Bush's Final F.U.

John Podesta, the transition chief for the Obama administration, has vowed that the new president will leverage his "executive authority" to fight Bush's last-minute rule changes. But according to experts who study midnight regulations, there's surprisingly little an incoming executive can do to overturn such rules. The Bush administration succeeded in repealing just three percent of the regulations finalized before Bill Clinton left office in 2001. "Midnight regulations under Bush are being executed early and with great intent," says Bass of OMB Watch. "And that intent is to lock the next administration into these regulations, making it very difficult for Obama to undo what Bush just did."

To protect the new rules against repeal, the Bush administration began amping up its last-gasp regulatory process back in May. The goal was to have all new regulations finalized by November 1st, providing enough time to accommodate the 60-day cooling-off period required before major rule changes — those that create an economic impact greater than $100 million — can be implemented.

Now, however, the administration has fallen behind schedule — so it's gaming the system to push through its rules. In several cases, the Office of Management and Budget has fudged the numbers to classify rules that could have billion-dollar consequences as "non-major" — allowing any changes made through mid-December to take effect in just 30 days, before Obama is inaugurated. The administration's determination of what constitutes a major change is not subject to review in court, and the White House knows it: Spokesman Tony Fratto crowed that the 60-day deadline is "irrelevant to our process."

Once a rule is published in the Federal Register, the Obama administration will have limited options for expunging it. It can begin the rule-making process anew, crafting Obama rules to replace the Bush rules, but that approach could take years, requiring time-consuming hearings, scientific fact-finding and inevitable legal wrangling. Or, if the new rules contain legal flaws, a judge might allow the Obama administration to revise them more quickly. Bush's push to gut the Endangered Species Act, for example, was done in laughable haste, with 15 employees given fewer than 36 hours to review and process more than 200,000 public comments. "The ESA rule is enormously vulnerable to a legal challenge on the basis that there was inadequate public notice and comment," says Pope of the Sierra Club. "The people who did that reviewing will be put on a witness stand, and it will become clear to a judge that this was a complete farce." But even that legal process will take time, during which industry will continue to operate under the Bush rules.

The best option for overturning the rules, ironically, may be a gift bestowed on Obama by Newt Gingrich. Known as the Congressional Review Act, it was passed in 1996 to give Congress the option of overriding what GOP leaders viewed at the time as excessive regulation by Bill Clinton. The CRA allows Congress to not only kill a new rule within 60 days, but to do so with a simple, filibuster-immune majority. De Rugy, the George Mason scholar, expects Democrats in the House and Senate to make "very active use of the Congressional Review Act."

But even this option, it turns out, is fraught with obstacles. First, the CRA requires a separate vote on each individual regulation. Second, the act prohibits reviving any part of a rule that has been squelched. Since Bush's rules sometimes contain useful reforms — the move to limit the Family and Medical Leave Act also extends benefits for military families — spiking the rules under the CRA would leave Obama unable to restore or augment those benefits in the future. Whatever Obama does will require him to expend considerable political capital, at a time when America faces two wars and an economic crisis of historic proportions.

"It's going to be very challenging for Obama," says Bass. "Is he going to want to look forward and begin changing the way government works? Or is he going to look back and fix the problems left by Bush? Either way, it's a tough call."

[From Issue 1068-69 — December 25, 2008 - January 8, 2009]

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