Bush's Midnight Regulations

The 43rd president may set yet another dubious record.

The political scientist James Pfiffner has compared the ability of a lame-duck president to achieve anything in his final months in office to "a balloon with a slow leak that shrinks with each passing week until it hits the ground." Yet in his waning hours, President George W. Bush managed to rush through an unprecedented number of late-breaking regulations, ranging from a rule increasing the length of time truck drivers can stay behind the wheel to a requirement that organizations providing aid to victims of sex trafficking certify that they do not advocate prostitution.

Midnight regulation is the term of art for the spike of new regulations promulgated between the election of a new president and Inauguration Day. These new rules, often too controversial to have been adopted earlier in the president's term, come at such a pace that they overwhelm the institutional review process, which is intended to ensure that new regulations have been carefully considered, are based on sound evidence, and have benefits that outweigh their cost.

Virtually every modern president has gone out with such a bang, though it wasn't until the lame-duck regulatory outburst of President Jimmy Carter that the term midnight regulation was coined. But it was President Bill Clinton's then-unprecedented passage of new rules in late 2000 that sparked a renewed interest in the use of presidential power between an election and a new administration.

During Clinton's midnight period, his administration published more than 26,542 pages in the Federal Register, a 51 percent increase over the average number of pages published during the same quarter of the previous three years of Clinton's second term. The regulations affected everything from water quality to minimum efficiency standards for air conditioning, heat pumps, and washing machines.

Midnight regulation is not just a Democratic phenomenon. Late in his presidency, despite an alleged regulatory "moratorium," President George H.W. Bush's administration issued scores of significant new rules, making a mockery of its alleged commitment to regulatory sobriety.

In a March 2008 study, the Duquesne University economist Antony Davies and I found that, between 1948 and 2007, when the White House switched parties, the number of Federal Register pages in the outgoing administration's final quarter was on average 17 percent higher than the number of pages issued during the same period in nonelection years. We found that, with the exception of Ronald Reagan's second term, the sudden outbursts are systemic and cross party lines.

Figure 1 shows the number of economically significant rules (defined as having an economic impact of $100 million or more) issued each year between November 1 and January 20 since 1982, based on Office of Management and Budget data. Here the regulatory spikes during the party-switching midnight periods (1992, 2000, and 2008) are obvious to the point of absurdity. Extrapolating from the number of significant regulations issued between November 1 and November 20, and assuming that new rules will be coming out at a constant pace until January 20, 2009, George W. Bush is set to out-regulate even his father, with a projected 70 significant rules during his midnight period.

This burst of regulation occurred despite the fact that this administration swore it wouldn't engage in last minute rule making. On May 9 White House Chief of Staff Joshua Bolten issued a memorandum to the heads of executive departments and agencies stating that except in "extraordinary circumstances," regulations to be finalized during the Bush administration should be proposed no later than June, with final rules issued no later than November 1.

As it turns out, "extraordinary circumstances" may add up to the largest spike in recent history. So now there is a rule granting sweeping new protections to health care providers who oppose abortion and other procedures on moral grounds and another making it easier for state and local police to collect, share, and retain information about Americans even when no underlying crime is suspected. (It is unclear, at this point, how many of the new regulations will tighten the restrictions on Americans' behavior, and how many of them will loosen pre-existing rules.)

The end of an Oval Office term is also the end of Congress' term, which allows the outgoing president to use executive tools (midnight regulations, executive orders, presidential proclamations, executive agreements, and national security initiatives) that during any other period might be halted by the legislature. It is easier to get controversial things done when Congress is distracted.

The political scientists William Howell of Harvard and Kenneth Mayer of the University of Wisconsin note that midnight regulations occur when "political uncertainty shifts to political certitude." During the last 100 days of an administration, a president knows exactly who will succeed him, as well as the new president's policy positions, legislative priorities, and level of congressional support.
The sitting president has every motive to use late-breaking rules to extend his influence beyond the day he leaves office.

The outgoing president knows there is no political consequence for his actions. He won't face the electorate again, and he doesn't have to worry about congressional retaliation. It's the perfect time to favor a particular special interest or to issue unseemly pardons.

Is the strategy effective? One would think that the incoming president could easily undo the midnight regulations of his predecessor. More often than not, though, new presidents cannot alter orders issued by their forebears without paying a political price or confronting legal obstacles.

The Bush administration experienced this sort of problem when it decided to suspend Clinton's last-minute rule setting the maximum acceptable level of arsenic in drinking water at 10 parts per million. Polls indicated that only one-third of the American public approved of the rule, but Bush's suspension led to severe public criticism, becoming, as the columnist Michael Kinsley explained, a symbol of the new administration's callous attitude toward the environment.

So most last-minute regulations survive. A 2005 Wake Forest Law Review paper by the attorneys Jason M. Loring and Liam R. Roth found that only 3 percent of Clinton's regulations were repealed by George W. Bush, 15 percent were amended, and a staggering 82 percent were accepted without changes.

After Inauguration Day the midnight period ends. The new president can start the process of making his own rules, but that takes years. Or he can try to reverse the midnight regulations by using a law that has been successfully deployed just once. The Congressional Review Act creates an expedited process for Congress to repeal, by a simple majority vote in each house, any regulation it doesn't like. The president then signs the bill, and the rules are reversed.

Given the Democratic majority, that tactic might work this time around. Now is the time to see whether Democrats really are any different from Republicans.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.