```

[Senate Report 115-164]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 233
115th Congress       }                                   {      Report
                                  SENATE
 1st Session         }                                   {     115-164
_______________________________________________________________________

                                     

                                                     

                   MIDNIGHT RULES RELIEF ACT OF 2017

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                          WITH MINORITY VIEWS

                              to accompany

                                 S. 34

         TO AMEND CHAPTER 8 OF TITLE 5, UNITED STATES CODE, TO
          PROVIDE FOR EN BLOC CONSIDERATION IN RESOLUTIONS OF
       DISAPPROVAL FOR ``MIDNIGHT RULES'', AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                October 5, 2017.--Ordered to be printed
                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

79-010                         WASHINGTON : 2017                 
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
                   Satya P. Thallam, Chief Economist
               Margaret E. Daum, Minority Staff Director
               Stacia M. Cardille, Minority Chief Counsel
       Charles A. Moskowitz, Minority Senior Legislative Counsel
                 Katherine C. Sybenga, Minority Counsel
                     Laura W. Kilbride, Chief Clerk

                                                      Calendar No. 233
115th Congress       }                                   {      Report
                                  SENATE
 1st Session         }                                   {     115-164

======================================================================

 
                   MIDNIGHT RULES RELIEF ACT OF 2017

                                _______
                                

                October 5, 2017.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                          [To accompany S. 34]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 34) to amend 
Chapter 8 of title 5, United States Code, to provide for en 
bloc consideration in resolutions of disapproval for ``midnight 
rules'', and for other purposes, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................4
 VI. Congressional Budget Office Cost Estimate........................4
VII. Minority Views...................................................6
VIII.Changes in Existing Law Made by the Bill, as Reported............8

                         I. Purpose and Summary

    The Midnight Rules Relief Act of 2017, S. 34, amends the 
Congressional Review Act (CRA) to allow Congress to consider 
multiple regulations within a single resolution of disapproval.

              II. Background and the Need for Legislation

    ``Midnight rulemaking'' refers to a phenomenon whereby 
outgoing administrations, especially when the incoming 
administration is of a different party, engages in a 
significant increase in regulatory activity. In particular, 
this means a marked increase in last-minute regulations issued 
by regulatory agencies before installation of the new 
administration's political appointees--``like Cinderella 
leaving the ball.''\1\ In practice, the ``midnight period'' 
refers to the roughly two-month period between the presidential 
general election and subsequent inauguration day.\2\ For 
example, President Barack Obama's administration published 842 
final rules (179 declared ``significant'') from November 9, 
2016 (the day after the election) to January 19, 2017 (the day 
before the inauguration), compared to 604 (79) for the same 
period a year prior, and 608 (51) for the comparable period 
after President Obama's re-election in 2012.\3\ Observers first 
identified this pattern going back to at least the transition 
from President Jimmy Carter to President Ronald Reagan (1980-
81), and in transitions since,\4\ though it was not until 2001 
that a scholar first formally tested the hypothesis that ``lame 
duck'' administrations increase their regulatory output.\5\
---------------------------------------------------------------------------
    \1\Susan E. Dudley, Reversing Midnight Regulations, Mercatus Ctr. 
(2001), https://object.cato.org/sites/cato.org/files/serials/files/
regulation/2001/4/dudley.pdf.
    \2\See Jack M. Beermann, Midnight Rules: A Reform Agenda, 2 Mich. 
J. of Envtl. & Admin. L. 285, 285-384 (2013) (Beermann uses 90 days as 
the Midnight period).
    \3\See U.S. Fed. Reg., https://www.federalregister.gov/ (last 
visited Sept. 1, 2017).
    \4\See Veronique de Rugy & Antony Davies, Midnight Regulations and 
the Cinderella Effect, 38 J. of Socio-Econ. 886, 886-890 (2009).
    \5\Jay Cochran III, The Cinderella Constraint: Why Regulations 
Increase Significantly During Post-Election Quarters (Mercatus Ctr., 
Working Paper, 2001); William G. Howell & Kenneth R. Mayor, The Last 
One Hundred Days, 35 Presidential Stud. Q. 533, 533-553 (2005) 
(Scholars had long observed the broader phenomenon of outgoing 
administrations undertaking ``lame duck'' policymaking; for example, 
John Adams's appointment of ``midnight judges'').
---------------------------------------------------------------------------
    One concern about midnight rulemaking is that the quality 
of analysis used to structure and justify the regulation 
suffers. A 2013 study examined regulations issued around the 
Bush-Obama transition and concluded this was indeed the case, 
and moreover that the degree to which quality suffers may be 
associated with the outgoing President's policy priorities.\6\ 
The implication is that midnight rules can have a lasting 
effect on policy without the necessary evidence to justify the 
rules, resulting in a suboptimal policy outcome.
