PPI to Congress: Scrub the SCRUB Act

House Republicans this week are expected to take up the ponderously titled Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB) of 2015 (H.R. 1155). The Progressive Policy Institute, a strong advocate for regulatory improvement, urges progressives to oppose this highly partisan bill.

Over the last three years, PPI has worked with reform-minded Democrats and Republicans in Congress, as well as Independent Senator Angus King, to develop a more effective way of dealing with the problem of “regulatory accumulation,” the relentless buildup of rules over time. Sadly, House Republicans have chosen to ignore a bipartisan bill—the Regulatory Improvement Act of 2015 (H.R. 1407)—in favor of the SCRUB Act, a conservative favorite that stands little chance of winning Democratic support.

Both bills have in common the creation of an independent commission charged with winnowing outdated, duplicative or overly burdensome federal regulations. There, the similarities mostly end. And while the House’s latest version of the SCRUB Act clearly has been tweaked in response to criticism from regulatory experts, it still fails on three grounds:

First, the bill caters to conservative demands to roll back existing regulations and make it harder to issue new ones. Rather than mandate careful consideration of rules widely thought to be in need of elimination or improvement, it requires the commission to cut regulatory costs by 15 percent—an arbitrary goal with no clear policy rationale. And while SCRUB’s vague, nonbinding language gives priority to examining “older major rules,” it could open the door to fresh assaults on favorite conservative targets: rules implementing Obamacare, the Dodd-Frank financial reforms, and the Environmental Protection Agency’s Clean Power Plan. The Regulatory Improvement Act, on the other hand, explicitly prohibits consideration of rules less than ten years old by its commission.

Second, the SCRUB Act enshrines a foolishly impractical “Regulatory Cut-Go” mandate. Under this procedure, no federal agency could issue a new rule unless it cut old ones that impose equal “costs” on the economy. The idea is to offset the cost of new regulations by killing old ones. This attempt to make regulation a zero-sum game would create pressures to target cost-effective rules for elimination based on highly imprecise estimates of what a new rule might cost—and with no consideration of the many public benefits of regulation.

Third, the SCRUB Act has zero support among House and Senate Democratic leaders or within the Obama administration. As a conservative “message” vehicle, rather than a serious legislative proposal, the bill will likely die in the Senate before it can be vetoed. In contrast, the House version of the Regulatory Improvement Act introduced by Congressmen Patrick Murphy (D-FL) and Mick Mulvaney (R-SC), has an equal number of Democratic and Republican co-sponsors. Defying the logic of polarization, it builds political support for smarter regulation from the center out.

At the core of this legislation is the Regulatory Improvement Commission—an independent, bipartisan commission under Congressional authority ensuring there is no hidden regulatory agenda. Consisting of nine members appointed by the president and Congress, the commission, after a formal regulatory review, would submit a list of regulatory changes to Congress for an up-or-down vote without amendment. This approach would build political trust and lay the groundwork for further rounds of regulatory review and revision.

Most important of all, the Regulatory Improvement Commission would lift the burden of regulation accumulation from the backs of U.S. workers, businesses, and taxpayers. It would reduce compliance costs and—most crucially—the opportunity costs that accrue when entrepreneurs and business managers spend their energies on complying with unnecessary rules rather than creating value.

PPI urges progressives to support a more politically viable mechanism for improving the regulatory environment for economic innovation and growth—the Regulatory Improvement Act.