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On Further Review, The Rule Is Overturned

time-lapse view of the U.S. Capitol at night
photo by Mike Norton

Purists may not like it, but most major sports these days use “instant” replay (often long enough to allow a TV commercial or three) to make sure critical rulings are correct.

The Republican-controlled Congress and its allies in the Trump administration are firing up the replay machine too. Democrats won’t like it any more than a grizzled old baseball fan enjoys seeing a slow-mo review overturn the umpire’s call on a close play at first base.

Washington’s replay does not require multiple cameras and a darkened war room filled with huge video monitors. It just requires each house of Congress to pass a “resolution of disapproval” to reverse an administrative regulation. Assuming the president signs that resolution, or that Congress then overrides a presidential veto, the challenged regulation is nullified and the bureaucracy is barred from later instituting a new rule in “substantially the same form” as the one that was overturned, unless granted express authority under new legislation.

This sort of instant replay was established two decades ago under the Congressional Review Act. Until this year, only a single rule – a Clinton administration regulation on workplace ergonomics – had actually been overturned. But Congress has already placed two disapproval resolutions on President Trump’s desk, and more are bound to follow once the Senate clears the Democrat-induced logjam over the new president’s cabinet appointments.

The first of the two rules already on the chopping block has to do with coal mining. The Interior Department’s Stream Protection Rule required coal firms to restore mined land to its condition prior to mining activity; as the name suggests, the rule emphasized the state of streams and waterways. The rule’s opponents pointed out that an existing law already forbids material damage to the environment to the extent technology allows. They criticized the new regulation as an unnecessary burden on mining operations. Both the Senate and the House have passed their resolution of disapproval on the rule, and given Trump’s previous expression of support for its repeal, it is safe to assume the Stream Protection Rule is effectively dead.

The other resolution of disapproval awaiting Trump’s signature concerns the disclosure of payments to foreign governments by oil, gas and mining companies. These companies argued that the rule put them at a competitive disadvantage and took the matter to court several years ago. While a federal judge tossed out the suit then, Congress has now voted to scrap the rule, and again Trump is expected to sign the resolution shortly.

A few more rule reversals are also already in the pipeline. The House passed a resolution last week to reverse the Bureau of Land Management’s rule on methane venting. And Rep. Paul Gosar, R-Ariz., has introduced a resolution to repeal existing rules allowing the National Park Service to manage mining and private drilling in 40 parks nationwide, though this resolution has not yet been put to a vote. There is no shortage of other rules Congress may choose to target in the coming weeks.

Still unknown is whether the flow of rule reversals from Congress will turn out to be a trickle or a dam burst. This may hinge, oddly enough, on the completely unrelated question of whether Democrats will filibuster the nomination of Neil Gorsuch to fill the vacancy on the Supreme Court.

If they do, Republicans who control the Senate may invoke the “nuclear option” to restrict the minority’s filibuster powers. If they only eliminate the filibuster for high court justices, there will be no effect on the Congressional Review Act. But if they eliminate the filibuster for ordinary legislation as well, it will become possible for the GOP to pass another piece of legislation that would likely lead to the mass reversal of Obama-administration rules.

That other piece of legislation is the Midnight Rules Relief Act. The bill, which has passed in the House but not yet in the Senate, would allow Congress to create a “batch” resolution of disapproval covering rules submitted during the final year of a president’s term (as long as the rules meet certain criteria). Should it pass, the new law would allow legislators to undo executive rulemaking much more rapidly than the current system of passing resolutions for each rule separately.

If the filibuster stays in place, the Midnight Rules Relief Act will almost certainly not get through the Senate, at least not in time to affect any rules promulgated by the recently departed administration. But if the GOP nukes the Senate filibuster once and for all, or confines it just to the area of foreign treaties where Senate advice and consent is required, then the new bill might reach Trump’s desk, and he is likely to approve it. At that point Congress could pass an omnibus rollback of dozens of rules the last administration issued from mid-2016 onwards.

Administrative rule-making is a necessary evil. It is impossible for any legislature to pass laws so detailed that they can apply to every situation, or even most situations, that arise in day-to-day life in a complex modern world. The so-called administrative state was born in the New Deal, and has flourished ever since, to fill those gaps.

But there is only a hazy line between the power to regulate and the power to legislate. Rule-making is a good thing when it is confined to boundaries that Congress, which is accountable to the voters, has established. It can be a very bad and costly thing when it goes beyond the authority Congress has delegated to the executive. Usually it is up to the courts to determine whether rule-makers have exceeded their properly granted powers, but there is no clearer expression of congressional intent than a joint resolution, enacted with all the formalities and the force of law, that says regulators have gone too far.

Those aligned with the Obama administration’s priorities will say that he made full and proper use of regulatory powers that Congress had previously granted. Courts, by and large, give deference to those regulations, but the Congressional Review Act makes them subject to review. Now we await a ruling from the booth.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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