Deep Dive Episode 152 – COVID-19 Regulatory Waivers and Suspensions: What Will the Biden Administration Do?

Following the onset of the COVID-19 pandemic, the Trump administration waived or suspended enforcement of a number of regulations, such as regulations affecting telemedicine. Will the Biden administration continue existing waivers and suspensions as is, or will it take a new tack on regulatory flexibility during the continuing pandemic?

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Transcript

[Music and Narration]

 

Operator:   Welcome to The Regulatory Transparency Project’s Fourth Branch Podcast Series. All expressions of opinion are those of the speaker.

 

Colton Graub:   Good afternoon, and welcome to The Federalist Society’s Fourth Branch Podcast for the Regulatory Transparency Project. My name is Colton Graub. I’m the Deputy Director of RTP. As always, please note that all expressions of opinion are those of the guest speakers on today’s call. 

 

If you’d like to learn more about each of our speakers and their work, you can visit RegProject.org, where we have their full bios. After opening remarks and discussion between our panelists, we will go to audience Q&A. So please be thinking of the questions you’d like to ask our speakers. 

 

This afternoon, we’re pleased to host a conversation exploring whether and how the Biden administration might approach the regulations that were temporarily waived by the Trump administration at the start of the COVID-19 pandemic.

 

Our Moderator for today’s discussion is Daniel Flores, the Chief Counsel for the House of Representative’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law for the Committee on the Judiciary. Daniel, the floor is yours. 

 

Daniel Flores:   Thank you, Colton. As we all know, the COVID-19 pandemic and our responses to it have turned a great many patterns of ordinary life upside-down. Some of those patterns will return to the normal we once new when the pandemic finally subsides, but others may never return. 

 

Most everyone knows the most obvious impacts the pandemic has had on our lives. Many thousands of our loved ones have been lost. Millions upon millions of us have not physically been to work or school since lockdowns began. Countless businesses, especially small businesses, have gone under or have survived so far only because of emergency government aid. 

 

The trajectories of the lives of many of those small business owners and workers has been changed forever. Among the less well-known impacts of the pandemic response has been its impact upon regulation and regulatory enforcement. Especially because of the dire straits in which many small businesses have been caught since lockdowns began, government has recognized a need for a more flexible regulation and regulatory enforcement during the pandemic period. 

 

One NGO has estimated the Trump administration has suspended or waived over 800 regulations since the pandemic began. These regulations have concerned a slew of activities from tele-medicine to production of sanitizer at distilleries to — for seeking approval of new [inaudible 2:47] hours of [inaudible 2:48] for commercial vehicle drivers transporting emergency relief, and the list goes on extensively.

 

With the pandemic expected to continue well into 2021, as we look towards the next presidential term, the question arises what might the Biden administration do regarding regulatory waivers and suspensions? 

 

Here to discuss this important topic today are Karen Harned, Executive Director of the National Federation of Independent Business Small Business Legal Center, and Sally Katzen, Professor of Practice and Distinguished Scholar in Residence at the New York University School of Law, Co-Director of NYU’s Legislative and Regulatory Process Clinic, and Former Administrator of the Office of Information and Regulatory Affairs for President Clinton. 

 

Karen and Sally both have been immersed for decades in the key regulatory policy issues of our time in these and other roles. I’m Daniel Flores, your Moderator today, as Colton mentioned. I actually serve now as Senior Counsel on the Committee on Oversight and Reform with the House of Representatives. Prior to that, I was in the position he mentioned on the House Judiciary Committee and before that, at the EPA, as Officer General Counsel in Department of Justice’s Environment and Natural Resources Division. 

 

Like Karen and Sally, I too have been active in many of the key regulatory policy debates for the past couple of decades. Let me just note, I’m here in my personal capacity, not on behalf of Ranking Member Comer or anybody else associated with the Committee or the House. 

 

With that introduction, let me turn it over to our panelists. Karen, let’s start with you.

 

Karen Harned:   Great. Thanks for having me everyone, and thank you for moderating, Daniel. And it’s always good to be with you, Sally.

 

So the pandemic has really shown, I think, in a bigger picture, the best and maybe in some respects the worst of government. And as we look back on it, one of the things that — and what we’re talking about today is it really did give us in real time information on where regulations are providing speed bumps when the government needs to be nimble to deal with a crisis. 

 

In this instance, of course, it’s a public health emergency dealing with the pandemic. So I would recommend to those that are interested in this both the Americans for Tax Reform and the American Action Forum have tracked these waivers. But there have been, since the beginning of the pandemic, a number of regulatory waivers that were deemed necessary by the administration in order to address the issues that kept presenting.

