Bush Administration Deregulatory Agenda Finishing Strong

by Thomas McGarity


Joining Thomas McGarity in this post are CPR Policy Analysts Margaret Clune Giblin and Matthew Shudtz.  This entry is cross-posted on ACSBlog, the blog of the American Constitution Society for Law and Policy.


In the wake of the meltdown in the US financial sector, federal regulation has attracted renewed public support as a vehicle for establishing responsible boundaries and correcting market failures. Recent news stories, however, have focused public attention on a flurry of regulations that the Bush Administration has finalized, or has proposed and is working feverishly to finalize, in its last weeks in office. Has the Bush Administration recognized the failure of the deregulatory principles that have guided its nearly eight years in office and, like the public, come to embrace regulation? Apparently not. Instead, the Administration has opted to push through hundreds of new rules, many sharing the common theme of further undercutting health, safety and environmental protections.


The strategy of promulgating “midnight regulations” in an administration’s waning days is by no means novel. But the Bush Administration is taking the practice of midnight rulemaking to new heights, and it is doing so with the goal of deregulation. The Federal Times reports that since June, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) has reviewed 267 rules (both proposed and final). Of those, 55 are “economically significant,” meaning they have more than a $100 million impact on the economy. (During the same period of the Clinton Administration’s final days, OIRA had reviewed 201 rules, 36 of which were economically significant.)


Critics of midnight regulations worry that this flood of new rules will ensure that OIRA will give each individual regulation less attention and scrutiny. According to the Mercatus Center, the time OIRA has spent reviewing economically significant regulations has dropped from the 43-day average during the bulk of the Bush Administration to 24 days over the past month. In May, the White House signaled it wished to avoid such slapdash regulations and review, when Chief of Staff Joshua Bolten sent a memorandum (the “Bolten Memorandum”) to the heads of all agencies expressing his desire to “resist the historical tendency of administrations to increase regulatory activity in their final months.” Bolten directed that “[e]xcept in extraordinary circumstances, regulations to be finalized in this Administration should be proposed no later than June 1, 2008, and final regulations should be issued no later than November 1, 2008.” The White House declared those deadlines a matter of good government, ensuring that new rules would undergo careful and transparent review.


The numbers detailed above show the extent to which agencies have heeded (or, more accurately, ignored) Bolten’s call for regulatory restraint. Both because of their numbers and their substance, the regulations combining to form this deluge have prompted an unlikely alliance of environmental and free market organizations to call on the Bush Administration to suspend all new regulations. The general theme of the new regulations is to favor business and industry interests at the expense of health, safety, and environmental protections.


Several specific examples follow.


Turning a Blind Eye to Waste from Concentrated Animal Feeding Operations


Among the most recent “midnight regulations” is one finalized by the Environmental Protection Agency on October 31 concerning nutrient-rich manure generated by concentrated animal feeding operations (CAFOs), commonly known as factory farms. CAFOs store waste in massive open-air lagoons or dispose of it on land. Spills and runoff of the waste can contaminate drinking water supplies, kill fish and spread disease.

According to EPA, the regulation requires CAFOs that “actually discharge” manure into streams, lakes and other waters to apply for a permit under the Clean Water Act and to submit a “nutrient management plan” for controlling manure with their permit applications. Why then, is the livestock industry welcoming the rule, praising it as “tough but fair”?


EPA said it is also providing an opportunity for CAFO operators who do not believe they need an NPDES permit “to show their commitment to pollution prevention by obtaining certification as zero dischargers.” Environmentalists argue that this vague provision ultimately puts the industry in charge of permitting decisions.


Weakening Protections for Workers


The Department of Labor is burning the midnight oil to finalize a new rule that will affect how scientists at the Occupational Safety and Health Administration and the Mine Safety and Health Administration compile and analyze the scientific studies that form the basis for new occupational safety standards. The new rule oversimplifies many of the complexities inherent in the risk assessment process. At the same time, it requires agency officials to abandon longstanding practices, like the assumption that safety standards should protect workers from occupational hazards over the course of a full 45-year working life.


Ignoring the Bolten Memorandum’s June 1 deadline, DOL published the first official notice of the rule on the Friday before Labor Day. In the interest of further rushing the rule through the regulatory process, the agency provided only the minimum 30-day window for public comments. When a group of 39 leading academics and practitioners from the world of public health and occupational safety told DOL that they needed more than 30 days to review the rule, Senator Obama took note and sent a letter to the agency echoing the experts’ concerns. The agency ultimately rejected the requests, and the final rule is due to be published any day.

Endangering Species by Sidelining the Wildlife Agencies


Another proposed regulation that missed the Bolten deadline by well over a month was the U.S. Fish and Wildlife Service’s (FWS) proposed changes to rules implementing the Endangered Species Act (ESA). The changes would affect the rules that implement Section 7 of the Act, which requires federal agencies “in consultation with and with the assistance of” FWS and its counterpart wildlife agency, the National Marine Fisheries Service (NMFS), to “insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species . . . .”


Congress included this provision because it recognized that federal agencies dedicated to a wide variety of different missions (some unrelated and even at odds with species protection) would resist careful evaluation of their actions from the perspective of whether species would be harmed. But the new proposal from FWS opens a route by which action agencies can decide on their own, without consulting with the wildlife agencies, that their actions won’t adversely affect endangered species. Thus the proposal would sideline FWS and NMFS and result in less protection for the endangered and threatened species the ESA charges the FWS with protecting.


FWS initially followed the example of DOL and allowed only 30 days for public comment. It later lengthened the comment period for 60 days. The agency is reported to have received as many as 200,000 unique comments from the public on its proposal. However, according to an e-mail obtained by the Associated Press, the Department of the Interior planned to “review” all public comments received in an astonishingly brief four-day period, with the goal of issuing the final rule by early November.


This record-setting speed-reading project at the Department of the Interior, and the 30-day comment period for the DOL Risk Assessment rule are illustrative of two additional points. First, the compressed time periods between initial proposal and planned finalization—and the short shrift the agencies are giving to public comment—demonstrate another way in which the agencies have failed to heed the Bolten Memorandum. In it, the White House Chief of Staff directed that agencies “provide adequate time for necessary analysis, interagency consultation, robust public comment, and a careful evaluation of and response to those comments.” Second, the approach provides another important contrast with the rules issued during the final days of the Clinton Administration. Many of those were promulgated only after the agencies over a period of years had gathered and analyzed scientific and economic data, provided for broad public comment, extensively analyzed public comments, and prepared lengthy and comprehensive background documents to support the particular requirements.


If agencies ultimately finalize these and other hastily conceived deregulatory rules by early November, the process by which they were promulgated will (with good cause) lead to widespread skepticism that they embody the spirit of “good government” envisioned by the Bolten Memorandum. A more powerful driver of the last-minute rules-rush at this stage of the game appears to be an intense desire by some in the Bush administration to prevent the incoming administration from doing what the Bush Administration did to President Clinton’s “midnight regulations” – keeping those for which the 60-day congressional comment period had not yet elapsed from ever taking effect. If this strategy is successful, the Bush Administration will have exerted its deregulatory control over the Obama Administration, despite President Bush’s promise to President-Elect Obama that he would facilitate a smooth transition. Then again, there’s always the hope that even if the outgoing Administration isn’t won over to the new pro-regulatory sentiment taking hold in the public, it at will at least live up to its own promise and put a stop to the blizzard of deregulatory midnight regulations.

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