[Senate Report 115-164]
[From the U.S. Government Publishing Office]
Calendar No. 233
115th Congress } { Report
SENATE
1st Session } { 115-164
_______________________________________________________________________
MIDNIGHT RULES RELIEF ACT OF 2017
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
WITH MINORITY VIEWS
to accompany
S. 34
TO AMEND CHAPTER 8 OF TITLE 5, UNITED STATES CODE, TO
PROVIDE FOR EN BLOC CONSIDERATION IN RESOLUTIONS OF
DISAPPROVAL FOR ``MIDNIGHT RULES'', AND FOR OTHER PURPOSES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 5, 2017.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
79-010 WASHINGTON : 2017
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Satya P. Thallam, Chief Economist
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Katherine C. Sybenga, Minority Counsel
Laura W. Kilbride, Chief Clerk
Calendar No. 233
115th Congress } { Report
SENATE
1st Session } { 115-164
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MIDNIGHT RULES RELIEF ACT OF 2017
_______
October 5, 2017.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany S. 34]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 34) to amend
Chapter 8 of title 5, United States Code, to provide for en
bloc consideration in resolutions of disapproval for ``midnight
rules'', and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................4
V. Evaluation of Regulatory Impact..................................4
VI. Congressional Budget Office Cost Estimate........................4
VII. Minority Views...................................................6
VIII.Changes in Existing Law Made by the Bill, as Reported............8
I. Purpose and Summary
The Midnight Rules Relief Act of 2017, S. 34, amends the
Congressional Review Act (CRA) to allow Congress to consider
multiple regulations within a single resolution of disapproval.
II. Background and the Need for Legislation
``Midnight rulemaking'' refers to a phenomenon whereby
outgoing administrations, especially when the incoming
administration is of a different party, engages in a
significant increase in regulatory activity. In particular,
this means a marked increase in last-minute regulations issued
by regulatory agencies before installation of the new
administration's political appointees--``like Cinderella
leaving the ball.''\1\ In practice, the ``midnight period''
refers to the roughly two-month period between the presidential
general election and subsequent inauguration day.\2\ For
example, President Barack Obama's administration published 842
final rules (179 declared ``significant'') from November 9,
2016 (the day after the election) to January 19, 2017 (the day
before the inauguration), compared to 604 (79) for the same
period a year prior, and 608 (51) for the comparable period
after President Obama's re-election in 2012.\3\ Observers first
identified this pattern going back to at least the transition
from President Jimmy Carter to President Ronald Reagan (1980-
81), and in transitions since,\4\ though it was not until 2001
that a scholar first formally tested the hypothesis that ``lame
duck'' administrations increase their regulatory output.\5\
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\1\Susan E. Dudley, Reversing Midnight Regulations, Mercatus Ctr.
(2001), https://object.cato.org/sites/cato.org/files/serials/files/
regulation/2001/4/dudley.pdf.
\2\See Jack M. Beermann, Midnight Rules: A Reform Agenda, 2 Mich.
J. of Envtl. & Admin. L. 285, 285-384 (2013) (Beermann uses 90 days as
the Midnight period).
\3\See U.S. Fed. Reg., https://www.federalregister.gov/ (last
visited Sept. 1, 2017).
\4\See Veronique de Rugy & Antony Davies, Midnight Regulations and
the Cinderella Effect, 38 J. of Socio-Econ. 886, 886-890 (2009).
\5\Jay Cochran III, The Cinderella Constraint: Why Regulations
Increase Significantly During Post-Election Quarters (Mercatus Ctr.,
Working Paper, 2001); William G. Howell & Kenneth R. Mayor, The Last
One Hundred Days, 35 Presidential Stud. Q. 533, 533-553 (2005)
(Scholars had long observed the broader phenomenon of outgoing
administrations undertaking ``lame duck'' policymaking; for example,
John Adams's appointment of ``midnight judges'').
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One concern about midnight rulemaking is that the quality
of analysis used to structure and justify the regulation
suffers. A 2013 study examined regulations issued around the
Bush-Obama transition and concluded this was indeed the case,
and moreover that the degree to which quality suffers may be
associated with the outgoing President's policy priorities.\6\
The implication is that midnight rules can have a lasting
effect on policy without the necessary evidence to justify the
rules, resulting in a suboptimal policy outcome.
