The Election Is Over: What Now For Regulation?

The people have spoken: despite dismal approval ratings, the House, Senate, and presidency will all remain in the same hands. What are the consequences on the regulatory front? In short run, it means a midnight rush of new rules is coming.

The deluge hasn’t started yet, as only 44 new regulations have been published this week in the Federal Register, a bit below the normal pace. But during the campaign, President Obama decided to postpone the enactment of several controversial rules until after the election. According to National Journal:

Federal agencies are sitting on a pile of major health, environmental, and financial regulations that lobbyists, congressional staffers, and former administration officials say are being held back to avoid providing ammunition to Mitt Romney and other Republican critics.

Now that this ammunition will no longer have electoral consequences, the EPA can move ahead on delayed rules on everything from greenhouse gas emissions to ozone standards. Rules from the health care bill and the Dodd-Frank financial regulation bill will also likely make themselves known in the weeks to come.

Of course, this would have happened however the election turned out. If Romney had won, the midnight rush might be even more severe. Not only would the delayed rules show up, but agencies would rush to pass as much of the outgoing president’s regulatory agenda as they can before the January 20 hand off. In that case, President Obama’s victory may result in fewer regulations, at least in the short term, than if Romney had won.

The last time the White House switched parties a Bush midnight rush resulted in 3,819 final rules being published in 2008, compared to 3,594 the year before. The 2000 election took place on November 7 of that year. Between then and Bush’s January 20 inauguration, Clinton’s executive branch published an impressive 935 final rules. A full calendar year at that pace would result in 4,675 regulations, nearly 200 more rules than the 4,490 that passed in 2000, and over 500 more than the 4,132 that passed in 2001. The trend is even more pronounced for economically significant rules, going back to at least the Reagan years. So the midnight rush phenomenon is thoroughly bipartisan.

Recall that the reason for midnight rushes in the first place is to avoid voter anger. My point is this: an even better way to avoid voter anger is to pass fewer regulations in the first place.