19–006 

112TH CONGRESS REPT. 112–461 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2 

REGULATORY FREEZE FOR JOBS ACT OF 2012 

JULY 20, 2012.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. ISSA, from the Committee on Oversight and Government 

Reform, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 4078] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Oversight and Government Reform, to whom 

was referred the bill (H.R. 4078) to provide that no agency may 

take any significant regulatory action until the unemployment rate 

is equal to or less than 6.0 percent, having considered the same, 

report favorably thereon with amendments and recommend that 

the bill as amended do pass. 

CONTENTS 

Page 

Committee Statement and Views ........................................................................... 3 

Section-by-Section .................................................................................................... 6 

Explanation of Amendments ................................................................................... 7 

Committee Consideration ........................................................................................ 8 

Rollcall Votes ............................................................................................................ 8 

Application of Law to the Legislative Branch ....................................................... 8 

Statement of Oversight Findings and Recommendations of the Committee ...... 8 

Statement of General Performance Goals and Objectives .................................... 8 

Federal Advisory Committee Act ............................................................................ 9 

Unfunded Mandate Statement ............................................................................... 9 

Earmark Identification ............................................................................................ 9 

Committee Estimate ................................................................................................ 9 

Budget Authority and Congressional Budget Office Cost Estimate .................... 9 

Minority Views ......................................................................................................... 14 


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The amendments are as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Regulatory Freeze for Jobs Act of 2012’’. 

SEC. 2. MORATORIUM ON FINAL SIGNIFICANT REGULATORY ACTIONS. 

An agency may not take any final significant regulatory action during the period 

beginning on the date of the enactment of this Act and ending on the date that is 

the earlier of— 

(1) two years after such date of enactment; or 

(2) the date on which the national unemployment rate, as published by the 

Bureau of Labor Statistics, is first equal to or less than 6.0 percent. 

SEC. 3. WAIVERS AND EXCEPTIONS. 

(a) IN GENERAL.—Notwithstanding any other provision of this Act, an agency may 

take final significant regulatory action only in accordance with subsection (b), (c), 

(d), or (e) during the period described in section 2. 

(b) PRESIDENTIAL WAIVER.—An agency may take final significant regulatory action if the President determines that the final significant regulatory action is— 

(1) necessary because of an imminent threat to health or safety or other emergency; 

(2) necessary for the enforcement of criminal laws; 

(3) necessary for the national security of the United States; or 

(4) issued pursuant to any statute implementing an international trade agreement. 

(c) DEREGULATORY EXCEPTION.—An agency may take a final significant regulatory 

action if the Administrator of the Office of Information and Regulatory Affairs of 

the Office of Management and Budget certifies in writing that the final significant 

regulatory action is limited to repealing an existing rule. 

(d) EXCEPTION FOR THE DEPARTMENT OF DEFENSE AND THE DEPARTMENT OF VET- ERANS AFFAIRS.—The Department of Defense and the Department of Veterans Affairs may take a final significant regulatory action if such action affects the health 

or safety of members of the Armed Forces or veterans. 

(e) EXCEPTION FOR EQUAL PROTECTION AND CIVIL RIGHTS.—An agency may take 

a final significant regulatory action if such action is to establish or enforce any statutory rights against discrimination on the basis of age, race, religion, gender, national origin, or handicapped or disability status except such final significant regulatory actions that establish, lead to, or otherwise rely on the use of a quota or preference based on age, race, religion, gender, national origin, or handicapped or disability status. 

SEC. 4. DETERMINATION OF MAJOR GUIDANCE. 

Before the issuance of any guidance, the head of an agency shall transmit any 

proposed guidance to the Administrator of the Office of Information and Regulatory 

Affairs of the Office of Management and Budget, who shall make a finding as to 

whether such proposed guidance is a major guidance. 

SEC. 5. JUDICIAL REVIEW. 

(a) REVIEW.—Any party adversely affected or aggrieved by any rule or guidance 

resulting from a final significant regulatory action taken in violation of this Act is 

entitled to judicial review in accordance with chapter 7 of title 5, United States 

Code. Any determination by either the President or the Secretary of Labor under 

this Act shall be subject to judicial review under such chapter. 

(b) JURISDICTION.—Each court having jurisdiction to review any rule or guidance 

resulting from a final significant regulatory action for compliance with any other 

provision of law shall have jurisdiction to review all claims under this Act. 

(c) RELIEF.—In granting any relief in any civil action under this section, the court 

shall order the agency to take corrective action consistent with this Act and chapter 

7 of title 5, United States Code, including remanding the rule or guidance resulting 

from the final significant regulatory action to the agency and enjoining the application or enforcement of that rule or guidance, unless the court finds by a preponderance of the evidence that application or enforcement is required to protect against 

an imminent and serious threat to the national security of the United States. 