And as you will see, I’m going to just run through some highlights. According to ATR, there’s 846 waivers. I think that also includes states, but regardless, we’re in the hundreds so we’re definitely not going to be covering all of those today. 

 

But the majority, as you would imagine, are in the health space and primarily with FDA, HHS, and CMS, the Centers for Medical Services, or I think that’s what it’s called, but anyway, the people that do Medicare and all of that is a CMS component of HHS. But FDA moved rather quickly because as we all remember, you couldn’t find a test to save your life when you’re trying to save your life and find out if you have COVID. 

 

And so they removed several restrictions giving states new powers to authorize labs in their states to do these tests, to also distribute the tests. They gave emergency use authorization for devices used in diagnostic testing for COVID. They also did a lot of work on tele-medicine. 

 

And I think as we discuss lessons learned from this moving forward, I would definitely put tele-medicine in the thumbs up category here because there were apparently a lot of things that made that more problematic than maybe it needed to be prior to COVID. Right now, we’re operating under waivers of HIPAA so that your care provider can use Google or others of those type of platforms if they need to see you physically. 

 

There were a lot of restrictions, not just for tele-medicine but also for the practice of medicine. As we remember, New York was such a hotspot at the very beginning of this, that would permit physicians and other healthcare professionals, nurses, to practice out of states. So we have many that traveled to New York, for example, at the early times to treat patients there. But restrictions had to be lifted for that to not be an illegal activity. 

 

Let’s see. There were more services that could be provided under tele-health as a result of restrictions being lifted. We remember — oh, and then there were on the CMS side, so the Center for — that deals with Medicare, allowing for ambulances to transport patients to a wide range of locations when other transportation was not medically appropriate, including physicians’ offices, mental health centers, allowing non-physician practitioners to do more like ordering tests and medicines for patients, eliminated some paperwork so that they were having more time to see patients in their practices.

 

And then you had — again, when we’re dealing with the shortage of supplies, remembering you couldn’t find toilet paper or hand sanitizer to save your life. Well, the Alcohol and Tobacco Tax and Trade Bureau had to lift restrictions to allow distilled spirits producers permission to produce hand sanitizer. DOT waived hours of service requirements for certain truckers to allow for greater flexibility. This was limited to the truckers transporting medical supplies, testing equipment, hand sanitizer, disinfectants, and foods required for emergency restocking.

 

And then EPA and other agencies, I remember, I have a good friend that does OSHA work. They were scheduled for some annual tests that they had to have done by an OSHA inspector, but it was just basically like your — I don’t know if I’d call it a physical, but it was not something that was inherent to a problem that was happening at that plant at that time. And you didn’t have OSHA inspectors that wanted to go in because of COVID concerns that they had. 

 

And I don’t even know of those inspectors and other inspectors honestly were going to facilities in real time at that point. And my point is then you can’t meet that requirement if you don’t have anybody that comes in and does it when you’re relying on a government inspector to do something. So there were certain waivers, I think, of those types of requirements if the business could explain why and not that they were just blowing it off saying we were due for this test, but nobody was available so therefore we didn’t do it or whatever.

 

But all that to say — and then generally, in May, as we were starting to think that we might get to come back to work, which I guess for some it did happen, the President issued an executive order that really was meant to ensure that there was nothing that was in the regulation space that’s inhibiting the economic recovery. 

 

And in particular, as a long-time representative of small businesses, I liked the shoutout to my constituency which was really — if you look at what the executive order said, it was basically putting on paper let’s not do gotcha enforcement here. If you see an issue at a business, then by all means, address it with the business owner but we don’t need to throw the book at them the first time, that they move forward.

 

And then I think with CMS, there was some paperwork requirement restrictions that were waived. I don’t know how much more of that was happening more broadly, but of course, the other thing that this May executive order did was really ask agencies moving forward how they can help lead to the economic recovery and not be a hindrance to it. And for small businesses, paperwork burden has always been the number one regulatory burden they face. And as we are trying to come out of this pandemic, this is something that I think a lot of agencies need to think about.

 

If they still need the information, does the form need to be five pages long, or could it maybe be a check the box, one-page deal? And I think that that directive is still in force, and I’m hopeful that the agencies are going back and looking and seeing do we really need to do this or that or make it this complicated? 

 

This, I think, pandemic’s bottom line, I guess, to summarize my comments is on the good — this really showed a light on regulation and honestly how it can be a hindrance to a nimble government. And I think as we come out of this, we need to come out of it thoughtfully and not just slap back on all the regulatory and paperwork requirements that were there without any thoughts. 

