By Cydney Posner
This DealBook article from Sunday's New York Times discusses a bill under discussion in the Senate designed to "curb the influence of the Securities and Exchange Commission, the Commodity Futures Trading Commission and other regulators, according to Congressional staff members and government watchdog groups. The measure, which a Senate committee is planning to debate this month, aims to empower the president in the rule-writing process. The proposal would allow the White House to second-guess major rules and mandate that agencies carefully study the economic effects of new regulation. The change could, in effect, delay a number of rules for the financial industry. Some legal experts say the White House already has ample authority to impose such demands on independent agencies like the S.E.C. But critics say that the bill would stymie financial reform and threaten the autonomy of regulators that operate outside the presidential cabinet….Senator Susan Collins of Maine [one of the bill's authors] backed Dodd-Frank, and the lawmakers point to support among several Democrats. The bill, introduced in the Senate last month, would offer a path to challenge the Dodd-Frank law, the sprawling regulatory overhaul passed in the wake of the 2008 financial crisis. Regulators have already encountered significant delays as the financial industry mounts legal challenges to the law." The article describes the bill's future as "uncertain," in light of election season, but it may nevertheless be "gaining steam."
The bill would allow "current and future White Houses … explicit authority to influence the rule-making process at independent agencies…. The president, through an executive order, would be allowed to mandate at the minimum a 13-point test for rule-making. That includes finding ‘available alternatives to direct regulation,' evaluating the ‘costs and the benefits,' drafting ‘each rule to be simple and easy to understand' and periodically reviewing existing rules to make agencies ‘more effective or less burdensome.' For more ‘significant' rules — those that have an annual effect of at least $100 million on the economy — independent agencies would have to submit their proposals to the Office of Information and Regulatory Affairs, an arm of the White House that acts as a sort of regulatory referee. A negative review from the office would delay a rule for up to three months and force an agency to explain its approach." Currently, only cabinet agencies, such as the Treasury, are subject to that kind of oversight.
According to the article, proponents of the bill contend that they "are aiming to close what they call a ‘loophole' for independent agencies, which have struggled at times to fully evaluate the costs of their rules. The bill tracks a recommendation made in a report this year by the president's jobs council. But for years, Congress has balked before explicitly granting the White House such authority….Critics of Wall Street say the bill is an unnecessary check on regulatory power. The S.E.C. and its fellow financial regulators, they say, already draft cost-benefit analyses….If Congress and the White House ramp up the requirements, that will translate into months of additional delays, advocates say. The bill, they argue, will also spur court battles over financial regulation, potentially handing Wall Street another victory."