Phil Kerpen is the President of the Committee to Unleash Prosperity and leads American Commitment, an activist policy organization. 

Federal Newswire:

In terms of policy, is it important to lay groundwork for things that may only bear fruit years later?

Phil Kerpen:

Well, I think this is something that, as conservatives or libertarians, we've been pretty bad at compared to the left. I think the left has their ideological objectives. They want universal healthcare, they're going to work decade after decade until they accomplish it. We have a tendency to try something once, and then be like, "Hey, we tried. Move on to the next thing."

That's a big problem. I think that to really get at the major policy issues, it can take a very long time. You need to have the right alignment of power, sow the seeds, the philosophical foundation, and have the policy specifics. Then, you need to have the political alignment to actually implement it. That can take a very long time.

In general, the left has done a remarkably good job of this. You start with the philosophical foundation and get the policy specific. The left actually starts much earlier, they start with elementary education. They lay the foundations over much longer timelines, and they've actually done a very good job of rewriting American and world history towards their worldview. 

Federal Newswire:

What is the REINS Act?

Phil Kerpen:

The REINS Act dates from a town hall meeting that took place in 2009 in Campbell County, Kentucky. A guy named Lloyd Rogers, who was a retired local judge, took his US Constitution and his water bill to a town hall meeting with his Congressman, who was Jeff Davis.

He said, "Congressman, my US Constitution says under Article one, section one, all legislative power is vested in Congress. So, explain to me how the EPA doubled my water bill without you ever voting on it?” His Congressman didn't have an answer. 

He went back to Washington, sat down with his staff and legislative counsel, and said, "Look, when a regulatory agency is doing something of a legislative character, and that has an impact on people's lives, they ought to be required to send it up here to Congress for our approval, rather than just being able to directly implement it."

The idea is any rulemaking that is important, that has an important economic impact, the agency should not just be able to promulgate and implement it. They should have to send it as a proposal to Congress and have it voted on. It should follow the constitutional process, need a majority in the House and Senate, and either a Presidential signature or a veto override before it can take effect.

So, it's taking the Congressional Review Act and turning it on its head. Instead of the agencies being able to do whatever they want unless you somehow muster enough votes to stop them, it's the agencies that need to write their rules with an eye towards actually getting them approved by the people's elected representatives.

Federal Newswire:

Are these regulations hard to fight in the courts?

Phil Kerpen:

[Yes] and by the time you win, you might lose. We had this with the Mercury Air Toxic Standard from the EPA under Obama, where they shut down hundreds of coal plants with a rule that most of us thought was illegal. But if you're an electric utility and you think the rule might be illegal, but you don't know, you're going to follow it.

What happened is it eventually got struck down by the Supreme Court and the Obama administration put out a statement that said, "It doesn't matter. We don't need it anymore." [All the factories had] already closed.

Federal Newswire:

Is this the problem we’re seeing with electric vehicle mandates and fuel economy standards?

Phil Kerpen:

Yeah. It's actually coming even faster than people think. This is probably the single largest regulation that we have from this current administration. A lot of people know about the subsidies. They know the $7,500 credit, the direct subsidies, the government funded charging stations, all of that. They get a lot of headlines talking about the carrots.

But the carrots are not what's going to drive the switch to electric vehicles beyond the 8-9% market share, of where it is now. It's really the stick of mandates. You look at what they've mandated, and I'm pretty sure these mandates are unlawful.

They're mandating for model year 2026 that 17% of vehicle sales be electric vehicles. That's going to be tough because we're at about 8-9% now.

Then, model year '27, they go to 30%. By model year '30, they're at 50%. Model year 2032, they're at 67%. The way that they mandated is they've calibrated the fuel economy standards, the miles per gallon from DOT, and the greenhouse gas from EPA, which are just two different names for the same thing.

But they've calibrated them such that the only way manufacturers can meet them is if they hit the percentage of electric vehicles that's embedded in the rulemaking. Of course, if you're a manufacturer that mostly sells gas powered vehicles, you've got to buy credits from the electric vehicle companies to meet the requirement. But that only works if the overall market meets the target. Otherwise, there aren't enough credits. They don't exist.

Even the 17% in '26 is going to be a challenge. But the 30% in model year '27 is going to be totally impossible. What's going to happen is the supply of internal combustion vehicles is going to be artificially restricted because they're not going to be allowed to sell them unless they can get the credits which won't exist. If you want to buy an internal combustion vehicle, they're going to be hard to find and they're going to cost a fortune.

Federal Newswire:

Since it takes fewer employees to make an electric vehicle than a normal one, why aren’t the auto unions up in arms about these mandates? 

Phil Kerpen:

Well, they've been assured that all the battery factories will be union jobs. They've tried to persuade them. There's some in the US with big subsidies. It's interesting, Kansas actually has a big battery factory that's going up. They canceled the retirement of a coal power plant because they said they need the electricity from the coal plant to build the batteries for the electric vehicles.

Federal Newswire:

Explain what net neutrality is and why it may lead to censorship on the internet. 

Phil Kerpen:

It's one of the stupidest debates in Washington because none of the hypothetical harms have ever occurred. They've got two examples and they're decades old, and they're not even really good examples. They just use them over and over because nothing's happened.