---------------------------------------------------------------------------
    \6\Jerry Ellig, Patrick A. McLaughlin & John F. Morrall III, 
Continuity, Change, and Priorities: The Quality and Use of Regulatory 
Analysis Across U.S. Administrations, 7 Reg. & Governance 153, 153-173 
(2013).
---------------------------------------------------------------------------
    A related but distinct concern is that midnight regulations 
can lead to a stress on resources for the Office of Information 
and Regulatory Affairs--tasked with centralized review of 
Executive Branch agency rules--which shortens review times and 
decreases accountability.\7\ Further, an administration free of 
electoral or Congressional constraints ``can pursue regulatory 
policies that, in other circumstances, might have invited 
retaliation.''\8\ This could be characterized as 
``undemocratic'' if the policies themselves are contrary to the 
preferences of the electorate as expressed via the prior 
election.\9\
---------------------------------------------------------------------------
    \7\``[O]ne additional economically significant regulation submitted 
to OIRA decreases the mean review time for all regulations by about two 
thirds of a day.'' See Patrick A. McLaughlin, The Consequences of 
Midnight Regulations and Other Surges in Regulatory Activity, 147 Pub. 
Choice 395, 395-412 (2011); see also Jerry Brito & Veronique de Rugy, 
Midnight Regulations and Regulatory Review, 61 Admin. L. R. 163, 163-
196 (2008).
    \8\McLaughlin, supra note 7.
    \9\Id. Also consider that regulations (including midnight 
regulations), once issued, tend to be highly persistent. E.g. Jason M. 
Loring & Liam R. Roth, Empirical Study: After Midnight: The Durability 
of the ``Midnight'' Regulations Passed by the Two Previous Outgoing 
Administrations, 40 Wake Forest L. Rev. 1441 (2005).
---------------------------------------------------------------------------
    The CRA set up a rolling window during which Congress can 
review and disapprove regulations submitted by the Executive 
Branch.\10\ If a regulatory agency submits a rule to a Congress 
which ends before the full review window elapses, then these 
procedures provide the next Congress a new period in which to 
review and disapprove of the rule.\11\ In practice, treating 
the rule as if it is resubmitted allows Congress to review 
midnight rules issued by an outgoing administration, as the end 
of a presidential term typically occurs within a few weeks of 
Congress's sine die adjournment.
---------------------------------------------------------------------------
    \10\See Subtitle E (``Congressional Review'') of the Small Business 
Regulatory Enforcement Fairness Act of 1996 Sec. 251, 5 U.S.C. 
Sec. Sec. 801-808 (enacted as 104 P.L. 104-121, codified at 5 U.S.C. 
Sec. Sec. 801-808) (the congressional disapproval procedure is 
contained in Section 802).
    \11\5 U.S.C. Sec. 801(d) (2012).
---------------------------------------------------------------------------
    The CRA's disapproval mechanism requires Congress to 
introduce, pass, and the president to sign a unique joint 
resolution for every rule. The Midnight Rules Relief Act of 
2017 would amend the CRA to allow for disapproval of more than 
one rule within a single joint resolution under a particular 
circumstance. For rules promulgated at the end of a 
Congressional session--those rules that effectively must be 
resubmitted to Congress--that occurs within a president's final 
year of a term, the Midnight Rules Relief Act of 2017 would 
provide the option for Congress to group multiple rules for 
consideration en bloc and outlines the specific form such a 
resolution must take.
    Under this proposed legislation, a new Congress is afforded 
an expedited means to prevent persistent and potentially costly 
policies via regulations pursued by an outgoing administration 
in its waning days. By grouping multiple rules together, it 
reduces the time and resources that Congress must spend, to 
reverse the prior administration's last minute regulatory 
policy grab. Moreover, the legislation makes it more likely 
Congress can prevent avoidable fixed costs of compliance with 
such regulations. It does not, however, change the overall 
review and disapproval procedure or application for rules that 
do not fall within this narrow set of circumstances.
    At the end of the Obama Administration, Chairman Ron 
Johnson sent letters to both outgoing and incoming officials 
urging a concerted effort to prevent ``a last-minute deluge to 
promulgate so-called `midnight rules.'''\12\ This effort 
focused on both specific rules\13\ as well as the overall 
midnight rules phenomenon. Nevertheless, the outgoing 
administration persisted in pushing through a significant 
increase in last-minute rulemaking, resulting in Chairman 
Johnson introducing the Midnight Rule Relief Act of 2017 as a 
means to address future attempts to do the same.
---------------------------------------------------------------------------
    \12\Letter from Sen. Ron Johnson, Chairman, S. Comm. on Homeland 
Sec. & Governmental Affairs, to Dr. Howard Shelanski, Administrator, 
Office of Info. & Regulatory Affairs, Dec. 7, 2016.