(d) REASONABLE ATTORNEY’S FEES FOR SMALL BUSINESSES.—The court shall 

award reasonable attorney’s fees and costs to a substantially prevailing small business in any civil action arising under this Act. A small business may qualify as substantially prevailing even without obtaining a final judgment in its favor if the 

agency that took the final significant regulatory action changes its position after the 

civil action is filed. 


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(e) LIMITATION ON COMMENCING CIVIL ACTION.—A party may seek and obtain judicial review during the 1-year period beginning on the date of the challenged agency action or within 90 days after an enforcement action or notice thereof, except that 

where another provision of law requires that a civil action be commenced before the 

expiration of that 1-year period, such lesser period shall apply. 

(f) SMALL BUSINESS DEFINED.—In this section, the term ‘‘small business’’ means 

any business, including an unincorporated business or a sole proprietorship, that 

employs not more than 500 employees or that has a net worth of less than 

$7,000,000 on the date a civil action arising under this Act is filed. 

SEC. 6. DEFINITIONS. 

In this Act: 

(1) AGENCY.—The term ‘‘agency’’ has the meaning given that term under section 551 of title 5, United States Code, except that such term does not include— 

(A) the Federal Election Commission; 

(B) the Board of Governors of the Federal Reserve System; 

(C) the Federal Deposit Insurance Corporation; or 

(D) the United States Postal Service. 

(2) FINAL SIGNIFICANT REGULATORY ACTION.—The term ‘‘final significant regulatory action’’ means the promulgation of any major rule or the issuance of any 

major guidance. 

(3) MAJOR GUIDANCE.—The term ‘‘major guidance’’ means any guidance that 

the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds is likely to result in— 

(A) an annual effect on the economy of $100,000,000 or more; 

(B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; 

or 

(C) significant adverse effects on competition, employment, investment, 

productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets. 

(4) MAJOR RULE.—The term ‘‘major rule’’ means any rule that the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds is likely to result in— 

(A) an annual effect on the economy of $100,000,000 or more; 

(B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; 

or 

(C) significant adverse effects on competition, employment, investment, 

productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets. 

(5) RULE.—The term ‘‘rule’’ has the meaning given that term under section 

551 of title 5, United States Code. 

Amend the title so as to read: 

A bill to provide that no agency may take any final significant regulatory action 

for two years or until the unemployment rate is equal to or less than 6.0 percent, 

whichever occurs earlier, and for other purposes. 

COMMITTEE STATEMENT AND VIEWS

PURPOSE AND SUMMARY

H.R. 4078, the Regulatory Freeze for Jobs Act, aims to stabilize 

the economy by establishing a moratorium on the finalizing of significant regulatory actions (i.e., regulations and guidance) for a period of two years. The moratorium would terminate sooner, however, if the unemployment rate were to fall to 6.0 percent or less 

before the two years have passed. The President may waive the 

moratorium for purposes of an imminent threat to health or safety, 

the enforcement of criminal laws, national security, or pursuant to 

an international trade agreement. A significant regulatory action 

finalized during the moratorium period is subject to judicial review, 

and a small business may recover attorney’s fees if successful. 


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1 H. Comm. on Oversight & Gov’t Reform Preliminary Staff Report, Assessing Regulatory Impediments to Job Creation, 112th Cong. (2011) available at http://oversight.house.gov/wp-content/ 

uploads/2012/02/Preliminary_Staff_Report_Regulatory_Impediments_to_Job_Creation.pdf.; H. 

Comm. on Oversight & Gov’t Reform Staff Report, Broken Government: How the Administrative 

State has Broken President Obama’s Promise of Regulatory Reform, 112th Cong. (2011) available 

at http://oversight.house.gov/wp-content/uploads/2012/01/ 

9.13.11_Broken_Government_Report1.pdf. 2 ‘‘How a Broken Process Leads to Flawed Regulations’’: Hearing Before the H. Comm. on Oversight & Gov’t Reform, 112th Cong. (2011) (testimony of Cass Sunstein, Administrator, Office of 

Information and Regulatory Affairs). 3 Business Roundtable and Chamber of Commerce of the United States v. SEC, No. 10–1305 

(D.C. Cir. July 22, 2011). 4 Alan Kovski, Federal Court Strikes Down EPA Decision To Retroactively Veto Dredge-andFill Permit, BNA (Mar. 26, 2012) available at http://www.bna.com/federal-court-strikesn12884908597/. 5 Chamber of Commerce of the United States and South Carolina Chamber of Commerce v. National Labor Relations Board, Order, No. 2: 11–cv–02516–DCN (SC Dist. Ct. Apr. 13, 2012). 6 News Release, U.S. Department of Transportation Takes Action to Ensure Truck Driver Rest 

Time and Improve Safety Behind the Wheel, Dec. 22, 2011. 7 Capital Update, New GIPSA Rule Issued, National Pork Producers Council, Dec. 9, 2011. 8 News Release, Salazar Announces Ban on Importation and Interstate Transportation of Four 

Giant Snakes that Threaten Everglades, Jan. 17, 2012. 9Dennis Jacobe, Health Costs, Gov’t Regulations Curb Small Business Hiring, Gallup, Feb. 