 

Maybe this is a time to go back through, and I know the President’s directed this, and say do all these requirements need to go back in total the way they were? I would suggest probably not. And I know that bureaucrats are busy, but I also think that it is important for us to clean house. 

 

And we’ve had an opportunity where there was dramatic house cleaning and rather than just throw all the dirt back on the floor, maybe we go in and do spot checks and figure out where we need to go in and fix things moving forward by reinstating a regulation but where one doesn’t need to be reinforced or maybe that form could be significantly simplified.

 

And with that, those are my comments. 

 

Sally Katzen:   This is Sally Katzen, and I think I’m next. And I want to start by thanking you for inviting me to join some of my favorite colleagues on this panel. Then I would like disclaimers. I do wear a “D” jersey, and I did some policy work for the Biden campaign. But I am not on the transition, and I threw away my crystal ball in 2016 when Trump beat Clinton.

 

But with those caveats, my best answer to the question in the title for today’s discussion, what might the Biden administration do, my best answer, who knows? Surely, Karen’s thoughts are as sound as [inaudible 14:37]. But with that being said, I have a few random or not so random thoughts that I’ve been encouraged by FedSoc to share with you.

 

First, I believe that the often repeated justification for the Trump administration’s regulatory waivers and suspensions, namely the continued adherence and/or enforcement of those regulations would cut against if not destroy the economy’s ability to recover from this pandemic, is somewhat disingenuous, if not pre-textual, to borrow a phrase from Chief Justice Robert’s opinion in the Census case. 

 

This administration took as its mission the “deconstruction of the administrative state.” And Trump as a candidate vowed to reduce by as much as 75 percent the regulations on the books. His first executive order on the subject called for two-for-one, for every new regulation, the agency had to rescind two existing regulations of comparable costs to the new one. 

 

And I, for one, will not forget his photo-op at a White House briefing featuring his cutting a big broad red tape and telling the number of regulations he had already gotten rid of and proudly promising that this was just the beginning. And this was well before COVID, and its horrible consequences not only on the health of the nation but on its economy.  

 

So the let’s not regulate or let’s not enforce regulations on the books is not new. There’s another recurring theme present in this mix that is also not new and not COVID-related. And that is the focus on costs and burdens of regulations without any mention let alone consideration of benefits. 

 

Again, this emphasis has been present from the beginning of this administration and flows through, I might say infects, every description of the need for and is a justification of waivers and suspensions of regulation. Again, President Trump’s executive order of the two-for-one regime, he mentioned the cost of regulations 17 times. He never said the word benefit. His repeated press statements claiming credit for reducing the regulatory burden always talked in terms of cost, never talked in terms of benefits, let alone forgone benefits from either not enforcing or rescinding or suspending existing regs. 

 

And Karen talked about some of the cost of burdens of regulations. And, again, I didn’t hear anything about foregone benefits. And Daniel is with the House Committee, although he’s here in his personal capacity, they have a bill that would authorize continued wavering suspension of regulations in light of COVID. It also speaks of costs and burdens and doesn’t mention benefits. This is not new. This is not COVID-related. This is simply an extension of a governing philosophy. 

 

So I may be old fashioned, but I was schooled in cost benefit analysis. That was the heart or guts of President Reagan’s executive order and the underpinnings of centralized review by OIRA for every president since, almost 40 years now, both Democrats and Republicans.

 

In fact, the last 15 to 20 years, some even say benefit cost analysis to emphasize [inaudible 19:10] factors in the equation. Do the benefits outweigh or justify the cost? So to strip away any consideration of benefits and to speak only of costs is, I believe, a gross distortion of economic principles as well as common sense.

 

That said, this is not new, and this is not COVID-related. And I think it taints the whole exercise we’re undertaking. One more point on this piece of the discussion. We are told by those who support continuation of regulatory waivers or suspensions that such action is imperative to get the economy up and running again. The premise here is that regulations are a drag on the economy. They are keeping us back and cannot co-exist with a healthy, vibrant, growing economy. I would submit that that is not the case. 

 

The booming economy during the first three years of Trump was the same or less booming than during the last three years of the Obama administration by any number of indices. And I would wager that few would dispute the fact that during those last three years of Obama, we saw a lot of regulations being issued and taking effect. Yet, the economy thrived.

 

So the face in deregulation as contributing to economic growth and that is a means to the end, the deregulation leads to a vibrant and growing economy may be more of a slogan and talking point than a conclusion based on facts. This leads to my next and I think most important point.

 

I believe it’s a fallacy to speak in terms of regulations writ large, as if all regulations are the same, deserving of the same treatment, subject to the same command, continue being waived or suspended or not. I often ask my students whether we should do X or Y. The best answer often is it depends. 

