Blog Posts of Jessica Randall

International Regulatory Cooperation: Will Harmonization Protect the Public or Prioritize Corporate Profits?

 

A May 1 Executive Order on international regulatory cooperation has raised questions about how regulatory agencies set their priorities. Regulatory cooperation is neither a particularly new idea, nor an inherently bad one – but if not handled carefully, it could undercut the public protections on which Americans depend.

It shouldn't shock anyone to hear that we are living in an increasingly interdependent world. Consider only the FDA: in 2009, it was responsible for overseeing imports from more than 300,000 drug facilities, totaling $2 trillion worth of products from 150 countries. And, between 2002 and 2010, imports of food, drugs, and medical devices all more than doubled. Because of these changes, the agency says that "FDA’s success in protecting the U.S. public depends increasingly on its ability to reach beyond U.S. borders."

International regulatory cooperation sometimes makes sense: for example, the Department of Labor has recently adopted the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). The GHS was the result of an international negotiation involving governments, industry, and labor unions. OSHA estimates it will save American companies $475 million each year (because they can use the same label in different countries) and keep workers safer (because the warning system will be more consistent).

But too often, international regulatory cooperation becomes a race to the bottom, elevating corporate trade concerns over public protections. On May 1, the Administration announced an Executive Order on "Promoting International Regulatory Cooperation." That afternoon, the Administrative Conference of the United States and the U.S. Chamber of Commerce co-hosted a conference on international regulatory cooperation.

Increased emphasis on international regulatory cooperation could be a good thing – if its priority is to improve and maintain regulatory protections across borders. But, too often international cooperation is an excuse to water down protections to the lowest level – a move that typically hurts American workers, consumers, and environment. Our goal should be to have American safeguards represent the “gold standard” worldwide.

Nor should international regulatory harmonization be used as an excuse to limit public participation in the regulatory process. Unfortunately, treaty negotiations controlled by the U.S. Trade Representative typically exclude most public interest groups and consumer organizations, while ensuring maximum corporate involvement and influence. In a disturbing example, "stakeholder presentations" - the only opportunity for public input - were recently eliminated from the meetings surrounding the negotiation of the Trans-Pacific Partnership (TPP), but corporations and industry representatives are still being invited to participate in the TPP talks. In fact, the U.S. Chamber of Commerce – which vigorously supports legislation to undercut public protections – boasts that its recommendations formed the basis for the U.S. negotiating positions.

Alarmingly, previous trade agreements have been interpreted to undermine a nation's ability to regulate within its own borders. For example, the U.S. had prohibited the sale of clove cigarettes on public health grounds. That regulation was recently struck down on grounds that it violated World Trade Organization agreements. Even more egregiously, the North American Free Trade Agreement allows corporations to challenge foreign regulations – and recently, a Canadian trade association raised a challenge to a rule authorized by the Dodd-Frank financial reform law.

As the American economy globalizes, the American regulatory system will have to as well. International regulatory cooperation can be a force for good, if it means that regulators from different nations are working together to enact common-sense standards that are clearer and more consistent and protect citizens no matter where they live. But if corporate special interests are being prioritized over essential public protections, no one should cooperate with that.

(Jessica Randall 05/03/12; 1 comment)

Maybe It's Time for a Moratorium on Bad Ideas in the House of Representatives

 

Imagine for a moment that you're in the last few weeks of your current job.  Your final goal is to complete an important, long-term project that you've been working on for several years.  Finishing this project will be a major milestone and will benefit people both inside and outside your organization.  Suddenly, your employer makes a new policy: people aren't allowed to complete projects during their last few weeks with the organization.  You'd probably be confused, even furious, and rightfully so, because all of your hard work would have been for nothing.  A policy like that just wouldn't make sense, yet it's similar to what the House wants to do to those who have been working to develop and improve our nation's public protections. 

Yesterday, the House Committee on Oversight and Government Reform approved two bills designed to block new standards and safeguards.  The first, the Midnight Rule Relief Act, would block agencies from publishing new rules between Election Day and Inauguration Day.  This would essentially leave a president powerless to adopt public protections for the last two months of his or her administration.
 
We must remember that regulations don't just appear out of thin air: they are the way that agencies implement the laws Congress has passed to provide clean air, clean water, food safety, worker safety, and a host of other important safeguards.  Agencies have to go through more than 110 procedural and analytical steps to develop a rule, so it typically takes years between the time Congress passes a law and an agency is able to finalize a standard.  Rules that have been in the pipeline for months or years shouldn't be blocked simply because their final publication date happens to fall after an election.
 
