POLITICS

House GOP Rams Through 2 New Deregulation Bills

02/05/2015 06:26 pm ET | Updated Feb 06, 2015

WASHINGTON -- House Republicans pushed through two bills this week designed to undermine key environmental and financial regulations by jamming federal courts with lawsuits.

The first bill, passed Wednesday, rejuvenates the Unfunded Mandates Reform Act of 1995, shepherded through Congress by then-House Speaker Newt Gingrich (R-Ga.). The 20-year-old legislation imposed a host of cost-benefit standards on federal regulators, including a requirement that they consider the costs that new rules might impose on state and local governments. Wednesday's GOP bill adds a new dimension to that law by allowing those detailed regulatory calculations to be challenged in federal court -- opening every stage of analysis to litigation that may make it nearly impossible for agencies to write and implement rules.

The bill is funded by a $32 million cut to the Consumer Financial Protection Bureau -- the agency created by President Barack Obama's 2010 Wall Street reform bill to crack down on predatory lending, mortgage abuses and unscrupulous credit card companies .

"Both of these bills are part of an attack on the entire regulatory state," said Marcus Stanley, policy director at Americans for Financial Reform. "They're designed to make it impossible for agencies to function."

No Republicans voted against the bill. Nine conservative Democrats -- Reps. Brad Ashford (D-Neb.), Jim Costa (D-Calif), Henry Cuellar (D-Texas), John Delaney (D-Md.), Gwen Graham (D-Fla.), Collin Peterson (D-Minn.), Loretta Sanchez (D-Calif.), Kurt Schrader (D-Ore.) and Kyrsten Sinema (D-Ariz.) -- voted in favor.

Regulatory cost-benefit analyses are inherently vulnerable to challenge. The long-term benefits of regulations are often difficult to quantify, while the costs can be immediate and straightforward. The calculations can be even more complex with public health and safety issues, where the value of human lives must be weighed against corporate costs.

Regulators had already been required to perform economic impact analyses and other calculations of costs and benefits for years before Gingrich began working to add new layers of red tape during the 1990s. The issue had largely been dormant in the decade between Gingrich's departure from Congress and Obama's inauguration, until conservative power lawyer Eugene Scalia -- son of Supreme Court justice Antonin Scalia -- began a series of challenges to financial regulations based on cost-benefit requirements.

Scalia's success in overturning new rules that Congress directed regulators to write under the Dodd-Frank Act has made additional cost-benefit legislation a top priority for Republicans in Congress. After passing the Gingrich bill update on Wednesday, the GOP pushed through another piece of legislation -- its third of 2015 -- adding additional cost-benefit calculations to the regulatory workload. That bill garnered 19 Democratic yeas.

The support from some Democrats is likely due to the bill's purported emphasis on small businesses. Under the legislation, regulators must now perform an analysis of the total "indirect effect" effect of any new rule on small firms, including any "effects on revenue."

These terms are undefined by the bill, which would leave rules open to an extraordinary array of challenges, since almost any significant rule has some follow-on effect at some point on smaller businesses. When financial regulators propose tighter rules on big banks, for instance, their lobbyists frequently make the claim that cracking down on Wall Street recklessness will end up limiting investment in Main Street firms.

"These votes make clear that the House GOP is only interested in helping small businesses and working families through trickle-down deregulation," said Amit Narang, regulatory policy advocate for Public Citizen. "It's no accident these bills are riddled with big business loopholes."

All of the Democrats who voted for intensifying the Gingrich law, except Rep. Sanchez, voted for Thursday's bill, as did Reps. Pete Aguilar (D-Calif.), Peter DeFazio (D-Ore.), Scott Peters (D-Calif.), Ed Perlmutter (D-Colo.), Sanford Bishop (D-Ga.), Ami Bera (D-Calif.), Patrick Murphy (D-Fla.), Ann Kirkpatrick (D-Ariz.), Timothy Walz (D-Minn.), Ron Kind (D-Wis.), Jim Cooper (D-Tenn.).

Neither bill is likely to be enacted as standalone legislation, since Obama opposes both measures and this week's votes demonstrated that Republicans do not have enough Democratic support to override a veto. Nevertheless, GOP leaders may try to tuck either or both bills into a broader government funding bill or legislation to raise the debt limit -- arenas in which Obama has demonstrated a willingness to let Republican priorities be enacted.

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