Introduction
The Biden administration has imposed $1.8 trillion in new regulatory burdens – double the regulatory costs imposed during the entire Obama presidency. With over 900 final rules potentially subject to review, the Congressional Review Act (CRA) offers a critical mechanism for a second Trump administration, in collaboration with a unified Congress, to unwind this regulatory expansion. The CRA’s “lookback” provision, which allows Congress to nullify rulemakings finalized in the closing months of a previous administration, ensures that even last-minute efforts to cement Biden-era policies can be scrutinized and reversed. Historically, the CRA has been used successfully 20 times to strike down burdensome regulations, most notably during the Trump administration, which rescinded 16 rules from the Obama administration. This tool, bypassing the Senate filibuster and requiring only a simple majority, provides a streamlined pathway to curb the excesses of the regulatory state and reset the balance of federal rulemaking.
The Evolution of Regulatory Policy
In 2014, with his policy agenda stalled in Congress, President Obama announced that he had a “pen and a phone” to move his policy agenda forward. With a divided government, the Obama administration eschewed the shoe-leather approach to advancing the president’s agenda through Congress and pursued an unprecedented expansion of the regulatory state. That legacy was fully embraced by the Biden administration, which embarked on a regulatory agenda that dwarfed that of his Democratic predecessor.
The scale of the Biden-era expansion of red tape is staggering. To date, the Biden administration has finalized 1079 new rules from executive agencies, with $1.8 trillion in regulatory costs. By comparison, the Obama administration imposed $890 billion in new regulatory burdens. The Biden administration has imposed more new regulatory burdens in four years thanthe Obama administration imposed in eight years, with no signs of slowing down.
The four years of the first Trump administration marked a conspicuous break in the regulatory onslaught that ensued before and after. On net, the Trump administration finalized regulations with a cost of just $40 billion. Beyond stopping the growth of the regulatory state, the Trump administration embraced a deregulatory agenda that also imposed a budget on agencies’ regulatory burdens.
Donald Trump’s return to the White House offers a unique opportunity to dismantle the regulatory regime developed during the Biden administration. As former Director of the Office of Information and Regulatory Affairs (OIRA) Susan Dudley recently noted, on January 20th, President Trump is likely to rescind a small mountain of Biden era executive orders and freeze any ongoing rulemakings. Prospectively, expect President Trump to reinstate a regulatory budget that imposes significant constraints on future rulemakings. Previously, the upshot of this constraint was that agencies generally had to offset new costs with other regulatory efficiencies and rescind two rules for every new regulation. This one-in-two-out rule could well be expanded, and indeed Trump suggested this policy be revised to a 10-to-1 ratio.
But properly weeding the regulatory garden requires two precious commodities: time and votes. Formally rescinding existing rules can take years through the Administrative Procedures Act (APA). With a unified government however, the incoming Congressional majority can disapprove, with the president’s assent, of rulemaking through the Congressional Review Act (CRA).
The Congressional Review Act (CRA)
The Congressional Review Act (CRA) is a tool that allows Congress to disapprove of executive agency rulemakings. Crucially, this process bypasses the Senate filibuster, allowing repeal with a simple majority vote. The CRA can also prevent agencies from issuing new rules that are “substantially similar” to those repealed.
The disapproval process under the CRA is broadly similar to enacting a change in law, whereby Congress must enact identical legislation that takes effect once signed by the president. In the case of the CRA, rather than changing law, Congress is disapproving federal rulemakings, such as, but not limited to, final rules published in the federal register. To enact a disapproval, Congress must pass a joint resolution of disapproval that specifies the agency publishing the rulemaking and the relevant rulemaking itself. Upon introduction, the resolution is referred to the relevant Congressional committee of jurisdiction.
Disapproval resolutions are generally considered in the House in the same manner as other legislation. In the Senate, however, qualifying joint resolutions of disapproval are considered under expedited procedures on the Senate floor. Specifically, motions to proceed to the resolution are nondebatable, cannot be amended, and debate on the measure is limited to 10 hours. The upshot of these procedures as the joint resolutions of disapprovals under the CRA cannot be filibustered in the Senate.
One critical aspect of the CRA is that it is time limited. Specifically, the CRA grants Congress 60 legislative days—not calendar days—to evaluate regulations finalized before the administration’s term ends. This extended window can span several months due to congressional recesses and other scheduling factors. However, the CRA also features what is known as a “lookback provision” that allows Congress to review rulemakings issued by an administration during the previous Congress. Under this provision, if a rulemaking is issued by an administration within 60 legislative days of Congress’s adjournment at the end of the year, those rulemakings are deemed to have been submitted to Congress on the 15th legislative day of the new Congress, which restarts the 60-day period for Congress to disapprove of the rulemaking.
The CRA also provides additional time for consideration of resolutions of disapproval. Because the lookback window is a function of the date of adjournment and the number of days in session, it cannot be determined prospectively, since the dates of adjournment and intervening recesses are uncertain until they’ve occurred. This is likewise true for determining the 60-day period for filing resolutions of disapproval and follow-on time for consideration of the resolutions. Based on previous patterns, it is possible to estimate these time periods. For example, the Congressional Research Service has “unofficially” estimated that rulemakings issued after August 1st would fall within the lookback window. Similarly, CRS estimates that the new Congress will have until late March to file resolutions of disapproval for rules falling within the lookback period, and those resolutions would be eligible for filibuster-proof consideration in the Senate until late May or early June.
