House Passes Midnight Rules Bill

November 23, 2016

pic-regulations-paperworkpic-paperwork-tax-smOn Nov. 16, the House passed H.R. 5982, the Midnight Rules Relief Act of 2016, by a vote of 240-179, largely along party lines, that would make it easier to prevent so-called midnight rules issued during a president’s final year in office. The bill was introduced on Sept. 9 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.

Midnight rules are new regulations issues as presidential administrations draw to a close and typically lack in-depth study or sufficient time for public comment. Typically, Congress does not 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.

Characteristically 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. 5982 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.

However, prior to the vote, the Obama administration said he would veto the measure, stating that providing for an arbitrary packaging of rules for an up-or-down vote, as this bill does, is unnecessary. In addition, the statement said that the bill would expand the scope of rules subject to the CRA such that by the time a vote on a resolution occurs, some of the rules may have been in effect for over a year. By doing so, H.R. 5982 would create tremendous regulatory uncertainty, potentially impose additional costs on businesses, and represent a step backwards for applying sound regulatory principles to protect public health, safety, the environment, and other critical aspects of society.

Oftentimes complying with existing regulations and navigating new ones takes a significant amount of time and resources, which the profitability and competitiveness of many small businesses. Therefore, NSBA is pleased to see the passage of this bill, as we continue to be tireless advocates against unfair, unnecessary and disproportionately burdensome regulations. Leading efforts to bolster the SBA Office of Advocacy, NSBA has, for years, worked toward broad process improvements to simplify and streamline the federal regulatory process as well as the U.S. litigation system.