Stealth Deregulation: The Untold Story

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Consider this: it is usually much easier to calculate the costs of regulations than it is to quantify the resulting benefits for society. For example, one can easily find out how many millions it would cost a utility to install a scrubber on a coal burning utility plant; but how much is it worth in dollars to save a life, or to reduce disease, or to have cleaner air? There are no markets for such things, and so they are difficult to “monetize.” This means that many benefits will always seem less important than the costs of the proposed regulations. The Bush administration admitted as much in 2004 when it deleted 55 pages describing benefits of a program to save an endangered species, leaving only the sections describing the costs to industry. An official explained that it was “too difficult to monetize the value of a species" – and the agency then used the amended report to justify cutting back the amount of protected habitat.6

Consider also what happened when the EPA proposed new regulations to limit runoff from construction and development sites, the largest source of pollution in coastal waters and estuaries in the U.S. During construction and development, massive amounts of sediments are carried into our water systems, and these activities also greatly increase storm water runoff that contains pollutants like pesticides, oil, grease, and fertilizers. But officials in the Bush White House gutted the proposal because the EPA was not able to put a dollar figure on the benefits the new regulations would produce for natural ecosystems and human health.7

Stealth Tactics Designed to Undermine Accountability

For conservatives, one of the main advantages of these kinds of deregulation tactics was that they took place deep in the bowels of the federal bureaucracy and so these decisions often flew underneath the public radar. Republicans were well aware that most Americans actually wanted more regulation, not less, in many areas like the environment and health care. For example, 60% want the government to spend more money on environmental protection. And only 7% of Americans want less regulation of pharmaceutical and drug companies, while 57% want more. And when conservatives tried to roll back these kinds of regulations in Congress during the 1990s, the public quickly found out and reacted very negatively. So to avoid this kind of public backlash, conservatives turned to “stealth tactics.” Once they had control of the presidency, they largely abandoned attacking consumer, environmental and workplace regulations in Congress where everyone could see what was going on, and instead turned to undermining these regulations in the dark halls of the federal bureaucracies. The idea seemed to be this: what people don’t know about, they are unlikely to get upset about.

What Can Be Done

While few Americans knew about all of these deregulation efforts, we are all now painfully aware of many of their disastrous consequences. People do tend to notice when tens of millions of gallons of crude oil spread over the Gulf of Mexico, when their food makes them sick, or when their retirement funds are cut in half. Clearly many of us are now outraged by the results of runaway deregulation, but what can we do about it?

First, the public must reject the conservative philosophy that fueled the deregulation fervor in the first place: the belief that the best market is an unregulated one. By now it should be abundantly clear that unregulated markets are prone to any number of problems and that there are legitimate reasons for government to step in to regulate them for the public interest. (For a description of the numerous failures inherent in a free market economy, see the  article “Capitalism Requires Government.”) It should also be evident that we cannot always trust businesses to do the right thing since they have to put corporate profits before the public interest.

Second, we must elect leaders who appreciate the importance of regulation as a way of protecting the public interest. Fortunately, President Obama understands this point and has pledged to use the administrative powers of government to actively protect consumers, workers, and the environment. He has appointed regulators who not only have expertise in the areas of their responsibility, but who also have pledged to vigorously enforce the rules and regulations of their agencies. The President has also promised that science and research will once again play a respected role in the formation of regulatory policies. Reports on his first two years in office found that many agencies have been much more diligent in their enforcement of regulations. For instance, Occupation Safety and Health Administration inspectors increased the number of citations for health and safety violations, and the agency shifted its attention toward high-risk sectors and repeat violators.

We must also insist that Congress step up to bat on these issues – something it has not always done, even when Democrats have been in control. It needs to ensure that agencies have the funds necessary to do their jobs effectively. In 2009, for instance, Congress passed a bill increasing the funding for the Consumer Product and Safety Commission, which should now allow this agency to increase a staff that had been reduced to almost half of what it was in the early 1980s. Increased budgets for other key agencies are also needed. Further, Congress needs to increase its oversight of these agencies and not wait until some disaster has struck before it calls hearings about a malfunctioning agency.

All of this recent activity to begin to revitalize our regulatory system is a good sign. But this should not be taken to mean that conservatives have given up on their efforts to promote deregulation. In 2010, for example, the Republican leadership called for a complete moratorium on new regulations – at a time when polls showed that a majority of Americans wanted increased regulation of the energy industry, health care companies, and the financial industry. Conservatives will try to return to their anti-regulatory agenda whenever they can – especially if the Republicans are able to gain control of the presidency and the administrative branch once again. And they made their intentions clear after taking over the House of Representatives in the 2010 elections. Who did the Republicans name to chair the House committee in charge of regulation of the financial sector? Rep. Ron Paul, who once observed: “I don’t think we need regulators.”

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1. Anne C. Mulkern, “When Advocates Become Regulators,” May 23, 2004, Denver Post.

2. Earthjustice and Public Campaign, “Paybacks: Policies, Patrons, and Personnel,” September 2002.

3. This and many of the other examples in this section come from The Bush Legacy: An Assault on Public Protections, a highly information 2009 report put out by OMB Watch. http://www.ombwatch.org/node/3877

4. Carl Pope, Strategic Ignorance (San Francisco: Sierra Club Books, 2004) p. 52.

5. Michael Grunwald, “Business Lobbyists Ask to Discuss Onerous Rules,” Washington Post, December 4, 2001.

6. Sherry Devlin, “Feds: Benefits of Bull Trout too Hard to Put a Value On,” The Missoulian, April 7, 2004.

7. “Special Interest Takeover: The Bush Administration and the Dismantling of Public Safeguards” (Washington, D.C.: The Citizens for Sensible Safeguards Coalition, 2004), p. 54.

 

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