15, 2012 available at http://www.gallup.com/poll/152654/health-costs-gov-regulations-curb-smallbusiness-hiring.aspx. 

BACKGROUND AND NEED FOR LEGISLATION

Since the beginning of the 112th Congress, the Oversight and 

Government Reform Committee has shone a spotlight on the manner in which regulations impact the economy and job creation. On 

this topic, the Committee has held seven full committee hearings 

and nearly 20 subcommittee hearings, issued two staff reports,1

and sent numerous letters to agencies. The Administrator of the 

Office of Management and Budget Office of Information and Regulatory Affairs (OIRA), Cass Sunstein, has called the Committee’s 

work on this subject ‘‘constructive’’ and ‘‘important.’’ 2

Several regulations that regulated entities brought to the Committee’s attention were subsequently struck down by the courts or 

significantly scaled back by federal agencies. For example, federal 

courts vacated a Securities and Exchange Commission (SEC) 

‘‘proxy access rule’’ because the court found the SEC acted ‘‘arbitrarily’’ in its analysis of costs and benefits,3 overturned the Environmental Protection Agency’s (EPA) decision to revoke a mining 

permit in West Virginia because the court found the EPA’s action 

was ‘‘contrary to the language, structure, and legislative history of 

section 404 [of the Clean Water Act],’’ 4 and delayed implementation of a notice posting rule because it was found the National 

Labor Relations Board (NLRB) ‘‘lack[ed] authority . . . to promulgate the rule.’’ 5 Moreover, the Department of Transportation altered its hours of service rule to cut the costs nearly in half,6 the 

Department of Agriculture scrapped the most controversial parts of 

its ‘‘GIPSA rule,’’ 7 and the Department of Interior reduced the 

number of species proposed to be covered by the Lacey Act, which 

will help limit the impact on small businesses specializing in the 

reptile industry.8 It is unfortunate that litigation and congressional 

oversight were needed to put a halt to these excessive regulations. 

Disturbingly, burdensome regulations continue to plague the 

economy. A recent Gallup poll found that nearly half of small businesses are not hiring because they are ‘‘worried about new government regulations,’’ 9 and 44 percent of likely voters believe EPA 


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10 44% Think EPA Actions Hurt The Economy, Rasmussen Reports, Apr. 10, 1012 available 

at http://www.rasmussenreports.com/public_content/politics/current_events/environment_energy/ 

44_think_epa_actions_hurt_the_economy. 11William C. Dunkelberg and Holly Wade, NFIB Small Business Economic Trends, NFIB Research Foundation (May 2012). 12Wayne Crews, Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, Competitive Enterprise Institute (2012). 13 James Gattuso and Diane Katz, Red Tap Rising: Obama-Era Regulation at the Three-Year 

Mark, The Heritage Foundation (Mar. 13, 2012). 14 Id. 15 Id. 16See Josh Hicks, Who has the better regulatory record—Obama or Bush?, The Washington 

Post, Mar. 27, 2012. 17 Robert W. Hahn & Cass R. Sunstein, A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis, 150 U. Pa. L. Rev. 1489 (2002). 18 U.S. Office of Mgmt. & Budget, Office of Information and Regulatory Affairs, Draft 2012 

Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates 

on State, Local, and Tribal Entities (March 2012). 19 Id. 20 Id. 21 Id. 

regulations and actions hurt the economy.10 According to the National Federation of Independent Business, ‘‘regulations and red 

tape’’ is the ‘‘single most important problem’’ for small business.11

Meanwhile, the federal regulatory state under the Obama Administration continues to grow. From 2010 to 2011, the number of final 

rules issued by federal agencies rose from 3,807 to 3,573—a 6.5 

percent increase. During the same time frame, the number of proposed rules increased 18.8 percent.12 Moreover, according to the 

