The Assault on Our Safeguards

by Thomas McGarity

November 22, 2016

We are about to experience a fifth major assault on the health, safety, environmental, and consumer protections that Congress put in place during the 1960s and 1970s, protections that most of us take for granted. And all indications are that this assault will be more intense and more comprehensive than any of the prior assaults on the governmental protections that shield our families and communities from the ravages of an unfettered free market. 

In my 2013 book, Freedom to Harm, I documented the first four assaults on federal regulatory protections by a dedicated group of trade associations, corporate lobbyists, think tanks, conservative foundations, and activist groups who were determined to return the American political economy to the laissez-faire benchmark of the late 19th century Gilded Age. 

The First Assault began during the last two years of the Carter administration and lasted well into the Reagan administration. Because the Democratic Party controlled at least one house of Congress during that time, it resulted in few changes to landmark statutes like the Clean Air Act, the Occupational Safety and Health Act, and the National Traffic and Motor Vehicle Safety Act. But the agencies implementing and enforcing those statutes suffered severe budget cuts, and President Reagan put into place a centralized regulatory review process that slowed regulation to a crawl, changed the content of regulations (often in ways that were contrary to the relevant statutes), and remains available for the Trump administration to employ to work its will on those agencies. 

The Second Assault began in 1995 as the Newt Gingrich Congress rode into power on promises made in the Republican Party's Contract with America. One target was the foundational statutes, with House Majority Whip Tom Delay pressing to repeal the Clean Air Act. Another focus was on omnibus "regulatory reform" legislation that would have, among other things, imposed by statute numerous procedural and analytical requirements on agency rulemaking and required agencies to base their regulations on formal cost-benefit analysis. After a strong outpouring of public support for agencies, however, Senate Democrats held firm and defeated all of the attempts to gut the foundational statutes, and they successfully filibustered the worst of the omnibus bills. But the agencies suffered another round of demoralizing budget cuts. 

The Third Assault occurred during the first term of the George W. Bush administration when both houses of Congress were controlled by the Republican Party after the 2002 off-year elections. A wave of scandals involving Enron, WorldCom, and other corporate bad actors undermined the business community's efforts to rewrite statutes and pass regulatory reform legislation. But appointments of dedicated deregulators to head the major agencies and intense White House review of protective regulations ensured that they did not intrude too deeply into corporate prerogatives. 

The Fourth Assault was launched in the summer of 2010 after the Tea Party successfully deflected widespread public outrage away from the role that financial elites had played in bringing about the economic downturn and toward the government's apparent inability to heal the broken economy. Despite considerable evidence to the contrary, Tea Party activists channeled the business community's claim that the ongoing crises were attributable to government limitations on economic freedom and that the solution was less government, fewer taxes, and a balanced budget. 

After the Republican Party won control of the House in the 2010 elections, the leadership brought a new bill limiting EPA's authority to the floor almost every week for the first six months of the 112th Congress. The House also passed omnibus deregulatory bills that made the omnibus bills of the Gingrich Congress look tame by comparison. Many of these bills passed the House, but died in the Democrat-controlled Senate. Still, the pressure registered: The Obama Administration slowed down its regulatory efforts after the president wrote an editorial in the Wall Street Journal announcing a new executive order on White House review of rulemaking and requiring the agencies to review existing regulations and eliminate any that did not pass a cost-benefit test. 

We are now on the verge of a much more intense Fifth Assault on regulatory protections, and this wave of the decades-long war on protective regulations has the best chance of success since the outset of the George W. Bush administration. The attack will come on several fronts. 

First, Congress will take up the omnibus regulatory reform legislation that the House passed in 2011 and possibly pass new bills aimed at slowing down or preventing major federal regulations. One of those bills, the Regulations from the Executive in Need of Scrutiny (REINS) Act, would require an affirmative vote of approval by both houses of Congress before any major rule could be finalized.  We may also see an omnibus bill from the Gingrich era imposing a cost-benefit decision criterion on all major rules, regardless of what the agencies' own statutes say about whether they are allowed to base their decisions on cost-benefit analysis. 

