InsideSources

It seems every day a new bureau or department is being created in Washington to address some obscure issue or problem facing Americans. For bureaucrats, it doesn’t matter if other regulatory bodies were already tasked, with the same oversight because the attitude is “forget the money it costs to start and fund such an agency — let’s expand the bureaucracy every chance we get.”

And, that’s exactly what happened in 2011 when Elizabeth Warren and her like-minded friends created the “independent” Consumer Financial Protection Bureau (CFPB) to “protect” consumers from another financial crisis. Instead of going after the big banks on Wall Street who had created the recession of 2008, the CFPB targeted Main Street, hurting businesses and significantly limiting consumer choice of financial products. With consumer protection far from their priority, the CFPB pursued a partisan agenda from start to finish under former director Richard Cordray.

Between a $43 million contract with a liberal advertising agency, a new luxury headquarters that’s renovation totaled around $216 million ($161 million over the initial budget slated for renovation) and other unnecessary expenses, the CFPB did little to protect consumers. Instead, it pursued a partisan agenda and sent the bill to the American taxpayer, all while enjoying $90,000 bike racks and a two-story waterfall with a sunken garden.

Even worse than the blatant waste of taxpayer funds, the bureau pursued illogical rules that lacked any reasonable accounting of costs and benefits. Case in point: the arbitration rule. Finalized in the summer of 2017, the regulation banned banks and other large financial institutions from making customers sign mandatory arbitration agreements with class-action waivers.

Despite claims that the rule was a necessary safeguard against corporate excess, firms undergoing arbitration typically save 60 percent to 70 percent in legal fees and discovery costs compared to going through (backlogged) state and federal courts. Wronged customers and employees needn’t keep lawyers on retainer in arbitration cases, since disputes are resolved far more quickly. Despite Cordray and Co. not seeing the light, the Trump administration stepped up and killed the rule in November 2017.

In the end, Cordray showed his true colors and left the CFPB to run for governor of Ohio, a pursuit that has left Trump the opportunity to replace CFPB leadership and get the bureau back on track. Acting Director Mick Mulvaney has done an excellent job of cutting spending and stopping the CFPB’s partisan agenda, but now it’s time for a long-term solution.

Kathy Kraninger is the perfect person to lead the agency. Kraninger is a dedicated public servant who knows how to manage a budget and put the taxpayer first. For more than two decades, she has served in important positions in the departments of Transportation and Homeland Security as well as the House and Senate Appropriations Committees.

In her current role at the Office of Management and Budget, Kraninger oversees the budget and policy management of seven Cabinet departments and more than two dozen federal agencies and bureaus — including every federal office that’s responsible for consumer finance. All totaled, she oversees more than $250 billion in federal tax dollars and she knows the importance of spending those dollars responsibly and effectively.

Kraninger is just the leader the CFPB needs to get the agency back on track for good. Kraninger will clean up the mess left behind by her predecessor and get back to the business of protecting consumers while also ensuring that American businesses are protected. The Senate should work to confirm this friend of the American taxpayer as soon as possible.

Emboldened House Republicans moved quickly this week to advance legislation under the Congressional Review Act that would force a repeal of Obama-era education department rules.

There are two sets of regulations in question: one dictates the way states and local school districts are held accountable for school quality and student learning under the Every Student Succeeds Act.

The other monitors teacher preparation systems and was technically issued under the authority of the Higher Education Act—though the regulations also impact K-12 systems.

The Congressional Review Act permits Congress to act within 60 legislative days from when a rule issued by a federal agency takes effect.

As is often the case when power shifts in Washington, the window to review the outgoing administration’s lame duck, or “midnight” rules, has been extended, making the late autumn Obama administration rules fair game for repeal.

The upshot is that the Senate has until early May to send the proposed repeals to Trump’s desk, otherwise the regulations will remain in full effect.

On the House side, Subcommittee Chairman Todd Rokita, R- Ind., introduced the proposal to change the ESSA accountability implementation blueprint, while Subcommittee Chairman Brett Guthrie, R-Ky., introduced the resolution targeting the teacher preparation regulations.

The House adopted the resolutions on two largely party line votes on Tuesday.

“These resolutions will help protect local control and ensure every child has the best chance to receive a high-quality education,” said education committee Chairwoman Virginia Foxx, R-N.C., in a committee release.

The largely partisan nature of the House votes could make quick passage challenging in the more deliberative Senate. Democrats have raised concerns that if the rules were to be repealed under the CRA, the education department would be barred from issuing any “substantially similar” rules in the future.

In other words, depending on how broadly the statute is interpreted, Democrats argue that states could end up with minimal, if any, federal oversight of their accountability and teacher preparation systems.

For Republicans, such an outcome is part of the appeal of rolling back the rules. A big part of ESSA, they argue, was limiting the federal role in education, and they see the Obama era regulations as an attempt to circumvent the spirit of the law.

Republicans also dispute the idea that repeal under the CRA would prevent federal education officials from issuing other, less prescriptive, rules in the future.

Additionally, Democrats have questioned whether it makes sense to change federal expectations of states at the same time that many are entering the final phases of submitting their ESSA plans for DoED review.

Rep. Suzanne Bonamici, D-Ore., the vice-ranking member of the House education committee, said in a statement that Republicans were “creating uncertainty and risking the good work of states around the country to provide locally tailored, equitable education to all their students.”

In an interview with InsideSources, Diane Stark Rentner, the deputy director of the Center on Education Policy, an independent research and education advocacy group, said she believes the repeal efforts, even if they pass the Senate and are approved by President Trump, are unlikely to substantially affect state ESSA proposals.

Many state officials have already spent months on long listening tours to get stakeholder input for their plans—some of those efforts started before the education department regulations were even issued.

