This article was published in the Winter 2009 Edition of the Administrative Law Review.
The midnight regulation phenomenon is a well-documented one. The reasons behind it range from the desire of the outgoing administration to extend its influence into the future as well as the opportunity to impose costs on the incoming administration. In fact, the high political costs faced by a new administration to overturn those last minute rules makes it an effective strategy for the outgoing administration to project its influence beyond its term. This paper outlines some solutions to this problem and offers a new idea on how to deal with it.
Midnight Regulations are problematic, they have been shown to raise some accountability issues and also be at odds with a democratic process.
During the midnight period the regulatory review process is seriously weakened. As we have seen, at the end of each administration-and especially between administrations of opposite parties-there is a dramatic spike in regulatory activity without a corresponding increase in the resources available to OIRA during those times of increased activity. If the number of regulations OIRA must review goes up significantly, and the man-hours and resources available to it remain constant, we can expect the quality of review to suffer.
Several solutions have been tried in the past such as delaying the effects of new rules and rescinding unpublished rules or by using the 1996 Congressional Review Act. However, these solutions have proven to be quite ineffective.
Prevent or Mitigate: It seems that a better approach to the midnight regulation outburst would be to try to prevent it, or at least mitigate its negative effects. One way to do this is to change the incentives of regulators by increasing the costs to bureaucracies of regulating during the midnight period. We suggest that a politically feasible solution to the midnight regulations problem is to cap the number of regulations an agency is allowed to submit to OIRA during a given time period.