Top Ten Regulatory Policy Stories to Look Out for in 2019 (IMHO)

As I documented in my most recent post, 2018 was an active year for regulatory policy, bringing several notable controversies, milestones, and developments. For those who follow this area, 2019 promises to be just as lively and momentous. Indeed, it appears that the dynamics that spurred much of the regulatory policy-related action in 2018 – namely, the high priority that the Trump administration has placed on corrupting our system of regulatory safeguards, and the accompanying political polarization around the issue more generally – will continue and perhaps even intensify in the new year. Here are 10 of the biggest stories I’m looking to following in 2019, in no particular order:

1. What will happen to longstanding doctrines of judicial deference to agencies? Seemingly out of nowhere in the last few years, conservative opponents of regulatory safeguards set their sights on the once relatively uncontroversial deference doctrines applicable to judicial review of agency actions. Broadly speaking, Chevron deference directs judges to defer to agencies’ reasonable interpretation of otherwise ambiguous provisions in their authorizing states, while Auer deference (sometimes referred to as Seminole Rock deference) directs judges to defer to agencies’ interpretation of ambiguous provisions in their own regulations, provided that those interpretations are not “plainly erroneous.” The prominence of these issues for conservatives is such that both of Trump’s additions to the Supreme Court had made names for themselves in part by using their positions as appellate judges to attack these doctrines. (You might even say Justice Neil Gorsuch is a one-hit-wonder in this regard.) As “fortune” would have it, the Supreme Court has already teed up an opportunity to obliterate Auer deference in granting the petition for Kisor v. Wilkie, which is due to be argued sometime later this year. Given the Supreme Court’s current make-up, enterprising conservative advocacy organizations and corporate lobbyists are no doubt already searching for litigation vehicles to bring the question of Chevron’s future squarely before the Court this year.
2. Will any bills on regulatory policy pass in the next Congress? Republicans failed to move any of their anti-safeguard bills when they controlled both chambers in the 115th Congress. The question is whether they will attempt to move similar legislation in the next Congress now that Democrats have obtained control of the House of Representatives in the midterm elections. With this change in dynamics, Republicans may scale back and look for less ambitious but still ill-conceived legislation that might conceivably pass with some Democratic support. An example of such a bill is the impressively named “Guidance Out of Darkness” Act (or the GOOD Act – see what they did there?), which would require agencies to undertake additional reporting requirements for their guidance documents. Make no mistake, though, the GOOD Act is anything but good; the changes it would bring are objectively dangerous and unnecessary. Or they may push more extreme bills – such as the REINS Act or the Regulatory Accountability Act – for “messaging” purposes. On the other hand, now that Democrats control the lower chamber’s legislative agenda, they have the opportunity to pass bills that would enhance the effectiveness of the regulatory system, such as measures to promote public participation or to remove unnecessary rulemaking procedures. One option would be Sen. Elizabeth Warren’s Anti-Corruption and Public Integrity Act, which includes an important regulatory reform title that contains many valuable provisions.
3. Will we see a new “Regulatory Czar”? Current Administrator of the Office of Information of Regulatory Affairs Neomi Rao was tapped by President Trump to fill now-Justice Brett Kavanaugh’s vacant seat on D.C. Circuit Court of Appeals. Despite her troubling views on regulatory policy and – seriously – dwarf-tossing (she’s for it), Rao is likely to be confirmed later this year by the Senate, where Republicans still hold the majority. That, in turn, would open up a vacancy for OIRA Administrator. Assuming OMB Director/Chief of Staff Designee Mick Mulvaney doesn’t decide to pad his resume with yet another job in which he’s reporting to himself, several leading opponents of regulatory safeguards appear to be in the running, including current Deputy Secretary of the Department of Transportation Jeff Rosen.
4. Will independent regulatory agencies be brought under OIRA’s centralized review? From the beginning, independent regulatory agencies – so-called because Congress explicitly designed them to be insulated against day-to-day interference from the White House – have been shielded from OIRA’s centralized regulatory review function under Executive Order 12866, and for good reason, too. Bringing independent agencies under this review process, so that the president’s political officers can stymie their efforts to protect the public on behalf of well-connected corporate interests, has long been a dream of small government ideologues, including Neomi Rao. OIRA has already expanded its review scope under her watch to include the formerly exempted Internal Revenue Service. Despite the constitutional problems the move would raise, it would not surprise me in the least to see President Trump undertake another extreme regulatory policy change via executive order by directing that OIRA review be extended to all independent agencies. Indeed, he might take this step because of its dubious constitutionality, simply to signal to his much-ballyhooed base that he is still the loose-cannon, bull-in-the-china-shop president they elected, and to his industry supporters that he’s still interested in corporate profit ahead of sensible safeguards.
5. Will the Trump administration’s de-regulatory actions stick to the ambitious timelines set out in the Fall 2018 Regulatory Agenda? One of the most noteworthy features of the Fall 2018 Regulatory Agenda (aside from the brazen disregard the public interest it dutifully catalogued) was the extremely quick timelines the Trump administration had set for itself in advancing even the most complex rulemakings it was undertaking. For example, the agenda, which was released in mid-October, announces that the Environmental Protection Agency (EPA) will issue its final rule to revise the Obama-era definition of the “Waters of the United States” by September 2019 – barely nine months after the proposal’s publication. Similarly, EPA claims it will finalize both the replacement for the Obama Clean Power Plan to limit greenhouse gases from existing power plants as well as the rollback of the Obama administration’s stringent greenhouse gas standards for cars by this March. Both proposals were issued roughly seven months prior to the March target date for completion. As CPR and others have documented, rules of this complexity normally take at least one to two years to move from the proposal to final stages due to the excessive and unnecessary procedural requirements that agencies must overcome as part of the rulemaking process. These timelines seem to have been set with an eye towards ensuring that even a one-term Trump administration has a chance at defending the rules in the first round of judicial review. Yet, faithful adherence to these timelines is likely to result in the kind substantive mistakes or illegal procedural shortcuts that could very well doom their chances in the courts. ¯_(?)_/¯, as the kids say.
