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It's Almost Midnight in Washington


With less than two months until Inauguration Day, the Trump administration, like its predecessors, is likely to unleash a slew of new federal regulations.

With more states certifying their 2020 election results this week, President Donald Trump announced that he would allow the official transition to the Biden administration to start. President-elect Joe Biden responded by naming his nominees for several cabinet posts, including the U.S. Department of State and the U.S. Department of Homeland Security, and his transition team reported it was in touch with every federal government agency within 24 hours of the GSA’s ascertainment that Biden would move into the White House next year.


But there are still 56 days until January 20, 2021. That’s plenty of time for the Trump administration to try to make new policy and use the power of the federal government to protect some of its policy priorities.


Doing so would hardly be unique to the Trump administration. According to Ballotpedia, which bills itself as the “Encyclopedia of American Politics,” since 1948, federal executive branch agencies “have made rules at a higher rate between election day in November and inauguration day the following January.” These rules often are derisively called “midnight regulations,” a term that Boston University School of Law professor Jack Beermann says comes from the fairy tale Cinderella. Or, as Ballotpedia explains: “The ticking clock of a pending leadership change, reminiscent of Cinderella's magic disappearing at midnight, encourages executive agencies to accomplish as much of their regulatory agendas as possible before time runs out.”


This regulatory phenomenon first gained national attention at the end of President Jimmy Carter’s four years in office when, according to researchers at George Mason University’s Mercatus Center, The Washington Post and The New York Times both reported that there was a significant increase in regulatory volumes during the months between the 1980 presidential election, which President Carter lost, and the inauguration of President Ronald Reagan in January 1981.


Indeed, the daily volume of federal rules during the final three months of the Carter Administration was more than 40 percent higher than the average during the same months in 1977, 1978, and 1979. Mercatus scholars note that the volume of Carter midnight regulations “was so high that the incoming Reagan Administration imposed a 60-day moratorium on the implementation of these last-minute rules,” just to get a handle on all of them.


George Washington University’s (GWU) Regulatory Studies Center has tracked midnight regulations for the last quarter of a century. According to GWU scholars, the Clinton administration finalized 56 major rules in 1999, but that number nearly doubled to 97 during Bill Clinton’s last year in office (2000). (A “major” rule is defined as one likely to impact the economy by $100 million or more; to result in a major increase in costs for consumers, individual industries, federal, state, or local government agencies, or geographic regions; or to have significant adverse effects on competition, employment, investment, productivity, or innovation, or on the ability of U.S.-based enterprises to compete with foreign companies.)


The same thing happened during President George W. Bush’s last two years in office when the number of major regulations that were finalized exploded from 64 in 2007 to 105 in 2008. President Barack Obama was a bit more restrained, but the number of pricey rules went from 81 in 2015 to 127 in 2016. And while there might not have been as many, those Obama-era midnight regulations still packed a punch. According to the right-leaning American Action Forum, the Obama/Biden administration added $24 billion in regulatory costs to the economy in its last three weeks in office alone.


In the mid-1990s, reform-minded Republicans in Congress, who had just taken control of the U.S. House for the first time in decades, approved the Congressional Review Act (CRA). The legislation was signed by President Bill Clinton and, as the non-partisan Congressional Research Service explains, the CRA requires that all final rules be submitted to both chambers of Congress and to the Government Accountability Office before they can take effect. At that point, lawmakers have a period of time during which they can pass joint resolutions of disapproval for any regulation. If the House and Senate both pass such a resolution, it goes to the president for his signature. The president can, of course, veto those measures, but Congress can override the veto with a two-thirds vote in both houses.


According to Politico, in early 2017 – when Republicans controlled both chambers of Congress and President Obama had just left office – the party used the CRA “to quash 13 ‘midnight’ regulations on topics such as coal mining pollution, gun rights, internet privacy, Planned Parenthood funding, retirement savings and even bear hunting in Alaska.”


The important point in that paragraph: the GOP had control of both the House and Senate. Democrats, of course, may not have the same hold on power in the 117th Congress. They likely will be constrained in their ability to use the CRA, even if they do manage to win both of the two Senate runoff races in Georgia next month.


They will have the White House, of course.


Stuart Shapiro, associate dean of faculty at the Bloustein School of Planning and Public Policy at Rutgers University, told Government Executive magazine, the “first six months to a year” of the Biden administration will be spent “figuring out which Trump administration initiatives are going to require significant effort to reverse.” Susan Dudley, who directs GWU’s Regulatory Studies Center, told the magazine, “from now until Inauguration Day, Biden transition’s transition team will be reviewing the Trump administration's regulations and deciding what they want to undo.”


There should be plenty of policies to examine. According to Bloomberg, the Trump administration has submitted at least 23 major rules for review since Election Day (which, for anyone counting, was only 22 days ago).


Among them, according to Yahoo News, are a U.S. Department of Agriculture rule that would allow poultry plants to increase line speeds (a move the Obama administration rejected for fear of endangering meatpacking workers); new caps on the length of foreign student visas; restrictions on the U.S. Environmental Protection Agency’s use of scientific research and its consideration of the benefits of regulating air pollutants; and a rule that would make it easier for companies to treat workers as independent contractors.


According to ProPublica, which is tracking all Trump administration regulations through a new app, “The Trump administration is on pace to finalize 36 major rules in its final three months, similar to the 35 to 40 notched by the previous four presidents.”


GWU’s Dudley, who headed the federal government regulatory review process under President George W. Bush, told ProPublica, “This White House is not likely to be stopping things and saying on principle elections have consequences.” Dudley also explains, “One concern is the rules are rushed so they” won’t “have adequate analysis or public comment.”


One change the Trump administration definitely will try to finish is its rewrite of the Obama administration’s fiduciary rule. Indeed, the U.S. Department of Labor (DOL) sent the final draft of this rule to the White House just yesterday, where the Office of Information and Regulatory Analysis (OIRA) will review it. We previously detailed the saga behind this rule about a year ago and in June 2020, the DOL published a new version. The Trump administration proposal would reinstate the agency’s “five-part test” for determining whether a person is a “fiduciary” by reason of providing “investment advice” for a fee and that would give “investment advice” fiduciaries more flexibility to provide advice.


Will this rule, and others, make it to the finish line?


It will be close. According to Bloomberg Law, since the start of the Trump administration, the OIRA review time for all regulations has averaged 71 days, but Labor Department rules have taken an average of just 48 days. In other words: the Trump administration could finalize this rule with just days to spare before Joe Biden becomes the 46th President of the United States.


The Trump administration, like its predecessors, ain’t over ‘till it’s over.

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