Overview
Title
To require the heads of agencies identify whether major rules of the agency are budget neutral, and for other purposes.
ELI5 AI
The Agency Accountability and Cost Transparency Act of 2025 is a rule that says if a government office wants to make a big new rule that costs a lot of money, they need to stop another rule that costs the same amount, so everything is fair and balanced money-wise.
Summary AI
H. R. 1963, also known as the "Agency Accountability and Cost Transparency Act of 2025," is a proposed law that requires heads of federal agencies to determine if their major rules are budget neutral before they are issued. A rule is considered budget neutral if the costs it imposes are balanced by a reduction in costs from the repeal of other rules. The bill mandates agencies to estimate the cost of new major rules, identify any rules that can be repealed to offset these costs, and repeal them if identified. A major rule is defined as one that has a significant economic impact, like costing $100 million or more annually, increasing consumer prices, or adversely affecting competition and innovation.
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AnalysisAI
General Summary
The "Agency Accountability and Cost Transparency Act of 2025," introduced in the 119th Congress, seeks to increase fiscal accountability and transparency in federal agencies. This legislative proposal mandates that agency heads determine whether new major rules are budget-neutral before implementation. This involves estimating the costs associated with these rules and identifying existing rules that can be repealed to balance these costs. The concept of budget neutrality here requires that the costs of new rules are offset by cost savings from the elimination of other regulations. The act also necessitates an accompanying statement in the Federal Register to identify the budget impact of each major rule.
Summary of Significant Issues
Several critical issues arise from this bill. Primarily, the requirement for agencies to repeal existing rules to offset new costs lacks clear guidelines on assessing the impacts of such repeals. This absence could lead to the removal of important regulations without adequately considering potential consequences. Another concern is the simplistic definition of "budget neutral," which may not capture the nuanced financial implications of adding and subtracting rules. Furthermore, the broad criteria for what constitutes a "major rule," such as "significant adverse effects” on competition or productivity, invoke potential subjectivity and inconsistency across agencies. Additionally, the complexity of the bill's text could pose difficulties for those not well-versed in regulatory procedures, creating hurdles in its implementation.
Public Impact
The public might experience a mixed impact from this legislation. On one hand, the bill's push for transparency and budget neutrality could help curb unchecked regulatory costs, potentially resulting in a leaner legislative framework. This could stimulate economic activities by lowering compliance costs for businesses and reducing regulatory burdens. On the other hand, insufficient guidelines on repealing regulations could lead to public welfare reductions if key protections are removed without comprehensive evaluations. The public might also find the bill's complexity a barrier, complicating their understanding and participation in the regulatory process.
Impact on Specific Stakeholders
For federal agencies, this bill adds layers of complexity by requiring a careful evaluation of existing rules in pursuit of budget neutrality. The demand to repeal current regulations could strain resources and lead to potential conflicts as agencies balance priorities. For businesses, especially those facing high compliance costs, the bill could present opportunities for reduced regulatory burdens, potentially spurring innovation and growth. However, industries dependent on regulatory protections might view this shift with concern, fearing disproportionate losses in safeguards necessary for ethical, safe, or sustainable operations. Moreover, the subjective interpretation of "major rule" criteria could lead to challenges in predicting how agencies will respond, resulting in uncertainty for stakeholders reliant on these regulations for competitive parity or stability. Overall, the balance between economic stimulation and safeguarding public interests will be crucial in determining the bill's broad impact.
Financial Assessment
The Agency Accountability and Cost Transparency Act of 2025, identified as H. R. 1963, includes financial stipulations aimed at ensuring that major rules imposed by federal agencies are budget neutral. This commentary examines the bill's approach to budgeting and cost management, with particular attention given to the identified money matters and related issues.
