A once almost forgotten law is creating urgency for the Biden Administration. That legislation — the Congressional Review Act (CRA) — is turning into a force of political power that drives regulatory decision making in a potential final year of a president’s term.
In fact, some say that the potential pendulum swing between Republican and Democratic presidential administrations and congressional control has transformed the Congressional Review Act from a legislative messaging device into a regulatory wrecking ball. That’s because, under certain circumstances and with the right timing, the CRA can allow a new president, with the consent of Congress, to undo certain regulatory actions implemented by the previous administration.
What’s the CRA, and Why Is it Important?
The Congressional Review Act was signed into law by President Bill Clinton in 1996 as part of a number of regulatory reforms commonly referred to as the Contract with America.
The authority granted to Congress in this law is fairly straightforward. It states that federal agencies shall submit each regulation to both the House and Senate for review, and that Congress shall have 60 legislative days to review that rule. Furthermore, it establishes a procedure whereby Congress can put forward a joint resolution of disapproval of the regulation in an effort to withdraw the regulation.
What does this mean in practice? Simply this: Any Member, in either the House or Senate, can put forward a disapproval resolution, which requires a simple majority to pass to the next chamber. If such a disapproval resolution is approved by the House and Senate, it must also be signed by the President to effectively withdraw the regulation.
Here’s the rub: While the Congressional Review Act can withdraw the current Executive Branch’s rule, it can also undo what a previous administration did — in a rather dramatic fashion. The Congressional Review Act states that, if the disapproval resolution is agreed to by the President, then the federal agency cannot issue a substantially similar rule.
The power of the CRA can be maximized where Congress did not have 60 legislative days to review, which means there is a lookback clock to beat (or use). If Congress does not have 60 legislative days to review a regulation, then the 60 legislative day period begins again in the next Congress, starting on January 15.
Regulations submitted without 60 days of review are commonly referred to as being subject to the “lookback period,” because the new Congress can look back at these regulations for a full 60 legislative days to consider a disapproval resolution. Such regulations submitted during this period are subject to vulnerabilities that are implicated by the results of any election that occurs prior to the next Congress.
The Congressional Review Act becomes a particularly powerful tool when a presidential election causes a shift in political party affiliation and that same party also controls both chambers of Congress. This confluence of political power would allow the subsequent Congress to analyze and pursue disapproval actions of regulations finalized in the previous presidential administration that the previous Congress did not have 60 legislative days to review.
As administrations try to withstand the potential for subsequent Congresses to “look back” at a specific set of the previous administration’s regulations, the threat of the Congressional Review Act activity creates an incentive in the potential or real final year of a presidential administration to finalize as many regulations as possible to avoid the lookback period.
While the House and Senate Parliamentarians possess the final determination on the number of legislative days that Congress had to review any rule, Executive Branch agencies take direction from the Office of Management and Budget (OMB) within the White House to provide a guidepost as to when federal agencies should target the finalization of regulations to avoid Congressional Review Act activity.
In 2017, with the beginning of the Trump Administration, the Republican-controlled Congress utilized the CRA to disapprove of 16 regulations finalized during the twilight of the Obama Administration. In 2021, the Democratic-controlled Congress utilized the CRA three times to disapprove of Trump Administration regulations, with President Biden in charge of the Executive Branch. The political pendulum in US government has created an environment whereby the CRA has become a much more normalized tool of the Congress.
The Impact for the Biden Administration
As the US is headed toward the 2024 presidential election, the CRA, and the power that a Republican-controlled Congress with a Republican president has to disapprove regulations in 2025 has a real time impact on the current Biden Administration policy agenda.
With the mere notion that Republicans could enjoy unified government in 2025, and leverage the power of the CRA, the Biden federal agencies are working to finalize and report as many regulations as possible to avoid the threat of the lookback period.
To that end, federal agencies like the EPA finalized a series of regulatory actions impacting the power sector in April 2024 in an effort to reduce the risk of any potential CRA activity. With regard to a regulation targeting greenhouse gas emissions from power plants, the EPA modified the scope of its regulation to apply only to new emissions sources rather than include existing sources in order to complete the regulation before the lookback factor of the CRA could attach.
As the second half of 2024 begins, the Biden Administration still has a host of regulatory actions it is striving to finalize to implement its agenda. For example, the Inflation Reduction Act, which charged the US Department of the Treasury and Internal Revenue Service to promulgate regulations to implement broad tax policy impacting the energy sector, has numerous regulatory packages that are not likely to be finalized until closer toward the end of 2024. Such regulations are potential targets of CRA activity in the unified Republican government scenario.
The threat of an incoming Republican, unified government to utilize the CRA as a tool to dismantle the Biden Administration regulatory agenda is not just an existential one.
The Federal Register and CRA Risk
In finalizing any such regulations to avoid CRA risk, federal agencies need to be mindful of a number of things. First, final rules need to be reviewed by the Office of Information and Regulatory Affairs (OIRA) within OMB — a process that can take up to, and even beyond, 90 days. Second, that regulations that navigate OIRA review then need to be reported to Congress and published in the Federal Register.
While such publication may appear to be a perfunctory step in the process, oftentimes Federal Register publication of a complex and technical regulation can take days or even weeks as the federal agencies gather the necessary technical information and data that underpins the final regulations. In particular, with recent final regulations promulgated by the US Environmental Protection Agency (EPA), final rules are often released by the agency, and subsequently published in the Federal Register weeks later, such as was the case with methane regulations and vehicle emissions regulations.
Additionally, as a CRA deadline looms, the Federal Register often also experiences a significant backlog of publication materials, which can further delay publication dates. For CRA lookback purposes, the date in which the rule is published in the Federal Register and reported to Congress is the date which can be adjudged to start the clock.
Conclusion
The evolution of the CRA from a scantily used messaging device into the maximum tool of Congressional oversight of federal agency regulatory authority coincides with the fraught political nature of the last decade. With the Supreme Court soon deciding on the fate of the deference given to federal agencies to interpret their regulatory authority granted by federal statutes, the power structure of federal regulations continues to be questioned.
Article originally published by Thomson Reuters’ Westlaw Today on June 20, 2024.