 

So to here, I cannot say that the regs that have been waived or suspended should continue in that status, at least until the pandemic is over and maybe for a period of time thereafter. I cannot say that the regs that have been waived or suspended should spring back in effect on January 20 or shortly thereafter. Not all regulations are alike, and their waiver or suspension or their reimposition and enforcement cannot or at least I think should not be treated the same.

 

One size doesn’t fit all. Not all regs are bad. Not all regs are good. And I think it’s better to treat each on its own merits. So for example, I would fully support continuing the availability to conduct tele-medicine across state lines. But I would emphatically resist the relaxation of the hours of service rule. 

 

The first rule was one of many precautionary rules adopted in another time concerning the practice of medicine. Among others, it was a reflection of deference to state privacy in licensing and terms of practice, something similar to the provisions for the practice of law with which most of you are familiar. Each state has its own standard for licensing and admission to the courts of its jurisdiction, a form of federalism, something Democrats, as well as Republicans, value in our federal society. 

 

Now should it be flexible in times of the pandemic? I’m glad it was, living in the District of Colombia and having doctors in joint states. And what did we learn? The restriction was lifted for COVID and the sky did not fall in. So far as I’m aware, the suspension of that rule and many of the others that Karen has talked about from CMS and FDA did not result in any harm and provides strong benefits, affording competent healthcare without requiring people to leave their homes. 

 

Should the suspension of those throughout the pandemic and more importantly for today’s discussion afterwards or permanently? I’m inclined to say yes. I would join Karen on that. But I would add that that decision should be based on something more than my instincts or preferences, rather on an expedited review of the facts, the actual consequences, both the good and the bad of the results of the suspension. What actually, not theoretically or anecdotally, happened? Then we would have rational decision making without prejudging the outcome. 

 

By contrast to those regs, I view the Department of Transportation’s changed in the hours of service rule very differently. Based on my admittedly limited knowledge, this suspension was not proposed because of COVID and cannot be justified by COVID. It was the product of successful lobbying by trucking companies who simply wanted to have their drivers spend more time behind the wheel. 

 

It was started by an MPR and in August of 2019 before there was any indication of COVID. It was finalized in March of 2020, and COVID became a justification. But it was not limited to truck drivers transporting medical supplies, testing equipment, hand sanitizers, and disinfectants. It was part of general Trump administration deregulatory agenda. It just happened that the final rule emerged at the same time as COVID.

 

As above, I have a preference for how a view that change come out. It’s dangerous, not only for the truck drivers but for all drivers and their passengers on interstate highways on which these trucks travel. But, again, that decision should be based on actual data. Should the data indicate, the Biden administration could revert to the pre-Trump rule regarding hours of service and at the same time, carve out an exception for the delivery of vaccines, if that proves to be appropriate and/or necessary. 

 

Exceptions can be made and possibly should be made, but we should not justify a wholesale revision on grounds that are palpably not accurate. I will not belabor my adverse reaction to the many steps taken by OSHA and EPA. EPA, the agency, so many loved to hate during democratic administrations, suspending requirements for reporting emissions and discharges and easing enforcement for noncompliance with applicable permits, regulations, and statutes. 

 

Many of these measures can be read and are read electronically, no human beings need to participate. Do I expect that approach will continue after the pandemic or even during the remainder of the pandemic? I would think it unlikely, but again, I do not have a working crystal ball. I do want to emphasize what Karen was saying in the do we let these exemptions, suspensions, waivers go through, or do we slap back on our regulations? 

 

She said probably not, but then she said we should do spot checks. That piece, I endorse. That piece, I encourage. Let’s not do one or the other without the necessary analysis of both the costs and the benefits of this real experiment. So let me close here. Perhaps, Karen would like to respond or chime in with some other suggestions or whatever but thank you.

 

Karen Harned:   Yes, thank you, Sally. I really appreciate your perspective, I truly do. And I think one of the things I’d just like to say before we go back to Daniel for questions is where I think my numbers get frustrated when we start talking about the benefits of the regulation is in this day and age, if you look, one of the things that was done in the Trump administration wasn’t just the two-for-one, which I personally support because I feel like it got rid of a lot of regulatory underbrush, if you will. All relations are not the same. Some have been on the books for forever and nobody even knew they existed and probably including some of the people at the agencies charged with enforcing them. 

 

And if they’re not being enforced and haven’t been enforced in decades, then I think the answer is can we get them removed from the books so that we cannot have some errant inspector one day use it against some business owner or regulated entity they don’t particularly like and it looks like a good sword at the time? 

