ABA Endorses S. 1173, the Independent Agency Regulatory Analysis Act

by Lynn White

The American Bar Association recently sent a letter to members of the Senate Committee on Homeland Security & Governmental Affairs endorsing S. 1173, the Independent Agency Regulatory Analysis Act of 2013 by Senator Rob Portman (R-Ohio).  The bill would affirm the authority of the President to issue an executive order requiring independent regulatory agencies to comply, to the extent permitted by law, with regulatory analysis requirements that are currently applicable to executive agencies when adopting new regulations.

Under current law, a number of regulatory agencies like the National Labor Relations Board, Securities and Exchange Commission, and Federal Trade Commission, are excluded from the requirements of Executive Orders 12866 and 13563.  The orders require agencies to conduct an economic analysis of certain costly regulations and obtain approval from the Office of Information and Regulatory Affairs (OIRA) prior to publishing rules.  A Senate aide noted that these regulatory agencies exercise a vast degree of power over huge sectors of the economy and would benefit from having OIRA review the cost benefit analysis of significant rules.

The ABA letter expressed support for greater presidential coordination, review and oversight of the regulatory process for several important reasons.  First, the President is in the best position to centralize and coordinate the regulatory process, a task that has become increasingly important.  Second, the President, unlike administrative officials, is electorally accountable to the people and is the only official in government with a true national constituency.  These characteristics make the President uniquely well-situated to design regulatory policy in a way that is response to the interests of the public as a whole.  Finally, the President by virtue of his accountability and capacity for inter-agency coordination and centralization, has the unique ability to energize and direct regulatory policy in a way that would be impossible if that policy were to be set exclusively by administrative agency officials.  The ABA urged Congress to ensure that implementing the legislation would not impair the ability of regulatory agencies to perform their statutory functions.

S. 1173 contains some of the broader regulatory reforms contained in S. 1029, also sponsored by Senator Portman (H.R. 2122).  S. 1029 would codify some of the core requirements of Executive Orders 12866 and 13563, require greater input from the regulated community early in the rulemaking process for high-impact regulations, and allow for heightened judicial review.  The House Committee on the Judiciary passed the House version of the bill out of committee on July 24, 2013 by a vote of 13 -9.