H.R. 4078 (112^th): Red Tape Reduction and Small Business Job Creation Act

GovTrack’s Bill Summary

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Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.

House Republican Conference Summary

The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.

This summary can be found at http://www.gop.gov/bill/112/2/hr4078.

Background

Prepared by the Office of Majority Leader Eric Cantor:

Since taking office, the Obama Administration has under review over 400 regulations classified as “economically significant” and defined as “likely to have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy…”  Combined, “…both the rule-making rate and number are surging to even higher levels under Mr. Obama.” (WSJ, 12/15/11)

So far this year, the Federal Register—where regulations are published—has run 41,662 pages. Regulations that have been published would cost $56.6 billion and result in paperwork that would take 114.1 million hours to complete, or over 13,000 years working 24 hours a day and seven days a week.  The Dodd-Frank law has produced regulations with more than $7 billion in direct costs. According to one estimate, the law would require 26,500 individuals working full-time just to complete the paperwork.

To date, ObamaCare has resulted in regulations that have imposed an estimated $17.1 billion in private-sector burdens, approximately $7.2 billion in costs to the states, and 59.2 million annual paperwork hours. For example, “Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water skis.” (The Economist, 2/18/12)

Small businesses, as illustrated by JEC Chairman Kevin Brady, are particularly entangled by this regulatory onslaught.  In fact, the Small Business Administration released a study indicating that per employee, small businesses face regulatory costs 36% higher than large businesses, contributing to a recent ranking of regulations that found that “…it’s now easier to start a business in Slovenia, Estonia and Hungary—three former Iron Curtain countries—than in America.” (IBD, 6/18/12)

Background on Title I

By one estimate this freeze could save at least $22.1 billion and thousands of jobs.  (Sponsored by Rep. Tim Griffin)

Background on Title II

According to House Report 112-513, it is widely acknowledged that ‘midnight regulations’—regulations issued in the final days of an outgoing President’s term in office—are problematic.  Empirical evidence demonstrates that Presidents from both parties tend to rush through midnight regulations at the end of their term.

Since 1948, in situations when control of the White House has switched to the opposite party, the volume of regulations promulgated by the outgoing Administration during the lame duck period (between election day and inauguration day) has averaged 17 percent higher than the volume of rules issued at the same time in any other year. (Sponsored by Rep. Reid Ribble)

Midnight rules are also problematic because an incoming president cannot easily repeal them.  Political realities and legal obstacles prevent this.  Political scientists explain that ‘not only does [repealing rules] take time, but changing the status quo probably means taking on interest groups who are reticent to give up ground that they have just won.’

Midnight regulations can undercut the benefits of a robust regulatory review process.  Despite an increase in regulations at the end of presidential administrations, there is no corresponding increase in resources available to OIRA, which is charged with ensuring that rules undergo a proper cost-benefit analysis.

Background on Title III

One of the worst regulatory abuses is the tactic of exploiting judicial consent decrees or settlement agreements to force regulators to issue new regulations.  Regulatory agencies often use these decrees and settlements so they can issue expensive new regulations while claiming that they were forced into it by the courts.  Even the House’s leading Democrat on the Agriculture Committee, Collin Peterson, has complained about the abuse of “sue and settle” tactics by federal agencies.  (Sponsored by Rep. Ben Quayle)

According to House Report 112-593, the bill would respond to the growing problem of the “sue-and-settle” phenomenon.  In sue-and-settle cases, pro-regulatory plaintiffs sue agencies that may be disposed to regulate but have delayed in doing so.  The litigation typically is resolved by a consent decree or settlement agreement that is negotiated behind closed doors and sets accelerated deadlines for proposal and final issuance of new regulatory actions.  These deadlines can reorder agency regulatory agendas, provide limited time for public notice and comment, and afford little or no opportunity for ordinarily required review of new proposed or final regulations by the White House’s Office of Information and Regulatory Affairs (OIRA).  As a result, under the cover of judicial decrees and settlement agreements that forcibly reorder their priorities, agencies can establish new regulations with less than usual scrutiny and even bind the regulatory discretion of succeeding administrations.

Background on Title IV

The Unfunded Mandates Reform Act (UMRA) of 1995 was enacted to promote informed and deliberate decisions by Congress and Federal agencies concerning the appropriateness of Federal mandates and to ‘retain competitive balance between the public and private sectors.’

