Sen. Shelby looks to force regulators to consider costs of rules

September 23, 2011

The Hill

Peter Schroeder

Sen. Richard Shelby (R-Ala.) wants to put the brakes on new financial regulations, offering a bill that would halt any new rules if their costs outweigh their benefits.

The ranking member of the Senate Banking Committee said Thursday that businesses were "under siege" from the Dodd-Frank financial reform law, and that steps need to be taken to make regulators think longer and harder about the rules they are writing and how they will function out in the world.

"Regulators are about to subject those who had nothing to do with the financial crisis to hundreds of new rules and regulations without determining whether the benefits exceed the costs," he said in a statement. "More American workers will lose their jobs as Washington bureaucrats implement the Democrats’ vision of a federally supervised economy."

Republicans have long lambasted the regulatory workload stemming from the Obama administration, and have repeatedly called for more analysis to be conducted on the costs any given rule would impose. Now Shelby is seeking to make such analysis mandatory. The legislation is co-sponsored by all of Shelby's Republican colleagues on the Banking Committee.

Sen. Mike Crapo (R-Idaho) said that regulators currently are applying "cursory, boilerplate" analysis to proposed Dodd-Frank rules. 

Under the bill, regulators would have to conduct a rigorous cost-benefit analysis on any regulations it is drafting, and allow the public to view and comment on those findings. Any proposed rule that has costs that outweigh the benefits would be halted. Furthermore, regulators would be required to revisit all rules five years after their creation to see if they has been effective.

It also would create the Chief Economist Council, which would consist of the top economists from all agencies. The notion behind such a council would be to ensure consistency of the analysis conducted by each agency, and would also subject that analysis to congressional oversight, as the council is required to file an annual report to Congress on its work.

The nation's largest business lobby, the U.S. Chamber of Commerce, has already come out in favor of the bill.

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