Heritage Foundation, the Obama Administration issued 106 new 

major rules in its first three years that collectively cost taxpayers 

more than $46 billion annually.13 To compare, this is nearly four 

times the number and higher than five times the cost of major 

rules issued by the George W. Bush Administration during its first 

three years.14 Further, in the past decade, the number of economi- cally significant rules—those that could cost $100 million or more 

annually—published in the Unified Agenda of Regulatory and Deregulatory Activity has increased by more than 137 percent, rising 

from 56 in the spring of 2001 to 133 in the fall of 2011.15 These 

numbers make claims by the Obama Administration that it is 

issuing fewer regulations than did the George W. Bush Administration misleading.16

OIRA Administrator Sunstein has said that expensive regulations can ‘‘increase prices, reduce wages, and increase unemployment (and hence poverty).’’ 17 Indeed, OIRA’s 2012 Draft Report to 

Congress on Federal Regulations reports that ‘‘regulations . . . can 

place undue burdens on companies, consumers, and workers, and 

may cause growth and overall productivity to slow.’’ 18 In the draft 

report, OIRA admits that ‘‘evidence suggests that domestic environmental regulation has led some U.S. based multinationals to invest 

in other nations, and in that sense such regulation may have an 

adverse effect on domestic growth.’’ 19 OIRA also admits that ‘‘regulations can also impose significant costs on businesses, potentially 

damaging economic competition and capital investment,’’ if not 

carefully designed.20

Placing a temporary moratorium on finalizing the most expensive 

rules injects ‘‘predictability’’ and ‘‘certainty’’ into the regulatory system—features that even the Obama Administration admits are 

‘‘highly desirable.’’ 21 The moratorium in this legislation achieves 

predictability and certainty by ensuring regulated entities get a reVerDate Mar 15 2010 05:01 Jul 21, 2012 Jkt 019006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR461P2.XXX HR461P2

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22 Alisa Roth, What’s a realistic ‘normal’ unemployment rate?, Marketplace, Nov. 24, 2010. 23 Economic News Release, The Employment Situation—April 2012, Bureau of Labor Statistics, May 4, 2012. 24Mark Memmott, Just 120,000 Jobs Added, But Jobless Rate Dips to 8.2 Percent, NPR, Apr. 

6, 2012. 

prieve from the most costly rules until the economy improves. According to economists, a healthy U.S. economy would feature a 5.0 

percent to 6.0 percent unemployment rate.22 The unemployment 

rate today stands at 8.1 percent.23 In March 2012, analysts expected that employers would add over 200,000 jobs; yet, only 

120,000 were added.24 This particular moratorium on rules is a 

balanced approach because it will allow federal agencies to proceed 

with the rulemaking process. Agencies will be permitted to engage 

in a meaningful and thorough dialogue with regulated industries 

and impacted parties—they will simply be unable to finalize any 

significant regulatory action until the end of the moratorium 

period. 

LEGISLATIVE HISTORY

H.R. 4078, the Regulatory Freeze for Jobs Act of 2012, was introduced on February 17, 2012, by Representative Tim Griffin (R–AR) 

and referred to the Committee on Oversight and Government Reform and the Committee on the Judiciary. On February 27, 2012, 

the Committee on the Judiciary’s Subcommittee on Courts, Commercial and Administrative Law held a hearing on the bill. On 

March 30, 2012, the Committee on the Judiciary marked up H.R. 

4078 and ordered it to be reported, as amended, by a vote of 15– 

13. On April 26, 2012, the Committee on Oversight and Government Reform marked up H.R. 4078 and ordered it to be reported 

favorably, as amended, by a vote of 21–16. 

On July 28, 2011, Senator Ron Johnson (R–WI) introduced S. 

1438, the Regulation Moratorium and Jobs Preservation Act of 

2011, a companion bill to H.R. 4078. 

SECTION-BY-SECTION

Section 1. Short title 

This Act may be cited as the ‘‘Regulatory Freeze for Jobs Act of 

2012.’’ 

Section 2. Moratorium on final significant regulatory actions 

This section provides that an agency may not finalize any significant regulatory action (i.e., rule or guidance) for 2 years or until 

the unemployment rate falls to 6.0 percent or less, whichever occurs first. 

Section 3. Waivers and exceptions 

This section provides that an agency may finalize a significant 

regulatory action during the time period described above if the 

President determines that it is necessary for purposes of an imminent threat to health or safety, the enforcement of criminal laws, 

national security, or pursuant to an international trade agreement. 

This section also provides that an agency may finalize a significant 

regulatory action if the Administrator of the Office of Information 


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and Regulatory Affairs (OIRA) determines that the significant regulatory action is deregulatory in nature. 

Section 4. Determination of major guidance 

This section provides that before an agency issues guidance it 

must first submit it to the OIRA Administrator, who shall determine whether the guidance is major guidance. 

Section 5. Judicial review 

This section provides that the bill shall be subject to judicial review. 