In accord with UMRA’s original intent, this bill would aim to improve the quality of Congressional deliberations and to enhance the ability of Congress, Federal agencies, and the public to identify Federal mandates that may impose undue harm on State, local, and tribal governments and the private sector by providing more complete information about the cost of such mandates and by holding Congress and Federal agencies accountable for imposing unfunded mandates.

President Obama’s Jobs Council has recommended similar proposals to increase transparency and require independent regulatory commissions to perform cost-benefit analyses.  (Sponsored by Rep. Virginia Foxx)

Background on Title V

The National Environmental Policy Act of 1969 (NEPA) requires agencies to analyze “major Federal actions significantly affecting the quality of the human environment.” There are no time limits on the process, which can take many years—especially if agencies are recalcitrant or if politics take precedence. Additionally, the statute of limitations to challenge in court an agency’s environmental review is six years. These sources of delay and uncertainty undermine job creation and economic growth.

The Chamber recently commissioned an economic study, entitled Progress Denied: The Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects, to examine what might be the potential short- and long-term economic and jobs benefits if the energy projects found on this site were successfully implemented. The study has produced several significant and insightful findings: For example, the authors find that successful construction of the 351 projects identified in the inventory could produce a $1.1 trillion short-term boost to the economy and create 1.9 million jobs annually. Moreover, these facilities, once constructed, continue to generate jobs once built, because they operate for years or even decades. Based on upon the analysis in, the report estimates, aggregate, each year the operation of these projects could generate $145 billion in economic benefits and involve 791,000 jobs.

Last October, President Obama’s Jobs Council recommended that reforms be undertaken to streamline the federal permitting process.  (Sponsored by Rep. Dennis Ross)

Background on Titles VI and VII

In 2011, the SEC and CFTC had over 100 rules in various stages of development.  Requiring cost-benefit analyses by these types of agencies was one of the recommendations of President Obama’s Jobs Council.  (Sponsored by Reps. Scott Garrett and Mike Conaway)

Title VI: According to the Committee Report H. Rept. 112-453, “H.R. 2308 requires the SEC to generally follow the principles set forth in Executive Order No. 13563, which directs non-independent executive branch agencies to adopt regulations only if the benefits of the regulations justify their costs; to tailor regulations to impose the least burden on society; and to develop plans for retrospectively analyzing rules to identify those that are outmoded, ineffective, insufficient, or excessively burdensome and to modify, streamline, expand, or repeal them accordingly.

Although Executive Order No. 13563 applies to non-independent agencies, it does not apply to independent agencies, such as the SEC. As the Executive Office of the President noted on February 2, 2011, “Executive Order 13563 does not apply to independent agencies.” Nonetheless, “such agencies are encouraged to give consideration to all of its provisions, consistent with their legal authority. In particular, such agencies are encouraged to consider undertaking, on a voluntary basis, retrospective analysis of existing rules.” SEC Chairman Mary Schapiro has indicated that under her leadership, the SEC would voluntarily follow the guidance set forth in Executive Order No. 13563.

Nonetheless, neither Executive Order 13563 nor statute compels the SEC to weigh the costs and benefits of the regulations that it issues. The SEC Office of Inspector General has reported that the SEC “is not subject to an express statutory requirement to conduct cost-benefit analyses for its rulemakings.” Because there is no express statutory requirement that the SEC conduct cost-benefit analyses, the SEC has neither uniformly nor consistently conducted such analyses as part of its rulemaking. As the SEC Office of Inspector General noted, “The extent of quantitative discussion of cost-benefit analyses varied among rulemakings,” and “none of the rulemakings examined in our phase II review attempted to quantify either benefits or costs other than information collection costs as required by the Paperwork Reduction Act.” The SEC Inspector General also found that “some SEC Dodd-Frank Act rulemakings lacked clear, explicit explanations of the justification for regulatory action.”

Perhaps the most compelling rationale for H.R. 2308 was offered by the U.S. Court of Appeals for the D.C. Circuit when it struck down the SEC's proxy access rule. As the court's unanimous opinion explained, the SEC—in promulgating its rule—“inconsistently and opportunistically framed the costs and benefits of the rule; failed adequately to quantify the certain costs or to explain why those costs could not be quantified; neglected to support its predictive judgments; contradicted itself; and failed to respond to substantial problems raised by commenters.”

