The Independent Agency Regulatory Analysis Act
Politicizing Independent Agencies and Putting Americans in Harm's Way
The Independent Agency Regulatory Analysis Act, S. 3468, would fundamentally change the way that independent agencies operate. Examples of independent agencies include, among others, the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Consumer Product Safety Commission, the Nuclear Regulatory Commission, and the National Labor Relations Board. The Independent Agency Regulatory Analysis Act would strip these agencies of much of their independence, requiring them to spend limited resources completing detailed cost-benefit analyses – even when Congress has not required this – and then to submit their analyses for review by the Office of Information and Regulatory Affairs (OIRA).
Congress should not cede control of independent regulatory agencies to the president. Unlike executive agencies, independent agencies are accountable to Congress and not under the control of the president. Where executive agency heads serve at the pleasure of the president, independent agency heads have a defined tenure that is independent of the election cycle. Congress frequently chooses to establish independent agencies when, in its judgment, the policy area affected needs to be insulated from the political pressures associated with being part of the executive branch.
In many cases, independent regulatory agencies' independence has allowed them to respond nimbly to emerging crises. For example, on Aug. 15, 2012, the Consumer Product Safety Commission recalled 4 million Bumbo Baby Seats in response to evidence that babies had been injured while sitting in them. This is a stark contrast with executive agencies, which often need years to respond to hazards. For example, the CEO of S.C. Johnson said of the Environmental Protection Agency's ability to regulate even known carcinogens under the Toxic Substances Control Act, "Your child has a better chance of becoming a major league baseball player than a chemical has of being regulated."1
Independent regulatory agencies' ability to protect people's lives and well-being would be undercut by a cost-benefit analysis supermandate. Independent regulatory agencies are quite different from one another – in structure, in statutory authority, and in the requirements they must meet to regulate. Overriding Congress' direction to each agency and requiring instead a preeminent focus on economic impact is, simply put, bad policy. This is because cost-benefit analysis fails when benefits and costs cannot be properly quantified.
Any requirement for cost-benefit analysis across all independent regulatory agencies would limit their ability to protect Americans from nuclear meltdowns, keep lead paint off children's toys, and stand guard against another mortgage fiasco. For example, the Federal Aviation Administration (FAA) is an executive agency that works to protect the flying public. Since it has been so successful doing so, there have been relatively few plane accidents over the past decade. That very success has made it more difficult for the agency to keep its rules current because under the blanket cost-benefit analysis requirement, there has not been enough loss of life to justify safety improvements.2
The bottom line: The Independent Agency Regulatory Analysis Act would politicize independent regulatory agencies and make it harder for them to protect Americans.