Why the REINS Act Is Unwise If Not Also Unconstitutional

Republicans in both the House and Senate have introduced legislation that would dramatically change the way our laws are implemented. Their proposed REINS Act – an acronym for “Regulations from the Executive in Need of Scrutiny” – would require both Houses of Congress and the President to approve virtually all new major regulations, the same basic process needed to enact ordinary legislation. Supporters view the REINS Act as a response to what they see as an out-of­-control regulatory process at federal agencies. By making agencies obtain congressional approval for rules likely to have an annual impact on the economy of more than $100 million, the bill’s sponsors claim they will improve regulatory policymaking – but in fact their bill is subject to some of the same criticisms that they make of agency regulations. That is, the REINS Act is not well considered, it is not tailored to the problem it is attempting to solve, and it will inevitably have unintended but nonetheless significant adverse effects on the economy and society at large, including fundamentally changing the constitutional structure of our government. In evaluating the REINS Act, it is important to understand that government regulations deliver important benefits that vastly exceed their costs. Even if one uses the Office of Management and Budget’s (OMB) highest cost estimates and its lowest benefits estimates, major regulations issued over the past ten years have produced net benefits of $74 billion to our society. These estimates cannot be dismissed as partisan, because even the OMB during the George W. Bush Administration issued similar results showing substantial net benefits from regulations. Given that the benefits of regulations consistently exceed the costs, the need for any legislation that would make it more difficult or time consuming to issue new regulations is certainly highly questionable. The REINS Act is also premised on the faulty view that agencies need more “scrutiny.” The reality is that federal agencies are already subject to numerous constraints or checks, whether imposed by prescriptive statutes, executive orders, congressional oversight, or judicial review. Most important, federal agencies are simply not free agents; they can only do what Congress has authorized them to do. They can only issue regulations that implement laws that are duly passed by both Houses of Congress and signed by the President. The REINS Act would place an unnecessary burden on already highly burdened regulatory agencies, impeding even a host of rules that most regulated entities would support. It may be counter-intuitive, but it is not unusual for regulated entities to support or even champion certain rules – such as those that provide certainty for operations for the foreseeable future. In addition, agencies sometimes propose eliminating outdated rules. But even these efforts at regulatory streamlining would nonetheless get caught in the REINS Act net, as deregulatory rules are nevertheless still rules. Proponents of the REINS Act might argue that rules that are acceptable to a majority of Members of Congress will have no trouble being approved, and only the objectionable ones will be stopped. But consider that in 2010 alone, federal agencies issued more than 90 major new rules that would likely have been subject to the REINS Act’s requirements. There simply would not be enough time for Congress to consider and approve even the most worthy rules while also fulfilling its ordinary legislative responsibilities. The costs of delaying highly beneficial rules could be substantial, whereas the marginal “benefit” of having another significant procedural step before a major rule becomes effective is likely to be minuscule. Still more troubling, the REINS Act would change dramatically the constitutional structure of the federal government in the United States. At the beginning of the 112th Congress, Members of the House read aloud the Constitution, which assigns various responsibilities to the different branches of the federal government. The drafters of the REINS Act cite Section 1 of Article I, which grants all legislative powers to the Congress. But equally important is Section 1 of Article II, which grants the executive power to the President. While the legislative branch holds the responsibility to make the laws, the executive branch must “take care that the laws be faithfully executed.” Over twenty years ago, Chief Justice Rehnquist set forth several tests for whether a statute violates the Constitution’s separation of powers. One is that a statute is suspect if it “involve[s] an attempt by Congress to increase its own powers at the expense of the executive branch.” Much of the discussion surrounding the REINS Act suggests that that may be an apt characterization of the bill’s sponsors’ intent. Another of Rehnquist’s tests is whether an act of Congress “impermissibly interfere[s] with the President’s exercise of his constitutionally appointed functions,” which clearly includes the obligation to “take care that the laws be faithfully executed.” For over a century, the executive branch has taken care to faithfully execute the laws by, among other things, developing and issuing regulations implementing legislation. Justice Scalia, who of all the Justices most aggressively guards the President’s authority, has relied in key separation of powers cases such as Morrison v. Olson and Mistretta v. United States on the fact that the activities at issue in those cases were ones in which the executive had traditionally engaged. That characterization is clearly applicable to agency rulemaking as well