Stanford Business Professor Keith Hennessey, a veteran of DC policy battles, recently coined a term to describe the media’s reaction to the President’s decision as “QTIIPs.” QTIIPS stands for Quantitatively Trivial Impact + Intense Political Symbolism. In his June 1 blog, Professor Hennessey goes on to explain QTIIPS.  QTIIPS can be best described as the overreaction to a policy decision. Other synonymous descriptions of QTIIPS could be overkill or hysteria.

Let’s revisit the Paris Accord as an example. The Paris Accord states that it is a multinational attempt at “keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.” Critics such as Professor Hennessey and Oren Cass, a senior fellow at the Manhattan Institute with a focus on energy and the environment have criticized the Accord because it does not address the climate change problems by requiring tangible outcomes. The Accord’s supporters have dismissed these allegations by accusing the Accord’s critics as “deniers of climate change.” When the President announced his decision to leave the Accord, the Accord’s supporters reacted with hysteria.

The QTIIPS phenomenon is not limited to the Paris Accord. Consider, your e-mail inbox being filled with request for political donations. Every issue, whether it is Medicaid reform, tax cuts, the federal budget, or the numerous other policy issues is described as a life and death matter. The moment someone makes a proposal to address these issues; the immediate reaction for those opposing the proposal is to attack the position as being the beginning of the end of civilization. The problem with QTIIPS is that it blurs the real issues from the superficial ones.

The root cause of this problem is that you have political fundraisers and consultants who have a vested interest in creating a polarizing atmosphere. Everything is viewed through the lens of life and death. The challenge is to have someone with an understanding of policy and the individuals behind those policy decisions guide you through this political environment. This requires an experienced public policy firm guiding you through the political process.  An experienced government affairs office will not sell your position based on hysteria, but in preparation. Preparation means understanding the impact of the proposed legislation or regulation, assessing the political landscape, developing a plan to advocate your position and executing that plan.

RESOURCES/REFERENCES

• More information on Congressional Investigations and Political Intelligence
• Is the Paris Agreement QTIIPS? by Keith Hennessey
• We’ll Never Have Paris by Oren Cass
• The Paris Agreement, Essential Elements and Summary – United Nations
• Text of the 2015 Paris Agreement – United Nations

The final decision that was issued provides us with two important lessons in the drafting and proposal of new regulations surrounding industries with rapidly growing and evolving technologies. As the Congress continues to tackle the regulatory aspects emerging from new innovations in the Unmanned Aircraft sector, they should consider not only the current laws and regulations, but be able to adapt and proactively address regulatory issues as they arise.

LESSON #1: KNOW THE LAW

The D.C. Circuit Court of Appeals struck down the FAA’s registration rule because of Section 336 of the aforementioned Reform Act of 2012. Section 336 states that the FAA “may not promulgate any rule or regulation regarding a model aircraft, or an aircraft being developed as a model aircraft”.[iii]  According to the law, a model aircraft in this instance refers to an unmanned aircraft that is (1) capable of sustained flight in the atmosphere; (2) flown within visual line of sight of the person operating the aircraft; and (3) flown for hobby or recreational purposes.[iv]

The court agreed with Mr. Taylor’s argument that he was operating his UAV for recreational purposes only and met the standards which qualified his unmanned vehicle as a model aircraft. Because they noted Mr. Taylor was a hobbyist that flew his drones from his home and within the visual line of sight, the court agreed that the FAA overstepped its boundaries and found the drone registration rule a violation of the Reform Act of 2012.

LESSON #2: BE ADAPTABLE

The drone industry is undergoing a technological revolution. Although, we think of drones as flying machines, technology is pushing for vehicles that will be self-driving. In fact, some developing drone designs are working on being able to transport people.[v]

The government’s challenge is to balance the need to innovate versus the challenge to regulate. Currently, the Federal Communications Commission and the Federal Trade Commission are applying the concept of regulatory humility to address this tension.[vi] FCC Chairman Ajit Pai recently explained this approach before the U.S.-India Business Counsel on March 29th. In his description, Chairman Pai discusses the importance of regulatory humility;

“That’s why—consistent with decades of bipartisan tradition—we are pursuing a light-touch regulatory approach. This approach suggests that the Internet should be free from heavy-handed government regulation. It seeks to eliminate unnecessary barriers to infrastructure investment that could stifle broadband deployment. It aims to minimize regulatory uncertainty, which can deter long-term investment decisions. It favors facilities-based competition—that is, creating an incentive to build one’s own network instead of relying on another’s (which depresses the deployment incentives of each).