 

I just think that that was a good — overall, we obviously supported that effort. But also, the sky hasn’t fallen since the size of the federal register has fallen. If you look at the federal register in the last four years of the Trump administration, it’s paper thin, and I — refreshingly so, quite frankly, because when it comes to benefits, I feel like we really have reached a point on so many of our issues — and I’m not saying all, new issues present every day, and there is going to be a need for regulatory intervention in order to prohibit bad actors. 

 

But what we find, as Sally mentioned, the EPA is not something that my members are huge fans of as an agency. But the Obama administration with their Clean Air Act rule that they had put forward that really would’ve redesigned the entire energy economy, they used as benefits not just the benefits to America and the United States but the benefits to the world and my goodness, I just — but the costs were just for the U.S. And so we need to do apples to apples comparisons.

 

And I feel like so often now with some of these statutes that have been on the books for forever where new regulatory proposals are coming out, we’re trying to reach some heightened platinum standard of regulation, and that’s when you really do need to weigh it strictly with the costs. I think you should always do a cost-benefit analysis. I don’t mean to say not to do that, but that’s where my — I start thinking what are we trying to do here, like, how much are we really getting out of this? Is the juice worth the squeeze, as a colleague of mine likes to say?

 

And I also would just finally say that in response to Sally’s note that regulations are not necessarily a drag on the economy, honestly, NFIB’s research, National Federation Independent Business, with which I’m affiliated, was pretty consistent and clear that they were. As soon as Obama lost and even before the Tax Cut and Jobs Act was really being seriously considered, you saw small business owners sighing a great sigh a relief and one of their top three issues, regulations, started going down as a top issue.

 

Many of the regulations that, quite frankly, Obama was putting forward were really targeting the big businesses. But because they were coming so fast and furious, my members never knew what was going to hit them next. And as a result, it really did paralyze them. I just saw it firsthand and I also saw it in the data. So I would argue against that. 

 

I think it does have, if nothing else, I saw it impacted the small business owners that I represent and their decisions. And I think it really — when they knew that the day of gotcha regulation was over, at least for a period, it helped them feel more comfortable putting back into the economy the cash that they had been sitting on. 

 

So those would be my reactions.

 

Sally Katzen:   Well, I appreciate that, Karen. And I am not in any way impugning the subjective response of your members to a questionnaire, what’s your greatest concern? What’s your greatest threat? And I know that consistently, small business has said it doesn’t like regulations, and it doesn’t like paperwork. And, actually, I’m far more sympathetic to the latter than to the former.

 

But let me just address a couple of points because you put a lot in there. I’d like to unpack it a little bit. Are you talking about the fact that there might be secret regs and somebody is going to come in there and enforce something that they don’t even know about and the company doesn’t know about and the agency has forgotten it’s on the books? That is gotcha, and that is not a common or even an occurring practice. 

 

Every president for the last 20 years, 30 years has had a policy in place that does a regulatory lookback that says if there’s something there that doesn’t make sense that hasn’t been enforced for years, that hasn’t been useful, hasn’t provided benefits, then tell us about it and we will get rid of it.

 

And the Obama administration claimed billions of dollars in rollbacks, well before Trump. And I have to say even during the Clinton administration, we found lots of things. And the way we found them was by people saying what’s this? Where did it come from? What’s it doing here? And that is a wholly legitimate thing to do, to complain about a specific regulation.

 

But after cleaning the books and recleaning the books and recleaning the books, over the course of Clinton but started with Reagan and George Herbert Walker Bush and Clinton and W. Bush and Obama, the request for the regulated entities to say what bothers you has been in place and those have not been enforced or played gotcha with people. 

 

And this was the crest of Al Gore’s, I know you probably don’t even remember Al Gore, but he had a reinvention program. And that was the major component for any of the agencies that do inspections. Don’t go in there and say uh oh, you don’t have this sign. Hang the sign up yourself. If the guy tears it down, that’s another matter. But don’t fine somebody because they don’t have the requisite sign in place. 

 

And that’s been the policy, and that’s been the practice for the last four years. We can talk about co-benefits and whether — you actually picked on another point whether it’s domestic or worldwide. We could talk about the discount rate. We could talk about co-benefits and direct costs. But let me just end by saying that the one thing you said that concerns me is when you said we don’t need any more regulations. 

 

The federal register is a thin volume of poetry now. It’s just, you can lift it easily whereas before, it used to be a doorstop. You said we don’t need more regulations. Maybe there’s some things out there we should regulate. There are a lot of issues, some of which were manifest during this pandemic. 

