over twenty years, Congress has had the power to overturn agency rules through the Congressional Review Act, which empowers Congress to use expedited procedures to overrule a regulation within 60 legislative days (or 6 regular calendar months) from when it goes into effect. While this sounds like a great tool, it is hard to use.

In 2010 both the House and Senate flipped to Republican control, though the Presidency stayed Democrat. For the past six years the Republican controlled Congress disapproved of many Obama administration regulations, however the CRA was not utilized because the President could veto the resolution.

To address the years-long stalemate, Congress is shifting regulatory power back to themselves by passing major legislation that will impact areas ranging from the environment to education and everything in between. These changes will not only make new regulations difficult to issue, but could restrict agencies from updating and modernizing existing programs. All the below mentioned bills have already passed the House.

The Regulations from the Executive in Need of Scrutiny (REINS) Actrequires any rule costing industry more than $100 millionto be submitted to Congress for approval, before it can take effect. If either the House or Senate fails to approve the rule within 70 days, the rule would die. The legislation would also retroactively apply to all regulations finalized over the past ten years including Dodd Frank and the Waters of the United States rule. 

The Regulatory Accountability Act would slow down future rule making at federal agencies by requiring agencies to prepare “impactstatements” on how proposed regulations directly and indirectlyimpact small business owners, employees and customers, as well as the cumulative effect on small businesses. It would also prevent rules with high dollar costs from taking effect until litigation against them has been resolved.

The Midnight Rules Relief Act allows Congress to overturn — in one giant batch — all the regulations made final since May 2016 by the Obama administration. This would capture controversial rules including Overtime and Paid Leave as issued by the U.S. Department of Labor.

While all three bills quickly passed the House, they are likely to undergo changes in the Senate in the coming months.

The REINS act, Regulatory Accountability Act, and Midnight Rules Relief Act would transform how agency regulations are made. While Schoolhouse Rock taught usthat all policies come from Capitol Hill, the reality is that Congress sets the guidelines and performs oversight, while agencies work out the gritty details. This combination of regulatory changes could significantly help out small business owners, as the effect of regulation is often underestimated, however it is likely to slow down regulations that could help businesses grow.

 

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