Header graphic for print
Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

House Passes “Regulatory Freeze for Jobs Act”; POTUS Senior Advisors Recommend Veto

Posted in Legislation

The House of Representatives today passed H.R. 4078 [engrossed], the Regulatory Freeze for Jobs Act of 2012, a bill to prohibit promulgation of significant regulatory action until the Secretary of Labor reports that the average of monthly unemployment rates for any quarter after enactment is 6% or less.  The President’s senior advisors would recommend a veto of the bill.  This latest skirmish in the regulatory legislation war joins previous House bills on which the Senate will take no action until forced by some larger legislative compromise.

H.R. 4078:  The bill itself (at the time of floor action) begins with a defined “significant regulatory action” in much the same way as Executive Order 12866’s directive for Office of Management and Budget review, but adds more details:  a regulation likely

  1. to have an annual cost to the economy of $100 million or more or to adversely affect the economy, productivity, competition, jobs, the environment, public health or safety, small entities, communities, or state, local, or tribal governments;
  2. to create a serious inconsistency or otherwise interfere with another agency’s action;
  3. to materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
  4. to raise novel legal or policy issues.

A critical floor amendment reduced the application threshold to $50,000,000.  The bill permits the President (POTUS) to exempt a rule from the bar contained in the bill if:

  • necessary to respond to an imminent threat to health or safety or other emergency,
  • necessary for the enforcement of criminal laws,
  • necessary for U.S. national security, or
  • issued to implement an international trade agreement.

If POTUS exempts a rule, the bill would Congressional review.  Moreover, the bill would permit judicial review of whether a regulation violated the Act and any determination by either the President or the Secretary of Labor under this Act.

Accompanying the bill are reports from the Committee on the Judiciary and the Committee on Oversight and Government Reform.

Veto Threat:  The Office of Management and Budget (OMB) issued a Statement of Administration Policy (SAP) in response to the Rules Committee report of the bill to the House.

  • Sidebar:  This is the normal course on behalf of the Executive Office of the President when legislative policy is stated:  OMB does not make the decision – the White House makes the decision.  OMB coordinates views and announces the decision.  Many commenters don’t seem to understand this process.

The SAP stated the second highest level of veto threat:  “If the President were presented with H.R. 4078, his senior advisors would recommend that he veto the bill.”

The SAP argued:

Passage of H.R. 4078 would seriously undermine the existing framework.  H.R. 4078 would also add layers of procedural burdens that would interfere with agency performance of statutory mandates, unnecessarily delay important public health and safety protections, and undermine and potentially delay important environmental reviews.  For example, H.R. 4078 would create excessively complex permitting processes that would hamper economic growth.  It would also spawn excessive regulatory litigation, and introduce redundant processes for litigation settlements.  It also addresses numerous problems that do not exist, such as a moratorium on “midnight” rules.

The analysis addresses more the political import of the bill rather than the bill’s language, because the bill contains a POTUS waiver provision.

Floor Action:  The House considered a number of amendments to the original reported bill under the rule.  The result of each record vote was close to party-line, but by no means a party-line vote.  The enrolled bill will not be available (in light of several amendments adopted) for several days.

House Passage / Senate …:  The Committee of the Whole House adopted five amendments to the bill, reported it to the House, and the House passed the bill by a recorded vote of 245 – 172.  The bill now joins three other major regulatory reform bills discussed previously in the Senate.  No action is expected on any of these measures unless and until a compromise is forced by larger legislative problems that must be solved or even a budget compromise.

Evaluation of the legislation welcome.

Updated:  Includes engrossed bill with amendments.