The GOP's Three-Pronged Assault On Regulatory Oversight
Mitch McConnell has been virtually silent about any legislative agenda leading into the November elections. He said that the Senate will focus on continuing to pack the federal court system with Federalist Society hacks. But it appears that McConnell will also be running a stealth campaign to roll back the last 20 years of regulatory oversight in virtually all areas of the federal government.
The Congressional Review Act (CRA) was one item in Newt Gingrich’s Contract with America and was passed into law in 1996. The Act empowered Congress to use an expedited process and a simple majority vote to review and overrule federal agency rules. Congress has 60 legislative days after a new rule is enacted by a federal agency in order to review it under the CRA. In addition, if Congress does overrule an existing rule, a new rule that is substantially the same as the old rule cannot be implemented without it being specifically authorized by Congress in a bill or joint resolution.
Before the Trump administration, the CRA had only been used once, in 2001, to roll back a Department of Labor rule on ergonomics. But in 2017, the CRA was used 15 times to roll back regulations in a variety of areas. The most important regulatory rollbacks were the so-called Stream Protection Rule, a rule requiring oil and gas companies to disclose payments to foreign governments for drilling rights, a rule requiring employers to keep accurate records of workplace injuries for five years, and a rule requiring broadband providers to get permission from customers before collecting and using their online information.
All those rollbacks were passed by Congress before June of 2017, before the 60 day legislative day review period expired on those rules. Now the ever-resourceful Republicans believe they have found a loophole that could effect hundreds of so-called regulatory guidance documents put out by federal agencies potentially since passage of the CRA in 1996. Guidance documents are different from rules in that the don’t go through the time-consuming process of the Administrative Procedure Act to become a formal rule. While guidance does not carry the force of the law like a rule, industries generally try to follow the guidance put out by their regulators. A classic example are the workplace safety posters that are in every business these days. Those posters are the result of a guidance from the Occupational Safety and Health Administration (OSHA), not a formal rule requiring them.
What the Republicans are now doing is appealing to the Government Accountability Office (GAO) in order to get a ruling on whether certain guidance documents can be treated as a rule for the purposes of the CRA. If the GAO determines that the guidance does count as a rule under the CRA, it officially becomes a rule on the date of that GAO determination, not at the point at which the guidance was issued. At that point the 60 day legislative clock starts ticking for Congress to review the rule and rescind it.
The first such test of this new approach involves a guidance issued by the Consumer Financial Protection Bureau back in 2013 that was instituted in order to reduce discrimination in auto lending. At the request of Club for Growth favorite Senator Pat Toomey (R-PA), the GAO determined that this guidance was actually a rule under the CRA and the Senate is currently taking up a bill right now that would rescind that guidance/rule. If the bill passes, it would mark the first time the CRA has been used to roll back a regulation beyond the 60 day window.
As you can imagine, this exposes an enormous number of federal protections to rescission by a simple majority of Congress. Virtually any regulatory guidance since the CRA’s passage in 1996 is now theoretically exposed. As one federal policy analyst noted, “You have this unimaginably large universe of stuff that is now eligible for repeal under the CRA. Agencies don’t submit all this stuff because it would be an administrative nightmare.” In addition, it is not like the next incoming administration could simply put those rules back in place because they would be similar to the rescinded rule and the CRA requires passage of a specific bill by Congress for them to be re-enacted.
Even worse, this now forces federal agencies to go through the time-consuming rule-making procedure for virtually everything they do going forward or risk the possibility that some future Congress will simply rescind it even when it survives the 60 day review period. That will slow the enactment of new agency rules to a crawl. Take a look at Dodd-Frank, passed in 2010, where its financial opponents have managed to drag out the rule-making process to this day.
