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theodore M I R A L D I mpa ... editor, publisher, writer
Friday, November 18, 2016
REVERSING Rule by Regulation
Trump can DISMANTLE much of Obama’s legacy with a pen and phone.
President Obama spent his final six years in office—and especially the last two—governing largely by executive fiat. He issued executive orders, and his administrative state issued tens of thousands of pages of new regulations that took on the force of law. He called it rule by pen and phone.
This infuriated millions of Americans and contributed to Donald Trump’s victory, and one irony is that this also means that Mr. Obama’s policy legacy is less durable. Mr. Trump will now have the chance to reverse these orders and regulations often without new legislation. Here are three ways he and Republicans can proceed:
New executive orders. Wayne Crews of the Competitive Enterprise Institute counts more than 250 executive orders signed by President Obama, plus more than 230 “executive memoranda.” These did everything from creating a new investment vehicle called MyRA, which seeks to encourage new savers to invest in government debt, to directing federal agencies to demand new data to investigate pay disparity by race and sex at government contractors. The Trump transition should review every one so the boss can rescind them if he wishes.
A related category are orders issued by federal agencies without a formal federal rule-making. Mr. Obama’s regulators made an unprecedented practice of issuing “guidance” that allowed agencies to duck rule-making while still forcing targets to comply—or risk enforcement action.
A classic of this genre is the Education Department’s rewrite of Title IX telling universities how they must handle accusations of sexual assault. Other examples run from auto lending to drug discovery to housing rentals. The President’s order legalizing four million illegal immigrants that is currently tied up in court can also be dropped at the stroke of a pen.
Mr. Trump can instruct his new cabinet secretaries to immediately void all such Obama guidance or else put it through the lawful rule-making process. He can also order federal agencies to immediately cease work on regulations in process or due to be sent for publication in the Federal Register.
Congressional Review Act. This legacy of the Gingrich era allows Congress to kill the many last-minute regulations now making their way through Mr. Obama’s agencies. For items enacted in the last 60 working days of this Congress—which probably will mean since late May this year—lawmakers can consider them in January without threat of a Senate filibuster.
That’s how Republicans dismissed Bill Clinton’s last-minute ergonomics rule in 2001. GOP lawmakers put four of these resolutions on the President’s desk during this Congress, but he vetoed them.
Republicans can now use this mechanism to kill the Treasury Department’s misguided effort to punish businesses that Treasury thinks might move their headquarters overseas. Other potential targets include a pending IRS rule to raise estate-tax collections and a Commodity Futures Trading Commission proposal to strip regulated companies of their due-process rights to challenge federal demands for information.
Mr. Obama’s agencies have also been moving rules on truck emissions, fracking, food labels and more on the expectation that President Hillary Clinton would protect them. All of these could be quickly killed.
New Regulations. The third leg of this regulatory reversal is the most difficult: Repealing Obama regulations that went through a formal rule-making.
Ground zero is the Environmental Protection Agency. William Beach of George Mason University’s Mercatus Center says the EPA is America’s most expensive regulator and its Clean Power Plan alone will cost the economy more than $7 billion a year. The power rule is being challenged in federal court as unconstitutional, and Mr. Trump’s Justice Department can tell the court that it is changing its position on the law’s legality. This is what the Obama Administration did with Bill Clinton’s Defense of Marriage Act.
Other Obama rules, such as the EPA’s much-loathed Waters of the United States regulation and the FCC’s Title II Internet takeover, may require new rule-makings to reverse. These new rules probably will be challenged in court, which could delay implementation. But this is all the more reason to start immediately.
Beyond fulfilling a campaign promise, all of this would amount to a huge, low-cost economic boost. Mr. Beach says a recent Mercatus study modeled a scenario in which the U.S. had simply maintained the level of regulation it had in 1980. The U.S. was hardly free of red tape at the time. Yet researchers at Mercatus and Duke University found that keeping the 1980 regulatory burden would have made the U.S. economy $4 trillion larger in 2012. That’s roughly $13,000 per capita.
Rarely do new Presidents get a chance for such readily achievable policy victories. Thanks to Mr. Obama’s pen and phone, Mr. Trump will have it.