The major regulatory policy battles of 2011 are following a pattern that's become familiar when each party controls one body in Congress. The House of Representatives has approved bills that would delay or overrule agency regulatory initiatives. In the Senate, leadership has cobbled together blocking minorities of 40 votes to filibuster repeal legislation to death. These deregulatory measures, however, can be revived on multiple occasions as other "must pass" legislation is considered. The Obama Administration may well have to make repeated commitments to cut spending to preserve the impasse in the Senate.
For example, the Durbin Amendment to the financial reform bill requires the Federal Reserve Board to adopt regulations that will limit the interchange fees banks that issue debit cards can charge merchants on a transaction. The proposed implementing rule would reduce these fees by 75 percent, transferring $14 billion per year from banks to merchants. The Federal Reserve was unable to meet the tight statutory deadline for issuing the rule, however, and opponents of the regulation have introduced a bill that would delay its effective date by two years, until after the next election. To date, Senator Durbin has been able to hold together enough votes to block the measure, but the Majority Leader will not schedule the extension bill for a vote until he is certain that the filibuster will succeed. Opponents of the Durbin Amendment would have one remaining option: to try to block the rule under the Congressional Review Act, which requires agencies to submit to Congress for potential disapproval each "major" rule (those with an annual impact of $100 million). Under Senate rules, a motion to disapprove an implementing regulation under this statute (which has been successfully invoked only once) cannot be filibustered.
A more complicated calculus applies in the policy dispute over EPA's authority to limit greenhouse gas emissions. In the skirmishing over the threatened government shutdown, the House easily passed legislation to repeal EPA's regulatory authority. The Senate deadlocked 50-50 on the measure, which proved fatal in the short term to republican efforts to attach the measure to the 2011 budget bill. While the repeal legislation has failed initially, EPA's authority will be in jeopardy until the 2012 elections. "Must pass" spending bills will continue to arise, notably those raising the debt ceiling and adopting the 2012 budget. On each occasion, republicans can reintroduce riders to strip the agency of authority, and the administration will have to renew efforts to preserve its blocking minority.
Repeated votes on repeal legislation could force the administration to accept many more spending cuts to obtain the swing votes necessary to kill the measure. Each time the issue arises, swing Senators will be able to demand additional spending reductions. President Reagan experienced this problem in 1985-86 in his efforts to support the Nicaraguan Contras. House democrats determined that the president was dug in on the matter and would agree to increased spending on democratic priorities to obtain a small level of funding for the Contras. Proposals to zero out Contra funding were introduced whenever adverse article were published about the Contras. Some internal administration estimates were that by structuring votes on a series of defunding provisions, democrats forced the president to accept $100 in spending on their priorities for each $1 approved for Contra funding.
If the swing senators are similarly motivated and equally skilled, the president may have to agree to substantial spending reductions on his policy priorities in order to preserve EPA's regulatory authority.
John F. Cooney is a partner in the Washington, D.C., office of Venable.