Section 6. Definitions 

This section provides that a significant regulatory action is a 

major rule or guidance that the OIRA Administrator finds is likely 

to result in the following: 

(A) an annual effect on the economy of $100,000,000 or more; 

(B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, 

or geographic regions; or 

(C) significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of 

United States-based enterprises to compete with foreign-based 

enterprises in domestic and export markets. 

This section defines agency to include executive branch and independent agencies. Exempted from the definition are the Federal 

Election Commission, the Federal Reserve, the Federal Deposit Insurance Corporation, and the United States Postal Service. 

EXPLANATION OF AMENDMENTS

An amendment in the nature of a substitute (ANS) offered by 

Chairman Issa was adopted. The provisions of the ANS are described in the section-by-section. 

Two additional amendments to the ANS were adopted. An 

amendment by Mr. Yarmuth was adopted by voice vote to exempt 

from the moratorium final significant regulatory actions by the Department of Defense and the Department of Veterans Affairs that 

affect the health or safety of members of the Armed Forces or veterans. Another amendment, by Ms. Maloney, was adopted by voice 

vote to exempt a final significant regulatory action if such action 

establishes or enforces any statutory rights against discrimination 

on the basis of age, race, religion, gender, national origin, or handicapped or disabled status, unless such action establishes, leads to, 

or otherwise relies on the use of a quota or preference based on 

age, race, religion, gender, national origin, or handicapped or disability status. The Committee intends this amendment to encompass regulatory actions that enforce existing statutory rights 

against discrimination concerning pay disparities, retaliatory discharge, hostile work environments, sexual harassment, voting 

rights, or access to education. 


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COMMITTEE CONSIDERATION

On April 26, 2012, the Committee met in open session and ordered reported favorably the bill, H.R. 4078, as amended, by a roll 

call vote of 21–16, a quorum being present. 

ROLLCALL VOTES

1. Mr. Cummings offered an amendment to the Issa ANS regarding exception for the health or safety of children. The amendment 

was defeated by a recorded vote of 16 Yeas to 20 Nays. 

Yeas: Cummings, Towns, Norton, Kucinich, Tierney, Clay, Lynch, 

Cooper, Connolly, Quigley, Davis, Braley, Welch, Yarmuth, Murphy 

and Speier. 

Nays: Issa, Burton, Turner, Jordan, Chaffetz, Mack, Walberg, 

Lankford, Amash, Buerkle, Gosar, Labrador, Meehan, DesJarlais, 

Walsh, Gowdy, Ross, Guinta, Farenthold and Kelly. 

2. Mr. Kucinich offered an amendment to the ANS regarding exception for limiting oil speculation. The amendment was defeated 

by a recorded vote of 16 Yeas to 20 Nays. 

Yeas: Cummings, Towns, Norton, Kucinich, Tierney, Clay, Lynch, 

Cooper, Connolly, Quigley, Davis, Braley, Welch, Yarmuth, Murphy 

and Speier. 

Nays: Issa, Burton, Turner, Jordan, Chaffetz, Mack, Walberg, 

Lankford, Amash, Buerkle, Gosar, Labrador, Meehan, DesJarlais, 

Walsh, Gowdy, Ross, Guinta, Farenthold and Kelly. 

3. The bill, H.R. 4078, was ordered reported favorably to the 

House, as amended, by a recorded vote of 21 Yeas to 16 Nays. 

Yeas: Issa, Burton, Mica, Turner, Jordan, Chaffetz, Mack, 

Walberg, Lankford, Amash, Buerkle, Gosar, Labrador, Meehan, 

DesJarlais, Walsh, Gowdy, Ross, Guinta, Farenthold and Kelly. 

Nays: Cummings, Towns, Norton, Kucinich, Tierney, Clay, 

Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, Yarmuth, 

Murphy and Speier. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch where the bill 

relates to the terms and conditions of employment or access to public services and accommodations. This bill establishes a moratorium on the finalizing of significant regulatory actions for a period 

of two years. As such this bill does not relate to employment or access to public services and accommodations. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goals and 

objectives are reflected in the descriptive portions of this report. 


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FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., Section 5(b). 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement as to whether 

the provisions of the reported include unfunded mandates. In compliance with this requirement the Committee has received a letter 

from the Congressional Budget Office included herein. 

EARMARK IDENTIFICATION

H.R. 4078 does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 

4078. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its 

report a timely submitted cost estimate of the bill prepared by the 

Director of the Congressional Budget Office under section 402 of 

the Congressional Budget Act. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE

COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause (3)(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 

1974, the Committee has received the following cost estimate for 

H.R. 4078 from the Director of Congressional Budget Office: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 20, 2012. 