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\6\Jerry Ellig, Patrick A. McLaughlin & John F. Morrall III,
Continuity, Change, and Priorities: The Quality and Use of Regulatory
Analysis Across U.S. Administrations, 7 Reg. & Governance 153, 153-173
(2013).
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A related but distinct concern is that midnight regulations
can lead to a stress on resources for the Office of Information
and Regulatory Affairs--tasked with centralized review of
Executive Branch agency rules--which shortens review times and
decreases accountability.\7\ Further, an administration free of
electoral or Congressional constraints ``can pursue regulatory
policies that, in other circumstances, might have invited
retaliation.''\8\ This could be characterized as
``undemocratic'' if the policies themselves are contrary to the
preferences of the electorate as expressed via the prior
election.\9\
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\7\``[O]ne additional economically significant regulation submitted
to OIRA decreases the mean review time for all regulations by about two
thirds of a day.'' See Patrick A. McLaughlin, The Consequences of
Midnight Regulations and Other Surges in Regulatory Activity, 147 Pub.
Choice 395, 395-412 (2011); see also Jerry Brito & Veronique de Rugy,
Midnight Regulations and Regulatory Review, 61 Admin. L. R. 163, 163-
196 (2008).
\8\McLaughlin, supra note 7.
\9\Id. Also consider that regulations (including midnight
regulations), once issued, tend to be highly persistent. E.g. Jason M.
Loring & Liam R. Roth, Empirical Study: After Midnight: The Durability
of the ``Midnight'' Regulations Passed by the Two Previous Outgoing
Administrations, 40 Wake Forest L. Rev. 1441 (2005).
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The CRA set up a rolling window during which Congress can
review and disapprove regulations submitted by the Executive
Branch.\10\ If a regulatory agency submits a rule to a Congress
which ends before the full review window elapses, then these
procedures provide the next Congress a new period in which to
review and disapprove of the rule.\11\ In practice, treating
the rule as if it is resubmitted allows Congress to review
midnight rules issued by an outgoing administration, as the end
of a presidential term typically occurs within a few weeks of
Congress's sine die adjournment.
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\10\See Subtitle E (``Congressional Review'') of the Small Business
Regulatory Enforcement Fairness Act of 1996 Sec. 251, 5 U.S.C.
Sec. Sec. 801-808 (enacted as 104 P.L. 104-121, codified at 5 U.S.C.
Sec. Sec. 801-808) (the congressional disapproval procedure is
contained in Section 802).
\11\5 U.S.C. Sec. 801(d) (2012).
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The CRA's disapproval mechanism requires Congress to
introduce, pass, and the president to sign a unique joint
resolution for every rule. The Midnight Rules Relief Act of
2017 would amend the CRA to allow for disapproval of more than
one rule within a single joint resolution under a particular
circumstance. For rules promulgated at the end of a
Congressional session--those rules that effectively must be
resubmitted to Congress--that occurs within a president's final
year of a term, the Midnight Rules Relief Act of 2017 would
provide the option for Congress to group multiple rules for
consideration en bloc and outlines the specific form such a
resolution must take.
Under this proposed legislation, a new Congress is afforded
an expedited means to prevent persistent and potentially costly
policies via regulations pursued by an outgoing administration
in its waning days. By grouping multiple rules together, it
reduces the time and resources that Congress must spend, to
reverse the prior administration's last minute regulatory
policy grab. Moreover, the legislation makes it more likely
Congress can prevent avoidable fixed costs of compliance with
such regulations. It does not, however, change the overall
review and disapproval procedure or application for rules that
do not fall within this narrow set of circumstances.
At the end of the Obama Administration, Chairman Ron
Johnson sent letters to both outgoing and incoming officials
urging a concerted effort to prevent ``a last-minute deluge to
promulgate so-called `midnight rules.'''\12\ This effort
focused on both specific rules\13\ as well as the overall
midnight rules phenomenon. Nevertheless, the outgoing
administration persisted in pushing through a significant
increase in last-minute rulemaking, resulting in Chairman
Johnson introducing the Midnight Rule Relief Act of 2017 as a
means to address future attempts to do the same.
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\12\Letter from Sen. Ron Johnson, Chairman, S. Comm. on Homeland
Sec. & Governmental Affairs, to Dr. Howard Shelanski, Administrator,
Office of Info. & Regulatory Affairs, Dec. 7, 2016.