It encourages competition among companies using any technology and from any sector—cable, telco, fixed wireless, mobile, and satellite. It embraces regulatory humility, knowing that this marketplace is dynamic and that preemptive regulation may have serious unintended consequences. And it places demands on the FCC itself—to be responsive to the public and to act as quickly as the industry it regulates. This regulatory approach, not the command-and-control rules of the 20th century, is most likely to promote digital infrastructure and opportunity.”[vii]

As we are able to process data at a quicker speed, the ability to analyze and assess a regulation’s impact on the economy becomes more immediate as the effects are almost instantly visible. As a result, agencies need to realize that their regulations would be open to assessment and review on an almost constant basis.

For the FAA and other federal agencies, it would be wise to assess the impact of their regulations since the marketplace has changed in their respective areas of industry. Technology is changing “the command and control approach” of federal agencies not just in telecommunications, but also in education, healthcare, and other industries.

CONCLUSION

In closing, this recent ruling by the DC Circuit Court of Appeals should be a wake-up call not only to the federal agencies, but also to the Congress. Both the Congress and Federal agencies need to be aware of the framework behind current laws and must also be ready to assess the impacts of the policies that are passed from both the Executive and Legislative branches.

Speaker of the House Paul Ryan (R-WI) will preside over a GOP majority, despite the loss of six seats this past election cycle. Speaker Ryan handily won the speakership with little or no opposition from his GOP colleagues. This as well as the selection of Reince Preibus as President-elect Trump’s Chief of Staff signaled the incoming administration’s desire to work with the Congress.

On the other side of the spectrum, the Democrats will face a period of transition, as they no longer hold the majority in either the House or the Senate. Congresswoman Nancy Pelosi (D-CA) has once again been elected as House Minority Leader. Despite her re-election, unity has proven to be an issue among Democrats after Representative Tim Ryan (D-OH) unsuccessfully challenged Minority Leader Pelosi for the position, showing signs of frustration with the Democratic leadership. Should the division amongst the party continue, it would come as no surprise if these frustrated Democrats assembled a voting bloc in order to swing votes in either passing or defeating pending legislation.

As this Congressional session begins issues surrounding the economy will most likely become the dominant topic on the House floor. In an interview with WPR’s Rob Ferrett, House Speaker Ryan discussed a preliminary outline of Congressional priorities in 2017 and addressed three areas that will be critical in building a stronger economy placing emphasis on the Affordable Care Act, burdensome regulations, and taxes.

“Well, we’ve got a lot of number-one priorities, I guess I’d say. The first we’re going to do is start working on a budget. And in that budget we’re going to try and bring Obamacare relief.” 

“But also [cutting back] the regulatory state, which is really putting a chilling effect on jobs, and reforming the tax code to make American businesses, particularly our manufacturers, much more competitive globally so we can grow more jobs here at home and increase take home pay, and just get faster economic growth.”

“What we ought to be doing is cleaning up our economic policy so that we’re the best…with a healthy economy, with strong companies that are in America, building, selling, exporting and engaging in the world, and pushing the values of freedom and free enterprise. That to me is what American leadership needs to look like.”[i]

Since the passage of the Affordable Care Act, House Republicans have been working on plans to repeal the healthcare law. Though preparations have been in the works since the enactment of the law, any proposals of legislation have been thwarted by veto threats from the Obama Administration, a significant obstacle that will be removed by the President-elect. With the nomination of Representative Tom Price, M.D. (R-GA), a physician and critic of the Affordable Care Act, as Secretary of Health and Human Services, President-elect Trump has sent a very strong signal that the healthcare law can expect major changes in the near future. Rep. Price has been very vocal opponent of the ACA and even introduced legislation in 2015 to repeal Obamacare all together.[ii] Actions have already been taken towards the dismantling of the ACA just days after the Congressional session began. The Senate passed a resolution on January 12, to instruct key committees to draft legislation repealing Obamacare. The House of Representatives followed suit passing the measure a day later.

