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With a powerful Republican ally in the White House, Sen. Rand Paul said Congress is moving fast to reduce the burden of government regulations.
On ABC’s This Week on Feb. 19, Paul, R-Ky., held up the deregulatory action taken by Congress as an example of the administration’s earliest weeks not being as chaotic as they may have seemed.
"We repealed regulations for the first time in 20 years using the Congressional Review Act," Paul added. "Three regulations that were going to cost the economy hundreds of millions of dollars and tens of thousands of jobs."
We decided to review Paul’s claim about whether the moves saved money and jobs.
His statement hinges on analyses by the government and industry advocates, but they also occasionally contradict his point.
Under the Congressional Review Act, Congress can disapprove a rule by a simple majority vote, and then the president must sign off.
Trump signed one disapproval on Feb. 14, which rejected a provision of the 2010 Dodd-Frank financial regulation law. The rule required publicly traded mining, oil and gas companies to disclose their payments to governments.
Another, signed Feb. 16, nullified the Stream Protection Rule, a rule created by the Office of Surface Mining Reclamation and Enforcement (within the Department of the Interior) to limit coal mining companies from releasing waste into waterways. Opponents of the rule said that it would reduce jobs in an already-contracting industry. Proponents said it would help keep ecosystems free of the toxic waste.
The third disapproval, which Trump signed on Feb. 28 after Paul’s interview, concerned some provisions of the 2007 National Instant Criminal Background Check System. Intended to stop the mentally ill from obtaining guns, the rule required the Social Security Administration to share information about beneficiaries who do not manage their own benefits to the national background check system.
Expected financial toll
Paul’s claim that these regulations could cost "hundreds of millions of dollars" is reasonable, said Brian Mannix, a research professor at the George Washington University Regulatory Studies Center.
He said many federal rules can cost much more than that, though it is difficult to say without a detailed analysis. We found some reports on the effects of the financial and environmental regulations. We did not, however, find a government report assessing costs or job impact for the rule on guns.
The SEC estimated that 425 companies might be affected by the new financial disclosure regulation, with average total assets of $6.4 billion. The SEC also set compliance costs for the companies at $54.7 million to upwards of $700 million (the variation is due to variations in fixed costs), though they acknowledged "significant limitations" on their analysis that might have made it much lower.
As for the cost of the Stream Protection Rule, the report prepared for the Office of Surface Mining and Enforcement’s estimated total U.S. compliance costs at $81.5 million (or 0.3 percent of estimated total annual revenue for the coal industry). That figure includes $63.6 million for operational costs, which includes commercial transport and reforestation. The government’s potential tax revenue loss to states was $995,000.
Paul’s spokesman Sergio Gor sent us a study by Ranboll Environ that was prepared for the National Mining Association, a private group with public opposition to the rule. The study estimates the potential annual value of coal lost to production restriction is between $14 billion and $29 billion, with between $3.1 billion to $6.4 billion lost in state and federal tax revenue.
The Office of Surface Mining Reclamation and Enforcement declined to comment on the record.
Expected jobs impact
The question of whether these regulations would save "tens of thousands" of jobs is more complex. On the disclosure rule, the SEC report did not comment on potential job increases or losses. And again, there is no estimate for jobs lost as a result of reduced reporting to the National Instant Criminal Background Check System.
As for the Stream Protection Rule, an impact analysis prepared for the Office of Surface Mining in November 2016 said the rule "would reduce employment by 124 jobs on average each year due to decreased coal mining," though the regulation might add 280 jobs in compliance efforts.
The Ramboll Environ report stated that the Stream Protection Rule threatened 113,000 to 280,000 American mining jobs based on what it said was an independent analysis performed at 36 mines across the country.
An expert said the government’s estimates are "much more reasonable" than the one completed for the mining association.
"My take based on the available research is that the impact of the rule would be minimal," said Robert Godby, the director of the University of Wyoming Center for Energy Economics and Public Policy, said about the Stream Protection Rule.
He said he thought that the NMA study conflated the potential effects of the Stream Protection Rule with other regulations enacted in 2009, and that the study didn’t account for other market factors that have caused larger downward trends in coal production.
Paul said that repealing three rules will save "hundreds of millions of dollars" and "tens of thousands of jobs."
Studies of the regulations partially back up Paul’s claim, particularly in terms of financial burden. The evidence is less strong for his point about "tens of thousands" of jobs lost.
The only information we could find for a regulation with a job-killing aspect is the stream protection rule. The government’s estimate said the rule could result in 124 lost mining positions a year (though compliance could result in the creation of more than twice as many). An industry-backed study offered a much more dramatic outlook for lost coal jobs, but one expert questioned its methodology.
We rate this claim Half True.
Correction: The Stream Protection Rule came from the Office of Surface Mining Reclamation and Enforcement, which is a bureau of the U.S. Department of the Interior. An earlier version of this story incorrectly characterized the source of the rule.
Email interview, Luke Popovich, Vice President External Communications National Mining Association, Feb. 22, 2017
Email interview, Robert Godby, Associate Professor, Department of Economics and Finance and Director, UW Center for Energy Economics and Public Policy, Feb. 22, 2017
Email interview, Brian Mannix, research professor, Regulatory Studies Center at George Washington University, Feb. 19, 2017
Phone interview, Chris Holmes, Public Affairs Specialist at the U.S. Department of the Interior, March 1, 2017
Regulatory Studies Center at George Washington University, President Trump Signs First Regulatory Disapproval in 16 Years, Feb. 19, 2017
New York Times, How Republicans Will Try to Roll Back Obama Regulations, Feb. 19, 2017
H.J.Res.40 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Social Security Administration relating to Implementation of the NICS Improvement Amendments Act of 2007, March. 2, 2017
H.J.Res.41 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Securities and Exchange Commission relating to "Disclosure of Payments by Resource Extraction Issuers," March 2, 2017
Securities and Exchange Commission, Disclosure of Payments by Resource Extraction Issuers, March 2, 2017
Social Security Administration, Implementation of the NICS Improvement Amendments Act of 2007, March 2, 2017
Office of Surface Mining Reclamation and Enforcement, Interior, Stream Protection Rule, March 2, 2017
Congressional Research Service, Congressional Review of Agency Rulemaking: An Update and Assessment of The Congressional Review Act after a Decade, Feb. 19, 2017
Congressional Research Service, The Office of Surface Mining’s Stream Protection Rule: An Overview, March 2, 2017
Office of Surface Mining Reclamation and Enforcement, Regulatory Impact Analysis of the Stream Protection Rule (draft), Feb. 22, 2017
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