The Burden of Proof Now Falls to Congress to Justify Regulations
by Gary Jay Kushner
A hallmark of the Clinton administration when it took office in 1993 was its commitment to review all governmental functions and agencies with a goal of making them more efficient and effective.
This campaign pledge effectively began and ended with Vice President Al Gore's Reinventing Government report.
There has been reorganization at USDA and other departments-and recent talk of a massive regulatory review and overhaul. But this administration has very little of substance to show for its regulatory reform pledge. If anything, the opposite has occurred.
The Republican crew that took over Congress in November, however, obviously heard the voters and has made regulatory reform a centerpiece of its Contract With America.
During the first 100 days of the 104th Congress, progress toward making government justify its actions or, at least, consider the costs of regulation is already evident.
Bills under active consideration would do everything from requiring realistic risk assessments and cost/benefit analyses before adopting new regulations to imposing a moratorium on all such initiatives.
Most recently, Congress passed and President Clinton signed the Unfunded Mandates Reform Act, making it more difficult for Congress to shift responsibilities to state, local or tribal governments without funding these intergovernmental mandates.
This will apply with some exceptions to any law or regulation that would impose an enforceable duty upon one of these governments; reduce or eliminate authorized amounts of federal financial assistance provided to these governments for compliance with already existing duties; create more stringent conditions for assistance; or reduce or place caps on federal responsibility to provide assistance to these governments under any existing program with an annual budget for assistance exceeding $500 million.
This new law requires Congress to approve by majority vote any "unfunded mandates" that impose costs of $50 million or more on these governments.
The Congressional Budget Office will determine whether specific legislative actions exceed this threshold.
Essentially, the law imposes new discipline on Congress by allowing members, subject to the majority vote override, to block actions by objecting to any significant mandate that Congress fails to fund as being out of order.
In addition, the new law requires federal agencies to consider the adverse effects that major regulations might have on the local governments.
Of particular significance for the meat industry, federal agencies must consider the effects of their actions on both the public and private sectors.
They must prepare statements of the costs, benefits and economic effects of any proposed rule that includes a mandate that might result in the expenditure by the public and private sectors together of $100 million or more in any one year.
The agencies are also required to consider the least costly, most cost effective, or least burdensome alternative to achieving their objectives.
Finally, the new law requires that an Advisory Commission on Intergovernmental Relations study and make recommendations to the president and Congress with respect to existing unfunded federal intergovernmental mandates.
This commission is required to establish criteria for making recommendations. For example: how inconsistent unfunded mandates might be reconciled or for termination of duplicate, obsolete or impractical mandates.
Technically, the legislation only stops Congress from saddling state, local and tribal governments with new requirements that might otherwise be imposed upon federal agencies.
The requirement that agencies consider the costs of regulations on the private sector, and that less costly, less burdensome, more effective alternatives be considered, however, should bolster the federal regulatory reform movement in general. It is certainly in the right spirit.
Congress has taken an important step forward in the fight against regulatory overkill.
To its credit, Congress has accepted some of the responsibility by making it either fund mandates imposed upon local governments or at least affirmatively admit publicly that it has not funded them.
The requirement that federal agencies evaluate the impact of their regulatory initiatives is also a step in the right direction, but it does not go far enough.
It is now more important than ever-and the groundwork has been laid-for the agencies to be required to justify all regulatory initiatives and to demonstrate that their benefits outweigh their costs.