 

I would note that the Obama administration had a regulation regarding nursing homes. And it was one of the first the Trump killed. And you know and I know that nursing homes have been the source or the site of a number of the deaths of people because very simple straightforward health-based regulations were eliminated. 

 

That’s what I’m talking about when I’m talking about you’ve got to look at the benefits. That’s past. For the future, we haven’t stopped inventing, we haven’t stopped discovering. Think of drones. Think of V2V cars, for example. Just within transportation, two issues, two huge issues. Drones, do they interfere with low flying airplanes? Do they interfere with helicopter services? Do they invade the privacy of your backyard when they’re coming and dropping their packages? Do they have cameras attached, and what does that mean? 

 

V2V, what are we talking about when we talk about automated cars? Wouldn’t you want some sentient intelligence to think about the rules of the road, pun intended. To figure out how we go forward, what we think about with these new discoveries. I don’t think the time for rest, the time for quiescence on the regulatory front is really here as long as we keep living, discovering, innovating, pushing, and trying to enhance our quality of life. 

 

Daniel Flores:   Thanks, Sally. Let me jump in at this point. We’re at the 40-minute mark. We’ve got 20 minutes reserved at the end for audience questions. I think it’s a good transition point. Obviously, we’ve had a robust and provocative discussion so far. I think it’s been terrific. And let me ask Colton if we have questions in the queue from the audience. If so, I would refer to those. If not, I can jump in with a few questions of my own. 

 

Colton Graub:   We don’t have any questions at the moment. Daniel, you can proceed with your questions.

 

Daniel Flores:   Thanks. I guess one of the questions I have to start with is a question about regulatory uncertainty. And, Karen, I think you got to this issue somewhat in your discussion of what was happening with the economy by the end of the Obama administration and things that happen around transition to the next administration. 

 

Regulatory uncertainty is a key issue and the pandemic environment added a whole new layer of uncertainty to the environment for everyone. And to some extent, I think it’s fair to say that the move to looking at waivers and suspensions of regulations or other enforcement at federal and state level helped to address some of that uncertainty. 

 

Could either one of you offer some more thoughts on that issue? 

 

Karen Harned:   Yeah. I’d just like to say we just — NFIB just released its latest study today showing that one in four businesses are likely to close their doors if the economic conditions remain the way they are for six more months. And we are going to lose millions of businesses as a result of this pandemic. And I guess what I would say is the uncertainty — 

 

Right now, small business owners are just trying to have cash to stay alive. They are really at the basics of what they’re trying to accomplish here. Do I have the cash flow to pay my employees, to pay my rent, to pay for my family to eat? And then when we go beyond that, it’s okay, how do I get my doors open? How do I get the PPE I need? How do I make my place safe so that employees and customers feel comfortable working here? 

 

What they don’t need on top of that is how much longer do I have to wait until some OSHA inspector or whoever comes in here and starts trying to, honestly, play gotcha. If it’s a conversation, that’s one thing. 

 

One of the things I meant to mention in my comments going on is a lot of laws were passed at the beginning of this pandemic, including one that required employers to provide family leave to their employees that had COVD or had people with COVID in it, and then they get a tax credit for doing so. And there were a lot of rules attendant to that, and I, again, in numerous conversations with DOL officials learned they were calling. They were hearing from employees that were not happy with what their employer was doing. They would call the employer, explain things to them. The employer was like oh, I didn’t understand that about the rule. I’ll start doing that now, problem solved. Much more cooperative relationship.

 

I just think as we’re pulling out of this, one of the things that could help with uncertainty is not feeling like it’s going to immediately be a boot on the back of the neck after they get through all of the other things that are much more pressing, again, money and just getting the business operating again, from government officials.

 

If they could have the notion that there’s not going to be a bunch of new, honestly, a bunch of new regs coming down the pipe immediately and also that the enforcement is going to be bad actors need to be punished. And if they’re willfully disregarding regulations that they know about, I have no — I’m not defending those people. I’m defending people that are trying to do the right thing and are just trying to keep their head above water. 

  

Sally Katzen:  Well, I appreciate that, Karen. And I actually agree with you. I think it is extraordinarily troubling that millions of small businesses are closing, that they cannot make ends meet. I think that is horrific. I think some of them survived because of what Congress was able to do earlier in the year. 

 

Somebody should explain why Congress has not been acting in the last several months to ensure that those who should be receiving money are getting it. And I would submit that the reason many of these small businesses are closing is the lack of funds, not some OSHA inspector coming by unannounced and acting like a bull in a china shop. But the need for small businesses to have funds, whether to pay their employees or to protect themselves and enable themselves to keep going is real. 