The Oversight Committee also approved the so-called Regulatory Freeze for Jobs Act.  This isn't the first time we've seen this bill come up in a House committee, and it hasn't gotten any better since it was approved by the Judiciary Committee last month.  The bill would put a block all new "significant regulatory actions" until the national unemployment level falls below six percent.  This idea makes no sense: it is premised on wrongheaded assumptions – despite all available evidence that shows that, if anything, regulations help create jobs.  Small business owners agree: survey after survey has shown that regulations aren't holding back job growth; the economy is.
 
It's worth remembering how the economy ended up in a bad state: as the Financial Crisis Inquiry Commission wrote, "Widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets."  Given that, it's hard to figure out how anyone could think blocking new financial protections or other safeguards across the economy could fix things.
 
Maybe the best way to understand the intent of these bills is a provision buried deep within each one of them: "significant regulatory actions" are blocked, but deregulatory actions are allowed to proceed. These bills are about rolling back and undercutting the public protections that keep Americans safe at home, work, and play.  Put simply, that's a terrible idea – it's too bad the House can't pass a moratorium on those.
 
(Jessica Randall 04/27/12; 8 comments)

House Marks Up Absurd Public Protections Moratorium Bill

 

Later this morning, the House Judiciary Committee is scheduled to hold a mark-up on the so-called "Regulatory Freeze for Jobs Act of 2012" (H.R. 4078), a farce of a bill that wrongly calls for a moratorium on public protections until the unemployment rate reaches six percent. This is the latest in a series of more than 190 attacks on regulatory safeguards in the House since the beginning of 2011.

Congress should focus its attention on unemployment, but it should be addressing the real causes of the problem and working to encourage job creation in America, not repeating tired, misleading assertions of relationships that don’t exist.

In fact, standards strengthen the economy and public protections make our country stronger and safer. Regulations:

  • Make our food safer
  • Make our air safer to breathe, saving hundreds of thousands of lives annually
  • Make our water safer to drink and lakes and rivers safe for swimming and fishing
  • Protect children’s brain development (by taking lead out of gasoline and paint)
  • Empower disabled Americans by giving them improved access to public facilities and workplace opportunities
  • Save the lives of thousands of drivers and workers every year

The scope of this latest anti-public protections bill would lead to unintended consequences that most Americans find absurd:

  • The start of bird hunting season would be delayed or even blocked, ensnared by the Regulatory Freeze Act, since the U.S. Fish and Wildlife Service determines the appropriate bird hunting season for each state.
  • American soldiers who have given years of their lives in extended tours of duty in Iraq and Afghanistan would discover their stop-loss pay significantly delayed by the Regulatory Freeze Act.
  • The Regulatory Freeze Act would block new rules from the Department of Labor that would ensure our servicemen and women are treated fairly under the Family and Medical Leave Act.
  • New Medicare payment schedules for doctors, hospitals, and home health workers would be killed off if no rules were allowed to be developed.

Beyond the actual harm this bill would cause, the Regulatory Freeze Act sends a larger message that underscores its absurdity. Simply put, the House bill tells agencies, “Don’t enforce the laws that we pass.” If the House passes this moratorium bill, it essentially sabotages legislation that has already been passed by forbidding executive branch agencies from making the rules that implement that legislation. It’s a “through the looking glass” moment that would be laughable if it didn't put the lives, health, and financial security of millions of Americans at risk.

UPDATE: The House Judiciary Committee approved the bill in a 15-13 vote. The legislation could move to the House floor in just a few weeks.

(Jessica Randall 03/20/12; 4 comments)

UPDATED: Rushing To a Full Stop: Obama Gets It Right When He Talks About the Keystone Pipeline

 
UPDATE (2/27/2012): TransCanada announced today that it will move forward with the Keystone XL pipeline. The company now plans to apply for two separate permits: one for the construction between the U.S.-Canadian border and Steele City, Neb. (the "Keystone XL Project") and the second for the construction between Cushing, Okla., and Port Arthur, Tex. (the "Gulf Coast Project").
 
In a statement, White House press secretary Jay Carney said that the administration "look[s] forward to working with TransCanada to ensure that [the Gulf Coast Project] is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary Federal permits."
 
Carney's statement also said that "House Republicans forced a rejection of the company’s earlier application in January, by not allowing sufficient time for important review or even the identification of a complete pipeline route. But as we made clear, the President’s decision in January in no way prejudged future applications. We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review."
 
ORIGINAL POST (1/18/2012): Rejecting the Keystone XL pipeline this afternoon, President Obama blamed a short-circuited process that didn't allow the State Department to gather all the information it would have needed to consider before approving the permit.
 
