In Letter to Senate leaders, Former CFTC and Acting CFTC Chairs Back Legislation Requiring Cost-Benefit Analysis of SEC and CFTC Regulations

In letters to Senate leaders, two former CFTC Acting Chairs and a former Chair  expressed strong support for the bipartisan Independent Regulatory Analysis Act, S. 3468. Introduced by Senators Mark Warner (D-VA), Rob Portman, and Susan Collins (R-ME), S. 3468 would require independent federal agencies, such as the SEC and CFTC, to conduct a cost-benefit analysis of new regulations and tailor new regulations to minimize unnecessary burdens on the economy. The bill would also provide for review by the Office of Information and Regulatory Affairs (OIRA) of every proposed and final economically significant regulation, pegged at economic impact of $100 million or more, followed by a public exchange of views between OIRA and the independent agency concerning the quality of the agency’s cost-benefit analysis. Although OIRA would not have the power to reject a regulation, it would place its evaluation of the agency’s cost-benefit analysis in the public record.

In their letter to Senator Tom Carper (D-DE), Chair of the Homeland Security and Governmental Affairs Committee and Ranking Member Tom Coburn (R-OK), former CFTC Acting Chairs Sharon Brown-Hruska and William Albrecht said that the bi-partisan legislation would promote a more cost-effective approach to regulation by affirming the President’s authority to extend to independent agencies the same principles of regulation that have long governed executive agencies. The former CFTC officials noted that the legislation take a balanced approach to extending cost-benefit analysis to independent federal agencies by providing for OIRA review of economically significant regulations, followed by a public exchange of views between OIRA and the SEC, CFTC other independent agency concerning the quality of the agency’s cost-benefit analysis and other basic considerations.

In this respect, said the former CFTC Acting Chairs, it takes an approach quite similar to that Congress took in providing for review of independent agency actions under the Paperwork Reduction Act. The proposed legislation carefully preserves the independence of the SEC, CFTC and other affected agencies, assured the former CFTC officials, since it explicitly states that OIRA’s assessment of independent agency rules submitted for review is nonbinding. Under S. 3468, they reasoned, accountability comes through the public exchange of views between OIRA and the agencies. Indeed, the bill does not permit judicial review of an agency’s compliance with the terms of the executive order, and it confers no power on OIRA to stop independent agency rules.

In a separate letter to the Senate leaders in her capacity as a former OIRA Administrator, former CFTC Chair Wendy Lee Gramm essentially agreed with the views of the two former  Acting CFTC Chairs.  Chairman Gramm was joined by five other OIRA former Administrators. As former OIRA Administrators from Democratic and Republican administrations, they were unanimous in their view that independent regulatory agencies should be held to the same good-government standards as executive agencies, and the Independent Agency Regulatory Analysis Act advances that goal.