August, 2008

Midnight Regulations FAQ

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1. What are midnight regulations and why are they important?

At the end of every presidential administration, regulatory activity spikes during the “midnight” period between Election Day and Inauguration Day. This surge is evident even when an incumbent is reelected, and it is considerably more pronounced if the administration changes.

Outgoing administrations often use this window to push through sweeping and controversial regulations. Once finalized, regulations prove hard to repeal. During the spike, the quality of the agencies’ regulatory analysis drops and regulatory oversight by Office of Information and Regulatory Affairs (OIRA) weakens. As a result, federal agencies produce ineffective regulations and waste public resources.

2. How does Mercatus determine what is a potential midnight regulation?

The list of potential midnight regulations contains all economically significant rules that were proposed by executive branch agencies after President Obama was inaugurated, but have not yet been finalized. The list refers only to “prescriptive” regulations that impose mandates or prohibitions; it omits budget regulations that implement federal spending or revenue collection programs.

3. What does Mercatus count restrictions for potential midnight regulations?

We use RegData to quantify regulations based on the actual content of regulatory text. RegData counts the number of binding constraints or “restrictions,” words that indicate an obligation to comply such as “shall” or “must.” This is important because some regulatory programs can be hundreds of pages long with relatively few restrictions, while others only have a few paragraphs with a relatively high number of restrictions.

4. How does Mercatus identify which industries might be affected by a regulation?

We use RegData to assess the probability that a given regulatory restriction is targeting a specific industry. RegData uses the same industry classes as the North American Industrial Classification System (NAICS), which categorizes and describes each industry in the US economy.

To learn more about RegData, visit http://regdata.org

These numbers refer only to “prescriptive” regulations that impose
mandates or prohibitions; they omit budget regulations that implement
federal spending or revenue collection programs.