    \13\See letter from Sen. Ron Johnson, Chairman, S. Comm. on 
Homeland Sec. & Governmental Affairs, and Sen. James Lankford, to Sally 
Jewell, Secretary, Dep't. of Int., Dec. 13, 2016; Shelanski, supra note 
11; see also letter from Sen. Ron Johnson, Chairman, S. Comm. on 
Homeland Sec. & Governmental Affairs, to Vice President-Elect Mike 
Pence, Dec. 12, 2016.
---------------------------------------------------------------------------

                        III. Legislative History

    Chairman Johnson (R-WI) introduced S. 34 on January 5, 
2017. The bill was referred to the Committee on Homeland 
Security and Governmental Affairs. Senators Rand Paul (R-KY), 
Michael B. Enzi (R-WY), Marco Rubio (R-FL), Steve Daines (R-
MT), and Roy Blunt (R-MO) later joined as co-sponsors of the 
bill. The Committee considered S. 34 at a May 17, 2017 business 
meeting.
    The Committee ordered S. 34 reported favorably on May 17, 
2017, by a roll call vote of 8 yeas to 6 nays. Senators voting 
in the affirmative were Johnson, McCain, Portman, Paul, 
Lankford, Enzi, Hoeven, and Daines. Senators voting in the 
negative were McCaskill, Tester, Heitkamp, Peters, Hassan, and 
Harris. For the record only, Senator Carper voted nay by proxy.

        IV. Section-by-Section Analysis of the Bill, as Reported

Section 1. Short title

    This section provides the bill's short title, the 
``Midnight Rules Relief Act of 2017.''

Section 2. En bloc consideration of resolutions of disapproval 
        pertaining to ``Midnight Rules''

    Paragraph (a) amends Section 801(d) of the CRA so that of 
the rules eligible for disapproval under the CRA, those 
``submitted during the final year of a President's term'' can 
be considered for disapproval in a single resolution.
    Paragraph (b) amends Section 802(a) to describe how the 
text of such a resolution must be structured.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                      May 30, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 34, the Midnight 
Rules Relief Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 34--Midnight Rules Relief Act of 2017

    S. 34 would amend the Congressional Review Act (CRA) to 
allow en bloc disapproval of multiple regulations issued during 
a President's final year in office. Under the CRA, the Congress 
can only disapprove one regulation at a time.
    Although the bill could affect how the Congress uses the 
CRA and thus affect which regulations are disapproved, enacting 
the bill would have no effect on the budget. Regulations can 
affect the cost of entitlement programs as well as the 
collection of fees, and changes to those regulations could 
either increase or decrease federal spending or revenues. 
However, any budgetary effects would result from future 
legislation that disapproved the regulations.
    Enacting the legislation would not affect direct spending 
and revenues; therefore, pay-as-you-go procedures apply. CBO 
estimates that enacting S. 34 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    S. 34 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                          VII. Minority Views

  MINORITY VIEWS OF SENATORS CLAIRE McCASKILL, THOMAS R. CARPER, AND 
                             MAGGIE HASSAN

    The Congressional Review Act (CRA),\1\ lays out the process 
by which Congress may disapprove an executive agency rule 
finalized within the last 60 legislative days of the House or 
Senate session during the final year of an Administration. 
Under current law, a joint resolution for each rule must be 
considered separately. S. 34 amends section 801(d) of the CRA 
to allow Congress to consider a joint resolution to disapprove 
an unlimited number of regulations all at the same time.
---------------------------------------------------------------------------
    \1\5 U.S.C. Sec. Sec. 801-808.
---------------------------------------------------------------------------
    This bill is a solution in search of a problem and is built 
on the misguided premise that the majority of rules promulgated 
at the end of an Administration lack the rigorous analysis and 
review that is required in the regulatory process. To the 
contrary, most rules finalized in the last months of an 
Administration have gone through rigorous review and taken 
years to move through the regulatory process. The nonpartisan 
Administrative Conference of the United States (ACUS) found 
that ``a dispassionate look at midnight rules issue by past 
Administrations of both political parties reveals that most 
were under active consideration long before the November 
election'' and that many others were routine rules such as 
``finishing tasks that were initiated before the Presidential 
transition period or the result of deadlines outside of the 
agency's control (such as year-end statutory or court-ordered 
deadlines).''\2\ In fact, a report last year found that rules 
finalized during a transition period were usually proposed 
several years prior to their adoption.\3\
---------------------------------------------------------------------------
    \2\Administrative Office of the United States, Administrative 
Conference Recommendation 2012-2; Midnight Rules 1-2 (June 14, 2012).
    \3\Public Citizen, Shining a Light on the ``Midnight Rule'' 
Boogeyman (July 18, 2016).