To address the shortcomings in the SEC's rulemaking identified by both the SEC's own Office of Inspector General and the D.C. Circuit Court of Appeals, H.R. 2308 mandates that the SEC conduct cost-benefit analyses, rather than leaving that decision to the discretion of the SEC's Chairman.

Title VII: Section 15(a) of the CEA sets forth requirements for the Commodity Futures Trading Commission (CFTC) to consider the costs and benefits of Commission actions. However, in boilerplate language in each proposed rule, the CFTC identifies the limitations of Section 15(a) in requiring cost benefit analysis by stating: “By its terms, Section 15(a) does not require the Commission to quantify the costs and benefits of an order to determine whether the benefits of the order outweigh the costs; rather, it requires that the Commission ‘consider’ the costs and benefits of its actions.”

Consequently, the CFTC’s Inspector General, at the request of the Chairman, conducted an investigation into the Commission's cost benefit analysis. In its report issued in April of 2011, the Inspector General concluded: “t is clear that the Commission staff viewed section 15(a) compliance to constitute a legal issue more than an economic one, and the views of the Office of General Counsel therefore trumped those expressed by the Office of the Chief Economist . . . We do not believe this approach enhanced the economic analysis performed.”

In early 2011, President Obama issued an Executive Order “Improving Regulation and Regulatory Review.” The Executive Order laid forth specific and extensive instructions for federal agencies in performing cost benefit analysis associated with new regulations. However, the CFTC as an independent federal agency is not subject to the President's Order, and when questioned in a hearing whether the CFTC would voluntarily comply, the Chairman of the CFTC, Gary Gensler, stated that it was inconsistent with the legal standard set forth in Section 15(a).

The Dodd-Frank Wall Street Reform and Consumer Protection Act drastically expanded the CFTC's authority over the derivatives markets. The CFTC is now the principal regulator of the swaps markets--markets that are used by businesses of all shapes and sizes in every sector of the economy. New rules promulgated by the CFTC will have far more wide reaching impacts on the economy, and it is critical that the CFTC have clear legal directives that require it to thoroughly examine the costs and benefits of each of its actions.

Summary

The bill is a legislative package of bipartisan measures that would end the uncertainty facing small businesses and job creators as a result of excessive regulatory rule writing.  A section-by-section breakdown is as follows:

Title I (Regulatory Freeze for Jobs Act of 2012)—H.R. 4078

The bill would prohibit an agency from finalizing any significant regulatory action (i.e., rule or guidance) for two years or until the unemployment rate falls to 6.0 percent or less, whichever occurs first. (This provision is pending a typographical correction to the legislative text as posted.)

The bill would allow an agency to finalize a significant regulatory action during the time period described above if the President determines that it is necessary for purposes of an imminent threat to health or safety, the enforcement of criminal laws, national security, or pursuant to an international trade agreement.  The bill would also provide that an agency may finalize a significant regulatory action if the Administrator of the Office of Information and Regulatory Affairs (OIRA) determines that the significant regulatory action is deregulatory in nature.

The bill would require that before an agency issues guidance it must first submit it to the OIRA Administrator, who would be required to determine whether the guidance is major guidance.

These provisions would be subject to judicial review.

Title II (Midnight Rule Relief Act of 2012)—H.R. 4607

The bill would prohibit a Federal agency from proposing or finalizing any midnight rule during the moratorium period (i.e., after Election Day through Inauguration Day of the following year if a President is not serving consecutive terms) if the rule is likely to result in any of the following:

(A) An annual effect on the economy of $100,000,000 or more;

(B) A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

(C) Significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

The bill would exempt from the moratorium rules scheduled to be proposed or finalized during the moratorium period pursuant to a pre-existing statutory or judicial deadline.

The bill would also allow a Federal agency to propose or finalize a midnight rule during the moratorium period if the President determines that it is necessary because of an imminent threat to health or safety, the enforcement of criminal laws, national security, or for the purpose of implementing an international trade agreement.

H.R. 4607 would allow an agency to propose or finalize a midnight rule during the moratorium period if the OIRA Administrator determines that the rule is deregulatory in nature.

