June 27, 2017

June 27, 2017

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June 26, 2017

Subscribe to Latest Legal News and Analysis

Congressional Review Act was No Panacea

With President Trump in the White House and Republicans in control of the House and the Senate, there were high expectations that the Congressional Review Act (CRA) would be used to roll back a broad range of Obama Administration regulations adopted in the waning days of the President’s term. Until this year, this legislative mechanism had been used only once. On January 30, we cautioned that the CRA would not turn out to be as useful as many Republicans had hoped.  As opponents of various Obama Administration rules ultimately realized, the CRA is a powerful tool on paper but it is no panacea in practice. In the end, the Republican Congress was only able to block 13 of the Obama Administration’s “midnight” rules.

Historical Context and the Narrow Window of Relevance

The CRA emerged from a long history of attempts by Congress to garner greater control over administrative regulation. Broadly stated, the aim of the CRA is to give Congress more control over the administrative state by providing for expedited legislative review of newly promulgated rules. Under the CRA, when an executive agency issues a new regulation, Congress may, by joint resolution, disapprove of it. With the President’s signature, the joint resolution invalidates and thus prevents the regulation from taking effect.

Since the New Deal, Congress has found itself unable to handle, by specific legislation, the many regulations required by a complex, modern economy. It has tended to delegate, therefore, broad swaths of authority to executive agencies. At the same time, Congress has worried that such broad delegations may leave too much power in the hands of an ever-growing bureaucracy, whose rules may not suit the needs of industry or the preferences of various constituencies. For a time, Congress sought to fix this problem with the legislative veto, whereby each or both houses reserved the ability to negate rules emerging from executive agencies. But in 1983 the Supreme Court ruled the legislative veto unconstitutional, stating that Congress could not invalidate the actions of agencies all on its own.

Seeking a replacement, and thus some form of control, Congress passed the Congressional Review Act in 1996, as a part of the Small Business Regulatory Enforcement Fairness Act. The CRA review process is, in some ways, like the legislative veto. It allows Congress, through a joint resolution brought to the floor in expedited fashion, to disapprove of new rules promulgated by executive agencies. The catch, however, is that such a joint resolution must also be signed by the President before the rule is invalidated.

Because Presidents are not usually enthusiastic about invalidating the rules of their own Administration, the CRA had largely been left unused by Congress. Only one rule – relating to ergonomics standards – had ever been rejected prior to this year. That occurred in 2001, when President George W. Bush agreed with Congress to reject the ergonomics rule adopted by OSHA in the waning days of the Clinton Administration.

The Procedure

Under the CRA, before any new rule may take effect, the issuing agency must submit it to Congress. “Major rules” – those with an annual cost of $100 million or more to the economy, a major effect on prices, or other significant adverse effects – may not take effect for at least sixty days. During that time, Congress may enact, by simple majority vote in each house, a joint resolution of disapproval. When signed by the President, the rule is nullified. Note that a complex scheme of measuring time until a rule takes effect – whether counting by legislative days, calendar days, or otherwise – assures that even adjournments and breaks, as well as misaligned House and Senate calendars, will not prevent either the House or Senate from having ample time to review new rules. When a major rule is submitted in the final sixty days of a congressional session, for instance, there is a special extended review period. As a result, a disapproval resolution may still issue within seventy five legislative days of when the next session of Congress convenes.

The CRA provides an expedited legislative path for these resolutions of disapproval. In the Senate, a submitted new rule is referred to the relevant committee, which has twenty days to report on a disapproval resolution. Once a disapproval resolution reaches the floor, the CRA precludes the use of the filibuster, sets time limits for debate (up to ten hours), and eliminates other procedural hurdles. (Ten hours of debate may not seem like much time to debate an issue, but in the Senate it can seem like a lifetime.) The House, for its part, considers the submitted rule under its general procedures. And crucially, when a disapproval resolution is sent from either the House to the Senate, or the Senate to the House, the chamber in receipt may not refer the resolution to a committee, but must bring the matter to the floor in the form approved by the other body.

Finally, disapproval resolutions may only be enacted as individual, stand-alone measures, using a template that is outlined in the Act itself. This ensures that unrelated bills are not combined with disapproval resolutions in order to exploit the expedited procedures under the CRA. It also assures that there are no discrepancies between the House and Senate versions of disapproval resolutions, and thus bypassing the need for a conference report and allowing the joint resolution to move swiftly to the President’s desk.

In an effort to address these limitations, the House on January 4 approved the “Midnight Rules Relief Act of 2017,” which would amend the CRA to provide for en bloc consideration in resolutions of disapproval of multiple rules at once. As we predicted in January, Senate Democrats blocked consideration of the legislation, the one-rule-at-a-time disapproval resolution has remained in effect during the 115th Congress.

Once a joint disapproval resolution is passed by both Houses and signed by the President, the new rule is effectively nullified. It may not be “reissued in the same form,” and further, any new variation that is “substantially the same” as the previously rejected rule is prohibited as well, barring express statutory authorization enacted subsequent to the disapproval resolution. In the event that Congress has rejected a rule that an agency is otherwise required to issue, the agency is given an automatic one year extension to attempt to fashion something different to meet the requirement.

Conclusion

The open window for use of the Congressional Review Act has now come to an end. While Republicans have made somewhat effective use of the CRA – as a part of a broader anti-regulatory push – they have managed to overturn only a portion of the dense labyrinth of regulations introduced over the Obama Administration’s final year. For one, Obama agencies managed to pass the vast majority of their rules before the twilight days of the Administration, leaving enough time for the CRA review window to open, and close, before the commencement of the 115th Congress. Just as importantly, the early months of the Trump Presidency have been filled with competing legislative priorities, including the push to repeal and replace the ACA.

For additional regulatory reform, the Trump Administration and the Republican Congress will now turn to more traditional processes, which inevitably prove to be less expeditious. Regulatory roll-back will revert to its standard form notice-and-comment, followed by, for the most controversial proposals, years of litigation.

The CRA is a powerful tool, with strong potential when the right circumstances align. But as an enthusiastically anti-regulation Congress has now proven conclusively, it is no panacea.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Jeffrey L. Turner, Squire Patton, Congressional Investigations Lawyer, Business Advances Attorney
Partner

As head of the firm’s Public Policy Practice, Jeff Turner works with domestic and international clients to advance their business objectives. Collaborating with colleagues, they help block harmful legislation and regulations, they encourage Congress and regulatory agencies to adopt favorable legislation and regulations, and they navigate the challenges of congressional investigations. He also is responsible for the day-to-day operations of the Public Policy Practice.

Jeff focuses much of his practice on public policy issues related to...

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