In a statement, Obama said that "the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment."  Last November, he explained it this way:
 
"Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.  The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people."
 
Obama is exactly right on those points.  At their core, agencies basically have one mission: to protect the well-being of the public.  The regulatory process is supposed to be about collecting and evaluating public input and the best available evidence, then making the decisions which best achieve that core goal.
 
As we wrote on Jan. 10, congressional Republicans made this virtually impossible by slipping a provision into the payroll tax bill that demanded a final ruling on the pipeline permit within 60 days.  This kind of obstructionism is just one in a string of examples of how political meddling in the regulatory process makes it harder for agencies to protect the American public.   
(Jessica Randall 01/18/12; 4 comments)

Grade Inflation Really Matters If It Means You Catch Listeria

 

Today, government officials, academics, and the cantaloupe industry are meeting at the University of California, Davis, to try to determine how the 2011 Listeria outbreak could have begun at a facility that had just received a "superior" rating from a third-party food safety auditor.   A report issued earlier this week places the blame squarely on the third-party audit system, which allows private companies hired by food producers themselves to perform food safety inspections.  

Jensen Farms hired its auditor, which in turn hired a subcontractor, off a list provided by one of its large buyers. According to the report, that subcontractor visited Jensen Farms on July 25, 2011, and found three "major deficiencies," three "minor deficiencies," and five "additional instances of non-compliance." Even so, Jensen Farms was given a grade of 96%, which is considered a "superior" rating. 
 
The front page of the audit report said, "This is a packing facility for cantaloupes which are washed by a spraybar roller system, graded, sorted by size, packed into cartons and stored in dry coolers. No anti-microbial solution is injected into the water of the wash station." The problem with this is that FDA guidance says that melon producers need to use an anti-microbial solution in their washing water – and its absence from Jensen Farms' facility is one of the conditions FDA says led to the listeriosis outbreak.
 
This report shouldn't come as a surprise to anyone: third-party audits often fail to catch food safety problems. As Democrats on the House Energy and Commerce Committee pointed out in a letter to Food and Drug Administration (FDA) Commissioner Margaret Hamburg: 
  • In 2009, a third-party auditor gave a peanut butter company a "superior" rating only six months before Salmonella in its products killed nine people and made 691 others sick.
  • In 2010, a third-party auditor gave an egg company not only a "superior" rating, but also a "recognition of achievement" two months before a Salmonella outbreak sickened more than 1,600 people and led to the largest egg recall in American history.
"Like it or not, our food safety system relies heavily on third-party auditors," that letter continued. While federal inspections of food producers are becoming more frequent because of the Food Safety Modernization Act (FSMA), FDA still doesn't have the resources to send inspectors out to producers like Jensen Farms more often than every three to five years. In the meantime, major food retailers often require producers to hire third-party auditors, which are private companies not subject to any FDA regulations.  FSMA requires FDA to develop an accreditation system and model audit guidelines – but only for third-party audits of imported foods, though industry officials say the new standards are likely to "influence" domestic audits, as well.
 
Right now, it's not hard to pass a third-party audit: in fact, the company Jensen Farms hired gave out passing grades 98.7% of the time in 2010. With results like we've seen over the past few years, it's hard to figure out why Congress hasn't given FDA the resources to send federal inspectors to food production facilities more often – or at least to more closely oversee the third-party auditors who are supposed to be filling in the gaps.
(Jessica Randall 01/11/12; 3 comments)

Congressional Budget Office Says Deregulation Will Not Create Jobs

 

On Tuesday, the Congressional Budget Office (CBO) released a report that concludes that deregulation will not create jobs. The report is the latest piece of evidence that the ongoing congressional attacks on public protections are misguided, at best.

Since the 112th Congress began its work in January, representatives and senators have offered up a slew of bills that would gut crucial safeguards. Some of these attacks, like the TRAIN Act and the Coal Residuals Reuse and Management Act have specifically targeted standards that would protect millions of Americans from dangerous air pollution and toxic waste. Others, like the REINS Act and the Regulatory Accountability Act, are broad and would grind the rulemaking process to a halt, endangering Americans' quality of life. Despite their supporters' claims, these bills do not constitute a jobs plan. Indeed, the bills' sponsors seem to be motivated by scoring points for future elections and garnering campaign cash.

The CBO report is just the most recent publication showing that there is no trade off between jobs and a good regulatory system. Studies by the Economic Policy Institute, statistics compiled by the U.S. Department of Labor, and surveys by McClatchy Newspapers, the National Association for Business Economics, and the Small Business Majority strongly reinforce this point. Individual business owners have testified – on camera – that most regulations are reasonable and that killing off regulations will not generate more jobs. You can listen to some of their stories here, here, here, and here.