Hon. DARRELL ISSA, Chairman, Committee on Oversight and Government Reform, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4078, the Regulatory 

Freeze for Jobs Act of 2012. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sarah Anders. 

Sincerely, DOUGLAS W. ELMENDORF, 

Director. 

Enclosure. 


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H.R. 4078—Regulatory Freeze for Jobs Act of 2012 

Summary: H.R. 4078 would prohibit most federal agencies from 

taking most final significant regulatory actions until either the unemployment rate falls to 6.0 percent or less or two years pass after 

enactment of the legislation. The legislation would affect many regulatory actions that vary greatly in nature and scope. CBO and the 

staff of the Joint Committee on Taxation (JCT) cannot determine 

the budgetary effects of delaying final significant regulatory actions, but we expect that enacting H.R. 4078 would have effects on 

both direct spending and revenues. Pay-as-you-go procedures apply 

because enacting the legislation would affect direct spending and 

revenues. 

CBO expects that implementing H.R. 4078 also could have a significant impact on spending subject to appropriation, although we 

cannot determine the magnitude of that effect. 

CBO expects that the provisions of H.R. 4078 would impose no 

intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the Federal Government: 

Background 

H.R. 4078 would prohibit agencies from taking final significant 

regulatory actions until the earlier of: (1) the date on which the national unemployment rate is 6.0 percent or less, or (2) two years 

after the enactment of the legislation. If an agency were to pursue 

a final significant regulatory action in violation of H.R. 4078, any 

party adversely affected by that action would be entitled to judicial 

review. 

H.R. 4078 includes several exemptions. The legislation would exempt final significant regulatory actions taken by the Federal Election Commission, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and United States 

Postal Service. Further, H.R. 4078 would exempt certain final significant regulatory actions related to the health and safety of members of the Armed Forces or veterans, equal protection and civil 

rights, and the repeal of existing rules. Finally, H.R. 4078 would 

exempt final significant regulatory actions that the President determines are necessary for one of four reasons: (1) to respond to an 

imminent threat to health or safety, (2) to enforce criminal laws, 

(3) to protect national security, or (4) to implement an international 

trade agreement. 

H.R. 4078 defines a final significant regulatory action as the promulgation of any major rule or the issuance of any major guidance 

that the Office of Management and Budget (OMB) finds is likely 

to result in: 

• An annual effect on the economy of $100,000,000 or more; 

• A major increase in costs or prices for consumers; individual industries; federal, state, or local government agencies; 

or geographic regions; or 

• Significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United 


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1 H.R. 4078 adopts the definition of major rule originally set by the Congressional Review Act 

of 1996 (see 5 USC § 804(2)) and defines major guidance using the same criteria. 2See GAO Federal Rules Database, http://www.gao.gov/legal/congressact/fedrule.html. 

3See Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2012 to 

2022 (January 2012), Appendix E. 

States-based enterprises to compete with foreign-based enterprises in domestic and export markets.25

Looking to recent major rules as a way to estimate the number 

of future final significant regulatory actions that would be affected 

by H.R. 4078 is difficult because the legislation applies to guidance 

in addition to rules, some major rules would fall under one of the 

exemptions listed above, and agencies might change course following the enactment of the bill. However, historical data shows 

that federal agencies published 80 major rules in 2011 and 84 

major rules, on average, for the past five full calendar years.2 Examples of major rules published in 2011 include: required warnings 

for cigarette packages and advertisements, Medicare payment rates 

for inpatient psychiatric facilities, and national emission standards 

for hazardous air pollutants from industrial, commercial, and institutional boilers. 

H.R. 4078 would delay final significant regulatory actions until 

either two years pass following enactment of the legislation or the 

unemployment rate is 6.0 percent or lower. Under CBO’s most recent economic forecast based on current law, the unemployment 

rate would remain above 6.0 percent until late 2016.3 Therefore, 

under CBO’s current projections, final significant regulatory actions would be delayed for two years after enactment of the legislation (assuming enactment later this year). However, final significant regulatory actions could be delayed by less than two years if 

the unemployment rate drops much more rapidly than CBO 

projects. 

Impact on direct spending 

The budgetary consequences of delaying final significant regulatory actions, as defined by H.R. 4078, would vary tremendously 

because the budgetary impact of different rules varies considerably. 

For example, of the three rules mentioned above, only one—Medicare payment rates for inpatient psychiatric facilities—has a significant federal budgetary impact. 

