Thompson-Levin Regulatory Improvement Bill Wins Converts

Thompson-Levin Regulatory Improvement Bill Wins Converts
May 1, 1998



A strong bipartisan regulatory improvement bill is advancing in the U.S. Senate. According to one of its lead sponsors, Senator Fred Thompson (R-Tennessee), S. 981, “The Regulatory Improvement Act,” “is an effort by both Republicans and Democrats to make our regulatory process work better.”

Senator Carl Levin (D-Michigan), the bill’s second lead sponsor, noted that S. 981 “does not mandate the outcome of the (regulatory) process. It requires only that the agency be up-front with the public as to just how cost-beneficial and cost-effective its regulatory proposal is.”

Approved by a two-to-one margin by the Senate Governmental Affairs Committee in March, S. 981 is awaiting debate by the full Senate. Unlike last year’s regulatory reform effort in Congress, S. 981 has earned broad bipartisan support.

In addition to Thompson and Levin, fourteen other Senators are cosponsoring the measure: Republicans Roth (Delaware), Stevens (Alaska), Abraham (Michigan), Cochran (Mississippi), Enzi (Wyoming), Frist (Tennessee), Gorton (Washington), Grams (Minnesota), Inhofe (Oklahoma), and Warner (Virginia) and Democrats Glenn (Ohio), Rockefeller (West Virginia), Robb (Virginia), and Breaux (Louisiana).

The Levin-Thompson bill offers a common-sense approach to cost-benefit analysis and risk assessment of major federal rules; the review of existing rules; and oversight of the rule-making process. It puts new requirements on those rules with the biggest economic impact--those projected to impose costs of more than $100 million on the U.S. economy. The legislation requires agencies to do a cost-benefit analysis to determine whether the benefits of the rule justify its cost, and whether the regulatory option chosen by the agency is more cost-effective or provides greater net benefits than other options considered by the agency.

The bill improves the quality of government decision-making, not its proponents, by instructing agencies to seek out smarter ways to regulate, including flexible approaches such as outcome-oriented performance standards.

Levin-Thompson also requires disclosure of the risk being addressed by health, safety, or environmental regulation; the risks of responses other than adoption of a rule; and new risks created by the rule itself. Independent peer-reviewed science will be required unless an agency certifies that such review has already been accomplished and the Office of Management and Budget (OMB) concurs. The bill also expands public disclosure requirements at several stages of the regulatory rule-making process.



Broad Support for S. 981



S. 981 has earned broad support from academics, think tank experts, state and local government officials, representatives of colleges and universities, and business leaders.

Dr. John Graham, director of the Harvard Center for Risk Analysis, is a passionate supporter. “If agencies implement faithfully the letter and spirit of this legislation,” he writes, “the American people can reasonably expect the government to save more lives and do more environmental protection than we are currently achieving through our fragmentary maze of regulatory options.”

Dr. Milton Russell, senior fellow at the Joint Institute for Energy and the Environment, opposed the last major regulatory reform proposal. But Levin-Thompson, he believes, “casts the correct balance in encouraging appropriate analysis to assure effective and efficient regulation, in avoiding counterproductive, excessive review by the courts, and in ensuring that regulation moves swiftly to implementation to protect the health and safety of the American people and of the environment.”

George Mason University law professor Ernest Gellhorn says S. 981 “reflects the latest and best thinking on how to ensure that necessary regulations are adopted only after full public consideration of priorities, costs and benefits, and less costly or intrusive alternatives.

The bill also enjoys strong support among the nation’s governors. The cochairs of the National Governors Association wrote Senate Majority Leader Trent Lott (R-Mississippi) in February supporting the bill and urging action by the full Senate. S. 981 is supported by the nation’s governors, they wrote, “to ensure that regulatory agencies are as accountable as the Unfunded Mandate Reform Act made Congress. This bill includes effective provisions on cost-benefit analysis, risk assessment, and limited judicial review.”



Tough Sledding Ahead

The bipartisan push for S. 981 faces tough sledding in the Senate, where sponsors for the bill are pressing for a floor vote. Working against the bill is a short legislative calendar created to give lawmakers as much time as possible to campaign for reelection in November. The outlook for action in Congress is further complicated by the uncertainty surrounding the various charges leveled against President Clinton stemming from the investigations being undertaken by Independent Counsel Kenneth Starr.

The bill also faces criticism from professional activist groups, such as the Sierra Club and Public Interest Research Groups. Warning that S. 981 will undermine the ability of the Environmental Protection Agency to protect the environment, they are using direct mail and the usual scare tactics to attack the bill and its Senate cosponsors.

Levin-Thompson needs to be scheduled soon in the Senate if it is to have a good chance of enactment in 1998. Jim Miller, a former close advisor to President Reagan and now a counselor to Citizens for a Sound Economy, recently urged Senate action on S. 981. While noting that a binding across-the-board benefit-cost provision should be the ultimate goal, Miller writes that “S. 981 would have been of very substantial value to the Reagan regulatory reforms in our many battles with Congress in the 1980s.”

Tom Walton, director of economic policy for General Motors, sums up the case for S. 981. “Economic studies and risk assessments are not a panacea. Not eery cost or benefit can be quantified, Much less monetized.

“But requiring economic and scientific analyses satisfies the public’s basic need to know, and ultimately will mean more sensible regulations, extending more lives, and improving environmental outcomes at lower costs.”