During a week in which regulators added $12.8 billion in costs, Congress intensified its battle against the regulatory state. This regulatory outburst comes as no surprise during Obama’s final months in office. Earlier this month, regulators rushed to release a flood of regulations, hoping to enact new rules before the newly elected administration takes over.
Here’s a look at the past week in regulation:
Lawmakers Introduce Regulatory Budget Act to Rein in the Regulatory State
Regulatory spending is out of control and Congress must put an end to it. Sen. Mike Lee (R-Utah) and Rep. Mark Walker (R-N.C.) unveiled a new bill designed to place a cap on regulatory spending and restore legislative powers to Congress. FreedomWorks Director of Government Relations Neil Siefring commented:
"The bill would help highlight the massive costs of the regulatory state, estimated to be at almost $2 trillion in compliance costs, which amounts to a de facto tax on the American people. This legislation needs to become law to help combat the regulatory state, hopefully resulting in its reduction and eventual elimination. Congress needs to reclaim its constitutional role as the lawmaking branch of the federal government and take back its powers from progressive regulators who are working around Congress.”
The legislation is part of the Article I Project, an initiative aimed at restoring the system of checks and balances from the control of Executive overreach.
Senate Rejects Labor Department Fiduciary Rules, Obama Vows to Veto
In one of several recent uses of the Congressional Review Act, the Senate rescinded the Department of Labor’s "Fiduciary Rule." However, the Senate’s efforts to block the DOL rule will likely be met with an Obama veto.
With this rulemaking, the DOL has put into effect a new test to determine when investment advice gives rise to fiduciary status and therefore a fiduciary duty on the part of the intermediary. As a result of this new rule, many firms and Financial Advisors whose activities previously did not create a fiduciary duty under the DOL’s prior rules will now be subject to stricter regulations.
Disguised as consumer protection, the rule would make it difficult for elderly Americans to get retirement investment advice and would harm average Americans by making retirement investment advice only available to the wealthy.
Comment Period Opens for CFPB Proposed Rule on Arbitration
The Consumer Financial Protection Bureau (CFPB) has published in the Federal Register its proposed regulations on pre-dispute arbitration agreements. With this rule, the CFPB is forcing disputes settled in arbitration to be dragged in to a process that is significantly less favorable to the consumer and is exponentially more expensive. The rule, if finalized, would lead to an abandonment of the arbitration process, effectively eradicating the most effective form of consumer relief.
In proposing this regulation, the CFPB misled consumers with a 728-page Dodd-Frank mandated study. Further examination revealed the study to be a data-filled Trojan Horse used by the CFPB while they padded the pockets of class action lawyers with $425 million.
Further analysis of how the CFPB Anti-Arbitration Rule harms consumers was published last month. This accompanies last week’s examination of the relationship between regulators and class action. Comments on this regulation are due August 22.
Department of Labor Publishes Overtime Rule in Federal Registry
It appears that the Department of Labor has been working overtime to hurt employees and small businesses. The Labor Department published a final rule that would force businesses to extend overtime pay benefit to white collar, salaried workers with an annual salary of over $47,476 — that’s roughly double the current annual salary ceiling.
In application, this regulation would do little to enforce fair labor practices. The new rule is likely to backfire as businesses would lower salaries and ask employees to work "off the books." Many workers could be laid off and employee advancement opportunities would be cut short. With this new rule, the Department of Labor is hurting the very people it was designed to help: middle-class Americans workers.
FreedomWorks is one of a coalition of 17 free-market groups [urging Congress](FreedomWorks is one of a coalition of 17 free-market groups urging Congress to reject the DOL overtime rule. ) to reject the Department of Labor’s overtime rule.
Proposed Accountability Rule Restores Federal Control Over Education
After decided that it had not done enough damage with Common Core, the Department of Education proposed a new rule that would expand federal control over the education of our children. The new regulation would impose federally mandated accountability measures that give the federal government oversight over student and school achievement.
The Department of Education has a long history of failed reform efforts and this regulation would be no different. The new rule is just another top-down measure that grabs power from the hands of schools and state governments. While ignoring the outcry from parents and teachers, the Education Department proposes more testing as the solution to poor student achievement.
FreedomWorks criticized the new regulation as well as the Department of Education’s failing report card.
Senate Blocks USDA Inspections with Congressional Review Act
There may be plenty of fish in the sea, but if they are catfish the USDA will no longer be inspecting them. Using authority granted under the Congressional Review Act, the Senate has repealed a U.S. Department of Agriculture’s catfish inspection rule. This little-known rule, with its annual funding of $14.4 million, is a perfect example of regulatory waste.
In urging senators to vote in favor of S.J. Res. 28 to repeal the USDA Catfish Program, FreedomWorks issued a Key Vote alert to 5.7 million activists nationwide.
House Republican Introduces Bill Requiring Cost-Benefit Analysis of Regulations
In an effort to curb regulatory overreach and bring transparency to the rulemaking process, Rep. Charles Boustany (R.-La.) introduced legislation requiring regulatory agencies to publish a cost-benefit analysis of any regulation that would have an economic impact of over $100 million. Boustany said in a statement:
“The Obama Administration has successfully weaponized the regulatory process as a tool to wage war against oil and gas, agriculture, the financial services industry, and more…The FACT Act forces bureaucrats to justify any proposed major rule with a publicly available cost-benefit analysis, giving industry adequate time to develop a strong legal and legislative defense against the administration’s regulatory assault."
FreedomWorks Letter to Congress in Support of Fiscal Commision Act (H.R. 5779)