The bill would require that all exceptions be published in the Federal Register no later than 30 days after their determination.

Title III (Sunshine for Regulatory Decrees and Settlements Act of 2012)—H.R. 3862

H.R. 3862 would increase transparency and judicial scrutiny of sue-and-settle decrees and settlements, improve fairness to the public and those affected by regulations, and assure that sue-and-settle rulemakings observe proper rulemaking procedure.

Specifically, the bill would impose new requirements upon consent decrees or settlement agreements in any action to compel a federal agency to take regulatory action that is alleged to be unlawfully withheld or unreasonably delayed that affects the rights of private parties other than the plaintiff or the rights of state or local governments.

The bill would require in any such action:

1. The publication of the complaint in a readily accessible manner;
2. An opportunity for affected parties to intervene in an action prior to the entry of a consent decree or settlement agreement;
3. Referral to a mediation program or a magistrate judge to facilitate settlement discussions after a motion to intervene is granted;
4. Opportunity for public comment on a proposed consent decree or settlement agreement before it is filed with a court and public hearings on whether to enter into the consent decree or settlement agreement; and
5. Approval by the Attorney General of any proposed consent decree or settlement agreement in cases litigated by the Department of Justice (DOJ).

The bill would allow an agency to file a motion for de novo review of a consent decree in court if such motion alleges that the terms of the decree are no longer fully in the public interest due to the agency’s obligations to fulfill other duties or due to changed facts and circumstances.

Title IV (Unfunded Mandates Information and Transparency Act of 2012)—H.R. 373

The bill would state the following purpose:

1. To improve the quality of the deliberations of Congress with respect to proposed Federal mandates by;
   1. providing Congress and the public with more complete information about the effects of such mandates; and
   2. ensuring that Congress acts on such mandates only after focused deliberation on their effects; and
   3. To enhance the ability of Congress and the public to identify Federal mandates that may impose undue harm on consumers, workers, employers, small businesses, and State, local, and tribal governments.

The bill would allow a Committee chairman or ranking member to request that the Congressional Budget Office (CBO) perform an assessment comparing the authorized level of funding in a bill or resolution to the prospective costs of carrying out any changes to a condition of Federal assistance being imposed on state/local/tribal governments participating in the Federal assistance program concerned.

The bill would codify current CBO practice by amending the definition of “direct costs” to ensure that CBO continues to account for the specifically named costs of federal mandates such as forgone business profits, costs passed onto consumers and other entities, and behavioral changes.

H.R. 373 would require independent regulatory agencies to comply with UMRA cost reporting requirements.

H.R. 373 would codify current practice by transferring authority for complying with (Title II) UMRA cost reporting requirements from the Director of the Office of Management and Budget (OMB) to the Administrator of the Office of Information and Regulatory Affairs (OIRA).

Similar to the enforcement mechanism currently available for public sector mandates, the bill would allow a point of order to be raised on the House floor if a private sector legislative mandate exceeds the UMRA threshold ($142 million).

H.R. 373 would reassert legislative intent by clarifying that agencies must conduct UMRA analyses unless a law “expressly” prohibits them from doing so.  The bill would also require agencies to adhere to the principles of regulation from Section 1 of Executive Order 12866 (issued by President Clinton), reaffirmed in Executive Order 13563 (issued by President Obama) when conducting regulatory actions. 

The bill would add the definition of “regulatory action,” defined as “any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including advance notices of proposed rulemaking and notices of proposed rulemaking.”

The bill would require federal agencies to measure a proposed rule’s annual effect on the economy, not just “expenditures” as is currently required.  This language would align UMRA with Executive Order 12866 and would require agencies to assess such specifically named costs as forgone profits, costs passed onto consumers and other entities, and behavioral changes as a result of regulatory mandates.

H.R. 373 would also remove a perverse incentive for agencies to forgo public comment periods by closing a loophole allowing agencies to forgo UMRA analyses for regulations that agencies deem are not subject to a notice of proposed rulemaking (NPRM).  Under the bill, the conditions for agencies to forgo NPRMs would be unchanged, but for regulations where NPRMs are not issued, the agency would be required to conduct UMRA cost reporting analyses before promulgating any final rule or within six months after promulgating a final rule.

