Top Ten Regulatory Policy Stories to Look Out for in 2020 (IMHO)

James Goodwin

Dec. 30, 2019

As I noted in my last post, 2019 brought a number of worrisome developments in regulatory policy. There were a few bright spots – most notably the positive attention public servants received for holding the Trump administration accountable. But, by and large, the most significant regulatory policy stories reflected the conservative movement’s successes in weakening the regulatory system. As a result, the threat to the future vitality of our system of safeguards – which we depend upon for our health and safety, the vitality of our economy, and the future of our planet – has never been greater. Here, in no particular order, are ten stories I will be following over the next year that could determine whether we will still have a regulatory system that is strong enough to promote fairness and accountability by preventing corporations from shifting the harmful effects of their activities onto innocent members of the public:

  1. Will regulatory policy feature prominently in the 2020 presidential race? Even among those vying for the Democratic nomination, there appear to be widely divergent views over the proper scope and function of the regulatory system. Regulatory policy could thus provide the candidates with a means for distinguishing themselves from others in the primary pack, especially given that regulation would likely be the most effective mechanism by which to accomplish their domestic policy objectives in the face of continuing congressional dysfunction. So far, though, only Sen. Elizabeth Warren has articulated a clear vision of how she would approach regulatory implementation and enforcement as president. Regardless of who captures the Democratic nomination, that candidate will surely have a vastly different vision for regulatory policy than President Trump (assuming Trump is on the ballot come November). Given that the outcome of the 2020 presidential election will have enormous significance for the future of the U.S. regulatory system, it will be interesting to see whether and how these issues are raised once presidential contest becomes a two-horse race.
  2. Will House Democrats step up oversight of the Trump administration’s assault on public safeguards? The Trump administration has made its assault on safeguards both a branding opportunity and a top policy priority through such measures as Executive Order 13771 – the so-called one-in-two-out order. And yet, Democrats have not used their majority in the House of Representatives to conduct vigorous oversight of the damage this concentrated assault on safeguards is causing. Understandably, the relevant agencies have had their dance cards full with the various scandals of the Trump administration as well as the resource-intensive impeachment proceedings. With impeachment largely in the House’s rearview mirror and election year dynamics set to kick in, House Democrats will likely turn their oversight focus to issues on which they believe the Trump administration and congressional Republicans are politically most vulnerable. Whether the Trump administration’s assault on safeguards emerges as one of those issues remains to be seen, but they could be folded into a broader campaign built around themes of corruption and abuse of power – themes that are likely to dominate in Democratic campaign messaging.
  3. When will the Congressional Review Act “deadline” fall this year? Democrats are hopeful that they’ll emerge from the 2020 election with control of the White House and both chambers of Congress. Such a result would tee up the opportunity for Democrats to wield the Congressional Review Act (CRA) – a law that creates fast-track legislative procedures for Congress to repeal newly effective regulations – to undo any rules that were issued late in the Trump administration. Republicans deployed this tactic very aggressively early in the Trump administration to roll back 16 Obama-era rules. Specifically, they leaned on the CRA’s “lookback” procedure, which enables a current sitting of Congress to reach back and undo rules issued during the previous sitting.  Many opponents of the Trump administration’s rollbacks hope that Democrats would return the favor and repeal as many rollbacks that might be covered by the CRA’s lookback procedure as possible. Under the CRA, the congressional calendar is what ultimately dictates how far back the lookback procedure will reach. The congressional calendar is itself a moving target, making it impossible to predict in advance what the cutoff date will be. For now, though, the cutoff date is May 20, 2020, which means any Trump rules issued after that date could be eligible for repeal under the CRA in the next Congress.
  4. How will the Trump administration’s rollbacks fare in the courts? Over the past year, the Trump administration has completed several controversial rulemakings, such as its weak replacement rule to limit greenhouse gas emissions from power plants and its repeal of Obama-era updates to a program meant to prevent major accidents at chemical facilities. These and other actions are likely to face their first tests in the courts during the year ahead. To this point, an unusually large majority of the Trump administration’s regulatory actions have not survived judicial review. Many of these actions, however, were smaller in stature or involved implementation delays rather than actual substantive changes. In contrast to those early cases, the stakes of these decisions will be much greater since they could determine whether vital safeguards from the Environmental Protection Agency (EPA) and other protector agencies remain in place. Given the Trump administration’s success in packing the federal courts with activist conservative judges, there’s a good chance that most of the regulatory rollbacks – even the ones were hastily or sloppily prepared – will survive legal challenges.
  5. Will Chevron deference survive the year? Anti-safeguard conservatives have long sought to end the practice of Chevron deference, in which judges reviewing agency rulemakings defer to the agency’s reasonable interpretations of otherwise ambiguous language in the authorizing statute for the rulemaking. They cling to the belief that this judicial practice has helped spur the growth of federal regulation, and that abolishing it is necessary step toward their goal of dismantling the regulatory system. The Supreme Court surprised many this year when it declined to abolish the closely related Auer deference – which arises from agency interpretations of their own regulations – in the case Kisor v. Wilkie, despite the Court’s solid conservative majority. Now regulatory policy wonks are looking at the cases percolating in the lower federal courts that may provide a vehicle for challenging Chevron. It’s possible that one of these cases may find itself before the Supreme Court by the end of the year.
