Agency Rulemaking and Political Transitions

INTRODUCTION Even before President Obama took to the dance floor on the night of his inauguration, his then-Chief of Staff, Rahm Emanuel, had already fired off a memorandum to the heads of federal agencies instructing them not to start or finish any regulations without approval of the new Administration.1 Emanuel also requested that agency leaders "[c]onsider extending for 60 days the effective date of regulations that have been published in the Federal Register but not yet taken effect."2 In short, the memorandum was an immediate and powerful assertion of control over regulatory policy by the new Administration. In the weeks before the inauguration, while Democratic Party organizers prepared to celebrate President Obama and his team, agencies under President George W. Bush rolled out "midnight" regulations. The Bureau of Land Management, for instance, finalized a rule that it had proposed just four months earlier to permit drilling for oil shale on federal land in western states.3 The Environmental Protection Agency (EPA) issued a regulation, initiated the previous year, to expand how much hazardous waste could be burned outside of incineration limits.4 These and dozens of other midnight regulations were unveiled despite an express command in May 2008 from Chief of Staff Joshua Bolten that directed executive agencies to finish regulations by November 1 of that year unless there were "extraordinary circumstances." This regulatory pattern-crack-of-dawn response to midnight regulation- has played out in all recent White House transitions, including those in which the incoming and departing presidents hailed from the same political party. In its closing weeks, President Clinton's Administration engaged in a flurry of regulatory activity, including the establishment of energy efficiency standards for washing machines and significant workplace ergonomic requirements.6 Overall, agencies completed about twice as many major regulations (those generally having more than a $100 million annual effect on the economy) in President Clinton's final year than in any preceding year for which such information on regulatory impact was regularly collected.7 On President George W. Bush's first day in office, Chief of Staff Andrew Card also had immediate instructions for federal agencies. Like Emanuel's memorandum, Card's directive barred agencies from sending regulatory notices to the Federal Register without approval by a Bush appointee. It also called for agencies to withdraw regulations that had been sent to the Federal Register but had not yet been published. More significantly, it told agencies to suspend the effective dates of rules that had been published but had not yet gone into effect.8 By the end of the first year of the Administration, hundreds of regulations started but not yet completed before Bush took office were formally withdrawn.9 And so the regulatory cycle goes. This crack-of-dawn response to midnight regulation manifests itself in congressional transitions as well. Although the rulemaking pattern is often not as pronounced or as frequent, due in part to the fact that two-chamber shifts in congressional control have been rarer than changes in the White House in recent decades, congressional transitions also can alter agency decisionmaking by creating similar midnight and crack-of-dawn regulatory opportunities-specifically, by fast-tracking regulations before control shifts or withdrawing uncompleted regulations afterward. In November 1994, the midterm elections switched control of both the House and the Senate from the Democrats to the Republicans; the reverse occurred in November 2006. The 1994 election accompanied a noticeable jump in regulatory completions before the new Republican majorities took control and a marked increase in withdrawals of uncompleted regulations after the transition, but the 2006 election was not accompanied by similar spikes in regulatory activity.10 In the 2010 election, Republicans promised to cut back regulation by President Obama's agencies. …