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Bill Requires CFTC, SEC to Justify Costs, Benefits of Dodd-Frank Regs
A Senate bill offered by Democrat Mark Warner of Virginia and Republicans’ Susan Collins and Rob Portman could undermine the authority of independent agencies, such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), to implement many of the regulations under Title VII of the Dodd-Frank Wall Street Reform Act.
“The independent agencies exercise vast power over major sectors [of] our economy…but they are exempt from common-sense requirements including cost-benefit analysis of major regulations to ensure they do more good than harm,” said Portman, who sits on the committee. This bill (S. 3468) “would close the loophole for independent agencies by authorizing the president to bring them within the same regulatory review framework that applies to other agencies.”
Republican lawmakers, energy industry members and Republican CFTC Commissioner Scott O’Malia have complained about the agency’s failure to conduct comprehensive cost-benefit analyses of its Dodd-Frank regulations.
But CFTC Commissioner Bart Chilton, a Democrat, countered that claims that the agency’s cost-benefit analyses of its Dodd-Frank rules are inadequate are a stalking-horse to thwart the rules (see Daily GPI, Oct. 10, 2011). “We’ve got some…who would like to delay, de-fund, de-fang or just plain demolish Dodd-Frank rules by any means possible, and they’ve hit on this odd little means — cost-benefit analyses — as yet another tactic to achieve those ends.” CFTC Chairman Gary Gensler also has defended the agency’s cost-benefit analyses of its Dodd-Frank regulations.
This is the latest in a string of efforts (primarily by Republicans) to stall implementation of Dodd-Frank, along with the challenges to the rule pending in court (see Daily GPI, June 15; Dec. 6, 2011).
Mark-up of the legislation was to be held before the Senate left to campaign this fall. However, Sen. Joseph Lieberman (I-CT), chairman of the Senate Homeland Security and Governmental Affairs Committee, has tentatively scheduled mark-up for when Senate returns in November after the election, a spokesman for Collins said.
“I have asked employers in my state what it would take to help them add jobs. No matter their business or the size of their workforce, they tell me that Washington must stop imposing crushing new regulations. Right now, independent agencies are not required to examine the costs and benefits of their regulations before they adopt them. This common sense bill would change that,” Collins said.
The triumvirate claimed that requirements to scrutinize the costs and benefits of major new regulations, have always exempted independent agencies, such as the CFTC, SEC, the National Labor Relations Board and the Federal Communications Commission, among others. The three senators said their legislation would bring independent agencies into the same analysis-and-review process that governs other regulators.
But, while they may not perform what the senators describe as “complete” cost benefit analyses, the CFTC does perform cost benefit reviews and the Federal Energy Regulatory Commission, an independent agency that regulates gas and power transmission, currently conducts cost-benefit analyses before issuing major rules.
The senators said government records show that of the 17 major final rules that were issued by independent agencies in 2011, not one was based on a “complete” cost-benefit analysis. They said the same was true in 2010.
Based on data from the Government Accountability Office, it is estimated that nearly 200 major regulations issued by independent agencies between 1996 and 2011 were exempt from the comprehensive cost-benefit framework that applies to other agencies, said the Senate lawmakers.
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