\13\See letter from Sen. Ron Johnson, Chairman, S. Comm. on
Homeland Sec. & Governmental Affairs, and Sen. James Lankford, to Sally
Jewell, Secretary, Dep't. of Int., Dec. 13, 2016; Shelanski, supra note
11; see also letter from Sen. Ron Johnson, Chairman, S. Comm. on
Homeland Sec. & Governmental Affairs, to Vice President-Elect Mike
Pence, Dec. 12, 2016.
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III. Legislative History
Chairman Johnson (R-WI) introduced S. 34 on January 5,
2017. The bill was referred to the Committee on Homeland
Security and Governmental Affairs. Senators Rand Paul (R-KY),
Michael B. Enzi (R-WY), Marco Rubio (R-FL), Steve Daines (R-
MT), and Roy Blunt (R-MO) later joined as co-sponsors of the
bill. The Committee considered S. 34 at a May 17, 2017 business
meeting.
The Committee ordered S. 34 reported favorably on May 17,
2017, by a roll call vote of 8 yeas to 6 nays. Senators voting
in the affirmative were Johnson, McCain, Portman, Paul,
Lankford, Enzi, Hoeven, and Daines. Senators voting in the
negative were McCaskill, Tester, Heitkamp, Peters, Hassan, and
Harris. For the record only, Senator Carper voted nay by proxy.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title
This section provides the bill's short title, the
``Midnight Rules Relief Act of 2017.''
Section 2. En bloc consideration of resolutions of disapproval
pertaining to ``Midnight Rules''
Paragraph (a) amends Section 801(d) of the CRA so that of
the rules eligible for disapproval under the CRA, those
``submitted during the final year of a President's term'' can
be considered for disapproval in a single resolution.
Paragraph (b) amends Section 802(a) to describe how the
text of such a resolution must be structured.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. Congressional Budget Office Cost Estimate
May 30, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 34, the Midnight
Rules Relief Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
S. 34--Midnight Rules Relief Act of 2017
S. 34 would amend the Congressional Review Act (CRA) to
allow en bloc disapproval of multiple regulations issued during
a President's final year in office. Under the CRA, the Congress
can only disapprove one regulation at a time.
Although the bill could affect how the Congress uses the
CRA and thus affect which regulations are disapproved, enacting
the bill would have no effect on the budget. Regulations can
affect the cost of entitlement programs as well as the
collection of fees, and changes to those regulations could
either increase or decrease federal spending or revenues.
However, any budgetary effects would result from future
legislation that disapproved the regulations.
Enacting the legislation would not affect direct spending
and revenues; therefore, pay-as-you-go procedures apply. CBO
estimates that enacting S. 34 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
S. 34 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
VII. Minority Views
MINORITY VIEWS OF SENATORS CLAIRE McCASKILL, THOMAS R. CARPER, AND
MAGGIE HASSAN
The Congressional Review Act (CRA),\1\ lays out the process
by which Congress may disapprove an executive agency rule
finalized within the last 60 legislative days of the House or
Senate session during the final year of an Administration.
Under current law, a joint resolution for each rule must be
considered separately. S. 34 amends section 801(d) of the CRA
to allow Congress to consider a joint resolution to disapprove
an unlimited number of regulations all at the same time.
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\1\5 U.S.C. Sec. Sec. 801-808.
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This bill is a solution in search of a problem and is built
on the misguided premise that the majority of rules promulgated
at the end of an Administration lack the rigorous analysis and
review that is required in the regulatory process. To the
contrary, most rules finalized in the last months of an
Administration have gone through rigorous review and taken
years to move through the regulatory process. The nonpartisan
Administrative Conference of the United States (ACUS) found
that ``a dispassionate look at midnight rules issue by past
Administrations of both political parties reveals that most
were under active consideration long before the November
election'' and that many others were routine rules such as
``finishing tasks that were initiated before the Presidential
transition period or the result of deadlines outside of the
agency's control (such as year-end statutory or court-ordered
deadlines).''\2\ In fact, a report last year found that rules
finalized during a transition period were usually proposed
several years prior to their adoption.\3\
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\2\Administrative Office of the United States, Administrative
Conference Recommendation 2012-2; Midnight Rules 1-2 (June 14, 2012).
\3\Public Citizen, Shining a Light on the ``Midnight Rule''
Boogeyman (July 18, 2016).
