Obama’s Midnight Regulations To Get Increased Scrutiny From Congress And Trump

House Majority Leader Kevin McCarthy (R-California) and other Republican leadership members just sent a letter to Obama administration regulatory agency heads telling them to put the brakes on rulemaking; no more rules from the lame-duck administration.

“[We] write to caution you against finalizing pending rules or regulations in the Administration’s last days….Moreover, such forbearance is necessary to afford the recently elected Administration and Congress the opportunity to review and give direction concerning pending rulemakings. Should you ignore this counsel, please be aware that we will work with our colleagues to ensure that Congress scrutinizes your actions and, if appropriate, overturns them pursuant to the Congressional Review Act.”

The CRA allows fast-tracking of so-called “resolutions of disapproval.” But whether the agencies obey the McCarthy letter or not, the House of Representatives is set to beef up the CRA with the bipartisan Midnight Rules Relief Act of 2016 (H.R. 5982). Rep. Morgan Griffith (R-VA) made the case for it this week in the Roanoke Star.

Let’s look at this.

“Midnight rules” is the term that has come to characterize regulations and mandates that presidents of both parties try to hasten out the door before they themselves depart. In recent years former Susan Dudley of the George Washington University Regulatory Studies Center as well as the Mercatus Center actively examined them.

Regulators issue thousands of rules annually, but the Obama administration has issued an accelerated number of the “economically significant” subset. That makes midnight rules more pertinent.

And in terms of the Federal Register rulebook, the 2016 edition today stands at an astounding 80,988 pages, with 44 days remaining in the year.

As it happens, though, when agencies finalize significant regulations, they lie fallow for 60 legislative business days, giving Congress an opportunity to formally reject them with a “resolution of disapproval” (ROD). This was the innovation of the CRA.

This little known procedure has now come into play “bigly” with president-elect Donald Trump taking office in two months.

To be sure, so far, these RODs established by the Congressional Review Act in 1996, haven’t worked. They only killed a costly ergonomics rule that straddled the Clinton and Bush administrations. But occasionally prominent attempts are made. Resolutions failed against Federal Communications Commission net neutrality regulations, and against Environmental Protection Agency greenhouse and waters rules, example.

In fact, over 100 RODs have been introduced since the CRA was enacted 20 years ago, all (but one) for naught. (For reference, here’s my “Inventory of Resolutions of Disapproval Introduced Since Passage of the Congressional Review Act in the 104th Congress.”)

That record of failure shows the standard for regulatory enactment should be congressional affirmation, rather than disapproval, of what unelected agencies do. But that reassertion of separation of powers, and the return of proper Article I lawmaking to Congress, has yet to materialize in the decades since the progressive era and the rise of bureaucracy began. Speaker Paul Ryan’s (R-WI) “Better Way” series task force reports last year, which are likely to play a part in the 115th Congress, represent today’s key effort to remedy the situation.

And now, with a new sheriff in town, congressional Republicans see a chance to go well beyond succeeding with CRA blockage of a rule for the first time since the 2001 ergonomics rule. My colleague Marlo Lewis notes several costly energy-related rules that are prime candidates.

The Midnight Rules Relief Act, likely on the House floor this week, ups the game by strengthening the Congressional Review Act. It says that “a joint resolution of disapproval may contain one or more such rules” under certain circumstances if they were issued during the “final year of a President’s term.”

That is, if passed, Congress can stop a block of qualifying regulations from taking effect with one vote, rather than voting one at a time on individual rules.

Since Congress is only in session part-time, 60 legislative days go back a while. Depending on the ultimate length of the lame-duck session, Congress could, potentially, vote to overturn every Obama regulation finalized since around the end of May or beginning of June.

They won’t do that, of course, but my current, regularly updated “inventory” of significant rules that qualify as potential candidates since May 31 now stands at 142. Naturally not all of them are contenders, but it’s a substantial list.

The Midnight rules legislation should be amended to incorporate “significant guidance” as well. Agencies issue far more sub-regulatory guidance, memoranda, notices, bulletins, advisories, letter circulars and so on than they do regulations, and these often have regulatory effect, agency denials notwithstanding.

Importantly, the CRA and its legislative history plainly covers such regulatory dark matter, but that’s not something often heard about. The CRA adopted the broad definition of “rule” under the Administrative Procedure Act and therefore allows resolutions of disapproval for sub-regulatory guidance as well.

I know the Hill’s excited, but it’s not enough to make a few cutbacks in a relative handful of agency initiatives. As Fred L. Smith Jr. the founder of the Competitive Enterprise Institute (my organization) says, “A pruned weed is a healthy weed.”

The point is this. As Congress and president-elect Trump pursue this midnight rules effort during this unquestionably unique presidential transition, they mustn’t lose sight of a need to pursue broader reforms including questioning entire regulatory statutes and eliminating bureaucracies.

The regulatory liberalization agenda needs to look at entire categories of regulation (communication, privacy, antitrust, cybersecurity) and question those, not just at particular agency rules.

If you know cronyism, and if you have a passing familiarity with public choice theory, what gets done by Washington regulatory agencies may not be, in fact, regulation. Think bigly, 115th Congress.

Originally posted to Forbes.