Awash in Regulation

Recent issues of CONTRACTOR have seen some important stories on government regulation. The top story on the cover this month is about changes to the Davis-Bacon Act, the legislation that requires employers to pay the “local prevailing wage” for contractors and subs performing public works projects. The regulation is more important than ever now since a raft of federal money is in the in the pipeline for infrastructure projects.

Last month we ran a pg. 3 story on newly proposed energy efficiency standards for water heaters from the Department of Energy. This month we have some reactions from major manufacturers in our Hydronics & Radiant Section that range from “no big deal” to “profoundly wrongheaded.” 

It seems not a month goes by without some new—and usually significant—piece of news coming out of OSHA or the EEOC. Regulatory agencies affect so much of what businesses can and can’t do that some have called them the “Fourth Branch” of government.

While the US has always been a nation of laws, we were not a nation of regulations until 1887 when the Cleveland Administration created the Interstate Commerce Commission to control the rates railroads where charging. Other early champions of regulation were the Roosevelts, with Teddy creating the FDA via the Pure Food and Drugs Act of 1906, and FDR with banking and union regulations in response to the Great Depression.

By 1946, sentiment shifted. It was felt the regulatory agencies were exercising authority that, constitutionally, belonged to Congress. The Administrative Procedure Act of that year required that all regulations be grounded in statutory law and have an administrative record that included public notice and comment.

In the 1970s and ‘80s it was discovered that a lot of price controls that were supposed to be helping consumers were, in fact, benefitting companies. Further investigation found that various regulatory agencies had been, in effect, “captured” by the industries they were supposed to control (FCC by telecom, FAA by aerospace). The result was a wave of deregulation that caused a boom in competition that, in turn, benefited the average consumer.

Successive Executive Orders by the Carter, Regan and Clinton Administrations have since then created a framework for all proposed regulations that involves a cost-benefit analysis before regulations can be adopted OR discarded.

This was one of the barriers encountered by the Trump Administration when it set about a wide-sweeping program of deregulation. Trump famously promised to cut government regulations by 75 percent—but procedures in place made that all but impossible.

This year the Biden Administration instituted reforms to the rulemaking process that would push the Office of Management and Budget and agencies to incorporate technological advances into the rulemaking process, increase engagement with traditionally underrepresented parties, and provide OMB greater discretion over its rulemaking review. All this seems aimed at creating regulations that can better withstand judicial scrutiny.

It seems the pendulum is swinging back towards more regulation—which naturally has some people upset on principle. There is a strong sentiment in this country that, “That government is best that governs least.” Personally, I feel that government regulation has an important role to play in our modern, industrialized, digital economy, and that regulations need to be taken on a case-by-case basis.

The best approach, I think, is to get involved in the rulemaking process through the public comment period, and to organize with others to do so through either your union or your local trade association. In the meantime, those of us in the trade press will try to keep you up to speed on what changes might be in the works, and what those changes might mean for you.