Financial Implications of Major Rules
The primary financial focus of H. R. 1963 is on ensuring that any new "major rule" introduced by an agency does not create additional financial burdens without corresponding offsets. Specifically, a rule is classified as major if it is expected to have an annual economic effect of $100 million or more. This threshold highlights the bill's attempt to capture significant economic impacts which justify scrutiny and budgetary considerations.
Definition and Challenges of "Budget Neutral"
The act defines a rule as budget neutral when the costs it creates are counterbalanced by cost reductions achieved through the repeal of other rules. While this definition promotes financial accountability, it raises concerns regarding its simplicity and effectiveness. A significant issue is the lack of clarity on evaluating the impacts of repealed rules. This could lead to the removal of regulations that, although financially cumbersome, may offer substantial public benefits, creating a false sense of neutrality and economic balancing.
Vague Criteria in Financial Designations
The bill introduces criteria such as "significant adverse effects" which are used to determine if a rule is major. Such language is open to interpretation, raising concerns about subjective application and inconsistent financial decision-making across different agencies. This could lead to situations where some financially impactful rules are inadequately assessed due to vague terms that require further clarification.
Lack of a Clear Process for Repealing Rules
The act does not provide explicit guidelines or processes for selecting which rules should be repealed to ensure cost neutrality. Without defined procedures, this could result in arbitrary financial decisions, potentially removing critical regulations with positive social impacts that are not immediately quantifiable in financial terms. This oversight might lead to disproportionate impacts on different stakeholders and obscure the financial evaluations intended by the act.
Complexity and Implementation Challenges
The complexity inherent in determining budget neutrality and managing the financial dynamics of rule implementation presents significant challenges. Both the public and agency personnel may struggle to understand and apply these financial principles, complicating compliance and potentially leading to unintended economic consequences.
In summary, while the Agency Accountability and Cost Transparency Act of 2025 aims to introduce a robust financial management framework for agency rules, its simplicity in defining budget neutrality and lack of clarity in rule-repeal processes present substantial challenges. The potential for misinterpretation and unreasonable financial assumptions underscores the necessity for clearer guidelines and consideration of the broader implications of financial neutrality within regulatory frameworks.
Issues
The requirement for an agency to repeal a rule without clear guidelines on evaluating the impact of such repeal (Section 2) could lead to unintended consequences, such as critical regulations being removed without thorough assessment. This might be particularly concerning if the repealed rules have significant public benefits that are not easily quantified.
The definition of 'budget neutral' (Section 2) is based on the costs eliminated by repealing rules, which could be overly simplistic. This approach may not fully consider the nuanced financial impacts of new regulations versus repealed ones, potentially misleading stakeholders regarding the true economic impact.
The term 'major rule' includes vague criteria like 'significant adverse effects' on competition or productivity (Section 2), which might require further clarification. This could lead to subjective interpretation and inconsistent application across agencies, raising concerns about fairness and transparency.
The complexity of the definitions and requirements (Section 2) may hinder clarity for both the general public and agency personnel. This could complicate the implementation process, making it difficult for stakeholders to understand or comply with the new rules.
There is no clear process outlined for how an agency should choose which rules to repeal, nor how to measure and validate if a rule's repeal successfully offsets the costs of a new major rule (Section 2). This lack of a defined process could lead to arbitrary or unjustified decision-making, impacting stakeholders disproportionately.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The Agency Accountability and Cost Transparency Act of 2025 is the official name given to this piece of legislation.
2. Requirement to identify whether major rules are budget neutral Read Opens in new tab
Summary AI
The section requires agency leaders to assess the cost of any major rule before it's enacted, find and repeal other rules to balance the cost, and indicate in the Federal Register if the rule is budget-neutral. It also defines key terms such as "agency," "budget neutral," "cost of the rule," "major rule," and "rule."
Money References
- (4) MAJOR RULE.—The term “major rule” means any rule, including an interim final rule, that the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget or the Federal agency promulgating such rule finds has resulted in or is likely to result in— (A) an annual effect on the economy of $100 million 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 the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.