Among the other goodies in store for America in the lame duck Congress is a bid to gut financial regulatory and other agencies and set up a process to take away their independent control and subsume them under the power of the executive. The Senate Homeland Security and Governmental Affairs Committee, under the direction of outgoing chair Joe Lieberman, plans to pass the Independent Agency Regulatory Analysis Act, S.3468, out of committee and into a fast track process. Mark Warner, Susan Collins and Rob Portman are the drives forces behind it. Americans for Financial Reform and other groups have raised alarms about it.

The bill would, according to AFR, strip away independence from various regulatory agencies, including the Securities and Exchange Commission, Commodity Futures Trading Commission, OSHA, the Nuclear Regulatory Commission, the FCC and the Consumer Financial Protection Bureau. These and more agencies would have to submit additional cost-benefit analyses to the executive branch, as well as submitting their rules and regulations for executive branch review. The immediate effect of this would be to slow implementation of things like Dodd-Frank. Review processes take time, and adding an executive branch layer gives Wall Street and other corporate interests another point of attack against various regulations. Heads of all the major regulatory agencies have already complained in a joint letter that the bill would give the executive branch far too much ability to influence their policy decisions.

Americans for Financial Reform writes:

Existing cost-benefit analysis requirements, and related legal challenges, are already a major source of delay in financial rulemaking. S. 3468 would add at least thirteen new resource-intensive analyses of regulatory costs before a rule can be finalized. In addition, the Office of Information and Regulatory Affairs (OIRA) would get to review any significant new rule, guidance, or policy – a process could add far more time and possibly lead to new rules being abandoned altogether. OIRA has a long standing reputation for blocking environmental and safety regulations, as well as generally being sympathetic to industry arguments that regulation is excessively costly. The big banks could use their influence to turn this tiny office into a bottleneck for all financial regulation. Wall Street lobbyists would have another powerful set of tools to delay and derail the implementation of the safeguards that are needed to protect our banking system and the wider economy.

AFR asks that all members of the Senate Homeland Security Committee get a phone call, to object to this gutting of the regulatory process. It’s bad enough that partisan officials get installed in these agencies, but this would just make the process of influence over the agencies complete.

The bill could get consideration in the committee next week, and a quick move to the Senate floor thereafter.

UPDATE: As Rena Steinzor points out, no less than bill sponsor Susan Collins has been against this kind of oversight review in the past:

But you don’t have to take my word on the need for independent agencies to be independent. On May 12, 2009, at the confirmation hearing for OIRA Administrator Cass Sunstein, Susan Collins herself made an articulate argument against bringing independent agency rulemaking under the White House’s purview. Here’s what the Senator had to say (at 57:53):

“Let me turn to another issue that concerns me. You have recommended that the process of regulatory review that OIRA undertakes should be broadened to include independent agencies, such as the Federal Trade Commission, the Federal Communications Commission, the Consumer Product Safety Commission. That recommendation concerns me greatly, because the whole reason that Congress creates independent regulatory agencies is to insulate them from administration policies, whether it’s a Democratic or Republican administration. Congress has deemed that this particular area needs to be protected from the changing agendas of different administrations. If you bring these independent agencies within the regulatory purview of OIRA, you defeat the whole purpose of having them be independent agencies. You’re treating them as if they’re members of the governor’s cabinet. So, why do you advocate expanding OIRA’s reach to independent agencies?”