A Bill To Take Advantage of Regulatory Reform Momentum...And for Other Purposes

Posted: Jun 01, 2017 12:01 AM
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Steve Bannon has been out of the headlines recently, but his war on the regulatory state continues apace.

Before this year, the Congressional Review Act, which passed in the 1990s and allows Congress to review and reject new regulations in some cases, had been used just once – to end a Clinton-era regulation on ergonomics.

But President Trump already has gotten more than a dozen bills through Congress to overturn regulations under the Congressional Review Act, ranging from coal mining to land use to federal education standards to funding for Planned Parenthood and has taken regulatory aim at the EPA, Department of Justice and elsewhere.

The House has passed the REINS Act – Regulations from the Executive In Need of Scrutiny – which requires that any regulation with $100 million more in economic impact requires an up-or-down vote in Congress.

And last week, a diverse set of congressmen, running the gamut from social conservative Louis Gohmert of Texas to libertarian Raul Labrador of Idaho, supported Rep. Mark Meadows, (R-N.C.), in introducing the Revamping American Infrastructure Act of 2017. This is not the big infrastructure legislation President Trump promised on the campaign trail, but if it passes, the Trump plan likely will work better and cost less.

The legislation, H.R. 2714, would require the Department of Transportation to identify regulations that now are prescriptive in nature and determine if they could be converted to outcome-based rules. Rules such as auto fuel efficiency standards – which allow auto makers to reach the goal any way they want – would be in. Regulations such as the one that requires rear-view mirrors in all American-made cars, even though rear camera technology provides the same view more reliably, would be out.

It then calls for a plan to transform prescriptive rules to outcome-based regulations where possible and to make all future rules with an eye toward achieving outcomes rather than meeting strict formulas. Researchers say prescriptive regulations, which define the narrow means of compliance, often through detailed design or operating standards, “preclude alternative compliance methods, even if those alternatives produce superior outcomes at lower costs.”

Its origin traces to an executive order from the Clinton administration that has been re-affirmed by every administration since.

And although its impact would be felt throughout all the industries regulated by the Department of Transportation, it could provide a significant boost to some, such as railroads.

Last year, as regulators of airports, cars and other transportation sectors were moving toward outcome-based regulation, the Federal Railroad Administration went the other direction and proposed a rule to require two-person crews on freight trains indefinitely.

The same agency had directed railroads to invest heavily in positive train control technologies presumably to move further towards the type of automation being tested in trucking.

Later in the year, in the waning days of the Obama administration, the railroad regulators finally proposed a regulation that would allow passenger rail cars to use crumple technology as car bumpers now do.

European railroads made this transition years ago, but in the United States, trains are still required to adhere to rigid “buff strength” safety principles, which attempt to harden cars to absorb impact. This requires cars to be significantly heavier, which makes it harder for trains carrying those cars to stop and avoid accidents. In other words, this safety regulation actually makes train travel more dangerous.

Then there is the matter of electronically controlled pneumatic brakes – a system that signals every car on the train of the need to stop and thus, in theory, would cause trains to stop more quickly without derailing.

The railroad industry pushed back, saying it had tried the idea on its own and found it ineffective, that braking problems account for fewer than 1 percent of all derailments, and that new technology offers a more effective, less expensive approach. But the Department of Transportation continued to push its proposal.

In its first review of the proposal, the Government Accountability Office essentially ordered the Department of Transportation to take the railroads’ complaints seriously. “GAO recommends that DOT acknowledge uncertainty in its revised economic analysis of ECP brakes, collect data from railroads on their use of ECP brakes, and publish additional information about ECP brake modeling,” stated the GAO report.

This is not about living in a wild and woolly world without regulation. These regulations hit all of us in the pocketbook. Freight railroads, which move just about everything consumed in the U.S. economy, say they spend $1.5 billion per year just to comply with federal paperwork requirements. That doesn’t include paperwork for other agencies, compliance costs beyond paperwork or all the ways regulations distort markets and disrupt incentives.

This is about getting from regulation what Americans want. They want the freight trains that travel through their towns to do so safely. They don’t care, nor do they need their government to prescribe, what kinds of brakes are used to accomplish this.

We’re at a rare moment in American history where the regulatory train can be truly stopped, or at least slowed. The Revamping American Infrastructure Act of 2017 is a key step in this direction. Will Congress take it?