Let's be clear: the economy crashed in 2008 because key regulations in the financial sector had been removed. These changes allowed banks and other institutions to take massive risks with other people's money as they raked in record profits themselves. Rolling back environmental, health, and safety standards is another version of this phenomenon: deregulation will allow particular companies to rake in higher profits while the risks and dangers to everyday Americans accumulate.

It's time for conservatives to give up their tired, discredited talking points about "job-killing" public protections and stop promoting efforts to kill rules that safeguard the public. Instead of wasting time with unconstructive attacks on our regulatory system, Congress should focus on making crucial investments in our nation's infrastructure and economy that will get Americans back to work.

(Jessica Randall 11/18/11; 12 comments)

OIRA Administrator Sunstein Calls Crain & Crain Report "Deeply Flawed"

 

In his oral testimony in a hearing before the Senate Committee on Homeland Security and Governmental Affairs on June 23, Cass Sunstein called out a "deeply flawed" report that many have been using to criticize the costs of the regulatory system.

The report in question was commissioned by the Small Business Administration's Office of Advocacy from economists Nicole and Mark Crain. It pins the annual cost of regulations at $1.75 trillion, a figure which many on Capitol Hill have repeated as they argue that federal agencies should halt or delay the rules that protect our health, workplaces, and environment.

Unfortunately, that number is simply not accurate. The study has been widely discredited by the Congressional Research Service, the Economic Policy Institute, and the Center for Progressive Reform. Even the Crains themselves have said that the number was "not meant to be a decision-making tool for lawmakers or federal regulatory agencies."

With Sunstein's opening remarks, the Obama administration became the latest voice to join the chorus decrying the report. He said the report is "deeply flawed and should not be relied on" and referred to the $1.75 trillion figure as "an urban legend." In defending the Obama administration's regulatory record, Sunsten noted that the benefits of final rules (including things like lives saved and illnesses prevented) far outweigh the costs of regulation. He pointed out that this has been the case under both Republican and Democratic administrations.

Austan Goolsbee, the Chairman of the Council of Economic Advisers, provided a bit more detail in a post on the White House blog. He wrote:

“Some people are throwing around scary numbers about the costs regulations are imposing on the US economy. One group is even claiming that the regulations currently on the books cost the U.S. economy $1.75 trillion in 2008. The Council of Economic Advisers has looked at those claims and the $1.75 trillion figure is utterly erroneous. In fact, their own data (which come from the World Bank) show that countries with smarter regulations have higher standards of living, and the United States has one of the best regulatory systems in the world. And beyond that, their number completely ignores the benefits of regulation.”

The Chamber of Commerce and their allies in Congress certainly can have their opinions about regulations – but it's high time they stopped trying to make up their own facts.  We can all hope that Sunstein's comments will make a difference in changing the debate.

(Jessica Randall 06/23/11; 9 comments)

No News is Big News at the FEC

 

The news out of yesterday's Federal Election Commission (FEC) meeting is that there is, yet again, no news to report.  The FEC has delayed a final vote on an advisory opinion which was jointly requested by the Democratic Senatorial Campaign Committee, the Democratic Congressional Campaign Committee, the Republican National Committee, the National Republican Senatorial Committee, and the National Republican Congressional Committee. If this stalemate continues, it will be merely the latest in an unprecedented string of partisan deadlocks.

By law, no more than three of the six commissioners may be drawn from the same political party.  Because the FEC can only take action when at least four commissioners agree, its decisions have always been subject to partisan deadlock.  However, as a 2009 Washington Post editorial put it, "[T]hose deadlocks have tended to arise sporadically, and in ideologically or politically charged cases, not in run-of-the-mill enforcement actions."  Until 2008, the FEC was able to reach a decision more than 98 percent of the time.

But two years ago, this trend was reversed.  The agency was stymied by a partisan deadlock 16 percent of the time in 2009 and 11 percent of the time in 2010.  A recent New York Times editorial lays out two of the most recent examples: on March 4, the FEC was unable to approve its professional staff's recommendations for enforcement actions against two state political parties (the Kansas Republican Party and the Georgia Democratic Party) which had clearly violated campaign finance laws. 

Things are only going to get worse next month, because five of the six commissioners' terms will expire by April 30.  Last week, a number of campaign finance reform groups sent a letter to President Obama urging him to move to nominate new commissioners.  Unless that happens, it seems likely that the biggest news out of the FEC will continue to be no news at all.

(Jessica Randall 03/17/11; 2 comments)