When Bad Things Occur to Good Regulations
The GOP’s effort cancel a pension reg illustrates the evils of the Congressional Review Act.
Of their crusade against “wokeness,” congressional Republicans are taking aim at Labor Department rule about pension plan investments. The rule’s transgression is outwardly that it makes easier for pension plans to think about how climate-related risks might affect an organization’s bottom line. To avoid being woke, the GOP would apparently prefer pension managers to shut their eyes to financial realities, sleepwalking their way through the climate crisis. The true fear, after all, is that more wide-awake investment might disfavor among the GOP’s biggest corporate supporters.
In attempting to quash the brand new regulation, Republicans plan to make the most of the Congressional Review Act or CRA. The CRA fast-tracks efforts to veto specific regulations. It’s a symbolic effort since Biden will certainly veto any such motion. But it surely does provide a splendid illustration of just what’s mistaken with the CRA and why it must be repealed.
To start with, the CRA is a blunt tool. Congress has to either block the whole regulation or none of it, with no opportunity for finetuning. The Labor Department regulation accommodates provisions coping with a wide range of topics, from investment selections by pension funds, to their proxy voting and whether or not they can offer plan options designed to suit the non-financial preferences of participants. The method provides no opportunity for members of Congress to reject a few of these requirements but not others or to change specific language.
On this case, the brand new regulation replaces a Trump regulation attempted to discourage consideration of climate risks and similar issues without actually prohibiting it. Most of the changes made by the brand new regulation are fairly subtle, like referring to “aspects referring to risk and return” somewhat than “pecuniary aspects.” The percentages are low – or be blunt, zero — that many members of Congress are aware of those subtleties.
They’re unlikely to seek out out way more in regards to the issue before voting. Based on past use of the Congressional Review Act, they’ll have little opportunity to learn more, since debate is truncated and hearings aren’t required. In other words, it’s a situation that’s rife for political grandstanding somewhat than serious deliberation.
Furthermore, even in the event that they desired to make an informed decision, the legal consequences of voting to overturn a regulation are very uncertain since the language within the CRA is so vague. The particular regulation becomes void but what in regards to the future? Under the CRA, an agency just like the Labor Department may not reissue the rule in “substantially the identical form” or issue a “recent rule that’s substantially the identical” because the overturned rule. Nobody really knows what this language means. How similar do two things need to be with a purpose to be “substantially the identical”? Greater than just a little similar and lower than completely equivalent, I assume. That leaves a really large gray area.
That signifies that nobody can answer some necessary practical questions. If the present regulation is overturned, what if the agency repeals the Trump rule but doesn’t replace it, or replaces only just a few provisions, or replaces it with something much stronger than the Biden rule? Which if any of those are “substantially the identical” because the Biden rule? Your guess is pretty much as good as mine. The reply appears to be in the attention of the beholder.
The CRA was a foul idea when it was passed, and its actual use has confirmed that it’s little greater than a chance for political posturing and pandering to special interests. The GOP’s current effort to blindfold pension managers is yet one more confirmation of the necessity to repeal that law.
