By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends most of her time in Asia and is currently researching a book about textile artisans. She also writes regularly about legal, political economy, and regulatory topics for various consulting clients and publications, as well as scribbles occasional travel pieces for The National.
This week has started with much sturm und drang as Trump closes in on the 100 day milestone — the benchmark for presidential achievement set by Franklin Delano Roosevelt (FDR) in 1933.
It’s worth recapping what FDR achieved in those first 100 days after his March 4, 1933 inaugural address– actually 105, but that tidbit has been left out of the story. Major legislation included: the Agricultural Adjustment Act, the Glass-Steagall Act, the National Industrial Recovery Act, and the Securities Act, as well as the creation of the Civilian Conservation Crops, the Federal Emergency Relief Administration, the Tennessee Valley Authority, and the Works Progress Administration, a record summarized in this Time magazine account, The First 100 Days. Some of these measures were later tweaked or modified, while some initiatives were subsequently overturned by the courts.
The purpose of this post, however, is not to discuss FDR’s legacy– formidable as it remains and one that’s especially vivid if you ever have the chance to stroll around Hyde Park, site of his home and the first US presidential library.
Instead, I wish to discuss how congressional Republicans and Trump are using the Congressional Review Act (CRA)– enacted as part of Newt Gingrich’s Contract with America Advancement Act of 1996– to roll back regulations drafted in the waning days of the his predecessor’s administration. As I wrote in my first post on this issue, Republicans to Use CRA to Roll Back ‘Midnight’ Rules and Benefit Oil Companies, the CRA allows rules finalized during the past 60 session days to be overturned, by a simple majority vote in both houses on a CRA resolution of disapproval, using expedited procedures, followed by a presidential signature. If the president vetoes the CRA resolution, the regulation could still be rescinded if a 2/3 majority in each house votes to override the presidential veto. Crucially and importantly, once the regulation has been successfully voided, the regulatory agency is barred from reviving the rule in “substantially the same form”– forever–in the absence of new legislative authority.
Rollback of Fourteen Midnight Regulations
Now, as I pointed out in that earlier post, the 1996 legislation had only been used once before to roll back a regulation– an Occupational Safety and Health Administration (OSHA) ergonomic rule squelched early in George W. Bush’s administration. Yet just because CRA authority hadn’t so far been extensively used, doesn’t mean it wasn’t there to be used. If agencies had paid more attention to CRA’s deadlines during the electoral cycle and completed their necessary rule-makings more quickly in 2016, the CRA may not have come into play at all (more on this below). As just one example– discussed at greater length in my January post, as well as other posts linked within– the Securities and Exchange Commission (SEC) had tarried in its Dodd-Frank rule-making efforts, and its resource extraction issuers rule– forcing disclosure of payouts (ahem, bribes) made to secure benefits– was one of first measures to end up on the CRA chopping block.
So far, 14 rules have been rolled back, covering a variety of issue, including abortion funding, drug testing, education performance, environmental protection, government procurement, gun control, internet privacy, land use, retirement plans, and teacher preparation. And just last week, Press Secretary Sean Spicer took the administration’s latest victory lap for its ’s CRA record, in his April 19 press briefing:
As I’ve mentioned here, we’re now at a dozen Congressional Review Act pieces of legislation that have been signed that have had, I think, a very positive impact and will have a very positive impact on job creation. When you — and I’ve noted before to you that only one had ever been signed in history before — that’s a pretty significant achievement for this President.
The Congressional Research Service has determined that any rule made final on or after June 13, 2016, is in theory, vulnerable to a CRA resolution of disapproval, according to a New York Times DealBook article, Republicans’ Paths to Unraveling the Dodd-Frank Act that I discussed further in my February post, Republicans Deploy CRA Authority to Roll Back Regulations. Sixty session days means that sometime next month, we’ll reach the limit and know exactly which rule-makings remain valid, and which have been more or less permanently rescinded– absent new legislative authority and further rule-making procedures.
Rolling Back the Rollback?
Not so fast. Last week, the Center for Biological Diversity filed a lawsuit in federal district court in Anchorage, Alaska, in which it:
challenges the revocation, and seeks reinstatement, of a [Department of the Interior] rule that protects wolves, bears and other wildlife in national wildlife refuges in Alaska from cruel and ecologically harmful predator control practices, such as killing wolves and their pups in dens and gunning down grizzly bears at bait stations….The Center also challenges the revocation of, and seeks to preserve, Interior’s authority to enact future rules to protect predators consistent with its statutory mandates to conserve natural diversity on Alaska wildlife refuges (citations omitted).
