Regulatory Reboot: Options for Revisiting Midnight Regulations

February 24, 2016



The Office of Information and Regulatory Affairs is bracing for the rush of regulatory activity that typically comes during the final year of a presidential administration. A government planning document lists 95 economically significant final regulations1 as priorities for President Obama’s final year in office. But according to a new report from the Congressional Research Service, any rule published after May 16 runs the risk of being summarily overturned in 2017.

The Congressional Review Act

Under the Congressional Review Act (CRA), congress has 60 working days after a final rule is issued to review it and decide whether to send a “joint resolution of disapproval” to the president.  Not surprisingly, presidents have been unwilling to sign disapprovals of their own regulations, so the few disapproval resolutions that have made it out of congress usually die when they reach the president’s desk. For example, in the last year, President Obama has vetoed resolutions disapproving the Environmental Protection Agency’s Waters of the United States rule, and the National Labor Relations Board’s union organizing rule. 

However, there is a window at the end of an administration when congressional resolutions of disapproval would land on the desk of the next president, reducing that veto threat. For rules issued with less than 60 working days left in the current Congress, the 60-day review clock starts over in the next Congress.  According to CRS’s review of the current legislative calendar, that means that the 115th Congress seated in January 2017 will have a chance to review any rule issued after May 16, 2016.  If the new Congress resolves to disapprove any of those regulations, the 45th president will be the one to sign or veto that resolution.

Since it was enacted in 1996, the CRA has only been used to overturn one regulation—an Occupational Safety and Health Administration rule aimed at addressing ergonomic injuries in the workplace. The ergonomics regu­lation was issued amid much controversy late enough in the Clinton Admin­istration that the new Congress had an opportunity to review it. It sent a resolution of disapproval to President Bush, who signed it.

A Blunt Tool

The CRA is a blunt tool for dealing with last minute regulations; once a rule is disapproved, the Act prohibits an agency from issuing a regulation that is “substantially the same.” Legislators may find this feature appealing for some controversial rules.  However, for fine-tuning a regulation that may address shared objectives but be troubling in its details (perhaps as a result of truncated public input or rushed analysis to meet the midnight deadline), reformers may need to look to other options.

The Next President’s Options

On his or her first day in office, the next president is likely to take action to stop the flow of regulations by directing agencies 1) not to send regulations to the Federal Register until they first are approved by his or her policy officials, and 2) to retrieve from the Federal Register all regulations not yet published.  Like past presidents, he or she may also direct agencies to publish notices in the Federal Register extending effectiveness deadlines for potentially controversial rules while the new administration considers its options.  The Obama administration has learned from its predecessors of the vulnerability of regulations issued during a transition, however, so these actions by the next president may not capture too many regulations. 

To revise or withdraw a regulation that is already final (even if it is not yet effective), a new president would have to begin the process of regulatory development de novo.  That would mean seeking public comment on alternative approaches, developing an administrative record, and issuing a final rule based on that record.  This would take at least a year and probably longer. Then, the rule would most certainly be the subject of litigation, with plaintiffs being able to point to the previous record to question the merits of the revised rule.

A more subtle way to alter a regulation’s impacts might be through enforcement. When administrations change, how rules are interpreted sometimes changes.  For example, the Department of Homeland Security altered its approach to enforcing immigration laws last year. Similarly, EPA in the Clinton administration began to bring enforcement actions against electric utilities that had undertaken what had previously been considered routine maintenance and repair not subject to new source review regulations. 

Working with the Judiciary

The more controversial regulations are likely to be litigated in court.  How vigorously a new administration defends those cases will influence the ultimate disposition of the regulation.  For example, the next administration will likely be responsible for defending the Clean Power Plan rule, which was recently put on hold while the United States Court of Appeals for the District of Columbia Circuit hears the case.

Other Congressional Options

Even without the expedited procedures of the CRA, congress can exercise control over regulatory outcomes by limiting appropriations for enforcement, or it could issue new legislation that supersedes or overrides a regulation.

1 The Unified Agenda of Regulatory and Deregulatory Actions published in December 2015 lists 95 economically significant regulations expected to be issued in final form by the fall of 2016.