Saturday, June 11, 2011

Portman Amendment to Economic Revitalization Act Would Extend Unfunded Mandates Reform Act to SEC and CFTC

Senator Rob Portman (R-OH) has offered an amendment (SA 417) to the Economic Development Revitalization Act, S782, extending the Unfunded Mandates Reform Act (UMRA) to independent agencies such as the SEC, CFTC and even to the new Bureau of Consumer Financial Protection created by the Dodd-Frank Act. Signed by President Bill Clinton in 1995, the Unfunded Mandates Reform Act was bipartisan legislation that basically says that regulators have to evaluate a regulation’s cost and find less costly alternatives before adopting a major rule.

A second Portman Amendment (SA 418) would require agencies specifically to assess the potential effects of new regulations on job creation and to consider market-based and nongovernmental alternatives to the regulation. It would also broaden the scope of UMRA to require cost-benefit analysis of rules that impose direct or indirect economic costs of $100 million or more. It would also require agencies to adopt the least costly or least burdensome regulatory option that achieves the policy goal set out by Congress.

In 1995, noted the Senator, UMRA was imposed upon the executive agencies but not on independent agencies. Those independent agencies have grown, and so have their regulations. Based on information from the GAO, observed Sen. Portman, between 1996 and this year independent agencies issued nearly 200 regulations that had an impact of $100 million or more on the economy. Over 200 regulations were not subject to review under UMRA, he emphasized, because they were from independent agencies. He sees a need to extend UMRA to these independent agencies in order to close this loophole. Cong. Record, June 9, 2011, pps. S S3657-3658

According to Senator Portman, no major regulation, whatever its source, should be imposed without serious consideration of what the costs are, what the benefits are, and whether there is available a less burdensome alternative. He noted that the two amendments would improve UMRA in a way that is entirely consistent with the principles President Obama laid out in his January Executive Order on regulatory review