Before Midnight, a Cap on Regulations

It appears that yesterday’s House Judiciary subcommittee hearing on midnight regs featured the usual political huffing and puffing, but it also elicited a sober and detailed analysis of regulatory practices in testimony from Veronique de Rugy, PhD, Senior Research Fellow at the Mercatus Center at George Mason University.

The phenomenon of midnight regulations — the rush of new rules issued in the last days and months of an administration — does exist, she argued, offering statistical evidence to prove the point. Furthermore, the additional number of consequential and costly rules undermines effective review by the Office of Information and Regulatory Analysis of OMB.

The solution?

Until now, the most common solutions to the midnight regulations problem have suggested steps that an incoming president can take to undo his predecessor’s last-minute actions. Our solution tries to mitigate the negative effects of midnight regulations by changing the incentives on the outgoing administration. We suggest placing a cap on the number of economically significant regulations OIRA can be expected to review during a given time period.

Doing so would help prevent OIRA oversight of new regulations from being diluted. A flexible cap would afford OIRA time and resources to carefully consider new rules while preserving Congress and the President’s prerogative to increase the cap by allocating more resources to OIRA. To the extent more resources are not allocated and end-of-term regulatory spikes are eliminated, a cap would also have the effect of addressing some of the other concerns raised by midnight regulations, including a lack of accountability and democratic legitimacy.

Sounds good in theory, but first it assumes that a White House would want to cede that authority. And we can’t imagine an activist agency couldn’t cirumvent such such a cap in any case. Agency staff could do all the preliminary work, collect all the data and arguments and commentary, try to issue the regulation and if blocked by OMB or OIRA, simply have their activist friends sue in the 9th Circuit. For example.

P.S. Gee, such interesting testimony and substantive proposals for reform. Guess ProPublica’s interest has waned now that the Bush Administration has left town.

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