 

That is the elephant in the room. The regulations are less of a factor than the absence of any money to keep them going. I join you in urging the Congress to do something already instead of playing games up there. But I think to say that it’s the regulations and the behavior of regulators, I think it’s a distraction from the real issue, how do we get meaningful amounts of money into the pockets who should be getting it? 

 

Look at where the first crunch of money went, to big businesses, under the guise of well, we have lots of little shops all over the place. That wasn’t what it was intended to be. That’s the mal administration of the earlier program. And any effort to supervise that, to oversee it, to comment on it was destroyed by the Trump administration. The firing of inspectors general and other kinds of things that were put into the statute to ensure that your members got what they should have gotten. I don’t disagree with you.

 

And on uncertainty, I think uncertainty is critically important, to go back to Daniel’s question. But I think the on again, off again, on again, off again is one of the factors that we’ve lived with for the last decade or two, and I think that’s very troublesome. But I wouldn’t say now’s the time to start worrying about it. 

 

There’s also the uncertainty on the benefits side, of whether people can expect protection, whether people in nursing homes who were told they were going to be protected and then were told no, we’re not. That’s uncertainty too. 

 

Daniel Flores:   Thanks to you both. Let me jump in. We’re coming up close to the ten-minute mark left now, so, Colton, are there anymore audience questions yet? 

 

Colton Graub:   We don’t have any, but I’m going to make an announcement. If you have joined via Zoom, please click the raise your hand button to ask your question. If you joined via phone, please enter star and then nine on your telephone keypad to raise your hand. When we get to your request, you will hear a prompt. Once you hear the prompt, please state your name and affiliation, and then ask a question. We will answer all questions in the order in which they’re received. Daniel, back to you.

 

Daniel Flores:   Thanks. I’ll jump in with a question and to follow up on some of this discussion, but if we get an audience question, by all means, feel free to jump in, Colton. 

 

I’d like to pick up on the thread that we just left. It struck me when, Sally, you were talking about the question of benefits and their consideration early on that one of the issues we’re dealing with in the pandemic period is that the benefit cost analysis, the benefit cost calculations that ran out and produced results, produced conclusions in the pre-pandemic period were in large part have said, in many cases, by the changing circumstances of the realizability of benefits and the actuality of costs in the pandemic period. And I think it’s fair to say that kind of upsetting of pre-pandemic calculations is going to continue as long as the pandemic does.

 

So I want to see if I can get your thoughts quickly, both of you, on whether there’s some consensus that in light of that, we do need to have some attention to flexibility in enforcement of the pre-existing results of those calculations in light of how things might be now. Karen, you want to start with that? Sally, either one of you, jump in. 

 

Karen Harned:   No, that’s fine. Yeah, no, I would agree. I think that back to what I was saying earlier, I think as we go out of this, we really do need to do a hard look. I know Sally mentioned just now about how agencies are each agency does the regulatory lookback. Quite frankly, our experience with that is they haven’t done the kind of rigorous lookback that we think Section 610 of the Reg Reform Act requires. 

 

But now, we do have some regs that we’ve been dealing with, and before they come back on the books, I think they’re just these — let’s at least start with those and do a meaningful review and look at, again, cost and benefits of those and whether any adjustments need to be made. I just, I think that what is — I understand that the people that work at the agencies are hardworking and work hard. I know many people that do work there, and they are not doing the 8-5 deal, I mean 9-5. They are working hard and getting as much out as they can. 

 

But at the same point, before we start adding on new stuff, let’s look at especially the ones we’ve just had immediate experience with and give a meaningful review to and see really what are the benefits of keeping this regulation or reinstating it? I think that analysis, we’re at a perfect time to do it and I just hope the agencies, especially those that have had these waivers, will do that thoughtful review. 

 

Daniel Flores:   Sally? You have some more thoughts on that? 

 

Sally Katzen:   Well, the only — I don’t disagree with Karen about the need to examine what we do before we do it. And I guess the only thing that I would add to that is that the benefit cost analysis has never been precise. This is in response to Daniel’s comment that some things maybe need happened or weren’t realized. 

 

So that, for example, in the hours of service rule, there’s a lot fewer people on the highways, or at least there were in the spring. People didn’t travel, at least in some areas of the country. They stayed home. And so the benefits and the cost were of a different model. 

 

Should information be updated? Absolutely. Should we think that only the benefits have disappeared? In many instances, the cost has been greatly diminished as well. And so the fresh look would be appropriate. And that was what I was calling for in my view about what a Biden administration should do.