---------------------------------------------------------------------------
    While the committee report asserts that the ``midnight 
period'' refers to a two month period between the general 
election and the subsequent inauguration, we would note that 60 
legislative days can in fact be many months. For example, 
during the most recent transition, 60 legislative days captured 
all regulations finalized in the last 6 months of the Obama 
Administration.\4\ This bill would institutionalize one party's 
ability to remove the last 6 months of the other party's 
policies without giving proper consideration to each policy or 
giving Members the ability to weigh the merits of each rule 
included in the resolution.
---------------------------------------------------------------------------
    \4\Congressional Research Service, Agency Final Rules Submitted on 
or after June 13, 2016, May be Subject to Disapproval by the 115th 
Congress (IN10437) (2016).
---------------------------------------------------------------------------
    There is no good policy rationale for Congress to take a 
single vote on a potentially wide variety of rules affecting a 
broad range of potentially unrelated issues. For example, if 
this bill had applied to CRA votes taken this year, Senators 
could have been forced to take a single vote on rules affecting 
a Securities and Exchange Commission rule relating to 
disclosure of payments by resource extraction issuers and a 
Department of Labor rule relating to drug testing of 
unemployment compensation applicants. Members of Congress 
deserve the right to take separate votes on issues this 
disparate and unrelated. If this process is to be taken 
seriously, Congress should have a robust debate and a separate 
vote on each rule they wish to reconsider.
    While the CRA had previously only been used successfully 
one time to overturn a rule,\5\ this year it was successfully 
used to overturn 14 rules issued in the last months of the 
previous Administration, many with votes largely along party 
lines.\6\ The lasting impact of overturning rules with the CRA, 
which would be amplified by the expansion proposed in this 
bill, is that agencies are prohibited from ever issuing 
replacement regulations that are substantially the same as the 
rule that was invalidated, absent additional Congressional 
action.\7\
---------------------------------------------------------------------------
    \5\Congressional Research Service, The Congressional Review Act 
(CRA) (IF10023) (2016).
    \6\See https://www.senate.gov/legislative/LIS/roll_call_lists/
vote_menu_115_1.htm.
    \7\5 U.S.C. Sec. 801(b)(2).
---------------------------------------------------------------------------
    Rather than working to refine rules with which one party 
disagrees, the current CRA serves as a blunt tool that a 
majority party can use to permanently invalidate policies of a 
previous Administration absent further Congressional action. 
This bill exacerbates the limitations of the CRA by allowing 
one vote to essentially erase any or all of the executive 
actions taken in last 6 months of a President's term. While 
this change would undoubtedly simplify the CRA process for 
Congress at the start of a new President's term, it does so by 
ensuring less consideration is given to each rule and by 
inserting more partisanship into a process that is already 
highly partisan.
    In their recommendation, ACUS advised that reforms to 
target rules late in a President's term ``should be aimed as 
precisely as possible at the activities that raise the greatest 
causes for concern'' and at rules where there appears to be 
``political illegitimacy'' or where rules ``appear to be rushed 
through the regulatory process.''\8\ This bill is anything but 
the precise tool ACUS suggests to target rules that raise real 
concerns. For these reasons, we urge our colleagues to join us 
in opposition.
---------------------------------------------------------------------------
    \8\Administrative Office of the United States, Administrative 
Conference Recommendation 2012-2; Midnight Rules 1-2 (June 14, 2012).
      VIII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 34 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *

             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *

CHAPTER 8--CONGRESSIONAL REVIEW OF AGENCY RULEMAKING

           *       *       *       *       *       *       *

SEC. 801. CONGRESSIONAL REVIEW.

    (a) * * *

           *       *       *       *       *       *       *

    (d) * * *
          (1) * * *

           *       *       *       *       *       *       *

          (4) In applying section 802 to rules described under 
        paragraph (1), a joint resolution of disapproval may 
        contain one or more such rules if described if the 
        report under subsection (a)(1)(A) for each such rule 
        was submitted during the final year of a President's 
        term.

SEC. 802. CONGRESSIONAL DISAPPROVAL PROCEDURE.

    (a) For purposes of this section, the term ``joint 
resolution'' means only a joint resolution introduced in the 
period beginning on the date on which the report referred to in 
section 801(a)(1)(A) is received by Congress and ending 60 days 
thereafter (excluding days either House of Congress is 
adjourned for more than 3 days during a session of Congress), 
the matter after the resolving clause of which is (except as 
otherwise provided in this subsection) as follows: ``That 
Congress disapproves the rule submitted by the _ relating to _, 
and such rule shall have no force or effect.'' (The blank 
spaces being appropriately filled in). In the case of a joint 
resolution under section 801(d)(4), the matter after the 
resolving clause of such resolution shall be as follows: ``That 
Congress disapproves the following rules: the rule submitted by 
the _ relating to _; and the rule submitted by the _ relating 
to _. Such rules shall have no force or effect.'' (The blank 
spaces being appropriately filled in and additional clauses 
describing additional rules to be included as necessary).

                                  [all]
```