Thursday, July 23, 2009

Midnight Regulations

Susan Dudley, faculty in the Regulatory Studies Program at the Mercatus Center of George Mason University, and a former recess head of the Office of Information and Regulatory Affairs (OIRA) inside the OMB during the final two years of George W. Bush, has an interesting article in the current issue of Engage, published by the Federalist Society, a conservative legal organization founded in the 1980s by attorneys in the Reagan administration.

Titled "Regulatory Activity in the Bush Administration at the Stroke of Midnight," she looks at the problem of a mountain of regulations pouring in as a president is winding down his final days in office. The regulatory process is one where a president can put his stamp on policy without the mess of trying to work policy through the legislative process. As a president is leaving office, this process jumps into overdrive. It is also a way the president can tie the hands of an incoming administration when that new administration is from the opposing party. Thus in 2000-2001, the Clinton administration issued regs lowering the permissible levels of arsenic in drinking water which gave the Bush administration a giant headache as it attempted to overturn the regulation and restore it to the original level. Generally speaking, when the new administration comes to power, any regulation that has not been finalized gets thrown out the door, which can be frustrating to career bureaucrats who put in a great deal of work only to see the fruits of their labor pitched into the garbage can.

Last year, Bush's Chief of Staff, Josh Bolten, sent out a memo to all departments and agencies demanding that any new regulation be finalized by November 1, 2008 to insure that 1) bureaucratic efforts are not wasted and 2) to insure that the president's policy stamp is protected and maximized. Thus, as a result of this order, incoming Chief of Staff Rahm Emanuel threw out "significantly fewer regulations than had Chief of Staff Andy Card" in 2001.

Thus as a result of this order, the administration was able to insure passage of key policies to which President Bush wanted to be remembered for:

* An HHS order protecting medical practitioners from performing services that violated their beliefs;
* A DOI order allowing mountain top mining;
* Treasury order restricting internet gambling.

More importantly, and a subtext to her piece, the order made sure that organized interest groups did not have their way with the treasury by pushing through thousands of regulations while the president and his staff were distracted with the business of leaving office.

Now there is an element of "nothing is as it seems" to this piece. In one part, she highlights how well the Bush administration cut down on "midnight regulations" that end up junked by the new administration when compared to previous administrations. But, when you expand the time period under study--to the last full year in office--you find that the administration issued more regulations than the previous year. So simply by moving the "drop dead" date from noon January 20 of the new year to November 1 of the last year, you have put on notice when the executive branch agencies have to finish the "president's work." To put it a different way, the Bush administration's policy maximized the president's advantage in the final year's regulatory output to insure favored regulations passed while those not favored died. In previous administrations, both ended up getting through because a president and his team simply concentrated on those important things that needed accomplished while organized interests also got their way.

Thus the Bush administration's policy simply advanced the president's power in the never ending saga of political institutions seeking advantage over others that has been a part of our system since 1789.

Wednesday, July 22, 2009

Smackdown

President Obama has been getting a lot of grief recently as a result of his signing statement over the "Supplemental Appropriations Act, 2009" and his challenge to a number of provisions that demanded the administration take certain positions in US policy in relation to our funding to the IMF, among other things. Most of the grief spins on statements Obama made while on the campaign trail during the Democratic Primary in 2008 that seemed to indicate an unwillingness to use the signing statement under any circumstances, or under a limited, but undefined, set of circumstances. Lost in the shuffle is Obama's statement made in December 2007 when he filled in a questionnaire on how he would use the signing statement. Obama is asked: "Under what circumstances, if any, would you sign a bill into law but also issue a signing statement reserving a constitutional right to bypass the law?" Obama wrote:

I will not use signing statements to nullify or undermine congressional instructions as enacted into law. The problem with this administration is that it has attached signing statements to legislation in an effort to change the meaning of the legislation, to avoid enforcing certain provisions of the legislation that the President does not like, and to raise implausible or dubious constitutional objections to the legislation. The fact that President Bush has issued signing statements to challenge over 1100 laws – more than any president in history – is a clear abuse of this prerogative. No one doubts that it is appropriate to use signing statements to protect a president's constitutional prerogatives; unfortunately, the Bush Administration has gone much further than that.

There are two important points in his answer, and unfortunately the focus has only been on one part. Obama says that he will not use the signing statement to "nullify or undermine congressional instructions enacted into law." Now if you use just this standard, any constitutional challenge in a signing statement by definition will either nullify or undermine congressional intent. You have to partner it with a key second part: "No one doubts that it is appropriate to use signing statements to protect a president's constitutional prerogatives."

The constitutional signing statement is designed to challenge provisions that either intrude upon the prerogatives of the president or violate the rights of states or individuals. Under the principle of coordinancy, it is the obligation of each branch of government to determine the meaning of the Constitution and the powers it is given. The Congress and the presidency have been pushing the boundaries of their respective powers since 1789 and will continue to do so in the future. To insure that a push does not "stick," the president has made use of the signing statement to declare that certain provisions violate his prerogatives--the formation of hybrid commissions, the power to recommend, the power to appoint, the power to establish foreign policy, etc. The Bush II administration decided to use the constitutional signing statement, without congressional objection, to make broad claims about the power of the presidency--claims that were not seen as legitimate by most people.

Obama clearly claimed both in December 2007 and in his March 2009 memo on the use of the signing statement that he would revert to the more traditional use of the signing statement--to protect his prerogatives and the rights of states/individuals, and not to upset the clear intention of the Congress for political purposes or to make illegitimate claims of presidential power. You may ask what the first part means--making claims for political purposes?

Presidents have run into trouble when they attempt to use the signing statement to negate a battle lost in the Congress. For instance, the Reagan administration made a change to a controversial provision of the 1986 Immigration Reform and Control Act that revised a provision dealing with discriminatory firing. The provision was designed to allow fired employees to sue based on discrimination, placing the burden of proof on the employer. Because the provision was not clearly defined, the Reagan administration used the signing statement to define the provision so it placed the burden of proof on the fired employee. Then in 2002, the Bush administration defined the whistleblower provision of Sarbanes Oxley so narrowly that it provoked outrage in the Senate--Senators Leahy and Grassley pressured the administration to back away from the provision, which the administration did temporarily.