You may think, as I do, that President Obama was wrong about a lot of things. But on two points he was indisputably correct: Elections have consequences, and the Oval Office stockroom has an ample supply of pens.
Both these observations are why much of what Obama’s administration has done in his final months in office is likely to be overturned not long after Donald Trump is sworn in as his successor. Trump is the first incoming Republican president in decades to have a Congress fully controlled by his own party. (George W. Bush arrived with a Republican House and a 50-50 Senate; his vice president lost tie-breaking powers when Vermont’s Republican Jim Jeffords defected a few months later.) Many congressional Republicans are itching to overturn the regulatory barrage that Obama’s subordinates have launched and, in some cases, are likely to continue to fire right up until the swearing-in ceremony.
A few of these regulations are already in Republicans’ sights. For example, the U.S. Equal Employment Opportunity Commission this fall finalized changes to the EEO-1 Form that would require businesses with 100 workers or more to gather data about who works, for how many hours, in what positions and for what compensation. Brian Hamilton, writing for Politico, observed that the new data-gathering requirements would nearly double the estimated annual labor cost for EEOC reporting; in addition, much of the data the government wants is subjective, distorted or unknowable.
Other targets include the Environmental Protection Agency’s Clean Power Plan, the same agency’s Waters of the United States rule and the Food and Drug Administration’s regulations on electronic cigarettes. Sen. Ron Johnson, R-Wis., went so far as writing letters to these agencies, as well as to the Labor Department, urging them not to bother enforcing rules that will soon be overturned anyway.
The Labor Department letter ended up somewhat moot, however, as a federal court blocked the contentious rule regarding when and how much employees must be paid for working overtime. Revised regulations under the Fair Labor Standards Act, originally set to take effect today, remain in limbo after the U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction in response to a consolidated legal complaint brought by nearly two dozen states and a collection of business groups. Though many employers had already taken action in anticipation of the change to overtime requirements, The Wall Street Journal reported that some of those who hadn’t are now determined to wait.
They have every reason to think the rule won’t come back. The injunction makes life very easy for Trump. He can merely instruct his Justice Department to drop its defense in the case, or he can have his Labor Department withdraw the rules for further reconsideration. Congress would have no need to get involved at all.
For regulations other than the Labor Department’s overtime rules, Congress’ main weapon will likely be the Congressional Review Act. Under the law, Congress has 60 working days after a final rule is issued to send a “joint resolution of disapproval” to the president with a majority in both houses. Due to the vagaries of the congressional calendar, this means any rule issued after mid-May this year will be fair game, according to the Congressional Research Service.
You’d be forgiven if you’ve never heard of the CRA. While it was passed in 1996 as part of then-Speaker of the House Newt Gingrich’s “Contract with America,” it has only been deployed successfully once in the past 20 years. That is largely because a president can veto Congress’ joint resolution. No president, of either party, is terribly likely to scrap his own work just because Congress asks nicely.
The one time the CRA worked came in 2001, after another administration handoff. Newly elected President Bush signed Congress’ resolution of disapproval, striking from the books an Occupational Safety and Health Administration rule issued late in the Clinton administration.
Even when power changes hands, however, the CRA is a blunt instrument some Congresses have hesitated to use because of its caveat: If a rule is disapproved, the agency cannot issue a regulation that is “substantially the same.” In other words, if you merely want to modify a rule, the CRA is not the right tool. This is another reason why, until now, it has remained largely unused.
That may be about to change, however. Next month, we will have a president and two houses of Congress who have expressed an appetite to outright abolish many of the regulations set in place by the outgoing administration. In fact, they have so many rules to undo that Rep. Darrell Issa, R-Calif., has introduced legislation that would allow lawmakers to combine multiple CRA resolutions, reducing the risk that they 60-day window will close before they axe everything on the chopping block. Unsurprisingly, Obama has promised to veto such legislation if it passes, but Issa in turn has promised to reintroduce it after Trump is sworn in.
Senate Democrats will hold 48 or 49 seats, depending on who wins the runoff in Louisiana this month. In theory, they could keep a bill designed to overturn Obama-era regulations from reaching President Trump’s desk. But doing so would invite Senate Republicans to “go nuclear” and cancel or greatly restrict the minority’s filibuster powers. This is a result that many in both parties in the Senate wish to avoid. So, most likely, there will be some sort of compromise where Senate Democrats will make their points on the floor but will ultimately limit themselves in their filibuster actions, in order to prevent the GOP from taking away their only remaining lever of power.
Regardless of whether Issa’s legislation becomes law, the Republicans will certainly try to make the most of their window of opportunity next year. Much of what the Obama administration thinks it accomplished by way of executive order and regulatory pronouncement is apt to be washed away by the flood of ink that will flow from President Trump’s pen.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
photo by Jack-Benny Persson
You may think, as I do, that President Obama was wrong about a lot of things. But on two points he was indisputably correct: Elections have consequences, and the Oval Office stockroom has an ample supply of pens.