 

Daniel Flores:   Thanks. Let me offer another question. It struck me for some time that what has happened during the pandemic period has in some cases accelerated transitions of work and of education, of home life, that were already in place. I’m thinking of things like tele-work, tele-medicine, tele-education. And I’m wondering if either of you have thoughts on how continuances of suspensions and waivers or just otherwise new directions in regulatory policy can help to support the good impulse that this unfortunate pandemic has given us to move froward in the evolution of those practices? 

 

Karen Harned:   Do you mind, Sally, I have one thing in particular I wanted to note on this. 

 

Sally Katzen:   Please. 

 

Karen Harned:   So the tele-work has been interesting, and I really think — and I know Department of Labor has done a little work on this but I think more is needed moving forward. It might be time to relook at some of the reporting, especially for the non-exempt overtime employees and how that is monitored by employers in light of the new tele-work situation.

 

I know for a — and I told the Department, and they did through FAQs, but I feel like we need maybe a more fleshing out of this. I think there needs to be some consideration of what is required of employers to make sure that time’s being properly recorded but that they’re not being overburdened in doing that, quite frankly, because if you’re not in the same physical location, it is just harder to know what you’re — when you’re employees are working, when they are not.

 

I felt that the agency did a nice balance in the FAQs they put out, but that is something where you might want to have a more formal rulemaking process to formalize a lot of that. 

 

Daniel Flores:   Sally? 

 

Sally Katzen:   I think that there’s mixed track record on the tele-working and the tele-education phenomenon. And I think we’ll be studying it for years to come. As a professor, all of my classes were for the end of the spring semester and all fall semester were on Zoom. And it was different. Was it better? In some respects. Was it worse? In some respects. 

 

How does it play out? I think that’s something we really don’t know. And I think that will be the subject of a number of studies, some underwritten by the government, maybe not.

 

Daniel Flores:   Thanks. Colton, any more questions from the audience yet? 

 

Colton Graub:   We don’t have any. Daniel, we should probably proceed to closing remarks. 

 

Daniel Flores:   Sure. Let me ask, then, Karen to Sally, to offer your closing remarks. Why don’t we start with Sally this time? 

 

Sally Katzen:   Well, I think my views were given a fair airing. I hope that some of my thoughts will be taken constructively. And I very much appreciate the opportunity by The Federalist Society to invite and listen to different voices and different views. And as always, I’m just delighted to be with Karen and Daniel, who I have enormous respect even if we differ on some points.  

 

Karen Harned:   Well, the feeling is mutual, Sally and Daniel. I just, I enjoy both of you all. And, Sally, I love — this is one of the things I love about The Federalist Society is I love getting to go back and forth with someone as knowledgeable and honestly, who I’ve just — your career in this area is second to none. And you’ve done a lot to move it forward, honestly, for small businesses and all of us. And I appreciate that.

 

I think, again, I do think that this pandemic has taught us that it doesn’t hurt to go back and look and see what’s on the books and what needs to be fixed and do that more often than trying to create, honestly, new regulations. I really encourage the new administration to use the lessons learned here and see what requirements might be able to be modified or simplified as a result of the experience we’ve had over the last year.

 

And then as Sally indicated, I definitely think when it comes to tele-work and tele-education and all those sorts of things, further study is needed so that we can figure out what’s working and what isn’t because I do think that is the future. The pandemic brought us there a lot quicker than I think a lot of us were ready to experience.

 

But I appreciate the opportunity and thanks, Daniel, so much for moderating us.

 

Daniel Flores:   Oh, you’re welcome. Thanks to you both, and thanks to our audience members for tuning in. I hope it’s been an informative and thought-provoking experience for you, and it will help you in your practice and going forward. Colton?  

 

Colton Graub:   I just want to echo everything that has been said. Thank you, Karen, Sally, and Daniel, for taking the time today and for the insightful discussion. We welcome listener feedback by email at RTP@REGproject.org. If you joined late, this discussion will be posted as a podcast next week. Thank you for joining us. This concludes today’s call. 

 

[Music]

 

Operator:  On behalf of The Federalist Society’s Regulatory Transparency Project, thanks for tuning in to the Fourth Branch Podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcasts, Google Play, and Spreaker. For the latest from RTP, please visit our website at regproject.org. That’s R-E-G-project.org. 

 

This has been a FedSoc audio production.

Karen Harned

Executive Director

National Federation of Independent Business Small Business Legal Center


Sally Katzen

Professor of Practice and Distinguished Scholar in Residence & Co-Director of the Legislative and Regulatory Process Clinic

New York University


Daniel Flores

Senior Counsel, Committee on Oversight and Reform

U.S. House of Representatives


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