  6. Will the Supreme Court revisit the question of nondelegation? In November, Justice Kavanaugh went out of his way to signal his interest in providing the crucial fifth vote to install a new, stricter approach to the “nondelegation” doctrine – that is, the view that the constitution prohibits Congress from delegating its legislative function to Executive Branch agencies through broad grants of rulemaking authority. Earlier in the year, Justice Alito used an unusual concurrence in the case Gundy v. United States to announce that the Court’s four other conservatives were prepared to take this step, while Justice Gorsuch’s blistering dissent outlined what the strict new approach might look like. If Kavanaugh is prepared to sign on to an approach like Gorsuch’s, then it could provide the Court’s conservative majority with a basis for declaring nearly all of the protective regulatory programs that federal agencies implement to be unconstitutional. Again, regulatory policy wonks are looking to the lower courts for potential vehicles to raise the nondelegation issue again. If – or when – one of these cases reaches the high court, it could trigger one of the most radical changes to our constitutional system of governance in the history of the United States. It would be the darkest timeline.
  7. Will President Trump issue any new regulatory policy executive orders? President Trump is a big fan of using executive orders signed with his oversized signature to project the illusion of effectiveness, and regulatory policy has been one of his favorite topics in in these documents. This past year he issued a pair of executive orders that ostensibly seek to restrain agency development and use of guidance documents. So, it stands to reason President Trump will return to this well again this year, particularly as he seeks to make the case for his reelection in 2020. The question is what might these orders executive orders actually say? While executive orders are no substitute for statute, and as such not legally binding on subsequent administrations, and while they are sometimes little more than messaging exercises, Trump could still do some damage. For example, he might issue an order that formally subjects independent agencies like the Consumer Financial Protection Bureau and Securities and Exchange Commission to Executive Order 12866’s cost-benefit analysis and centralized regulatory review requirements. Or he could seek to undermine implementation and enforcement of key regulatory programs by severely curtailing agencies’ ability to collect information from the public. It’d end up in court, of course, but it’d certainly gum up the works while the courts consider the matter. Finally, Trump could issue an order that direct agencies to disregard or discount scientific research for which all the underlying data is not publicly available – much like the EPA’s “censored science” rule – with an aim toward to preventing agencies from considering cutting edge studies that often form the backbone of stronger safeguards.
  8. What will the Trump EPA’s Science and Cost-Benefit Analysis proposals look like? If the EPA’s Fall 2019 Regulatory Agenda is to be believed, we can expect to see the agency’s proposal for its radical overhaul of cost-benefit analysis procedures for Clean Air Act rules as well as the supplemental proposal for its “censored science” rule by early 2020.  In the “benefits busting” proposal, we might see limits placed on the agency’s consideration of “co-benefits” – or benefits that result from regulation but that were not the stated main objective of the enabling legislation – as well as an attempt to distort the Clean Air Act’s various regulatory standards to conform with the anti-safeguard bias of cost-benefit analysis. As for the “censored science” rulemaking, according to a leaked version of the supplemental proposal, the agency is now considering broadening the rule’s damaging impacts by extending it to all forms of regulatory science and making it retroactively applicable to existing rules. The supplemental also suggests an attempt by the agency to clarify key provisions in the original proposal and strengthen its legal basis. Whatever is included in these two rulemakings, we can be relatively certain that their effect will be to prevent the EPA from fulfilling its core mission of protecting people and the environment.
  9. How will the lower courts apply the new Kisor test for Auer deference? One of the other big surprises from the Supreme Court in 2019 was its Kisor decision, noted above, in which the Court rejected the invitation to abolish Auer deference. In so doing, though, the Kisor majority instituted several new conditions on its use. As this year progresses, we will get a clearer image of how lower courts are responding to the Kisor decision and whether the new conditions it imposes are having a material effect on how often agencies win in legal challenges against applications of their regulations that turn on their interpretation of those regulations. The conventional wisdom holds that agencies should be prevailing less frequently in these cases. The irony of course is that it is the Trump administration’s agencies that would be suffering these losses, though it is its conservative allies who have pushed most heavily for gutting Auer deference.
  10. Will we see more industrial catastrophes that expose the folly of industry self-regulation? One of the big story lines of 2019 was that there was growing public attention to the problem of industry self-regulation, thanks to high profile catastrophes like the Boeing 737 Max airplane crashes. Variations of self-regulation exist in almost every policy context from food safety to offshore oil drilling, and they reflect the dire state to which our protector agencies have been reduced through budget cuts and pervasive legal attacks. One of the goals of the Trump administration’s broader assault on public safeguards has been to transfer even greater regulatory responsibilities to industry, leaving the public increasingly at the mercy of arbitrary corporate munificence and simple good luck. Conditions seem ripe for still more industrial catastrophes – such as a major offshore oil spill or a foodborne illness outbreak linked to tainted pork, or some other industrial catastrophe – that might have been prevented but for the existence of ineffectual industry self-regulation. If and when these catastrophes do occur, will we learn the right lessons from them?

As many of these story lines suggest, 2020 could be a “make or break” year for the system of regulatory safeguards we currently rely on to ensure our drinking water is safe, our air is clean, and our workplaces free of unacceptable hazards. Developments like the upcoming elections and the Supreme Court’s decision on nondelegation could all but demolish the modern regulatory system. While the stakes are high, and the outlook is grim, we are fortunate to have so many dedicated and smart people working to ensure a basic level of protection for all Americans. For all of our sake, let’s hope their hard work and dedication ultimately pays off.

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