Delaying or preventing some final significant regulatory actions 

would result in costs to the federal government, while delaying or 

preventing others would result in savings. On net, CBO estimates 

that enacting H.R. 4078 would have a significant effect on direct 

spending, but we cannot determine the magnitude or sign of those 

changes. Short-term effects would be driven by: (1) preventing annual updates to payment schedules for certain Medicare services 

and other routine revisions to aspects of selected government programs, including payment rate reductions scheduled to take place 

under the Medicare physician fee schedule, and (2) altering the 

implementation of new federal programs with substantial budget 

effects. 

Routine Updates to Government Programs. Many final significant regulatory actions that occur routinely are health-related and 

in particular pertain to Medicare. Some examples include rules 

that establish annual updates to payment rates for services proVerDate Mar 15 2010 05:01 Jul 21, 2012 Jkt 019006 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\HR461P2.XXX HR461P2

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vided by hospitals, physicians, and other Medicare providers. Enacting H.R. 4078 would freeze payment structures for those providers at current levels. Similarly, payment rates (such as the annual benefit amount for each individual) under some other federal 

programs might also be temporarily frozen under the bill. CBO 

cannot estimate the net impact of all such changes. 

Many programs, such as Social Security, make annual adjustments in the benefits that are paid, often referred to as a cost-ofliving adjustment. The new amounts are published in the Federal 

Register, but do not rise to the level of final significant regulatory 

action. Thus, under the bill, CBO expects that these types of programs would continue to operate as they normally do, though agencies would not be able to make significant changes to the programs 

while the moratorium was in effect. 

Implementation of New Federal Programs. Enacting H.R. 4078 

might also affect the implementation of new programs. For example, additional rules and guidance related to the implementation of 

the Affordable Care Act are expected in coming months. Many of 

these anticipated regulatory actions are consequential for health 

insurance exchanges, which are to become operational in 2014 

under current law. Delaying those regulatory actions could delay 

implementation of health insurance exchanges, which would in 

turn result in significant savings to the federal budget, relative to 

spending expected under current law. 

H.R. 4078 might also delay the issuance of non-major guidance 

because the legislation would require applicable agencies to submit 

all guidance to OMB prior to issuance so that OMB may determine 

whether the guidance is major or not. This additional step of review, which does not exist under current law, might slow the implementation of new laws or updates to existing programs. 

Impact on revenues 

Enacting H.R. 4078 also would affect revenues, and JCT expects 

that delaying final significant regulatory actions of the Internal 

Revenue Service could reduce collections of revenues in some cases 

and increase collections in other cases. JCT cannot determine the 

sign or magnitude of the possible effects on revenues. 

Impact on spending subject to appropriation 

H.R. 4078 also would affect programs for which spending is subject to the annual appropriations process. However, CBO cannot 

determine the magnitude of that effect. For example, if the Environmental Protection Agency were prohibited from issuing final 

rules for the lesser of two years or while the unemployment rate 

exceeds 6.0 percent, there could be reductions in spending for the 

agency, subject to appropriation action. A second example involves 

annual calculations made by the Department of Housing and 

Urban Development (HUD) of the fair-market rents that it uses to 

determine rental subsidies for low-income individuals. We expect 

that the bill would prohibit those calculations from being made and 

implemented, which would prevent the rental subsidy from adjusting for changes in market conditions. Any increase in rents would 

be paid for by the tenant and not by HUD and if tenants were unable to pay the increased rent, some landlords would likely leave 

the program. 


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Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. Pay-as-you-go 

procedures apply to H.R. 4078 because enacting the legislation 

would affect direct spending and revenues. CBO and JCT cannot 

determine the sign or magnitude of those effects. 

Intergovernmental and private-sector impact: CBO expects that 

the provisions of H.R. 4078 would impose no intergovernmental or 

private-sector mandates as defined in UMRA. By delaying final significant regulatory actions, the bill could affect public or private entities in a number of other ways, including slowing reimbursements 

and eliminating regulatory requirements. Such effects would not be 

mandates as defined in UMRA because they would not impose enforceable duties on public or private entities. Depending on the 

types and number of regulations affected, the costs and savings of 

those effects could be significant. However, CBO has no basis for 

estimating either the overall direction or magnitude of those effects 

on public or private entities because of uncertainty about the nature and number of regulations that would be affected. 

Previous CBO estimate: On April 20, 2012, CBO transmitted a 

cost estimate for H.R. 4078, as ordered reported by the House Committee on the Judiciary on March 20, 2012. There are several notable differences between the version ordered reported by the House 

Committee on Oversight and Government Reform and the Judiciary Committee’s version: • First, the Oversight Committee’s version uses a definition of 

significant regulatory action that is narrower in scope than the definition of significant regulatory action adopted by the Judiciary 

Committee’s version. • Second, the two bills differ in the types of exemptions allowed. 

