House Passes Midnight Rules Bill

January 11, 2017

Winter Capitol.

On Jan. 4, the House passed one of its first pieces of legislation in the new Congress, a bill that would make it easier to overturn so-called midnight rules issued during a president’s final year in office. The House passed H.R. 21, the Midnight Rules Relief Act of 2017, by a vote of 238-164, largely along party lines. The bill was only introduced the previous day by Rep. Darrell Issa (R-Calif.) and amends the Congressional Review Act (CRA) to allow joint resolutions disapproving en bloc regulations submitted to Congress for review within 60 legislative days of the end of a presidential term.

Under current law, Congress can only use the CRA to disapprove one regulation at a time. However, the new bill allows Congress to scrap multiple rules with a single vote. Sen. Ron Johnson (R-Wis.) plans to introduce a companion bill, although the measure faces an uphill climb in the upper chamber and will need the support of eight Democrats.

Midnight rules are new regulations issues as presidential administrations draw to a close. Administrations of both parties have for decades witnessed a spike in regulatory output during the midnight period. Congress may not be have the ability to check regulatory overreach during the last few months or weeks of an administration, partly due to its inability to consider more than one disapproval of a regulation at a time.

Typically regulations issued during this period are usually rushed and not properly vetted by agencies, impose high costs on taxpayers, and thwart the will of voters who just elected a new Congress or President.

Presidents from both parties have made habit of using midnight regulations to sneak in the few remaining parts of their agenda just before the clock runs out. This measure will keep outgoing administrations in check by ensuring new regulations attain the proper level of scrutiny by Congress and the American people. Many of these new rules and regulations come at a tremendous cost to small business and job creators, and thus, H.R. 21 ensures that rules are not rushed in to fulfill some partisan agenda and that the people’s elected representatives have the opportunity carefully review them.

The White House has already threatened to veto the bill if it makes it to President Barack Obama’s desk before he leaves office.

NSBA supports legislation which will stem the flow of regulations coming out of federal agencies as small businesses struggle to keep up. Small businesses on average spend more per employee on regulatory compliance than larger businesses which are also better suited to absorb the additional compliance costs. Steps should be taken to encourage consistent and responsible regulation. Increasing predictability in the regulatory process is crucial for small businesses to grow, and limiting the potential for several major regulations to be implemented at once will provide that predictability.