In an entirely different arena, another stealth attach on regulatory oversight is also being prepared. Yesterday, in a huge win for liberals and immigrants, the Supreme Court struck down a law allowing the deportation of permanent resident aliens who had been accused of certain violent crimes, deciding that the law was unconstitutionally vague. The three liberal women on the Court were joined by Breyer and the deciding fifth vote was surprisingly cast by Gorsuch. But lest you think that Gorsuch is a closet liberal or perhaps a new Souter, his rationale for supporting this decision was actually laying the groundwork for a broad assault on the constitutionality of regulatory interpretation of Congressional laws by federal agencies.
Way back in 1984, in the case Chevron v. National Resource Defense Council, the Supreme Court made a historic ruling that empowered federal agencies. The Court ruled that it would defer to the interpretation of the federal agency when it enacts a regulation if the Congressional law that “allows” such regulation is ambiguous, an exception being made for a truly outlandish interpretation of the Congressional act. This so-called “administrative deference” has allowed for all sorts of regulations that are not specifically addressed in such laws as the Clean Air Act, for instance, which was at the core of the Chevron case. Considering how poorly and hastily Congress writes laws these days (see the latest tax cuts) and how quickly technology changes, relying on administrative deference is the only way for government to enforce the meaning or broad older legislation like the Clean Air Act these days.
Gorsuch’s opinion in this latest Court decision on immigration takes clear aim at the Chevron decision, one of his pet peeves. Gorsuch writes, “Under the Constitution, the adoption of new laws restricting liberty is supposed to be a hard business, the product of an open and public debate among a large and diverse number of elected representatives. Allowing the legislature to hand off the job of lawmaking risks substituting this design for one where lawmaking is made easy…”. In other words, Gorsuch wants to eliminate any deference or delegation to the federal agencies in creating the rules and regulations to enforce Congressional law and put that back in the hands of Congress. His concurrence in this immigration case is purely because he believes that any ambiguity in Congressional law must be resolved by the courts of Congress itself and not left up to the interpretation of the executive branch.
Before Donald Trump even took office, on January 11, 2017, the House of Representative passed the Regulatory Accountability Act of 2017 which specifically targeted the Chevron case and administrative deference and delegation. Thankfully, it could not muster the 60 votes needed in the Senate to pass it. But what the Republicans and their corporate overlords could not get in Congress, they may get at the Supreme Court where Gorsuch is laying the groundwork for the conservative bloc to overturn Chevron.
There is a three-pronged attack on regulatory oversight. The most visible one is at the federal agencies themselves. There, Mick Mulvaney, Scott Pruitt, and Ryan Zinke are targeting consumer and environmental protections at an unprecedented rate. But they are hampered by the same cumbersome process the Administrative Procedure Act requires. It takes just as long for any agency to repeal a rule as it does to implement it. For the most part, the terrible trio have simply managed to delay or re-review of Obama-era regulations that were scheduled to go into effect, rather than rescind any prior regulations. And because of the haste in some of their proposals and the resulting lack of scientific or technical analysis behind them, they will surely be challenged in court, some already successfully so.
This is not to say that the Trump administration’s zeal for deregulation has not had an impact. Agency budgets have been cut, science advisory boards have been gutted, and businesses are certainly having an easier time when it comes to things like permitting. More importantly, the signal has been sent that oversight will essentially cease and violations will not be vigorously prosecuted.
So, while the focus of regulatory rollback has mainly been on the actions of Trump’s cabinet, those agency heads have actually been far less effective than many imagine, at least for the moment. Yes, the delays or rescission of planned regulation is certainly a blow. But they have so far been able to actually rescind hardly any existing rules. The real imminent danger lies in the Congress, which has managed to rescind some previously scheduled rules and now is planning to use the CRA for the remainder of this term to gut as many existing guidance/rules as they possibly can, presumably in return for handsome campaign donations. The longer term and almost mortal danger, however, clearly lies with the Supreme Court, which could effectively destroy the rule-making authority of federal agencies entirely and put it back in the hands of our dysfunctional Congress or the courts that McConnell has managed to pack.
