Thursday, May 3, 2012

Midnight Rules Legislation

Last week there were two interesting bills introduced that dealt with the controversial issue of ‘midnight rules’; regulatory action taken during the lame duck portion of a President’s term of office between his losing election day and the inauguration of his successor. Rep. Ribble (R,WI) introduced HR 4607, the Midnight Rule Relief Act of 2012. A day later Sen. Johnson (R,WI) introduced the companion bill, S 2368, in the Senate.

Midnight Rules

There is a natural inclination in the closing days of an Administration to finish up uncompleted projects, particularly when the successor Administration is from another Party. Just as naturally the successor gets a tad bit bent out of shape when those actions put rules and regulations into place that are ideologically objectionable to the new comers; they are put into the unenviable position of having to enforce such rules until they are able to go through the lengthy process of changing or removing them. Add to that equation the time lag due to the nomination vetting and approval process and the last minute regulations can remain in place for quite some time.

Both Presidents Clinton and Bush put out official word in the last summer of their respective presidencies that the Executive Branch agencies were not to start any new regulatory actions since they knew their terms were expiring. Still, both were accused by their successors of having ‘unfairly’ initiated midnight rules.

President Obama cannot be expected to take the same step this summer since his Administration intends to win re-election this fall and would expect to continue to make new rules and regulations for another four years. At this point it is way too early and the polling too close to clearly state that they are mistaken in that belief.

The Legislation

Both bills have identical language (that’s why they are called companion bills after all) that would prohibit any executive branch agency from proposing or finalizing any midnight rule that would fall into one of the following three categories, as determined by the Administrator of the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB) {§2}:

• Would result in an annual effect on the economy of $100,000,000 or more;

• Would result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

• Would result in significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

There are qualifications and exceptions to the prohibition. Rules that have a previously set deadline, set by law or judicial decree, would be allowed. The President could exempt rules if they pertain to certain defined categories like national security or imminent threat to health or safety. And, of course since this a Republican authored bill, any regulatory action that reduces or eliminates rules or regulations could still go forward during the lame duck period.

Midnight Rules and Chemical Security

If this bill did become law (more about that later) and President Obama did lose the upcoming election, it could have some interesting effects on potential chemical security regulations. There are three currently pending chemical security rules that could potentially have final rules published during the resulting lame duck portion of the President’s term; personnel surety, ammonium nitrate security, and TWIC reader.

The CFATS personnel surety rules that would become an addendum to 6 CFR Part 27 do not have a mandated deadline, so they would not be permitted during lame duck period under this bill. The other two rule makings have deadlines that were set into law; the first by a DHS spending bill and the other by an amendment to the Homeland Security Act of 2002. The fact that both deadlines are long since passed would not appear to have any bearing on their being exempted by the language in this bill.

Possible EPA Chemical Security Rule

There has been a significant amount of talk lately by a wide variety of environmental activists (including the Bush EPA Administrator) that the EPA should impose IST requirements on high risk chemical facilities under the General Duty clause of the Clean Air Act. I haven’t discussed this move to date because I do not expect that a rule could be crafted before the election nor complete the ‘publish and comment’ process any time soon. And it seems to me that the current Administration has little focus on chemical security issues, particularly this late in their first term.

Having said that, I can posit a scenario where the EPA might try to short circuit the rule making process by initiating an ‘interim final rule’ that would greatly reduce the time involved in the rule making process. That scenario would involve an ‘imminent threat to health and safety’ that would still exempt the rulemaking process from restrictions under this bill.

Chance of Passage

I have no doubt that this bill could easily pass in the House this month. The speed with which it was introduced and ordered reported by the House Oversight and Government Reform Committee is an example of how quickly this bill could move. Given that it is obviously directed at President Obama, I would expect that a House floor vote would fall on a pretty strict party line split.

If this actually came to a vote in the Senate (a near impossibility in itself) it would fail along a party line vote for the same reason.

Finally, if the bill did manage to pass in both Houses, there is no way that President Obama would potentially tie his own hands if he were to fail in his re-election bid. This bill would be vetoed so fast the GPO ink would hardly be dry on the document.

But…. We might just see a minor coup for the Democrats with this bill. If the House passes the bill this month, it would be smart for Sen. Reid to just sit on the bill until November 7th (the day after the election). If Obama were to loose, he could just hold the bill to the last day of the lame duck session and pass it then without amendments (okay it wouldn’t be easy, but it could be done). Then it would only effect the last month or so of the Obama term, but would be on the books for the next Republican President. And he would certainly have enough votes to stop a repeal bill from coming to the Senate floor in the 113th Congress and likely the 114th Congress.

It will be interesting to watch this bill. And I will.

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