Midnight in the Garden of Regulatory Evil

From the December issue of CEI UpDate

They’re called midnight regulations–the flood of federal regulatory activity occurring in the closing months of an administration. Though a bipartisan phenomenon, the midnight madness is particularly pronounced in Democratic administrations that know (or fear) that they will be replaced by Republicans. Professor Jay Cochran of the Mercatus Center at George Mason University has studied midnight regulations extensively, including the more than 100 rules presently in their final stages. According to Cochran, the last minute regulatory binge under Clinton is rivaled in number and scope only by that under the Carter administration at the end of 1980.

In some instances, President Clinton’s midnight regulations (as well as his midnight executive orders) are of a legacy-building nature, particularly environmental measures like the regulation banning any new roads in nearly 60 million acres of national forests. Others are simply an effort by Clinton appointees to enact pet projects unlikely to garner Republican support, such as the Occupational Safety and Health Administration’s (OSHA) attempt to regulate away workplace injuries caused by repetitive motions.

Perhaps the most consumer-unfriendly midnight regulation is a Department of Energy (DOE) energy conservation standard for clothes washers. The rule will add more than $200 to the initial cost of clothes washer when it takes full effect in 2007, an amount unlikely to be earned back in the form of lower utility bills. It may also result in a market dominated by front loading washers rather than the inexpensive top loading designs currently popular with consumers.

Several midnight regulations are merely the last step for proposals that have been kicking around for many years. Often, the delays were due to widespread (and still unresolved) concerns about the regulation at issue. For example, the roadless initiative threatens to devastate many local economies, and the costly new workplace rules will likely do little to improve employee health and safety. But regulators know that a finalized rule is much harder to undo than a pending one, thus the rush to get as much as possible through the pipeline before January 20.

Midnight regulations are like any other regulations, only more so. The big problem with the regulatory state is that agencies are generally unaccountable to the public, and thus have little incentive to avoid measures that may impose excessive costs, restrict freedoms, or fail to accomplish their goals. Add to that a situation where the highest level agency officials–not to mention the President who appointed them–know they will be out of the government in a few months, and the level of accountability drops even further.

Federal regulators are likely to keep busy right up to inauguration day. Then, the incoming administration, even before it can embark on its own agenda, will face the daunting task of cleaning up the mess left by the outgoing one.