Both these observations are why much of what Obama’s administration has done in his final months in office is likely to be overturned not long after Donald Trump is sworn in as his successor. Trump is the first incoming Republican president in decades to have a Congress fully controlled by his own party. (George W. Bush arrived with a Republican House and a 50-50 Senate; his vice president lost tie-breaking powers when Vermont’s Republican Jim Jeffords defected a few months later.) Many congressional Republicans are itching to overturn the regulatory barrage that Obama’s subordinates have launched and, in some cases, are likely to continue to fire right up until the swearing-in ceremony.
A few of these regulations are already in Republicans’ sights. For example, the U.S. Equal Employment Opportunity Commission this fall finalized changes to the EEO-1 Form that would require businesses with 100 workers or more to gather data about who works, for how many hours, in what positions and for what compensation. Brian Hamilton, writing for Politico, observed that the new data-gathering requirements would nearly double the estimated annual labor cost for EEOC reporting; in addition, much of the data the government wants is subjective, distorted or unknowable.
Other targets include the Environmental Protection Agency’s Clean Power Plan, the same agency’s Waters of the United States rule and the Food and Drug Administration’s regulations on electronic cigarettes. Sen. Ron Johnson, R-Wis., went so far as writing letters to these agencies, as well as to the Labor Department, urging them not to bother enforcing rules that will soon be overturned anyway.
The Labor Department letter ended up somewhat moot, however, as a federal court blocked the contentious rule regarding when and how much employees must be paid for working overtime. Revised regulations under the Fair Labor Standards Act, originally set to take effect today, remain in limbo after the U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction in response to a consolidated legal complaint brought by nearly two dozen states and a collection of business groups. Though many employers had already taken action in anticipation of the change to overtime requirements, The Wall Street Journal reported that some of those who hadn’t are now determined to wait.
They have every reason to think the rule won’t come back. The injunction makes life very easy for Trump. He can merely instruct his Justice Department to drop its defense in the case, or he can have his Labor Department withdraw the rules for further reconsideration. Congress would have no need to get involved at all.
For regulations other than the Labor Department’s overtime rules, Congress’ main weapon will likely be the Congressional Review Act. Under the law, Congress has 60 working days after a final rule is issued to send a “joint resolution of disapproval” to the president with a majority in both houses. Due to the vagaries of the congressional calendar, this means any rule issued after mid-May this year will be fair game, according to the Congressional Research Service.
You’d be forgiven if you’ve never heard of the CRA. While it was passed in 1996 as part of then-Speaker of the House Newt Gingrich’s “Contract with America,” it has only been deployed successfully once in the past 20 years. That is largely because a president can veto Congress’ joint resolution. No president, of either party, is terribly likely to scrap his own work just because Congress asks nicely.
The one time the CRA worked came in 2001, after another administration handoff. Newly elected President Bush signed Congress’ resolution of disapproval, striking from the books an Occupational Safety and Health Administration rule issued late in the Clinton administration.
Even when power changes hands, however, the CRA is a blunt instrument some Congresses have hesitated to use because of its caveat: If a rule is disapproved, the agency cannot issue a regulation that is “substantially the same.” In other words, if you merely want to modify a rule, the CRA is not the right tool. This is another reason why, until now, it has remained largely unused.
That may be about to change, however. Next month, we will have a president and two houses of Congress who have expressed an appetite to outright abolish many of the regulations set in place by the outgoing administration. In fact, they have so many rules to undo that Rep. Darrell Issa, R-Calif., has introduced legislation that would allow lawmakers to combine multiple CRA resolutions, reducing the risk that they 60-day window will close before they axe everything on the chopping block. Unsurprisingly, Obama has promised to veto such legislation if it passes, but Issa in turn has promised to reintroduce it after Trump is sworn in.
Senate Democrats will hold 48 or 49 seats, depending on who wins the runoff in Louisiana this month. In theory, they could keep a bill designed to overturn Obama-era regulations from reaching President Trump’s desk. But doing so would invite Senate Republicans to “go nuclear” and cancel or greatly restrict the minority’s filibuster powers. This is a result that many in both parties in the Senate wish to avoid. So, most likely, there will be some sort of compromise where Senate Democrats will make their points on the floor but will ultimately limit themselves in their filibuster actions, in order to prevent the GOP from taking away their only remaining lever of power.
Regardless of whether Issa’s legislation becomes law, the Republicans will certainly try to make the most of their window of opportunity next year. Much of what the Obama administration thinks it accomplished by way of executive order and regulatory pronouncement is apt to be washed away by the flood of ink that will flow from President Trump’s pen.
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