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Can Obama Turn Back The Clock On Bush’s Midnight Rules?

 This story was originally published in Politico.

Whether it’s relaxing pollution-control standards for power plants or allowing loaded weapons into national parks, the Bush administration is scrambling to approve or change as many federal rules as it can before it hands off power to President-elect Barack Obama. This surge of "midnight regulations" presents a thorny question for the next administration: What can it do to void rules it thinks should be undone?

An Obama spokesman told ProPublica that the transition team can’t comment on the new administration’s strategy yet. However, John Podesta, a leading member of the transition team, has said Obama will use his "executive authority without waiting for congressional action" to reverse many of Bush’s policies.

But that authority has its limits.

While executive orders and rules that are not yet in effect can swiftly be reversed or altered by Obama’s appointees or his own executive orders, rules that go into effect before he takes office will be extremely difficult to undo. Rescinding a rule would require the new administration to restart the rulemaking process, which can take years and prompt legal challenges. Another strategy that has been talked about lately – getting Congress to disapprove the rules through the Congressional Review Act – carries political risks and has been used only once before. 

"The problem with what the Bush administration is doing is that these rules are extremely cumbersome to adopt, and they are every bit as cumbersome to undo," said David Vladeck, an administrative law professor at Georgetown University. "It condemns the next administration to spend years fighting on the old administration’s agenda."

ProPublica is assembling a list of these "midnight regulations" and will track them through the rulemaking process, regularly updating its Web site and detailing how the proposed changes might affect the public. Some of the rules have lingered on the president’s agenda for years, others are more recent proposals.

Stop the presses

Strategies to rescind a midnight regulation vary depending on its status in the rulemaking process. 

After a rule has been finalized by the Office of Management and Budget, it takes 30 to 60 days for it to go into effect – 60 days for rules that cost the economy $100 million dollars or more, 30 days for rules that cost less than that.

During this period, Obama can void the rule by directing agency heads and OMB to halt work on it until his administration can review it. That’s what President Bush did in response to the dozens of rules President Bill Clinton finalized in the weeks before he left office in January 2001.

On the day of Bush’s inauguration, his chief of staff, Andrew Card, instructed agency heads and OMB to withdraw rules that had not yet taken effect so the Bush administration could review them first. Many were altered to fit Bush’s agenda or rescinded altogether.

Susan Dudley, who at the time was a research fellow at the Mercatus Institute, a conservative think tank, criticized the tradition of last-minute rulemaking and the way Clinton used it.

"Like Cinderella leaving the ball, many of Clinton’s 7,000 presidential appointees hurried to issue last-minute ‘midnight’ regulations before they turned back into ordinary citizens at noon on January 20th," Dudley wrote in a 2001 commentary.

Now Dudley serves as the head of OMB’s Office of Information and Regulatory Affairs and is a key player in finalizing Bush’s midnight rules.

To make sure the Bush administration’s rules would survive, White House Chief of Staff Joshua Bolten wrote a memo in May urging agency heads to publish all final rules in the federal register by November 1, so they would be in effect when the next administration took office. Despite Bolten’s prodding, however, many regulations are still under review at OMB, and still more are being submitted.

Starting from scratch

Getting rid of a rule that is already in effect is enormously difficult because it must be replaced with another rule. That process can take months or even years and could leave some of the Bush rules in place in the meantime. It can also lead to lawsuits. 

"If you start the rulemaking process over again, the end product is likely to be challenged in court by somebody, and the administration would need to develop a record that supports the decision to promulgate a new rule," said Robert Glicksman, an administrative law professor at the University of Kansas.

Bush’s midnight regulations also could be challenged by public interest groups, who are already considering legal actions to get some of them overturned. If the Obama administration agrees with the group’s position, it could promise the court to develop a new rule that both parties can agree on. But that would open up the possibility of further legal challenges from third parties, such as utility companies or other industry interests, which could assert that the Obama administration and the group were participating in a "collusion of interests" without adequately considering the impact on industry.

"By intervening, industry could buy more time and save billions of dollars by avoiding compliance to a new rule," said Rena Steinzor, a University of Maryland law professor who is also a member of the Center for Progressive Regulation, a Washington, D.C.- based advocacy group.

Leave it to Congress

To bypass such an arduous process, some Democrats in Congress are contemplating the use of the Congressional Review Act, an obscure Clinton-era law that allows Congress to vote to disapprove any rule finalized within about six months before Congress adjourns. It was passed by the Republican-dominated House in 1996, partly because Republicans wanted to shoot down Clinton-backed rules.

OMB Watch and other public interest groups have urged Congress to use the Review Act to deal with some of Bush’s midnight regulations. But it, too, presents challenges.

Of the nearly 50,000 rules that have been submitted to Congress since the act was passed, it has been used to overturn only one rule, according to a recent Congressional Research Service report on the act. That happened in 2001, when Congress voted down a Clinton-backed ergonomics standard aimed at improving workplace conditions and equipment for workers. Critics said the standard was too broad and too costly.

Using the Review Act doesn’t necessarily guarantee that a rule will be voided, because the rule’s opponents may not be able to muster the votes they need. It would have to be for a "rule that is politically unpopular and reinforces the message that the new Congress and the President want to send," said Reece Rushing, a regulatory expert for the Center for American Progress, a liberal think tank in Washington, D.C.

If the Congressional Review Act is used to disapprove a rule, Congress would also be required to approve any similar rule in the future.

"This might be a lot more difficult than people think," said Matt Madia, a regulatory expert at OMB Watch.

Madia expects a flood of lobbying on Capitol Hill now that the Review Act is being considered as an option. "Everyone who has a dog in this fight is going to come to Congress, because now everyone knows about the CRA."

Read the list of midnight regulations.

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