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U.S. Regulatory System “Stymied by Special Interests”

WASHINGTON, Jun 12 2013 (IPS) - A broad-based alliance of public interest and other groups is warning that years of attacks by business interests has made the U.S. regulatory so inefficient that public safety is being put at risk.

The groups, under the umbrella of the Coalition for Sensible Safeguards (CSS), are urging the White House and U.S. Congress to institute reforms to increase transparency, reduce special interests’ ability to block public protections, and improve the enforcement of legislated rules.

"It’s important to note that this was a very concerted effort by the business community as well as their allies in the conservative media and think tanks." -- Prof. Thomas McGarity

“[The U.S.] regulatory system is frequently subject to undue influence from regulated industries during the development and review of standards and rules,” a new CSS report, released Tuesday, states.

That system “is not as responsive in the face of new knowledge and new risks as the … public has a right to expect. Instead, it is plagued by a number of problems that make it difficult for federal regulatory agencies to react to identifiable hazards in a timely, proactive fashion.”

CSS is an umbrella of nearly 150 state and national business, labour, science, health, advocacy and environment groups.

Nearly four decades after U.S. public interest regulation began in earnest – covering issues such as public health, safety and the environment – the report points to a slew of regulations that have already been approved by legislators but currently remain mired in judicial or executive approval processes.

According to CSS analysts, many of these languish for months or even years past legally imposed deadlines for implementation, disappearing down what the report calls the “regulatory rabbit hole”.

“Today there are more than 120 rules under review by an office within the White House that have been stuck there far beyond the standard review deadline – that’s very problematic,” Rachel Weintraub, legislative director at the Consumer Federation of America and a co-author of the new report, told IPS.

“There is a broad range of important social goods – health, environment, worker protections, product safety, food safety – that is being directly impacted by this delay. Some of these rules are controversial but some aren’t, so it’s hard to figure out what they have in common. Is it that there’s strong industry opposition?”

Inordinate delay

Weintraub and her co-authors point to three facets of today’s U.S. regulatory system as particularly worrying. Together, they say these issues are dangerously slowing the rulemaking process, to the detriment of the public.

First and foremost is the outsized influence by industry. This includes both being offered opportunities to provide extensive and imbalanced input in shaping rules, as well as the potential for bias from what has been referred to as the “revolving door” between industry and government regulators.

Second, courts over recent decades have imposed greater and greater documentation and review requirements for setting regulation rules. The report cites “overuse and abuse” of judicial review processes for adding years on to certain regulatory processes.

Finally, since the early 1980s the White House has had the opportunity to impose politics directly on regulation through the little-known Office of Information and Regulatory Affairs (OIRA). Currently, of the more than 120 rules pending before OIRA, Weintraub says that 70 have been in approvals limbo for longer than the 30-day review deadline – some have remained there for years, often with little or no explanation for the delay.

These include rules on safety of imported foods, energy efficiency standards, tamping down on energy speculation, and the installation of backward-looking cameras on cars. The latter requirement has already been signed into law but has been stuck at OIRA since 2011, despite widespread backing and analysis suggesting that it would save hundreds of lives and thousands of injuries each year.

The country’s main worker safety agency, meanwhile, has not issued a single protective rule since the beginning of George W. Bush administration, more than a decade ago.

“Protections are stalled or blocked as major industries and their allies use their considerable resources to influence the process at every stage, including during OIRA’s rule reviews,” the report states.

“A regulatory system plagued by delay and stymied by the special interests of regulated industries cannot effectively protect the [public].”

Concerted campaign

According to some researchers, the overall weakening of the U.S. regulatory infrastructure is the result of decades’ worth of combined effort.

“This is no accident, the business community specifically wanted to slow down this apparatus,” Thomas McGarity, a professor in administrative law, told IPS.

“Further, it’s important to note that this was a very concerted effort by the business community as well as their allies in the conservative media and think tanks, aimed at constraining federal regulation. And, of course, that effort has been enormously successful.”

McGarity is the author of “Freedom to Harm”, a new academic history of the last three and a half decades of U.S. regulation.

During the late 1960s, he says, regulation in the United States was quite efficient. But the roots of today’s system began to take hold following new legislation passed in the late 1970s and early 1980s.

“There used to be an attitude in the United States that was much more accepting and supportive of government service,” he says, “similar to the attitude in Europe today.”

Those new analysis and paperwork requirements have massively slowed down the process, McGarity continues. He suggests that trend has been abutted by a growing conservative movement that has tried to convince the public that the government is part of the country’s problems rather than a solution.

“It’s clear that attitude will have to change before we can really have any real progress, but at the same time there have been few attempts to actually repeal major regulation,” McGarity says.

“In fact, the public has repeatedly shown that it won’t stand for those kinds of roll-backs. But the public doesn’t see the defunding of [regulatory] agencies that has taken place, or the adding of all of these requirements for the rule-making process.”

Indeed, for years polls have found that, when U.S. consumers are asked about particular regulatory safeguards, they are generally supportive, regardless of broader political implications.

“The bottom line is that many of these are important rules that have broad impacts that help the public generally,” the Consumer Federation of America’s Weintraub says.

“Industry supports certain regulations at certain times, and regulations can very much give the public faith in a particular sector. But ultimately, as a society, these are protection issues that only government can solve.”

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  • AngelFive

    This article miss characterizes problem as a result of conservative versus liberal US politics. Crony capitalism is alive and well in US under Obama too. But democracy is dead worldwide so who you vote for doesn’t matter anymore. Planet earth is ruled by a group of unregulated hedge funds and investment bankers who built a system of worldwide debt peonage. The Bank for International Settlements keeps track of all the insurance policies the world’s rulers took out on their toxic underwater mortgages worldwide called credit default swaps…currently listed at more than US$$ six hundred trillion dollars…I call this the Bottomless Pit predicted in Christian Book of Revelations. I warned the UN in 2009 in New York that Bottomless Pit would enslave the world to debt peonage if they didn’t seal the Pit. UN needs to do their job and regulated banks worldwide instead of trying to blame it on US politicians who are corrupt anyways.