The bill would also align further UMRA with Executive Order 12866 by removing the words “adjusted annually for inflation” when determining the threshold for adhering to UMRA cost analysis requirements.  H.R. 373 would also require that the descriptions and summaries an agency must complete be “detailed.”

H.R. 373 would extend the treatment currently available to state/local/tribal governments by providing that agencies benefit from the timely, meaningful consultation of private sector entities directly impacted by a proposed regulation during in the development of regulatory mandates.  The bill would also adopt guidelines, based on current OIRA policies, to instruct agencies how to execute this requirement.

H.R. 373 would give OIRA oversight responsibility to determine whether agencies have drafted their regulations consistent with the regulatory principles this bill adopts and whether their analyses are adequate.  If OIRA determines the agency has not met these requirements, OIRA would be required to notify the agency and request that the agency comply before finalizing the regulation.

The bill would also require agencies to include in their annual reports to Congress an appendix detailing their consultation activities with state/local/tribal governments and the private sector.

H.R. 373 would require federal agencies to conduct a retrospective analysis of an existing federal regulation at the request of a Committee chairman or ranking minority member.  The retrospective analysis must be submitted to the requesting member and to Congress, and would be required to include the following:

1. A copy of the federal regulation;
2. The continued need for the federal regulation;
3. The nature and comments or complaints received concerning the federal regulation;
4. The extent to which the mandate may duplicate another federal regulation;
5. The degree to which technology or economic conditions have changed in the area affecting the federal regulation;
6. An analysis of the retrospective costs and benefits of the federal regulation that considers studies done outside the government; and
7. The history of legal challenges to the federal regulation.

The bill would extend judicial review to the selection of the least costly/least burdensome alternative to a regulatory mandate.  It would also permit a court to stay, enjoin, or invalidate the rule if an agency fails to complete the required analyses or adhere to the regulatory principles.

Title V (Responsibly And Professionally Invigorating Development Act of 2012 (RAPID Act))—H.R. 4377

Title V would incorporate the provisions of H.R. 4377, the Responsibly And Professionally Invigorating Development Act of 2012 (RAPID Act). The bill would streamline approval of construction projects subject to environmental impact reviews and permits under the National Environmental Policy Act (NEPA) and other legislative or regulatory requirements. These requirements generally apply to all projects that are undertaken, reviewed, or funded by federal agencies. This title would amend the Administrative Procedure Act (APA) to establish requirements that federal agencies must adhere to with respect to reviewing the environmental impact of construction projects that are federally funded or that require approval by a federal agency.

Among other reforms, the provisions contained in Title V would:

• Set a 4.5 year-maximum deadline to complete the review process, including an 18 month maximum for the Environmental Assessment and 36 month maximum for an Environmental Impact Statement.
• Establish a 180-day statute of limitations and a “get in or get out” rule that requires interested parties to comment and involve themselves early on in the process to maintain standing to bring a lawsuit later.
• Allow lead agencies to accept existing relevant environmental documents, including those prepared under state laws that satisfy or exceed National Environmental Policy Act standards.
• Adopt established concepts, definitions and best practices to ensure that the federal review and permitting process is efficient and transparent.

The following is a summary of the title’s major provisions.

Coordination of agency administrative operations for efficient decision-making:

The bill would allow a covered construction project sponsor, upon the request of the lead agency, to prepare any environmental document required under NEPA. In addition, the bill would limit the documents required under NEPA to no more than one environmental impact statement and one environmental assessment (not including supplemental and court-ordered environmental documents).

The bill would also require the lead agency to designate participating agencies that would adopt environmental impact studies and invite their input and approval. Under the bill participating agencies would have to be agencies “that may have an interest in the project, including, where appropriate, Governors of affected states.” Consistent with current NEPA practice, tribal and local governments, including counties, also may become participating agencies in the environmental review process. If the agency does not respond in writing within 30 days to the lead agency's invitation, then the invitation to participate in the process would be declined.

The bill would direct construction project sponsors to notify the responsible federal agency of the project’s initiation, so it can identify and promptly notify the lead agency. Under the bill, the lead agency should initiate the environmental review within 45 days, by inviting and designating the participating agencies. The bill would require the lead agency and the cooperating agencies to begin the evaluation process “as early as practicable.”