The plaintiff alleges that the CRA provision that bars any future rules in “substantially the same form” as the revoked rule imposes “a constraint on future rulemaking violates the separation of powers that must be maintained between the legislative and executive branches under the U.S. Constitution.”
It’s extremely unlikely that the plaintiffs will succeed in this lawsuit, and manage to overturn the CRA– as discussed further in this New York Times piece, Group Sues Trump for Repealing U.S. Wildlife Rule in Rare Legal Challenge. In fact, I think the suit is likely to be dismissed before the court considers the merits, on the grounds that the plaintiffs have failed to establish standing to sue. So the CRA is likely to continue to be good law.
Yet until the suit (and any similar actions), wind their way through the courts to their ultimate resolution, the minuscule possibility that the CRA might be overturned on constitutional or other grounds exists.
The CRA’s Outer Limits
So, it’s extremely unlikely that any pending or future lawsuits would cause the CRA to be overturned– resurrecting some or all the 14 revoked rule makings (as well as any further ones that might occur).) Yet as I wrote in my February post, Republicans Deploy CRA Authority to Roll Back Regulations, there’s reason to think that CRA’s scope may be greater than has so far been widely acknowledged in providing authority to overturn rules that are seemingly long-settled. Permit me to quote form that post:
Kimberley Strassel’s WSJ piece, A Regulatory Game Changer,has attracted lots of chatter, for its assertion that the CRA could be used to rescind rules that go back as far as 2009. Strassel makes two arguments. First, she points out that the CRA mandates any federal agency promulgating a rule to submit a report on said rule to the House and Senate, and recognizes that the 60-day window for invoking CRA is triggered by the later of when the rule is published in the Federal Register or when Congress receives the report. At least in theory, if current regulators were to submit the missing reports– no matter when the underlying rule was finalized– Congress could invoke the CRA and pass a resolution of disapproval and invalidate the rule. Strassel asserts that there are rules for which no required reports were filed, which suggests that potentially more rules could be rescinded under CRA procedures: “Bottom line: There are rules for which there are no reports.” Really? I’m willing to believe there are. Unfortunately, she fails to identify any specific rule.
Another potential problem, according to Strassel, is the CRA’s expansive definition of what counts as a “rule”– which extends beyond measures published in the Federal Register to include “guidance” that agencies issue (e.g., on transgender bathrooms or on campus sexual assault). This means in theory that the CRA could be invoked against any rules or guidance dating back to 1996, when it was passed, for which results were not correctly filed.
Now, since I wrote that post, the administration has failed to act on this broader interpretation, and in fact seems to acknowledge that the 60-day review period for CRA resolutions will expire next month. But in another April op-ed piece, the Wall Street Journal doubled down on the interpretation that the full scope of the CRA has yet to be tested, in Trump’s Deregulation Project. Allow me to quote from that piece at length:
But our colleague Kimberley Strassel has explained how the law applies to past rules that agencies failed to report to Congress as required. The same is true for “guidance” letters, such as the Education Department’s sexual assault “Dear Colleague,” that were imposed with the force of law without having to go through a public comment period.
The Administration could require agencies to work up lists of rules that were not properly reported, and send them up for rejection. Bonus: If Congress disproves a rule, the CRA stipulates that an agency cannot issue the same regulation again. That is much more powerful than perennial blue-ribbon regulatory commissions or a pledge to identify two old regulations to replace for every new one, which usually achieve less than advertised.
The minds behind this interpretation are the Heritage Foundation’s Paul Larkin and the Pacific Legal Foundation’s Todd Gaziano, who helped write the CRA. They are combing federal records for potential candidates. There appear to be hundreds, and here’s an example: The EPA’s interpretation of the Supreme Court’s Rapanos opinion in its waters of the U.S. rule, which has let the agency pummel property owners with tenuous claims about drainage into navigable waters.
Some Republicans may want to move on to other legislative priorities, and floor time is limited. But agencies could report a handful of rules at a time so as not to swamp the House and Senate as they consider the budget or Mr. Trump’s nominees.
I admit that I haven’t been able to decide whether this more expansive interpretation of what the CRA allows is valid. Nor has there been any real consensus one way or another among the practitioners I’ve consulted. But I will go out a bit on a limb here. If significant obstacles continue to obstruct Trump legislative achievements in areas such as immigration, healthcare, the budget, and tax cuts– not to mention the debt ceiling issue– I believe the Trump administration may decide to test the limits of what the CRA might allow in terms of rolling back regulations. Already, Spicer is presenting the limited successes thus far as a major achievement. The temptation to continue to pursue further CRA rollbacks will only increase as Trump beings to understand how difficult legislation is to achieve– even when both executive and legislative branches are controlled by the same party.