“Most states will stick with what they have” said Rentner. Though she also added that if the regulations are successfully repealed and the education department doesn’t jump in with new guidances quickly, state legislatures may move to fill the regulatory vacuum.

From a broader perspective, the partisan skirmishes over the Obama-era regulations reflect an unusually tense atmosphere in education policymaking circles.

The bitterness surrounding the confirmation of Betsy DeVos as education secretary has yet to abate. News broke Friday that protesters attempted to physically block Sec. DeVos from entering a D.C. school she had arranged to visit.

The education department website currently has information posted about both the accountability rules and the teacher preparation regulations that House Republicans have formally objected to.

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Who has final say over New Hampshire’s abundance of regulations put forward by state agencies? That’s the latest battle at the State House, where a legislative committee says it is in charge, not Gov. Chris Sununu, of the process to decide on the need for administrative rules.

The Joint Legislative Committee on Administrative Rules unanimously sent a letter to Sununu on Friday saying the committee and the process that already exists “accomplishes many of the goals of your letter seeking a reduction in governmental rules and regulations.”

During his inaugural address, Sununu called for a 90-day moratorium on new regulations.

“There are a lot of regulations in this state, for such a small state,” he said. “It is unbelievable. Let’s take a pause. Let’s take a step back and figure out what we are doing and why we are doing it.”

The next day, Sununu sent a memo to agency heads and department commissioners asking them to “immediately establish a pause on any proposed adoption, amendment, re-adoption or re-adoption with amendment of administrative rules until March 31, 2017.”

The request did not apply to any proposed rule mandated by law or that was “immediately essential to the public health, safety and welfare.” By March 31, he asked the agency heads to review “each and every regulation under the agency’s jurisdiction that is currently being proposed” or is already in effect.

The bipartisan joint committee includes five state senators and five House members and is authorized, according to state law, to have final say over rules proposed by state agencies, following a detailed approval process.

In their letter to Sununu, the committee members say they’re who oversees the rulemaking process.

“The majority of rulemaking is mandated by statute, and agencies cannot choose not to adopt rules when a statute says that they shall,” the letter states.

Sen. John Reagan, R-Deerfield, who chairs the committee, told WMUR that no rule or regulation can “exceed the authority of the legislation.”

“There seems to be a lack of understanding in the corner office about what the process is to create rules,” he said. “It seems that he was trying to do what everyone promises to do in Washington, stop passing laws that proliferate bureaucratic rules.”

In fact, President Donald Trump’s chief of staff, Reince Priebus, issued a very similar memo to Sununu’s on Friday telling federal agencies to not issue any more regulations.

He told the federal agencies not to send any regulation to the Federal Register until the rule is reviewed and approved by the new head of that respective agency, who is appointed under Trump.

But Reagan said New Hampshire is different than the federal government. Rules in the Granite State expire every 10 years and must be reauthorized. This year alone, 250 rules and 41 interim rules will expire, he told WMUR.

The agencies must hold public hearings on proposed rules, which are then submitted to the committee, and the committee’s attorneys determine if a proposed rule exceeds its legislative authority.

“What we’re saying to the governor in the letter is, let the process go on because we’re already doing what you want done,” Reagan said. “As chairman, I felt it was incumbent on me to state for the sake of the committee’s reputation to say that we already do this. This is what we have been doing for all these years. We’re not challenging anybody. I just had to make a statement for the sake of the committee.”

Emily Corcoran, a law professor at the University of New Hampshire, said the committee is “reasserting their belief that they have jurisdiction [over rulemaking] and then the courts would be the arbitrator” if the moratorium were to be challenged.

“You also see some changes in power here,” she told NH Journal. “It’s the change we have when a new person with a different political view is trying to separate themselves from what their predecessor did. You also have renewed power struggles among the different branches of government vying for power.”

Corcoran also clarified that Sununu announced the moratorium through a memo instead of an executive order. While both methods essentially produce the same result and are legally binding, the memo method could send a non-confrontational message, she said.

“Executive orders are a way to reverse existing policies,” she said. “If you want to reverse a position from a previous administration, you have to do that through an executive order. To put a policy on hold or not do anything right now to reassess, it signals that there is a new sheriff in town who wants to see where things are and where things are going. It doesn’t send the signal that we are ending anything quickly or completely switching gears.”

“He’s exercising his power to give agencies guidance,” she added. “It could be that he wants to appear measured and also signal to people that voted for him that it will be different under his term than [former] Gov. [Maggie] Hassan.”

Sununu has not issued his first executive order yet.

And Sununu is not alone for calling a halt in new regulations. Missouri Republican Gov. Eric Gretiens issued a similar action this month, except through an executive order, to freeze new rules and regulations.

Arizona Republican Gov. Doug Ducey issued a continuing moratorium through an executive order on Monday. Arizona has had a moratorium on new regulations since 2009.

Even Massachusetts Republican Gov. Charlie Baker issued a similar executive order halting new regulations in 2015.

While it seems like Republicans are the only ones who halt new regulations, it’s actually not partisan. Former President Barack Obama issued a moratorium, through a memo when he took office on Jan. 20, 2009, telling federal agencies to refrain from sending any new or proposed rules.

“You do tend to see that happen with new administrations,” Corcoran said. “He [Sununu] made campaign promises and he’s acting out on them.”

Sununu’s office responded to the committee’s letter on Monday, saying, “New Hampshire is an over-regulated state with too many rules stifling opportunities for economic growth.”

“As the state’s chief executive, he is leading a collaborative effort with department heads and commissioners to foster an environment in which businesses can more easily grow jobs,” said David Abrams, Sununu spokesman, in a statement to WMUR. “His carefully thought-out request has been met with enthusiasm and cooperation and we are confident that the information we have gathered will lead to meaningful reform.”

 

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