The bill would specify that the lead agency is responsible for coordinating public and agency involvement in the review process and for making a schedule to complete the entire review process within the applicable timeframe. The lead agency would be required to give the review process timeframe to the participating agencies and project sponsor within 15 days of its completion and it must be made available to the public.

The bill would set specific time requirements and deadlines for the completion of mandatory environmental reviews as follows:

• For projects requiring preparation of an environmental impact statement (EIS), the bill would require that it must be completed within 2 years of the project initiation request, with a 1-year extension allowed for good cause or by agreement among the lead agency, project sponsor and all participating agencies.
• For projects requiring preparation on an environmental assessment (EA), the bill would require that it must be completed within 1 year of the project initiation request, with a 6-month extension allowed for good cause or by agreement among the lead agency, project sponsor and all participating agencies.

Thus, for a project requiring both an EA and an EIS, the entire environmental review process would not take more than four-and-a-half years, with maximum extensions granted under the bill. All comments on a draft EIS must be made within 60 days of its publication in the Federal Register.

Title V would also set deadlines for agencies to make permitting decisions after an EA or EIS is complete.  The bill would establish a 180-day approval deadline beginning after all other relevant agency review related to the project is complete and after the decision is published to make the decision, finding or approval, with extensions not to exceed 1 year from when the decision was published. Only persons or entities that commented on the environmental review document (if an opportunity for comment was provided) would be allowed challenge that document in court, and all claims must be brought within 180 days after the final decision is published under the bill. Finally, the bill would require the Council on Environmental Quality (CEQ) to issue implementing regulations within 180 days of enactment, and agencies to amend their regulations within 120 days thereafter.

Title VI (SEC Regulatory Accountability Act)—H.R. 2308

H.R. 2308 would broaden the scope of analysis performed by the Securities and Exchange Commission (SEC) when issuing or amending regulations. The bill would require the SEC's Chief Economist to conduct a cost-benefit analysis of proposed regulations, and it requires that the benefits of proposed regulations justify their costs before the SEC can issue them. The bill would also require the SEC to identify and assess alternatives to regulations that it considers, and to explain why a regulation that it issues meets regulatory objectives more effectively than the alternatives.  

The bill would also require the SEC to review its existing regulations within one year of the bill's enactment and every five years thereafter, to determine whether any of its regulations are outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with that review. The bill would also require the SEC to conduct a post-adoption or post-amendment assessment of any major regulation to measure the economic impact of the regulation and the extent to which it has accomplished its stated purposes.

Finally, H.R. 2308 would require the SEC to report its plans to Congress for subjecting the Public Company Accounting Oversight Board, the Municipal Securities Rulemaking Board, and any national securities association registered under section 15A of the Securities Exchange Act of 1934 to the requirements of the bill within one year of the bill's enactment.

This bill was considered in a mark-up session of the Committee on Financial Services and was ordered to be reported by a vote of 30-26.

Title VII (Consideration by Commodity Futures Trading Commission of Certain Costs and Benefits)—H.R. 1840

The bill would amend the Commodity Exchange Act (CEA) to require the Commodity Futures Trading Commission (CFTC) to conduct cost-benefit analysis prior to promulgating a rule or Commission order. The bill would strengthen current requirements under the CEA which includes a vague provision (Section 15(a)) that directs the CFTC to “consider” costs and benefits when it engages in rulemaking.  However, existing statute does not require the CFTC to quantify costs and benefits in order to determine whether the benefits outweigh the costs.

Specifically, the bill would require the CFTC, through the office of the Chief Economist, to assess the cost and benefits of a regulation or order before the regulation is promulgated. In performing the assessment the Chief Economist would be required consider:

• Protection of the market participants and the public; the efficiency, competitiveness and financial integrity of futures and swap markets;
• The impact on the futures and swap’s market liquidity;
• Price discovery;
• Risk management practices;
• Available alternatives to direct regulation;
• The degree and nature of the risks posed by various activities within the scope of the Commission's jurisdiction;
• Whether the regulation or rule is tailored to impose the least burden on society;
• Whether it is inconsistent or duplicative of other federal regulations; and
• Whether the approach taken maximizes net benefits and other public interest considerations.