Though the initial steps have been taken to repeal the Affordable Care Act, several members of the House have voiced concern over the strategy of voting for a repeal first without having a legitimate replacement prepared. Speaker Ryan has stated that the maximum number of suitable replacement provisions should be added into the legislation to repeal Obamacare.[iii]

The next matter that Speaker Ryan would like to revisit is burdensome regulations. Notwithstanding the overlap with the Affordable Care Act, the regulatory state has increased dramatically over the past eight years.[iv] Since 2009, the Obama Administration has imposed 229 major regulations, and in 2015 alone, federal regulators issued 2,353 new rules.[v] To put that in perspective, as stated in a CRS Report on Federal Regulations, “In 2015, approximately 30% of the total pages in the Federal Register were in the “Rules and Regulations” section, the section in which final rules are published.”[vi]

One major piece of legislation that Congress will look at is the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into federal law by President Obama in July 2010. Since the implementation, Republican members of Congress have been critical of its impact toward the smaller banks and community banks, especially as it relates to a financial institution’s ability to make loans.[vii] While on the campaign trail, President-elect Trump stated on several occasions that he plans to dismantle Dodd-Frank, and even considered Rep. Jeb Hensarling (R-TX), the bill sponsor to The Financial CHOICE Act of 2016 that proposed significant amendments to Dodd-Frank, for Treasury Secretary.

The third factor that Speaker Ryan noted as having a critical effect on the economy is the tax code. The majority of Americans have viewed the current tax code as burdensome. In 2016 a gallup poll showed that 57% of Americans felt they pay too much and 47% said their taxes are unfair. [viii] Speaker Ryan believes that reforming the tax code will allow the U.S. to be, “much more competitive globally so we can grow more jobs here at home and increase take home pay, and just get faster economic growth.”

House Republicans have an excellent opportunity to address the issues that they have campaigned for in the last six years. They can no longer use the excuse of a presidential veto for unsuccessfully converting legislation into law. The challenge for the Republican leadership is to see this opportunity as a two-year window to fulfill the promises that they have made.

To learn more about pending legislation for this upcoming Congressional Session, check us out on Twitter and Facebook. In our next segment, Part 2 of this series will turn our focus to the Senate.

[i] Ryan Outlines 2017 Congressional Priorities on WPR. (2016, December 6). Retrieved January 10, 2017, from http://paulryan.house.gov/news/documentsingle.aspx?DocumentID=398585

[ii] Price Introduces Empowering Patients First Act. (2015, May 13). Retrieved January 10, 2017, from https://tomprice.house.gov/HR2300

[iii] Cornwell, S. (2017, January 12). U.S. Senate Approves Measure Launching Obamacare Repeal Process. Reuters. Retrieved from http://www.reuters.com/article/us-usa-obamacare-idUSKBN14W0MC

[iv] Lux, M. (2016, April 14). Dodd-Frank Is Hurting Community Banks. The New York Times. Retrieved from http://www.nytimes.com/roomfordebate/2016/04/14/has-dodd-frank-eliminated-the-dangers-in-the-banking-system/dodd-frank-is-hurting-community-banks

[v] Gattuso, J. L., & Katz, D. (2016, May 23). Red Tape Rising 2016: Obama Regs Top $100 Billion Annually. Retrieved January 10, 2017, from http://www.heritage.org/research/reports/2016/05/red-tape-rising-2016-obama-regs-top-100-billion-annually#_ftn6

[vi] Carey, M. P. (2016, October 4). Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register (Rep. No. R43056). Retrieved January 10, 2017, from Congressional Research Service website https://fas.org/sgp/crs/misc/R43056.pdf

[vii] Lux, M. (2016, April 14). Dodd-Frank Is Hurting Community Banks. The New York Times. Retrieved from http://www.nytimes.com/roomfordebate/2016/04/14/has-dodd-frank-eliminated-the-dangers-in-the-banking-system/dodd-frank-is-hurting-community-banks

[viii] Norman, J. (2016, April 14). Most Americans in 15 Years Say Their Tax Bill Is Too High. Retrieved from http://www.gallup.com/poll/190778/americans-years-say-tax-bill-high.aspx   Gallup Poll, April 6-10