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Midnight Regulations

At the end of every presidential administration, regulatory activity spikes during the “midnight” period between presidential 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.

Mercatus scholars analyze this phenomenon, conduct regulatory impact analysis of potential midnight regulations, and weigh in on the what the surges of midnight regulations mean for the entire regulatory process.

Midnight Regulations: Poster Children for Regulatory Reform

Incoming presidents always try to curb the prior administration’s midnight regulations, and Congress can invalidate them using an expedited process under the Congressional Review Act. But if policymakers want to prevent poorly designed regulations year-round, they should require agencies to analyze, act, and then account for the results.

RegData

RegData is a new database that quantifies federal regulation. It analyzes the text of federal regulations to create novel and objective measures of the accumulation of regulations in the economy overall and across different industries in the United States. In addition, RegData measures the degree to which different groups of regulations, such as those from a particular agency, target specific industries.

Regulating in the Dark: Examining Bush Midnight Regulations

This paper examines whether political motivation plays a role in the timing of some midnight regulations. It further examines whether political motivation has a negative impact on the analytical quality of midnight regulations. In contrast to other studies that focus on the overall regulatory activity using proxies, this paper concentrates on a detailed analysis of three regulations issued in the final days of the Bush administration.

The Phenomenon of Midnight Regulations

Compared with non-election years, the number of economically significant regulations submitted for OIRA review more than doubles during midnight periods when control of the White House switches to a different party. The surge is rarely accompanied by an increase in OIRA’s budget or staff. Thus, OIRA can be overwhelmed during midnight periods, resulting in rushed, flawed oversight.

Midnight Regulation: Decisions in the Dark?

The midnight regulation phenomenon is not new or limited to one political party. New research suggests that midnight regulations proposed during the second half of a presidential election year are more likely to have lower-quality regulatory analysis and less likely to use the results of analysis to inform decisions. Thus, these regulations may be particularly costly or ineffective.

Regulation: A Primer

Buy the paperback and e-book on Amazon“Those wanting to get a clear and downright interesting introduction to federal regulation—both its practice and its impact—should get their hands on a copy of this primer. It is so well done that it won’t have to be required reading to be read by any one who lives with regulation. And who doesn’t?”—Bruce Yandle, author of Regulation by Litigation and Alumni Distinguished Professor of Economics Emeritus, Clemson University

Beware the Surge of Midnight Regulations

Administrations face fewer political constraints during the midnight period and, thus, take the opportunity to impose their policy preferences. These rushed, politically motivated regulations have poor quality analysis and face less stringent oversight from OIRA. Stemming the surge of midnight regulations requires comprehensive reform to constrain agencies’ ability to issue too many regulations and improve OIRA’s ability to oversee regulatory quality during the midnight period.

Midnight Regulations Redux

This week, the House Oversight and Government Reform Committee will consider legislation intended to prevent a rash of “midnight regulations” – regulations hastily issued between Election Day and Inauguration Day. Republicans are concerned that the Obama administration is holding back sweeping and controversial regulations until the president no longer faces reelection. Four years ago, congressional Democrats expressed the same concerns over the Bush administration’s “midnight regulations.”

The Consequences of Midnight Regulations and Other Surges in Regulatory Activity

Is the midnight regulations phenomenon real and what are its consequences? This paper finds that when an administration’s time is almost up, submissions of economically significant regulations nearly double. Such surges in regulatory activity decrease the duration of regulatory review at the Office of Information and Regulatory Affairs (OIRA), likely because of political pressure to quickly approve new rules. Specifically, one additional economically significant regulation submitted to OIRA decreases the mean review time for all regulations by about two thirds of a day. If OIRA review improves regulation quality, then regulatory surges that decrease review time could hinder such improvement.