Cost

The Congressional Budget Office (CBO) estimates that “over the 2013-2022 period, enacting H.R. 4078 would affect direct spending, and, together with the staff of the Joint Committee on Taxation (JCT), CBO expects that enacting the bill would affect revenues; therefore, pay-as-you-go procedures apply. However, CBO and JCT cannot estimate the sign or magnitude of those effects. Similarly, implementing H.R. 4078 would have a discretionary cost over the 2013-2017 period, but CBO cannot determine the sign or magnitude of that effect.” 

Further, “CBO expects that several federal and independent regulatory agencies would increase fees to offset the costs of implementing the additional regulatory activities required by the bill; thus, H.R. 4078 would increase the costs of existing mandates as defined in the Unfunded Mandates Reform Act (UMRA) on public and private-sector entities that would be required to pay those fees. Based on information from the affected regulators, CBO estimates that the additional costs of those mandates would be small and would fall well below the annual thresholds for intergovernmental and private-sector mandates established in UMRA ($73 million and $146 million in 2012, respectively, adjusted annually for inflation).”

However, CBO notes that previously submitted cost estimates for the respective Titles compiled under H.R. 4078 are still applicable.  Specifically:

On April 20, 2012, CBO transmitted a cost estimate for H.R. 4078, the Regulatory Freeze for Jobs Act of 2012, as ordered reported by the House Committee on the Judiciary on March 20, 2012. Title I of the Rules Committee version of H.R. 4078 modifies the Judiciary Committee version by changing several definitions and clarifying agency responsibilities. The modifications in the language do not change CBO’s estimate of those provisions’ costs.

On May 10, 2012, CBO transmitted a cost estimate for H.R. 4607, the Midnight Rule Relief Act of 2012, as ordered reported by the House Committee on Oversight and Government Reform on April 26, 2012. Title II of the Rules Committee version of H.R. 4078 modifies H.R. 4607 by changing several definitions. The modifications in the language do not change CBO’s estimate of those provisions’ costs.

On June 25, 2012, CBO transmitted a cost estimate for H.R. 3862, the Sunshine for Regulatory Decrees and Settlements Act of 2012, as ordered reported by the House Committee on the Judiciary on March 27, 2012. Title III of the Rules Committee version of H.R. 4078 modifies H.R. 3862 by providing certain clarifications that do not change CBO’s estimate of the cost of those provisions.

On March 28, 2012, CBO transmitted a cost estimate for H.R. 373, the Unfunded Mandates Information and Transparency Act of 2011, as ordered reported by the House Committee on Oversight and Government Reform on November 17, 2011. Title IV of the Rules Committee version of H.R. 4078 modifies H.R. 373 by exempting the Federal Reserve from the bill’s requirements. In the cost estimate for H.R. 373, CBO estimated that including the Federal Reserve in the new administrative requirements would reduce revenues by $9 million over the 2013-2022 period. That revenue loss would not occur under Rules Committee version of those provisions.

On June 25, 2012, CBO transmitted a cost estimate for H.R. 4377, the Responsibility and Professionally Invigorating Development Act of 2012, as ordered reported by the House Committee on the Judiciary on June 6, 2012. Title V of the Rules Committee version of H.R. 4078 modifies H.R. 4377 by exempting certain projects from the new requirements. That change does not affect CBO’s estimate of the cost of those provisions.

On April 5, 2012, CBO transmitted a cost estimate for H.R. 2308, the SEC Regulatory Accountability Act, as ordered reported by the House Committee on Financial Services on February 16, 2012. Title VI of the Rules Committee incorporates H.R. 2308 with an amendment to limit the bill’s effect on the Public Company Accounting Oversight Board (PCAOB). CBO estimated that enacting H.R. 2308 would increase the deficit by $2 million over the 2013-2022 period as a result of provisions affecting the PCAOB. That deficit effect would be eliminated in the Rules Committee version (with the accepted amendment) of H.R. 4078.

On April 9, 2012, CBO transmitted a cost estimate for H.R.1840, a bill to improve consideration of the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders, as ordered reported by the House Committee on Agriculture on January 25, 2012. Title VII of the Rules Committee version of H.R. 4078 is the same as H.R. 1840, and CBO’s estimates of the cost of the two versions are the same.

House Democratic Caucus Summary

The House Democratic Caucus does not provide summaries of bills.

So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.

We’ll be looking for a source of summaries from the other side in the meanwhile.