Cutting Agency Budgets

When Congress returns to Washington following the Labor Day holiday, the talk will focus on one thing and one thing only -– the economy. While several things involve discussions of "the economy," such as jobs and taxes, there will also be a discussion on another area that many feel impacts the economy in a major way. This is the discussion about regulations and their impact on jobs.

This session of Congress is somewhat unique in that there are several legislative measures introduced that would provide for "regulatory reform." But let's be realistic: The chances of any of these measures making it through both the House and Senate and signed by the president are nearly zero. However, that doesn't mean we can't discuss the various proposals.

Most of the proposals have been introduced by Senate Republicans. There are several that would provide for small business to challenge proposed regulations before the regulations are enacted, rather than wait until they are finalized. An interesting concept and one that small business would undoubtedly embrace. On the surface, I like this concept. Why shouldn't we allow the entities impacted by a rule or regulation to take a serious look at the regulation before it is enacted? Well, for one thing, can you imagine how long it might take to ever put a regulation in place if a challenge was allowed before it is even enacted? The courts would tie up these regulations for many years. As for the possibility of legislation like this being enacted, there is a chance it could pass the Senate -– if the Republicans can find enough Democrats to go along with the proposal. Don't count on it.

There are also legislative measures introduced that would provide for considerable cost analysis prior to enactment of a regulation. In other words, what will this cost business if this regulation is put in place? This is an excellent idea if they can work out the details of what should and should not be included. Some say it should apply only to those regulations that would have an economic impact of more than $100 million. Others say it should apply to every proposal. There are even some who believe that Congress must approve any major regulation.

This last one is very interesting. The way things are now, Congress can review and override any rule or regulation -– as they did in 2001, when they overrode the Clinton-era ergonomics standard. If the legislation as introduced is enacted, it would mean that Congress would have to approve all rules and regulations prior to an agency putting the reg in place. Never happen! There is no way Congress would have the time or will to review rules and regulations that haven't even been put in place.

The bottom line on these legislative measures is that they face a difficult road if they are to be enacted. But that doesn't mean there won't be considerable discussion about the measures. You can bet that when Congress returns on Sept. 6, there will be a number of oversight hearings in both the House and the Senate that will attempt to blame regulations for all of our economic problems. Some regulations do create economic problems, but to lump all of them together is not the right approach. Don't look for anything even similar to these bills to be enacted in this session of Congress.

'State Plans May Be in for a Rude Awakening'
And while we are discussing Congress and the economy, it will be interesting to see what Congress has in store for the federal FY12 budget that is supposed to become effective on Oct. 1. Not one of the appropriations bills has been enacted, and I don't expect them to be enacted prior to Oct. 1. What I think will happen is that Congress will lump everything into one omnibus bill that will spell out what the federal government can spend in the next fiscal year. Congress may even try to protect themselves by telling federal agencies what they can spend in the next year, but not telling them where this spending should be allocated. That means every agency will be responsible for allocating funds to specific projects.

What will this mean for occupational safety and health? Looking at the OSHA budget, my first thought is that the agency will not take much of an overall hit in funding. Congress will recognize the importance of the agency, and if cuts are made, they will be minimal. The agency will, however, probably have to reallocate its funding. Look for the Republicans to attempt to cut funding for the training grants and cut back on funding for enforcement and standard setting. The Democrats will work to cut some funding in the compliance assistance area. I think VPP will receive funding in FY12. State plans may be in for a rude awakening as OSHA tries to cut back on matching funds.

Over at NIOSH, the future looks even more bleak than it does for OSHA. Not only has the president recommended cutting all funding for the ERCs and the AFF program, but there will undoubtedly be cuts in CDC itself. CDC will then likely re-appropriate some of the NIOSH funds for itself. First of all, I believe the ERC and AFF funding is in real trouble. (Just try to convince federal officials who are trying to protect their own funding to protect the funds for programs such as the ERCs, which are simply pass-through funds.) I don't believe you will see a lot of support for the ERCs and the AFF program. As for the rest of NIOSH, I don't see Congress cutting the Institute directly, but you may see CDC take some of those funds.

Bottom line on federal funding: Look for everyone to take some sort of hit, some more than others. I think OSHA and MSHA will survive with small cuts, NIOSH will take a little bigger cut, and EPA will face huge cuts.

Editor's note: Aaron Trippler is Government Affairs director of the American Industrial Hygiene Association.

Posted by Aaron Trippler on Sep 01, 2011