President Obama pulled off a neat trick with his announcement on regulatory streamlining yesterday. Initially, it earned praise from the right (they claimed it was their idea) and enmity on the left, even though it looked to be more of an announcement of general principles rather than any specific prescription. Then, when asked if the streamlining would incorporate the two major legislative goals of the Administration so far, health care and financial reform, both of which have a major regulatory component, they said no, the announcement had nothing to do with that. And that earned the enmity of the right and muted praise from the left. So as a result, nobody’s happy with this clear kabuki announcement.
President Barack Obama’s government-wide review of federal regulations will have little effect on two of the president’s major regulatory victories: an overhaul of Wall Street and the health-care market, according to a White House budget official.
The review focuses on old, outdated regulations so new ones written as part of the health-care and financial overhaul likely won’t be affected, an official at the White House Office of Management and Budget said. Mr. Obama wants agencies to take a fresh look at old regulations to determine whether they are outdated or unnecessary. “New regulations will not be priorities for the lookback,” the official said.
I sense a pattern here. Administration announces policy. One side or the other goes ballistic. Administration backtracks and assures people that policy won’t really change much of anything. People who supported initial policy go ballistic. Rinse. Repeat.
Rather than put out misleading press releases that amount to “we’re going to be efficient,” the Administration might want to take a look at how they’re implementing the new regulatory environment for which they fought for two years. It’s clear that the regulatory agencies don’t have the funds or manpower to implement health care and financial reform right now, and as a result the laws will not even reach the modest goals laid out when passed in Congress. Regulators did manage to get a study done on implementing the Volcker rule yesterday (and at first glance, it actually looks OK), but on many other fronts, financial regulators are missing deadlines left and right.
The Securities and Exchange Commission and Commodity Futures Trading Commission are straining to keep up with the workload of turning the language in last summer’s law into regulations in time to begin enforcing some of the new rules this summer.
SEC officials postponed at least seven of the agency’s self-imposed deadlines related to the law, including revising the definition of an “accredited investor” to whom higher-risk investments can be sold.
The agency has slowed its work on a proposal to ban private share placements by individuals convicted of certain criminal and regulatory offenses, and rules aimed at curbing excessive pay by imposing controls on corporate compensation committees, advisers and consultants also have slipped behind schedule. Two of the Dodd-Frank proceedings delayed by the SEC have since been completed.
“The Commission and its staff are working hard to meet the rule-writing timelines, with an emphasis on getting those rules right,” said John Nester, an SEC spokesman.
The CFTC will miss this month’s deadline under the law to issue a rule aimed at curbing speculative trading of more than two dozen raw materials, including precious metals, crude oil and soybeans. Last month, CFTC Chairman Gary Gensler decided to postpone a vote on the rule amid disagreement among the agency’s commissioners. The CFTC couldn’t be reached Monday for comment on the deadline delays.
This isn’t about regulators having to “work harder,” although Congress did put an enormous burden on them to implement Dodd-Frank and basically write the entire law. The point is that they don’t have the funds to hire adequate staff, and because there was no self-execution of funds inside Dodd-Frank, they’re relying on appropriations from a Republican House to get the funds necessary to implement a law House Republicans oppose. And it’s the same thing with health care.
I’d say that’s a much bigger deal than some business-friendly press release.
UPDATE: Tom Donohue of the Chamber of Commerce wants to “starve to death financially” the Consumer Financial Protection Bureau. The CFPB is one of the few agencies whose money is relatively protected – they get a percentage of the Fed budget – but isn’t this worth a press release, not century-old regulations?