Second, the president may issue a new regulatory review executive order that puts even greater procedural and analytical restrictions on major agency rules.  The White House will probably step up the intensity of its review of major agency rules, and we may see a return to the Reagan era, where the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) becomes a "black hole" into which controversial regulations disappear, never to emerge again. 

Third, every indication is that President Trump will appoint committed deregulators to head the federal agencies that are responsible for implementing protective federal statutes. Given that Trump appointed leading climate denier Myron Ebell to oversee his EPA transition team, we could see a repeat of the reign of Anne Gorsuch, the Reagan-appointed head of EPA who pushed the staff into reducing regulatory protections while she presided over a series of scandals and conflicts with congressional committees before finally being forced to resign. 

The current Republican Leadership in the House has already fired the first salvo in the Fifth Assault. On November 17, the House passed the Midnight Rules Relief Act of 2016, which amends the Congressional Review Act (CRA), one of the few omnibus regulatory reform bills passed during the Gingrich Congress. That law requires agencies to send a report containing final versions of all regulations to Congress for review, then provides Congress with an expedited process for overturning those rules through the enactment of a "joint resolution of disapproval" by temporarily suspending the various legislative procedural chokepoints, including most notably the Senate filibuster. 

If both houses of Congress pass the joint resolution and the president signs it (or it is passed over his veto), the regulation may not go into effect. Worse, once a regulation has been the subject of a successful joint resolution, the agency may not promulgate a regulation "in substantially the same form," even under a new administration, unless Congress passes legislation specifically authorizing the regulation. 

The Congressional Review Act also includes a "carryover" provision for rules finalized toward the end of a session of Congress. Any rules finalized during this period can be carried over to the next session of Congress, which can then consider and potentially overturn the rule using the Congressional Review Act's expedited procedures. The length of the carryover period is based on the active days in the congressional calendar and thus varies from year to year. This year, it appears likely to start sometime in mid- to late May. 

The Midnight Rules Relief Act amends the Congressional Review Act's carryover provisions to allow a joint resolution of disapproval to encompass multiple regulations that were issued during the final year of a president's term. Congress may then pass a joint resolution containing as many of those regulations as it wants to kill. 

The current Congress will not pass this abomination during the lame duck session that lasts from now until the end of the year. But it will almost certainly breeze through the House at the outset of the next Congress, and President Trump will undoubtedly sign it if it passes the Senate. 

If enacted, this statute will allow Congress to kill EPA's limits on formaldehyde use and the National Highway Traffic Safety Administration's strict fuel economy standards for trucks, the Food and Drug Administration's ban on certain antibacterial soaps, and the Consumer Financial Protection Bureau's stringent protections for consumers who use prepaid debit cards, as well as many more rules that the Obama administration has finalized since May. 

We can only hope that senators will filibuster the bill and that at least 41 of them will oppose a cloture motion to end the filibuster. 

The battle over the Midnight Rules Relief Act will probably be the first skirmish in what will be a lengthy and exhausting war over the role that the federal government should play in protecting Americans from the ravages of an unfettered free market, in which corporate profit is the highest value. 

Those Americans who care about clean air, clean water, safe food, safe workplaces, safe cars, safe airplanes, safe trains, safe pipelines, non-predatory loans, reasonable consumer protections, and all of the other public goods that federal regulatory agencies protect and provide should gird themselves for the upcoming battles with the Trump administration, the Tea Party Republicans in Congress, and the legion of think tanks, trade associations, pro-business advocacy groups, and lobbyists who will be pressing the administration and Congress to tear down the protective governmental infrastructure that has shielded us all from physical and economic harm for half a century.

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Also from Thomas McGarity

Thomas O. McGarity holds the Joe R. and Teresa Lozano Long Endowed Chair in Administrative Law at the University of Texas in Austin. He is a member of the board of directors of the Center for Progressive Reform, and a past president of the organization.

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