6. How well will the first of the completed rollbacks fare in the courts? In the event that the Trump administration does manage to adhere to some approximation of these timelines, we could very well see the courts hand down decisions in response to legal challenges against some of these earliest completed rollbacks before the close of 2019. In other words, this could turn out to be a make-or-break year for the Trump administration’s promise to undo the Obama administration’s legacy on protective safeguards. Judging by the administration’s dismal track record in court so far, and factoring in its rushed timelines and general penchant for sloppiness, the odds of these regulations surviving judicial review do not look great. Ironically, their very survival may depend on a healthy, heaping dose of Chevron deference (provided the doctrine still remains viable that long).
7. What will the EPA’s “sequestered science” and cost-benefit analysis overhaul rulemakings look like? In 2018, EPA spent more time regulating itself than it did polluters, pursuing a pair of ill-advised rules that would fundamentally transform how the agency uses science and economics to inform its decision-making. Its proposal to limit critical scientific studies that undergird many of the agency’s most important safeguards (and not coincidentally most strongly opposed by industry) was so universally panned that Acting EPA Administrator Andrew Wheeler appeared to backpedal on it in the Fall 2018 Regulatory Agenda. Recently, however, Acting Administrator Wheeler announced his intention to press forward with the rulemaking, raising significant questions about whether and how the proposal might be revised so that it has any chance of passing judicial muster. Similarly, the EPA plans to issue the full proposal of its cost-benefit analysis overhaul in May 2019, at which point we will get to see what the agency has planned for this rulemaking. At its most ambitious, the EPA might seek to use the measure to prohibit consideration of co-benefits and to convert all of its applicable statutory standards into something approximating formal cost-benefit analysis – measures that would all but prevent the EPA from carrying out its responsibilities and that would likely be ripe for rejection by the courts in any event.
8. Will there be any industrial catastrophes or other disasters that help to raise public consciousness about inadequate safeguards? The sad truth is that we don’t notice regulatory safeguards most of the time, because they are working. When catastrophe strikes, though, the cost of inadequate safeguards are often laid bare in dramatic fashion. In 2018, for example, a steady stream of unprecedented natural disasters – including hurricanes in the Southeast and Gulf regions and wildfires in the West – all super-charged by climate change began to focus the public’s attention on the costs of our continued inaction to address greenhouse emissions. Will we see something similar in 2019? For example, will more wildfires and mammoth hurricanes continue to shift the public’s perception on the urgency of climate action? Will new revelations about the dangers of PFAS (or other toxic substances) to public health confirm the woeful inadequacy of current regulatory programs for addressing toxic chemicals used in commerce and the workplace?
9. Will states respond to federal inaction on protective safeguards by instituting their own? As the Trump administration and the Republican-controlled Congress have continued to abdicate federal responsibility for protecting health, safety, environment, and financial security, states have continued to step up to fill the gap – particularly those in which Democrats hold the legislature, the governor’s mansion, or both. The 2018 midterms saw Democrats gain control of several state-level government offices, increasing the possibilities for sub-national action on issues like climate change and contaminants in drinking water. We are already seeing some important early steps by state governments, such as the recent announcement by a group of Northeast and Mid-Atlantic states to form a regional cap-and-trade program aimed at limiting emissions of greenhouse gases from the transportation sector and investing in low-carbon transportation alternatives. And perhaps states like Illinois, where Democrats now control both the legislature and the governor’s mansion, can finally tackle local public health and environmental problems such as coal ash waste disposal. They may be stymied in their efforts, however, by recalcitrant Republican state lawmakers who have passed self-defeating “ceiling laws” – laws that bar the state from implementing protections that are stronger than what are provided for by federal regulations.
10. What impact will oversight from the new Democratic majority in the House of Representatives have on the Trump administration’s assault on public safeguards? Democrats taking over the House of Representatives in the 116th Congress have a strong mandate to conduct intensive oversight of the Trump administration’s assault on public safeguards. Topics that would be ripe for such oversight include the extent to which corporate interests are improperly controlling agencies’ policy agendas, instances of outright corruption by agency officials, abuses of administrative processes and principles to advance deregulatory actions, attacks on career public servants who oppose the administration’s illegal or unethical activities, the harms to the public that are being caused by specific rollbacks, actions to sabotage scientific integrity at the agencies, dereliction of enforcement responsibilities, and any improper steps that the administration has taken to prevent meaningful public participation in rulemaking or enforcement activities. That said, Democratic lawmakers must be careful in conducting this oversight, lest they inadvertently reinforce Republican’s message that the regulatory system is inherently corrupt and irreparably broken. They can avoid this pitfall by carefully pairing oversight with progressive proposals to reform and strengthen the regulatory system so that is more robust, responsive, and delivers results that work for everyone.

Even if only some of these developments come to pass, 2019 is sure to be another frenetic year in regulatory policy. I urge my fellow regulatory policy wonks to start stocking up on Dramamine, because we may have a bumpy ride ahead of us.

Did I miss anything? Let me know in the comment section below.