(Bloomberg News) The U.S. Securities and Exchange Commission and other independent federal regulators should face greater scrutiny before imposing rules on business, opponents of the current regulatory process said today.
They testified in favor of a measure that would require independent federal agencies to do the same cost-benefit analysis of proposed regulations that the White House requires of all other executive government departments.
The issue has taken on greater urgency as the SEC moves to implement rules under the Dodd-Frank financial overhaul that may have a major effect on financial institutions and the economy.
"There is no constraint on what these agencies can do right now," C. Boyden Gray, a former regulatory official under President Ronald Reagan and now a partner at Boyden Gray & Associates in Washington, told the House Judiciary Committee.
"I feel as though this is 1980 all over again, when we had a serious invasion of regulatory overkill," said Gray, who also was White House counsel for President George H.W. Bush.
Representative Lamar Smith, a Texas Republican and the committee's chairman, and other lawmakers said the legislation would curb any potential government overreach on health care, financial services and the environment.
In practices dating back two decades, both Democratic and Republican administrations have required executive departments including Interior and Health and Human Services to submit an analysis of costs and benefits when proposing major new rules.
Agencies Exempt
Independent agencies, where the president lacks the power to remove the chairman or a member such as the SEC, the Nuclear Regulatory Commission and National Labor Relations Board, are exempt from those requirements.
Committee Democrats said today that imposing the standard on the independent agencies would delay new regulations, undercutting protections they said are necessary for health and safety and adding to the unease of business owners.
"The biggest problem we have is that we cannot get to the final rule quick enough," said Representative Melvin Watt, a North Carolina Democrat. "I don't understand how this is going to be consistent with ending uncertainty."