Top Ten Regulatory Policy Stories of 2019 (IMHO)

James Goodwin

Dec. 20, 2019

For many of us, the best way to characterize the past year in three words would be “too much news.” That sentiment certainly applies to the wonky backwater of the regulatory policy world. Today, that world looks much different than it did even just a year ago, and with still more rapid changes afoot, the cloud of uncertainty that now looms ominously over it doesn’t appear to be dissipating anytime soon. None of this is good for the health of our people, our democracy or our economy, and it’s certainly not good for the millions of working families struggling to keep their heads above water between paychecks.

Here, in no particular order, are 10 of the biggest developments from the past year that have contributed to this disquieting state of affairs.

  1. Nondelegation bullet dodged – for now. The case, Gundy v. United States, presented as clear cut an opportunity as there could be for the Supreme Court to institute a strict new approach to enforcing the nondelegation doctrine – long a top priority for small government ideologues intent on dismantling the regulatory system. At the time of oral arguments, though, Justice Kavanaugh had not yet been seated on the Court leaving the four other conservatives one vote short of a decisive majority in the case. In November, Kavanaugh used a rare statement in conjunction with the Court’s denial of an appeal of another case raising the issue, evidently to signal his intent to provide the fifth vote for a stricter approach to “nondelegation” – or the view that the constitution prohibits congress from delegating its legislative function to Executive Branch agencies through broad grants of rulemaking authority. Only time will tell whether this new approach would put many of the regulatory programs we depend on to protect our health, safety, and the environment in constitutional jeopardy.
  2. The Congressional Review Act dog learns a new trick. In April, Acting Director of the White House Office of Management Budget (OMB) Russell Voight issued a controversial memo that seeks to leverage the Congressional Review Act (CRA) to impose onerous new rulemaking requirements on regulatory agencies. The memo’s most troubling provisions would subject independent regulatory agencies to cost-benefit analysis and Office of Information and Regulatory Affairs (OIRA) review requirements similar to those currently mandated by Executive Order 12866 (and from which independent regulatory agencies are categorically exempt). That these requirements are justified as needed for determining whether rules are considered “major” – a determination that carries little legal significance under the CRA – suggests that the real intent of the memo is to extend presidential oversight over such independent regulatory agencies as the Consumer Financial Protection Bureau, Consumer Product Safety Commission, Federal Communications Commission, Federal Election Commission, Securities and Exchange Commission and more.
  3. Cracking down on guidance via executive orders. Or not. In October, President Trump issued a pair of executive orders that ostensibly seek to restrain agency development and use of guidance documents. Given that nearly all of the provisions are simple restatements of existing laws and policies, it appears these orders were mostly a messaging exercise by the Trump administration aimed at enhancing his anti-regulatory brand, and advancing the broader conservative campaign to delegitimize the regulatory system by propagating the tired old myth that regulatory agencies are unaccountable and pose a threat to our society. Perhaps even more tellingly, in the months after the executive orders’ release, the Trump administration went right ahead and issued several such guidance documents – although, unsurprisingly, they were designed to weaken existing safeguards. Several were intended to make it easier for large industrial polluters to evade compliance with Clean Air Act regulations, for example.
  4. The EPA’s Science and Cost-Benefit Analysis rules take a detour. Heading into 2019, the Trump Environmental Protection Agency (EPA) appeared poised to complete its radical overhaul of its methods for incorporating science and economic analysis into its regulatory decision-making, with the barely disguised intent of making it harder to carry out its core statutory mission effectively. Instead, unexpected changes in the development of the two rulemakings could mean that they will not be completed before the 2020 presidential election. In May, EPA Administrator Andrew Wheeler announced that instead of pursuing a single agency-wide cost-benefit analysis rule, the agency would develop rules specific to each program office. The EPA has yet to publish the first of those proposals, which is slated to cover air pollution regulations. In November, the “censored science” rule became subject to its own delay. That’s when the agency submitted to OIRA  a draft supplemental proposal of that rule. According to a leaked version, the agency is now considering broadening the rule’s damaging impacts. The supplemental also suggests an attempt by the agency to clarify key provisions in the original proposal and strengthen its legal basis. The agency projects that it will publish the supplemental proposal sometime in January.
