Stacking the Deck: The Regulatory Accountability Act’s Threat to Civil Rights

(AP Photo/J. Scott Applewhite)

Senate Majority Leader Mitch McConnell, center, with Senators Rob Portman, Roy Blunt, John Barrasso, John Thune, and John Cornyn, in March 2014

The Trump administration has made clear its intention to “deconstruct the regulatory state.” While they have lost no time in beginning to pick off specific regulations, the broader goal is to implement structural changes to bedrock administrative law and policies. What’s Trump’s endgame? Conservatives hope to get, if not a full “deconstruction,” at least a deep re-engineering of regulatory practices to align with corporate interests.

In Congress, the proposed “Regulatory Accountability Act” (RAA) would do exactly that, and it has gathered an alarming level of support. (The House of Representatives passed a version of the bill in January, and a Senate version progressed through the Senate Homeland Security and Governmental Affairs Committee in May, and awaits a vote by the full Senate.) This bill has sparked relatively little public concern because, as Georgetown University Law professor William Buzbee has pointed out, an overhaul of administrative law is very opaque for most ordinary Americans, even though it directly affects countless safety, environmental, nondiscrimination, and other regulations. While consumer and environmental advocates have spoken out against the bill, there has been little discussion about how these changes would reshape areas like civil rights. Yet civil rights advocates and the public should be vigilant.

An RAA overhaul would radically rework the Administrative Procedure Act (APA), the federal “super statute” that sets the across-the-board procedural requirements for executive agencies and establishes the framework for judicial review of agency actions. This fundamental pillar of the New Deal was enacted in 1946 to buttress the expansion of federal social welfare programs and economic controls. It also has been significantly shaped by the courts in the intervening years, balancing public access and accountability with agencies’ subject matter expertise and statutory authority. Though at times an imperfect balance, the APA enabled the creation of our current civil rights regulations, the living tissue of the legislative gains of the civil rights movement.

The Regulatory Accountability Act would gut nondiscrimination law by entangling the regulatory process with burdensome new procedures, such as time-intensive cost-benefit analyses and a complicated and expensive public hearing process for “major” rules that would require agencies to use legal counsel and produce witnesses, giving the advantage to better-resourced advocacy groups backed by corporate interests. The new processes proposed for “major rules” and “major guidance” could easily be politicized, since determining what constitutes a “major” rule that triggers hearings lies with the White House’s Office of Information and Regulatory Affairs (OIRA), which is exempt from judicial review.

These additional hurdles would choke the work of agencies, especially since the process of issuing regulations is already slow. Not only would the proposed RAA changes further decelerate that process, but the agencies’ limited capacity to handle these extra demands would mean that fewer regulations would be issued.

Conservative administrative law scholars have called the bill a “modernization” of the APA and a “bipartisan effort,” noting that it would constrain conservatives as much as progressives in their future efforts to modify or issue regulations. This argument is unconvincing given the constituencies, mainly industry groups and other regulated institutions, that stand to benefit from the RAA’s emphasis on cost assessments.

But the proposed changes also fail to reflect the nature and history of civil rights regulations. Like consumer and environmental protections, these regulations have evolved over time to meet new challenges. After decades of failing to address racial segregation, HUD fair-housing regulations are still evolving in response to civil rights advocacy and litigation. Regulatory flexibility allows agencies to respond to new technologies and new evidence (such as how certain federal program elements like housing-siting incentives may actually reinforce discrimination). New ideas, like those incubated in the “blue laboratories” of progressive localities and states can also produce regulatory modifications. During the Obama administration, HUD modernized its housing discrimination rules to include sexual orientation protections and updated its rule on lead exposure to match the current Centers for Disease Control standard.  

Mainstream progressives bear some of the responsibility for demanding cost-benefit reviews as an analytical tool. Presidents Clinton and Obama both issued executive orders directing agencies to undertake cost-benefit reviews of proposed rules. Obama’s OIRA head and “regulatory czar,” Cass Sunstein, famously brought a behavioral economist’s eye to the office and nudged a cost-cutting agenda. While most would agree that the elimination of unnecessary costs is good governance, steering cost-benefit analyses takes careful stewardship. Place too strong an emphasis on a regulation’s cost, and federal officials can jeopardize environmental justice policies that could rein in industry profits.

Meanwhile, longer-term costs, or costs incurred by marginalized populations, can be harder to tease out than the costs of immediate restraints on corporations or other institutions. Under the current APA, if a regulation advances social interests but cuts into corporate profit margins, conservatives may be motivated to challenge it in the courts, but they are unlikely to succeed on those grounds. Current APA claims are largely limited to situations where an agency has shirked the notice-and-comment process, violated a statutory or constitutional right, or strayed from reasonable action and interpreted a statute in an “arbitrary and capricious” way.

The RAA proposal would upset this landscape, because it would insert laborious new cost analyses into the APA itself. Others have rightly noted that the RAA is full of ambiguous provisions that would re-open areas of administrative law to years of litigation. One place where this is likely to happen is in judicial review of an agency action’s under the APA. If the cost assessments codified by the RAA gain legislative force, it is an open question how they will compete with the interests of substantive statutes such as civil rights laws.

Corporate plaintiffs will argue that the RAA has changed the factors that courts use to consider whether agency decisions are reasonable. By re-opening the APA and adding these extra dimensions to agency rulemaking analysis, Congress would grant institutional litigants new legal arguments to support their own interests in pure cost-saving. In addition, the RAA will have “stacked the deck” in such litigation through its focus on cost assessments and cost comparisons: It doesn’t similarly give weight to benefits, especially qualitative benefits such as nondiscrimination.

Here’s a hypothetical scenario: In five years, Congress will authorize a new program to remediate flood damage on the coasts. A year into the program’s hasty rollout, the agency administering it assesses the data and learns that states and localities have been allocating these resources solely based on property values—leaving minority communities, in particular, unprotected. Using its authority under civil rights law, the agency crafts a regulation to ensure that its resources will be more fairly distributed.

But with the RAA in place, the agency instead becomes mired in red tape around its cost projections, and winds up in court. Meanwhile, the agency, which also administers a new flood shelter program, learns about problems with sexual and racial harassment and access by limited English proficiency populations and minorities at suburban facilities. Despite the benefits of passing protective regulations, agency officials never even draft the new rule; they run out of time to complete all the required calculations on the incremental costs of multiple training and monitoring alternatives—and the agency’s economists are all still busy compiling a litigation record for the remediation program.

The RAA proposal will choke off agencies’ ability to enact civil rights rules. It will also skew internal negotiations and priority-setting. Trying to steer a regulation through an agency like the EPA, particularly if unpopular with business interests or other constituents, takes considerable stamina and diplomacy. Opponents of robust regulations will have a new advantage in these internal jousts over which potential regulations to spend time advancing, and which to discard. Agencies hesitate spending time and political capital on regulations that they fear may be vulnerable to litigation. If enacted, the RAA will do precisely what it is intended to do: impede federal agencies’ power to rein in powerful economic interests and protect Americans’ health, safety, and civil rights.

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