For example, the Oversight Committee’s version includes exemptions for regulations affecting certain populations or specific agencies, such as the Board of Governors of the Federal Reserve System, that are not included in the Judiciary Committee’s version. 

However, unlike the Judiciary Committee’s version, the Oversight 

Committee’s version does not include an avenue through which 

Congress could expeditiously consider exemptions requested by the 

President for significant regulatory actions that do not fall into one 

of the four exemption categories discussed above. 

• Finally, the Oversight Committee’s version delays final significant regulatory actions for a maximum of two years after enactment, whereas the Judiciary Committee’s version delays significant 

regulatory actions until the unemployment rate is 6.0 percent or 

less. Under CBO’s latest economic forecast, the Judiciary Committee’s version of H.R. 4078 would delay significant regulatory actions for a longer period than the version ordered reported by the 

Oversight Committee. 

As a result of these differences, while both versions of H.R. 4078 

would affect direct spending and revenues, the budgetary effects 

could be very different. 

Estimate prepared by: Federal Costs: Sarah Anders; Impact on 

State, Local, and Tribal Governments: Elizabeth Cove Delisle; Impact on the Private Sector: Paige Piper/Bach. 

Estimate approved by: Holly Harvey, Deputy Assistant Director 

for Budget Analysis. 


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1See, e.g., Economic Policy Institute, Regulatory Uncertainty: A Phony Explanation for Our 

Jobs Problem (Sept. 27, 2011) (online at www.epi.org/publication/regulatory-uncertainty-phonyexplanation/); House Committee on Education and Workforce, Testimony of Jared Bernstein, 

Hearing on Expanding Opportunities for Job Creation, 112th Cong. (Feb. 1, 2012) (citing evidence that it is weak demand rather than regulation that is preventing faster job creation.); 

Misrepresentations, Regulations and Jobs, New York Times (Oct. 4, 2011) (‘‘regulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems 

to pursue an agenda supported by the business community year in and year out’’) (online at 

www.economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/?smid=tw-nytimes& 

seid=auto). 2 House Committee on the Judiciary, Subcommittee on Courts, Commercial and Administrative Law Written Testimony of Robert Weissman, President, Public Citizen, Hearing on H.R. 

4078, the Regulatory Freeze for Jobs Act of 2012 (Feb. 27, 2012). 3Senate Committee on the Budget, Testimony of Douglas Elmendorf, Congressional Budget 

Office, Hearing on Policies for Increasing Economic Growth and Employment in 2012 and 2013, 

112th Cong. (Nov. 15, 2011) (online at budget.senate.gov/democratic/index.cfm/files/serve? 

File_id=795c2267-9349-4c2c-a488-262dfd346a2c). 

MINORITY VIEWS 

H.R. 4078, the Regulatory Freeze for Jobs Act of 2012, is based 

on the false premise that business investment and hiring is being 

held back by uncertainty over future regulations. The bill disregards evidence from economists on both sides of the political 

spectrum that regulations do not negatively impact the economy or 

job growth.1

Supporters of this bill argue that regulation is impeding job creation and injuring small businesses, but small businesses have directly disputed this premise. Recent surveys by the American Sustainable Business Council, the Main Street Alliance, and the Small 

Business Majority show that the vast majority of small business 

owners believe weak demand is the primary problem their businesses currently face.2

The regulatory moratorium included in this legislation is misguided and will produce terrible results for the American people. 

As Cass Sunstein stated at an Oversight Committee hearing last 

September: 

A moratorium would not be a scalpel or a machete, it 

would be more like a nuclear bomb, in the sense that it 

would prevent regulations that . . . cost very little, and 

have very significant economic or public health benefits.3

The Congressional Budget Office (CBO) has found that the bill 

would freeze routine updates to government programs. For example, payment rates for services provided by hospitals, physicians, 

and Medicare providers would be frozen at current levels, interfering with access to quality healthcare for seniors. 

Although the Committee has held more than 20 hearings on regulations so far this Congress, the majority has emphasized the 

costs of regulation while disregarding the much more significant 


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4Office of Management and Budget, 2011 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (June 24, 2011) 

(online at www.whitehouse.gov/sites/default/files/omb/inforeg/2011_cb/ 2011_cba_report.pdf). 

benefits that have resulted from all major rules issued over the 

past ten years.4

Freezing all significant regulatory activity would do great harm 

to our economy and the health and safety of millions of Americans. 

It is critical that agencies have the ability to issue protections that 

carry out the laws Congress passes. Regulations save lives, protect 

the health and safety of hundreds of millions of Americans, and 

provide protections that are critical to the functioning of a healthy 

economy. 

ELIJAH E. CUMMINGS, 

Ranking Member. 

Æ 


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