Forget the 3 am Phone Call: Watch Midnight Regs Instead

There’s a phenomenon going back to the Carter-Reagan transition or before that is well known among K Street lawyers and what is called the “regulated community” (a perfectly Orwellian term for private sector business under the visible foot of government): outgoing Democratic administrations enact a number of new rule-makings on the last day of the administration, often very controversial and costly rules that the outgoing administration has sat on for several years because they would be politically difficult.

These have come to be known as “midnight regs,” usually posted to the Federal Register literally on the last day of the outgoing administration. (The 2000 arsenic rule of the Clinton administration is one example.) You can think of these it little “gifts” to the incoming president, or perhaps land mines, because if the new president holds up or tries to rescind the regulations, he reaps a flood of bad publicity and usually legal action.

That’s what happened to Bush with the last-minute Clinton regulation on arsenic levels in drinking water. When the Bush Administration attempted to halt the rule and review it, suddenly the cry went up from the demagogic activist groups, and then duly reported by their media toadies, that Bush wanted to “put” arsenic in drinking water. Bush quickly backed down and let the extremely costly rule (which likely offers no tangible health benefits) through unmolested.

Outgoing Republican administrations do this too, though like spending, they tend to do less of it, and at lower cost, than Democratic administrations. The main reason for this is one that is seldom acknowledged publicly in political campaigns, to the detriment of Republicans: the permanent bureaucracy is the partisan instrument of the Democratic Party. Full stop. This is one reason why Trump is such a threat to them, in ways that the Bushes and the Romneys and the McCains, with their go-along managerial disposition, weren’t. Of course, everything would depend on whether a President Trump would follow through on disrupting the permanent bureaucracy, but that is a post for another time.

Meanwhile, a new analysis from the George Washington University Regulatory Studies Center offers some good quantitative evidence to support the common sense suspicion that the regulation-happy Obama Administration is going to blow the doors of all previous records for Midnight Regulations when it leaves office in January. The chart below presents the forecast visually, but here’s some of the explanation from the authors:

What will the last few months of the Obama Administration mean for regulatory policy? If history is any guide, it will mean a significant uptick in regulatory activity as agencies wrap up their priorities in anticipation of a new President with a different regulatory agenda. The George Washington University Regulatory Studies Center recently released a report on these “midnight regulations” that uses historical data to project just that: a substantial increase in economically significant rules during the Obama Administration’s remaining months. This predicted increase in midnight regulation would outpace that of Presidents George H.W. Bush, Bill Clinton, and George W. Bush.