Deregulation Déjà Vu

Unified v. Divided Government: One of the biggest constraints during the Reagan years was divided government. Reagan occupied the White House, but the Democrats controlled one or both chambers of Congress. And Congress was quite aggressive in its oversight of federal agencies and of deregulation efforts.

Today, with unified government, Congress allowed former EPA Administrator Scott Pruitt to deregulate however he saw fit. Ditto for Betsy DeVos at Education, Mick Mulvaney at the Consumer Financial Protection Bureau, and countless others.

The Congressional Review Act: Back when Newt Gingrich was Speaker of the House, Congress passed a law called the Congressional Review Act (CRA) in response to the 1983 INS v. Chadha decision, which held that the one-house legislative veto was unconstitutional.

The CRA provided a way around that ruling by allowing Congress to “disapprove” agency rules by joint resolution. Though passed in 1996, it was used rarely before 2017. Since then, Congress has used the CRA 14 times to get rid of rules promulgated during Obama’s presidency. That didn’t happen during the Reagan years because Chadha was still the law of the land and because, although Republicans controlled the White House, they never controlled both houses of Congress.

That said, the CRA is limited; it can be used only within 60 “legislative session” days of the publication of a final rule, and we are now past that timeframe for Obama-era regulations. But Republicans are looking for other ways to use it for older, previously “unreported” rules.

The Courts: During the Reagan years, a frequent tactic was to rescind or revoke rules that had been promulgated during earlier administrations. For example, the National Highway Traffic Safety Administration revoked President Carter’s airbag rule.

The courts were an active check on these efforts and frequently—as with the airbag rule—held that federal agencies had acted “arbitrarily and capriciously.” Today, the $64,000 question is how the courts will respond to the current administration’s deregulatory efforts. Will they allow the Trump EPA, Fish and Wildlife Service, and SEC to rescind extant rules? Or will they enforce the “arbitrary and capricious” standard?

The Appointees: It takes a lot of expertise to develop a rule, but it doesn’t take much expertise to rescind or revoke one. All it takes to undo Obama’s regulation is a stroke of a pen. So I don’t think that lack of substantive policy expertise on the part of presidential appointees slows down deregulation very much.

The Career Civil Service: Traditional political science scholarship attributes vast power to unelected bureaucrats. As early as the late 1800s, sociologist Max Weber asserted that their power was “overtowering” because of their monopoly on information. But if facts don’t matter, then neither do career civil servants—they are disposable and expendable as we just saw in the case of the EPA’s Dr. Ruth Etzel. And Trump’s efforts to undermine the Civil Service/Pendleton Act of 1883 and return to a system of patronage makes them even more so.

Conclusion: This leads us back to the courts. The absence of civil service input will matter only if the courts say it matters. The incompetence of appointees will matter only if the courts say it matters. And ex-parte contact between appointees and anti-regulation interests will matter only if the courts say that all stakeholders must have equal access to decision makers.