We had the most aggressive, absurd, mangled form of net neutrality for the last two years of the Obama administration. They actually said, "We're going to reclassify broadband service as a regulated public utility. We're going to use 1930s style regulation to command and control every aspect of it. Except once we grant ourselves that power, we're going to mostly forebear from using it and trust us, we won't really use it unless we have to. We'll know it when we see it."

They put these regulations in, and they were in for two years, and they never really used any of the power they gave themselves. I guess you could say that in their favor. But investment declined pretty significantly from the trend line for the simple reason that now you have to be worried you're going to invest billions of dollars and you might not be able to get [a return]... If they decide they don't like how you're going to use that network, you're not going to be able to get a return on it.

Under Trump, the FCC said, "We're going to go back to the way it was for the 20 years before the last two years, and we're going to have basically an unregulated competitive internet where the phone and cable guys compete with each other. We mostly stay out of it and leave it alone." You would've thought that they had proposed the most insane, radical idea in history, even though they were just going back to the way it had always been prior to those last two years.

You know what did happen when those rules were repealed? Private investments snapped back to trend, went up dramatically from where it'd been from those two years, speeds more than tripled, and prices were actually down for the first couple of years after it was repealed. Then, more or less flat after that, even in an inflationary environment. The one thing that really hasn't gotten more expensive is broadband. It's still $40-50.

Federal Newswire:

Along with wanting to regulate rates again, do they also want to impose content control?

Phil Kerpen:

Well, they don't admit content control, they say, "National security, we need to have regulation." The interesting thing about price regulation is the draft version of the net neutrality order had explicit price regulation in it.

They actually had a paragraph in there that said, "We're not going to do X anti-price regulation. But after the fact, if we decide the price wasn't just and reasonable, we're going to [do it anyway]..." They actually took that paragraph out. So, "Great victory. They're not going to do rate regulation." 

Then, they put out a digital discrimination order. This one has express rate regulation in it. If you say, "They're charging me too much," and it's a discriminatory, disparate impact on whatever protected group, then they have to hold essentially a rate hearing and see who's right about that. Even when you win, you don't win, because they basically took that little piece out. Then they just put it in this other crazy rule. 

This digital discrimination rule is actually worse than the Title two order, because this doesn't just apply to the ISPs themselves. It applies to basically any company that touches anything that has anything to do with the internet. The construction company that goes out and digs the ditch, they now have to worry they might be regulated by the FCC if they have some practice that has a disparate impact on race or sex or some other protected characteristics.

Federal Newswire:

If there are companies who begin to install internet equipment in certain areas but not others, can they get in trouble for disparate impact?

Phil Kerpen:

Yeah. It could have an environmental [impact or] it could be noise. I mean, who knows? But the way that they wrote this that's so crazy is you're going to have whole industries that have never interacted with the FCC ever in all of history that are suddenly like, "Someone can file a discrimination complaint against us at the FCC?"

It doesn't have to be intentional discrimination. They adopted a disparate impact standard. Any facially neutral policy that, statistically, had a disparate impact on a protected class can get you hammered with fines by the FCC. An agency you never even thought you had anything to do with. This is all for equity. The word equity's in there 30-40 times.

Federal Newswire:

In regards to the Chevron deference where an agency's interpretation of congressional statutes means the courts are not going to substitute their judgment for that of the agencies themselves, does that mean if an agency can make a justification then they will get deference?

Phil Kerpen:

Unless it's arbitrary and capricious. They set a very high standard of deference to agencies. Originally, [the agencies would say], "This language is ambiguous, and because we're the expert, we can interpret it and that should be entitled to deference." But increasingly, they take language that isn't even particularly ambiguous, or they just invent language out of whole cloth and courts say, "Hey, they're the experts."

Federal Newswire:

Is this how a dry patch of desert sand in the high desert of Nevada becomes navigable water to the United States?

Phil Kerpen:

Correct. Although, we could go through the 404(k)'s, there's a whole crazy line of those. I remember in SWANCC and Rapanos, the Army Corps of Engineers argument for navigability was that migratory birds navigate from the water and go across state lines. The glancing goose theory. That was actually the argument they advanced with a straight face.

We've had some pretty severe absurdity. But in these cases that are going up, there's an inspector program. The fishing boats have to have an inspector on them, that they pay for, whose job is to be there and search for violations. But there's nothing in the law that says that. 

Federal Newswire:

How is there not a regulatory takings argument to be made here?

Phil Kerpen:

My friend, James Valvo, at Cause of Action Institute, was, I think, the original architect of using this as the test case for Chevron. I think the desire was to tee up a completely clean challenge. One where you could get directly at the legal issue and not have facts that are subject to dispute.

This is a program where you read the statute, it's not in the statute, the agency made it up, [well] are they allowed to do that? I think this was picked because of its ability to cleanly get at the legal question. I think, for that reason, they don't want to address another.

Federal Newswire:

How do folks get the daily email that you put out?

Phil Kerpen:

It's the Committee To Unleash Prosperity, Unleash Prosperity hotline. It's totally free. Get it on www.committeetounleashprosperity.com.

Also, check out the American Commitment website and get on our email list there. We send about one a week or so, but they're always action oriented.