The same day the House Judiciary Committee approved a measure that would place a moratorium on significant regulatory actions until the unemployment rate drops to 6 percent, an official with the Office of Management and Budget (OMB) issued a new directive to federal agencies to take steps to ensure their rules are not unduly burdensome for employers.
On March 20 the House committee voted 15-13 along party lines in favor of the Regulatory Freeze for Jobs Act of 2012 (H.R. 4078), a bill that would prohibit federal agencies from undertaking any significant regulatory action until the unemployment rate is equal to or less than 6 percent. The bill defines “significant regulatory action” as any regulatory action that is likely to result in a rule or guidance that may:
- Have an annual cost to the economy of $100,000,000 or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, small entities, or state, local, or tribal governments or communities;
- Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
- Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
- Raise novel legal or policy issues.
Although similar bills (S. 1438, H.R. 2898) have been introduced in both the House and Senate this legislative term, the Regulatory Freeze for Jobs Act is the first to advance. Even if the full House were to pass this measure, however, it would not likely be received favorably in the Senate.
On the executive front, also on Tuesday, Cass Sunstein, Administrator of the OMB’s Office of Information and Regulatory Affairs, issued a memorandum (pdf) directing the heads of executive departments and agencies to take steps to curb the costs and redundancy of their regulations. The memorandum says that consistent with the Executive Order President Obama issued last year that is designed to improve regulation and regulatory review of rules that potentially hamper economic growth and job creation, the new directive provides that agencies:
should take active steps to take account of the cumulative effects of new and existing rules and to identify opportunities to harmonize and streamline multiple rules. The goals of this effort should be to simplify requirements on the public and private sectors; to ensure against unjustified, redundant, or excessive requirements; and ultimately to increase the net benefits of regulations.
To this end, the memorandum lists a number of steps that agencies should consider during the rule-making process. These measures include:
- Early consultation with, advance notice to, and close engagement with affected stakeholders to discuss potential interactions between rulemakings under consideration and existing regulations as well as other anticipated regulatory requirements;
- Use of Requests for Information and Advance Notices of Proposed Rulemaking to obtain public input on potentially overlapping rulemakings and on rulemakings that may have significant cumulative effects;
- Specific consideration of the cumulative effects of regulations on small businesses and start-ups;
- Careful consideration, in the analysis of costs and benefits, of the relationship between new regulations and regulations that are already in effect;
- Identification of opportunities to integrate and simplify the requirements of new and existing rules, so as to eliminate inconsistency and redundancy; and
- Coordination of timing, content, and requirements of multiple rulemakings that are contemplated for a particular industry or sector, so as to increase net benefits.
According to the memorandum, “the cumulative effects [of regulations] on small businesses and start-ups deserve particular attention.”
The provisions of this memorandum are effective immediately.
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