JONATHAN COHN OCTOBER 22, 2010
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This is the second in an occasional series examining how Republican control of Congress might affect policy debates in the next two years.
Democrats are warning that if Republicans capture the House—and perhaps also the Senate—in this November’s election, they would abolish cabinet departments, repeal Obamacare, and privatize social security. They might want to do these things, but they won’t be able to overcome a Senate filibuster or a presidential veto. What they will be able to do, however, is undermine the work of regulatory agencies like the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and the Federal Communications Commission (FCC).
The Obama administration has appointed good people to these agencies and increased their funding, and they are beginning to revive after being crippled during George W. Bush’s presidency. A Republican Congress wouldn’t be able to close them down, but it could make life very difficult for them to function by cutting their funding. That’s exactly what happened after the Republicans captured the Congress in November 1994 when Bill Clinton was president.
The newly minted Republican majority in the House, led by Georgia Rep. Newt Gingrich, immediately passed the Job Creation and Wage Enhancement Act, which contained sections specifically aimed at curbing regulatory agencies. The Private Property Reform Act forced the government to reimburse property owners for any loss suffered from regulations; the Regulatory Reform and Relief Act and the Risk Assessment and Cost Benefit Act created a labyrinth of appeals and studies that any new regulation would have to pass through. As the authors of a Contemporary Regulatory Policy put it, they “mired regulatory agencies in a procedural quagmire.”
In the Senate, Democrats killed the bill by threatening a filibuster, but the effort put the agencies on the defensive. In the budget that year, the Republicans—not constrained by a filibuster—were able to get their way. They cut the EPA’s overall budget by 25 percent and cut its critical enforcement budget by 40 percent and put 17 riders on the budget bill limiting the EPA’s ability to police industries. They cut OSHA’s already barebones budget by 16 percent and put a rider prohibiting OSHA from adopting new rules on ergonomic industries (like carpal tunnel syndrome) that had first been proposed in 1990 by George H.W. Bush’s administration.
When Clinton vetoed the Republican budget, the Republicans forced the government to shut down that fall. Clinton eventually won the political battle over the shutdown by demonstrating that Republican tax cuts for the rich were almost exactly equal to their proposed reductions in Medicare, but when the dust cleared from the budget battle, funding for the EPA and OSHA had been cut, and OSHA had been forced to suspend its attempt to enforce standards on ergonomic injuries. EPA director Carol Browner complained that from October 1995 to February 1996, EPA inspections had been reduced by 40 percent because of budget cuts. And there’s a clear lesson there. If you don’t have the people to enforce regulations on pollution or worker injury, it doesn’t matter how tough the rules are.
After Clinton easily won re-election in 1996, and the Democrats won back some of their seats (although not a majority) by running against the Republican leadership in Congress, the administration was able to get back some of the regulatory funding that had been lost, but even at the end of Clinton’s two terms, the agencies were not operating at full speed. In 2000, there were actually less people working in OSHA than there were in 1975. And an ergonomics rule had still not been adopted. (Clinton proposed it finally as a “midnight regulation” after the November election, but George W. Bush promptly threw it out.)
A similar tale could be told of what happened in other regulatory agencies after the Republicans won Congress in November 1994. And the same thing could happen next year if the Republicans win back the House—or the House and Senate—this November. That’s reason enough to worry about the outcome of the coming election.
Read Jonathan Cohn's introduction to the series, explaining why a Republican Congress might not be the end of the world.
6 comments
I hope the term Obamacare stays around for years and years like the terms "Roth Ira" or "McCain-Feingold" or "Taft-Hartley."
- Nusholtz
October 22, 2010 at 6:23am
Democrats can help fix the issue but opening their yaps loud and in harmony about what the GOP does and do it often. Right now they're silent. Case in point: why did they not bash the GOP on their hypocritical sudden love of deficit reduction a year ago? This the same clan that took a budget surplus and turned it into massive structural deficits. The Democrats were silent (and many still are) on this subject.
- tnmats
October 22, 2010 at 9:21am
The New Republicans (not the magazine subscribers) are hard charging against regulations. I have no idea why they are so vehement in their angst. The derivatives mess was a result of deregulation. As in, deregulation CAUSED THE FINANCIAL CRISIS!! Right now we are dealing with an epic problem, a bug HUGE problem with CO2. Either oil, gas and coal subsidies need to be completely cut as well as farm subsidies so that clean energy and organic farming (as in true organic farming, not just letting the chickens run around for a half hour organic farming)compete on an even plane with Big Oil, Big Gas, Big Coal and Big Agra, or we need regulation of CO2. I really can't believe the EPA hasn't started to regulate it already. But at least before they withold funding for the EPA, Obama could appeal to their anarchistic streak and try and cut the subsidies that poison us citizens.
- RedState
October 22, 2010 at 9:29am
Unfortunately, RedState, those who fervently believe that regulation is bad for the economy assume that deregulation can therefore only be good. So how can it be the problem? "Everyone knows" that the financial crisis was actually caused by ACORN, despite what you hear in the liberal media (not that these folks know what the liberal media is saying unless Fox quotes it to them out of context). You make a good point about subsidies. But here we run into the problem that all non-defense government spending is an outrage, unless it's being spent to support big business. Actually, post-bailout clarification: unless it's being spent *by Republicans* to support big business.
- frippo
October 22, 2010 at 11:05am
Redstate: "The derivatives mess was a result of deregulation." Derivatives have been with us for decades, and our use of derivatives today in the financial industry is higher than ever. “If you divide it by, say, U.S. GDP or divide it by U.S. credit markets, or you divide it by market cap, on all three scores, we have far more derivatives exposure today than we did two years ago. And I think that's the reason that I would be concerned about what this is telling us about the risks that banks are taking in a nominal zero interest rate environment.” http://www.realclearpolitics.com/video/2010/10/06/kauffman_foundations_harold_bradley_risks_from_derivatives_look_terrifying.html This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten. This text is to make sure the link isn't eaten.
- seattleeng
October 23, 2010 at 1:10pm
Our financial industry has plenty of regulation. In fact, Fan and Fred have even an EXTRA layer of regulation. The problem was that these regulations were not enforced. Ditto with BP. It wasn't a regulation issue. It was an enforcement issue. Fannie and Freddie have the dedicated office called "Federal Housing Enterprise Oversight" office to make sure sure they are doing everything right. Remember in 2006, it was Barney Frank who insisted there were no problems there, and that the 27 months investigation that was completed that year and found Fan/Fred profits were "“illusions deliberately and systematically created by the company’s senior management” was swept under the rug by Barney. How was it swept under the rug? The dems stood up and screamed that any attempt to the put the breaks on Fan/Fred were racially motivated and thusly beat the regulators into submission. Fannie was sound. No worries, move along. http://www.boston.com/news/politics/articles/2010/10/14/frank_haunted_by_stance_on_fannie_freddie/?page=1 There's plenty of regulation out there. It's just not allowed to work. Adding more regulation will not solve the problem.
- seattleeng
October 23, 2010 at 1:19pm