  5. The Fiscal Year 2019 Regulatory Budget falls short. For Fiscal Year 2019, the Trump administration had set a goal for itself to cut “regulatory costs” by $17.9 billion, but ended up missing that mark by over $4.4 billion. To be clear, those “costs” are what industry spends to clean up its own pollution, fix or prevent unsafe working conditions, make its products safe for consumers, and so on. So, saving that money might be good for industry’s bottom line, and very bad for Americans’ health and safety. But taking the White House’s projections on its own terms – a tough thing to do given that it’s impossible to independently verify OMB’s opaque reckoning – the administration achieved only $13.5 billion in cost savings. Using publicly available data, the anti-regulatory think tank American Action Forum could account for only about $8.6 billion of those cost savings, however, creating the impression that the administration resorted to cooking the books to spare further blushes over its poor deregulatory performance. Opponents of regulatory safeguards will likely also have been disappointed that very few of the deregulatory actions were considered “significant,” casting further doubt on the effectiveness of the administration’s rollback efforts.
  6. Auer deference overhaul. In another high profile regulatory policy case, Kisor v. Wilkie, the Supreme Court declined to abolish Auer deference, or the legal doctrine that courts should defer to agencies’ reasonable interpretation of their own regulations. Regulatory opponents have long worked to overturn Auer deference, believing that it has contributed to the expanded role of regulatory agencies in federal policymaking. Instead, Chief Justice Roberts sided with the Court’s four liberals to retain Auer deference while imposing several conditions on its use. It remains to be seen whether this new approach to Auer deference will have much of a practical effect on future cases. Nor is it clear whether this decision offers any clues as to how the Court will likely handle a future case that challenges the related doctrine of Chevron deference, which has been similarly targeted by conservatives.
  7. Changing of the Czar at OIRA. Earlier this year, the Trump administration’s first OIRA Administrator, Neomi Rao, was confirmed to Justice Kavanaugh’s old seat on the U.S. Court of Appeals for the D.C. Circuit. Eventually, President Trump nominated acting OIRA Administrator Paul Ray to replace her. Ray, a former industry attorney, seemed an odd choice given his lack of management experience. Ray and the Trump administration earned strong criticism from Democratic members of the Senate Homeland Security and Government Affairs Committee for failing to cooperate with their vetting efforts, and as a result his nomination cleared the committee in December on a party line vote. The timing of the final floor vote on his confirmation before the full Senate sometime is unclear.
  8. Agency experiments in self-sabotage. The EPA wasn’t the only agency that sought to adopt new internal procedures aimed at making it harder to issue new protective regulations. In December, the Department of Transportation issued a direct final rule that overhauls its processes for issuing new regulations and guidance and for enforcing existing policies. Among other things, the rule codifies the regulatory review process established in President Trump’s Executive Order 13777 and promotes “private-sector cooperation in enforcement.” Separately, the Federal Deposit Insurance Corporation (FDIC) is seeking public input for designing its own voluntary approach to conducting cost-benefit analysis on its pending regulations. (As an independent regulatory agency, the FDIC is exempt from Executive Order 12866’s cost-benefit analysis requirements, so far, see item 2, above.)
  9. House Democrats MIA on oversight of Trump assault on safeguards. After Democrats recaptured the House of Representatives in the 2018 midterm elections, I had expected the relevant committees, such as House Judiciary and House Oversight, to conduct vigorous probes of the Trump administration’s frequent and flagrant abuses of law to advance its rollback of vital regulatory protections. This oversight has never really materialized, however. While some of the committees have done excellent work focusing on specific rollbacks, especially by leveraging the watchdog capabilities of the Government Accountability Office and individual agency Inspectors General, none have taken the essential step of focusing on the Trump administration’s dangerous approach to regulations as a whole. It is notable that not a single oversight hearing has been held concerning Executive Order 13771, the President’s infamous one-in-two-out anti-safeguard order, nor has any regulatory official from OMB or OIRA been compelled to testify.
  10. Heroic bureaucrats in the spotlight. Conservatives are fond of denouncing the public servants who keep our government running as “unaccountable bureaucrats,” as part of their broader campaign to delegitimize the entire regulatory system. Over the past year, however, public servants have played a highly visible role in promoting political accountability for the Trump administration. The most notable example has been the various whistleblowers whose accounts of President Trump’s efforts to extort political favors from Ukraine that have propelled the impeachment proceedings against him. Less notable, but just as important, several public servants over the last year have been instrumental in calling public attention to the harms that would be caused by the Trump administration’s assault on public safeguards. A recent example comes from the government inspectors blowing the whistle on the dangers of the new Department of Agriculture rule that would let the pork processing industry essentially regulate itself.

By and large, 2019 was a bad year for those of us who care about having the kind of effective regulatory system we need to protect us from those harms against which we cannot protect ourselves. The attacks from conservatives and their allies in industry have been relentless and are now showing the signs of progress. With such developments as a strict new nondelegation doctrine still on the horizon, the future of our regulatory system looks bleak. Looking forward, 2020 is likely to be a pivotal year for our system of regulatory safeguards, which I will explore in my next post.

Read More by James Goodwin
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