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While the committee report asserts that the ``midnight
period'' refers to a two month period between the general
election and the subsequent inauguration, we would note that 60
legislative days can in fact be many months. For example,
during the most recent transition, 60 legislative days captured
all regulations finalized in the last 6 months of the Obama
Administration.\4\ This bill would institutionalize one party's
ability to remove the last 6 months of the other party's
policies without giving proper consideration to each policy or
giving Members the ability to weigh the merits of each rule
included in the resolution.
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\4\Congressional Research Service, Agency Final Rules Submitted on
or after June 13, 2016, May be Subject to Disapproval by the 115th
Congress (IN10437) (2016).
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There is no good policy rationale for Congress to take a
single vote on a potentially wide variety of rules affecting a
broad range of potentially unrelated issues. For example, if
this bill had applied to CRA votes taken this year, Senators
could have been forced to take a single vote on rules affecting
a Securities and Exchange Commission rule relating to
disclosure of payments by resource extraction issuers and a
Department of Labor rule relating to drug testing of
unemployment compensation applicants. Members of Congress
deserve the right to take separate votes on issues this
disparate and unrelated. If this process is to be taken
seriously, Congress should have a robust debate and a separate
vote on each rule they wish to reconsider.
While the CRA had previously only been used successfully
one time to overturn a rule,\5\ this year it was successfully
used to overturn 14 rules issued in the last months of the
previous Administration, many with votes largely along party
lines.\6\ The lasting impact of overturning rules with the CRA,
which would be amplified by the expansion proposed in this
bill, is that agencies are prohibited from ever issuing
replacement regulations that are substantially the same as the
rule that was invalidated, absent additional Congressional
action.\7\
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\5\Congressional Research Service, The Congressional Review Act
(CRA) (IF10023) (2016).
\6\See https://www.senate.gov/legislative/LIS/roll_call_lists/
vote_menu_115_1.htm.
\7\5 U.S.C. Sec. 801(b)(2).
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Rather than working to refine rules with which one party
disagrees, the current CRA serves as a blunt tool that a
majority party can use to permanently invalidate policies of a
previous Administration absent further Congressional action.
This bill exacerbates the limitations of the CRA by allowing
one vote to essentially erase any or all of the executive
actions taken in last 6 months of a President's term. While
this change would undoubtedly simplify the CRA process for
Congress at the start of a new President's term, it does so by
ensuring less consideration is given to each rule and by
inserting more partisanship into a process that is already
highly partisan.
In their recommendation, ACUS advised that reforms to
target rules late in a President's term ``should be aimed as
precisely as possible at the activities that raise the greatest
causes for concern'' and at rules where there appears to be
``political illegitimacy'' or where rules ``appear to be rushed
through the regulatory process.''\8\ This bill is anything but
the precise tool ACUS suggests to target rules that raise real
concerns. For these reasons, we urge our colleagues to join us
in opposition.
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\8\Administrative Office of the United States, Administrative
Conference Recommendation 2012-2; Midnight Rules 1-2 (June 14, 2012).
VIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 34 as reported are shown as follows (existing law proposed
to be omitted is enclosed in brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 8--CONGRESSIONAL REVIEW OF AGENCY RULEMAKING
* * * * * * *
SEC. 801. CONGRESSIONAL REVIEW.
(a) * * *
* * * * * * *
(d) * * *
(1) * * *
* * * * * * *
(4) In applying section 802 to rules described under
paragraph (1), a joint resolution of disapproval may
contain one or more such rules if described if the
report under subsection (a)(1)(A) for each such rule
was submitted during the final year of a President's
term.
SEC. 802. CONGRESSIONAL DISAPPROVAL PROCEDURE.
(a) For purposes of this section, the term ``joint
resolution'' means only a joint resolution introduced in the
period beginning on the date on which the report referred to in
section 801(a)(1)(A) is received by Congress and ending 60 days
thereafter (excluding days either House of Congress is
adjourned for more than 3 days during a session of Congress),
the matter after the resolving clause of which is (except as
otherwise provided in this subsection) as follows: ``That
Congress disapproves the rule submitted by the _ relating to _,
and such rule shall have no force or effect.'' (The blank
spaces being appropriately filled in). In the case of a joint
resolution under section 801(d)(4), the matter after the
resolving clause of such resolution shall be as follows: ``That
Congress disapproves the following rules: the rule submitted by
the _ relating to _; and the rule submitted by the _ relating
to _. Such rules shall have no force or effect.'' (The blank
spaces being appropriately filled in and additional clauses
describing additional rules to be included as necessary).
[all]