Center for American Progress

Deregulation Nation: Congress Wants to Let Corporations Take Charge

Deregulation Nation: Congress Wants to Let Corporations Take Charge

Congress is not only trying to remove vital federal regulations that protect Americans and their interests from big businesses, but also block agencies from making new ones.

Visitors tour the Rotunda on Capitol Hill in Washington, Tuesday, November 15, 2016. (AP/Susan Walsh)
Visitors tour the Rotunda on Capitol Hill in Washington, Tuesday, November 15, 2016. (AP/Susan Walsh)

The new congressional session is still in early days, but members have wasted no time laying the groundwork to give Congress and the courts unprecedented power to vitiate critical federal regulations and prevent new rule-making. This push is in line with President Donald Trump’s promise to cut 75 percent of government regulations, but it goes against the wishes of Americans, a majority of whom oppose lifting regulations on businesses and corporations.

Yet on January 4, the House passed the first in a suite of legislative actions to this end: the so-called Midnight Rules Relief Act, which expands an existing law giving Congress the power to review and disapprove recent agency regulations. The Regulations from the Executive in Need of Scrutiny, or REINS, Act, and Regulatory Accountability Act, or RAA, which create new mechanisms for blocking new rule-making and overturning well-established rules, followed days later.

When and if the Senate votes its approval and President Trump signs these bills into law, federal agencies will be dangerously weakened—with grave and far-reaching consequences. Without regulations to enforce—or the ability to make new regulations—agencies will have tremendous difficulty implementing legislation critical to protecting Americans from big business, such as the Clean Water Act and the Clean Air Act.

Changing the rules to strike the rules

The Midnight Rules Relief Act tweaks the Congressional Review Act, or CRA—a little-used piece of legislation—to pave the way for Congress to repeal en masse regulations passed during the last seven months of the Obama administration.

Under the CRA, Congress usually has 60 working days to review new federal rules. The clock starts over, however, if a rule has been under consideration for fewer than 60 days when a congressional session ends. The 115th Congress will therefore be able to challenge any rule submitted to Congress since June 13, 2016.

At risk are at least 40 “major” rules—that is, rules with an annual effect on the economy of $100,000,000 or more—and many more protections with smaller economic footprints but tremendous daily relevance. Vulnerable regulations include, for example, environmental and climate-related rules restricting corporate pollution and emissions, limitations on oil and gas exploration in Alaska, and conservation standards for new batteries and electronics. On the education front, Americans stand to lose the guarantee of nutritious school lunches for children and groundbreaking accountability standards to ensure all students are succeeding. 

Workers who were granted paid sick days for the first time this fall may see them taken away, while financial institutions may regain their ability to exploit Americans who use prepaid cards. Worse still, Congress could make it harder for Americans to stand up to big business by getting rid of a rule that keeps corporations from blocking consumers from bringing class-action suits.

Under the CRA, Congress could strike any one of these rules through a resolution of disapproval, passed with a simple majority. Unlike efforts to challenge rules through the regular legislative process, which can be filibustered and are not guaranteed to reach the floor, resolutions of disapproval enjoy “fast track” status—without any risk of postponement, amendment, or filibuster. And once Congress has nixed a rule, the agency that made it cannot propose any substantially similar rules in the future.

Because the president can veto a resolution of disapproval, the CRA is most relevant when an incoming Congress and administration are aligned in opposition to the outgoing president. Since the law was passed in 1996, such a scenario has previously occurred only once: following President George W. Bush’s election. Congress struck just one rule at that time, marking the single successful deployment of the CRA to date.

Congress’s prior reluctance to use the CRA may be attributed to its requirement that legislators challenge rules one by one. The one-by-one requirement has acted as a built-in safeguard against abuse. Each resolution of disapproval takes hours, forcing members to weigh the time required to disapprove agency rules against legislative priorities. This process also ensures transparency and accountability. As Congress challenges rules one at a time, Americans can follow each proceeding to learn what issues are at stake, consider the implications of striking the rule, and contact their representatives in Congress to express their views.

These safeguards, however, would be torn down if the Senate passes the Midnight Rules Relief Act and President Trump signs it into law. That legislation would amend the CRA to allow Congress to disapprove multiple rules submitted during the final year of a president’s term in a single bill. Supporters of the act claim that this change is necessary to allow Congress to address potential overreach—so-called midnight rulemaking—during an administration’s lame duck period. But the Midnight Rules Relief Act would give Congress the power to wipe out rules finalized over the course of the last seven months of the Obama administration following a years-long rule-making process involving millions of comments from the public. Congress would be doing what it claims it wants to prevent: changing rules overnight and keeping Americans in the dark.

The dire implications of the Midnight Rules Relief Act would be compounded if the Senate approved a second piece of legislation passed by the House in early January: the REINS Act. This act would require Congress to proactively approve all new major rules within 70 days for the rules to go into effect, setting a default of disapproval.

Giving conservative courts the power to overrule agencies

On January 11, just one week after passing the Midnight Rules Relief Act and REINS Act, the House followed with the RAA. The third in the suite of legislative actions to advance deregulation, the RAA would modify the longstanding Administrative Procedure Act, or APA, to make it harder for agencies to issue good rules and easier for federal judges to overrule regulations. This move is especially concerning as the incoming administration is beginning the process of filling more than 100 judicial vacancies.

Provisions of the RAA would impose a mandatory six-month delay on all new rules and limit agencies’ prerogative to issue and follow guidance, another means of implementing legislation. The conservative majority in the House explicitly rejected attempts to amend the bill to exempt regulations that are particularly critical to Americans’ health, such as environmental protections and child safety measures.

The RAA would also require agencies to conduct excessive cost analyses of regulatory impact, which would further slow rule-making. Barring special circumstances and extensive justifications, the RAA would force agencies to adopt the least costly rule rather than the most effective. This provision would ensure minimal regulation and puts industry and corporate profits ahead of public health and consumer safety.

Should it pass the RAA, Congress would effectively overturn 30 years of judicial precedent. Since a U.S. Supreme Court ruling in 1984, courts have deferred to agencies’ expertise and justifications when reviewing regulations, overruling rules only if they are “arbitrary and capricious” and show “an abuse of discretion.” But the RAA would end the practice of deferring to experts, requiring judges—who rarely have a background in specialized subjects of federal regulation—to review rules anew and substitute their judgment for that of experts.

An unpredictable, unregulated future

In combination with President Trump’s freeze on new regulations, the REINS Act, Midnight Rules Relief Act, and RAA would ensure Americans will have fewer protections from big business than ever—even as the Trump administration doubles down on its commitment to advancing corporate interests, fills its ranks with CEOs, and pushes huge corporate tax cuts. Such political brinksmanship in Congress is unacceptable when Americans’ health and wellbeing are on the line.

Rebecca Buckwalter-Poza is a Fellow at the Center for American Progress.

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Rebecca Buckwalter-Poza