Inviting Delays So Corporations Can Weigh In

It seems as though bills stripping away protections for everyday Americans are all the rage on Capitol Hill these days. After pushing ahead with a measure to keep the government from enforcing health and safety regulations on businesses, House Republicans are moving forward with a more subtle – but potentially more dangerous – assault on Americans’ Constitutional rights.

The House Judiciary Committee recently reported out HR 3862, known as the Sunshine for Regulatory Decrees and Settlements Act.  Sponsored by Rep. Ben Quayle (R-AZ), HR 3862 purports to shine some sun on the “bevy” of settlement agreements and consent decrees generated whenever the government is taken to court for failing to enforce a law or regulation. The bill would block either party in the case from filing a motion for a decree or settlement until all other affected third parties have had an opportunity to intervene.

Giving third parties the opportunity to intervene in such cases is nothing new. What’s new in this bill is the reduction in the degree of discretion the court has to deny a third party's intervention.

Not only does that sound boring, it seems harmless. At first glance, Quayle’s bill is so tedious and benign that it would be hard to imagine it having anything to do with a messy, blood-and-guts assault on civil rights.  But as our mothers always tell us, the devil is in the details…and the procedures.

The expanded ability for third parties to intervene could mean additional delays in forcing an agency to step in and protect consumers from unsafe business practices. It could mean that a discrimination suit against a corporate giant might be delayed months or years as other giant corporations – as “affected third parties” – take the time to weigh in on the case.

We have seen time and again that big corporate interests benefit the most from changes to legal procedure, and this bill is certainly no exception.

At last week’s markup, Chairman Lamar Smith (R-TX) summarized the reasoning behind this bill by saying:

“Job creators need relief from the flood of new regulations… [A] heavy contributor to the burden of new regulations is the use of consent decrees and settlement agreements to force federal agencies to issue new rules.”

According to the sponsors of this bill, the need for HR 3862 all boils down to a little TLC: transparency (or the absence thereof) in the current process; lack of access by third parties; and a covert conspiracy between federal agencies and pro-regulatory businesses.

Yes, you read it right: a conspiracy.

Rep. Quayle explained that settlements or decrees:

“…often made behind closed doors, are the result of activist, pro-regulatory parties suing the federal government when an agency misses an enforceable statutory deadline…  this closed door process… can effectively make public participation meaningless.”

He went on to argue that the current legal process of obtaining decrees and agreements is a smokescreen for:

“pro-regulatory parties conspiring in secret with agencies prior to formally initiating litigation and then proposing a settlement agreement and filing suit concurrently.”  

Quayle did not mention that speedy resolution of disputes over enforcement might be beneficial to Americans who want to protect rights such as access to clean water and air, freedom from racial and gender discrimination, and protection of Medicaid and other benefits. Following the argument of Quayle and his cosponsors, that’s all part of the conspiracy.

Rep. Mel Watt summed it up best when he said HR 3862 is ”inviting delay, inviting more expenditure of funds by parties who really can just rope a dope and game the system for as long as the courts will allow them to do that, and you have given  them the licenses to do it.”

No cosponsors at the markup mentioned that this conspiracy of speedy resolution to disputes can occasionally prevent large corporations from prolonging the process of making the government accountable, and that third-party corporations often have a financial interest in altering the outcome of such disputes.

Now who’s doing the conspiring?

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Nonsense: House Bill Conflates Regulatory Uncertainty with Economic Uncertainty

This Tuesday, the House Judiciary Committee held a markup of HR4078, the Regulatory Freeze for Jobs Act. The act would impose a moratorium on all “significant regulatory action” until the national employment rate falls below six percent. As Congressman Jerrold Nadler (D-NY) said in the markup yesterday, the bill is just “nonsense and is based on  nonsense.”

Regulatory actions by the government enforce standards for clean water, safe food, child-safe toys, and privacy protection. Regulations prevent unsafe business practices from jeopardizing the health and rights of all Americans.

But Republicans on the committee say small businesses are being hurt by government regulations, offering soft statistics and ambiguous quotes from small business owners claiming that job loss and lack of economic growth over the past few years has been caused by “regulatory uncertainty” driven by undefined regulatory changes proposed or implemented by President Obama.

This  new “regulation nation,” as Chairman Lamar Smith (R-TX) said, is breaking the backs of small businesses. Experts dispute that claim.

Small business owners’ primary complaint is not regulatory uncertainty, but economic uncertainty;  in other words, a dearth of demand caused by a lack of customers and sales. As Rep. Nadler pointed out Tuesday afternoon, a Wall Street Journal survey of economists concluded that, “The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists.”

Congressman Mel Watt said it best on Tuesday when he stated that uncertainty is major concern, but it’s not the uncertainty caused by over regulation, rather the uncertainty caused by no decisions on and finalizations of any regulation.

“My constituents are saying that we need to get on with adopting and finalizing regulation under Dodd-Frank so we know what the rules of the road are and can move forward," Watt said at the markup. "The problem I have with this bill is that it doesn't add to the level of certainty that business have because whatever those regulation are… will be put on hold, waiting for the unemployment rate to drop below six percent. If it drops below six percent for a little while, maybe they can gear up again and start writing the regulations. But if it happens to go back over six percent during that period then they have to suspend again.” That sounds like uncertainty in a nutshell.

So why all this talk about "regulatory uncertainty?"

This conflation of economic uncertainty and regulatory uncertainty is the only real basis the supporters of HR 4078 have for promoting a bill that would undermine standards and safeguards that both industry and the public rely upon. Regulations being targeted include implementation of the Food Safer Modernization Act, restrictions on oil speculation that could lower gas prices, enactment of pharmaceutical approval standards, and rules keeping our workplaces safe, and the end of pay loss for our veterans as well as ensuring family and medical leave for all military service personnel, just to name a few. All those regulations protect Americans. Suspending "significant regulatory actions" would put those protections in dire jeopardy... and wouldn't even achieve the bill's stated goal of helping small businesses.

After rejections of several amendments to the bill offered by Democrats -- such as excluding nuclear safety regulations from the moratorium -- one couldn’t help but think that perhaps "regulatory uncertainty" for small businesses wasn't the real focus of this bill. More likely, as conservative economist Bruce Bartlett admitted, it's “simply a case of political opportunism, not a serious effort to deal with high employment.”

Or put another way, the bill is nonsense, and is based on nonsense.

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