In recent years, filibuster-proof Congressional processes have generally been used by the majority party to advance the president’s agenda. Specifically, budget reconciliation and reduced Senate thresholds for considering executive nominations are increasingly common processes for staffing cabinet agencies and advancing the agenda of the president when there is unified government.
A different dynamic prevails with respect to the CRA, insofar as it pits the legislative branch against the executive branch. Even with a filibuster-proof process for Congressional consideration, any resolution of disapproval enacted by Congress relating to a rulemaking by a sitting president is likely to be vetoed. Overruling a veto requires a two-thirds majority, a high hurdle indeed. This is why the lookback period is so critical to the CRA. A new president working with a unified Congress can nullify rulemaking from the previous administration.
The CRA has been successfully employed to nullify agency rulemakings 20 times since it was first created in 1996. The first successful employment of the CRA process occurred during the Bush administration, when, in March of 2001, Congress struck down an Occupational Safety and Health Administration (OSHA) rule published during the final months of the Clinton administration. President Trump signed 16 resolutions of disapproval striking down rulemakings from the Obama administration or Obama appointees of independent agencies. In 2017, Congressional Republicans sent 14 resolutions of disapproval for President Trump’s signature. In 2018, Congress used the CRA to repeal two additional rulemakings from the Consumer Financial Protection Bureau headed at the time by an Obama appointee. In 2021, Biden, upon taking office, reversed three Trump-era rules through the CRA process.
Most Burdensome Rulemakings: Biden’s 10 Costliest Regulations in the CRA Lookback Window
Unquestionably, the 119th Congress and the second Trump administration will employ the CRA to nullify Biden-era rulemakings as part of a broader deregulatory agenda. According to the GW Regulatory Center, there are 902 final rules from executive agencies that have been published within the estimated CRA lookback window. While no doubt many should be scrutinized by Congress, a more modest approach to determining which rules should be nullified would begin by examining the cost burdens imposed by rulemakings falling within the CRA lookback window. The American Action Forum compiled the following 10 regulations as the costliest rulemakings falling within the estimated lookback window of under the CRA:
Together, these rules carry a combined regulatory burden in excess of $100 billion. But cost is, of course, not the sole consideration for the merits of a given rulemaking. Indeed, in some instances, policy goals may be worth incremental increases in regulatory burdens. Or conversely, some low-cost regulations may have other policy deficiencies not wholly captured by the estimated cost burdens. For example, while not among the most costly regulations falling within the window, the Federal Trade Commission’s final relating to premerger notifications under the Hart-Scott-Rodino Act (HSR) is worthy of consideration for disapproval.
Enacted in 1967, the HSR Act created a federal premerger notification program requiring businesses planning mergers or acquisitions above $119.5 million to notify the FTC and the Department of Justice’s Antitrust Division (DOJ) before finalizing the transaction. The law also imposes a 30-day waiting period, allowing the agencies to assess whether the deal raises antitrust concerns. The latest rule imposes additional reporting requirements on firms, which have been estimated to add $139.3 million in new regulatory burdens to the U.S. economy. While an improvement from the proposed rule, the final nonetheless will act as a “merger tax,” that will incrementally deter merger activity.
Given the Biden administration’s approach to regulations, Congress can expect additional rulemakings to be published in the waning months of the 46th presidency. Among the rulemaking expected to be published before relate to the regulation of certain chemicals under the Toxic Substances Control Act (TSCA). The EPA is expected to release a final rule on both perchloroethylene (PCE) and carbon tetrachloride (CTC). Both PCE and CTC are used in the manufacturing of refrigerants with a lower global warming potential, known as hydrofluoroolefins (HFOs). PCE is used in the production of protective skin for planes used by NASA, the U.S. military, and commercial airplane manufacturers.
Strict EPA limits on CTC will likely render domestic semiconductor manufacturing more challenging and require more imports from countries that already produce the chemical on a global scale, like China. Semiconductor lines are made with materials (like PFAS) derived from chloroform, which is a co-product of chemicals like CTC. If CTC is banned under TSCA, chloroform also cannot be produced domestically.
But there’s one application to both PCE and CTC that, if the EPA has its way, could hamper our everyday lives. According to industry experts, PCE and CTC are critical to processes that go into gas blends that make up 45% of the gasoline pool in the United States. Should the EPA effectively ban the production of PCE and CTC, it would severely impact the production and supply of gasoline.
These are but two examples of rules that may not rank among the costliest rulemakings vulnerable to disapproval, but nevertheless pose policy risks worthy of consideration for nullification under the CRA.
Conclusion
The CRA will be a central pillar of Trump’s second-term deregulatory strategy, offering an effective, if circumscribed, process for dismantling the last vestiges of the Biden administration’s regulatory legacy. As a practical matter, there are simply too many rules potentially subject to disapproval under the CRA for Congress to take the time to eliminate. To discipline this process, policymakers should first look towards the most burdensome and distortionary. Beyond the CRA, the second Trump administration will have an opportunity to not only stop the growth of the regulatory state, but perhaps meaningfully shrink it with the reintroduction of the regulatory budget.