BGR Primer: Congressional Review Act

A Potential Tool to Overturn Trump Administration Regulations

By Remy L. Brim, Ph.D. – Health and Life Sciences Practice Co-Head
Andrew Lewin – Vice President, Financial Services

SUMMARY

The Congressional Review Act (CRA) is an oversight tool that Congress can use to overturn certain rules issued by a federal agency. The CRA requires agencies to report their rulemaking activities to Congress and provides Congress with a special set of procedures under which it can overturn those rules. Congressional Republicans used the CRA in early 2017 (115th Congress) to overturn 16 of the Obama Administration’s regulations.

HOW DOES THE CRA WORK?

Scope

Only “major rules” can be overturned under CRA procedures. A major rule is one that is likely to have an annual economic impact of $100 million or more, will increase costs and prices for consumers or local governments, or will have an adverse effect on the economy. The CRA authorizes the Office of Information and Regulatory Affairs (OIRA) in the White House’s Office of Management and Budget (OMB) to determine whether a rule is major.[1]

If the CRA is used to overturn a regulation, it both nullifies the regulation in question and prohibits a federal agency from reissuing the same regulation or promulgating a regulation that is substantially similar. Therefore, Congress cannot pull back a rule that would leave a void in a regulatory framework without passing a legislative correction in parallel. The CRA also provides that any “determination, finding, action or omission” made pursuant to the CRA cannot be challenged in court.

Timing

The effective dates of major rules are delayed for 60 calendar days after they are submitted to Congress, or after they are published in the Federal Register, whichever date is later. The CRA also includes a special provision for regulations submitted to Congress right before it adjourns its annual session sine die. In this case, a rule submitted during this carryover period is treated as if it were published on the 15th session day after Congress convenes its next annual session. The House or Senate can introduce a joint resolution to start the CRA process only within 60 continuous session days starting on the date on which the regulation is received.

Days are considered a “continuous session” day if both the House and Senate are in session. However, what days qualify can be ambiguous and contested.[2] Looking at the 115th Congress as precedent, Congress pulled back a rule issued August 1, 2016, at the end of March 2017; reflecting that “60 days of continuous session” can last much longer than 60 days. Based on this precedent combined with amount of time Congress was away during the pandemic, we expect that rules finalized by federal agencies on or after June 1 may be vulnerable to the CRA in 2021.

Process

The CRA process must begin with a joint resolution of disapproval being introduced in the House and Senate. Passing the joint disapproval resolution requires a simple majority in the Senate, bypassing the 60-vote threshold needed to end a filibuster. The joint resolution limits debate to 10 hours and does not allow amendments.

Because of this process, overturning a rule generally requires single party control of both chambers of Congress. The process also requires the President to sign the joint resolution, so success in overturning a regulation generally requires the President to be of the same party as the jointly controlled Congress. The CRA has only been used 17 times, 16 of which were during the 115th Congress.

WHAT RULES MIGHT BE VULNERABLE?

After President Trump’s election in 2016, the House Freedom Caucus sent the new president a list of nearly 200 Obama-era regulations that it wanted overturned. Congress and the President ultimately overturned 16 of them. The Congressional Progressive Caucus among other groups will probably compile a similar list of Trump administration regulations that they would like to overturn. Some early targets of Trump regulations could include:

  1. Multiple environmental rules, including two methane emissions rules finalized by the Environmental Protection Agency (EPA) in August, changes to the National Environmental Policy Act (NEPA), and the EPA’s proposed rule for cost-benefit analyses related to air pollution rules. Expect the USDAs October rule exempting the Tongass National Forest from the “roadless rule,” which opens up it to logging, to be in the mix.
  2. Several rules finalized by the Department of Labor (DoL), between June and August, some of which DoL is issuing under the SECURE Act, which President Trump signed into law on December 20, 2019
  3. DoL’s new fiduciary rule, proposed on June 29 with a 30-day comment period, which includes a prohibited transaction exemption that would allow investment advice fiduciaries to receive compensation (congressional Democrats opposed the proposed rule and relatively short comment period)
  4. DoL’s proposed rule that would restrict the use of environmental, social or governance (ESG)-focused investments within tax qualified ERISA plans (multiple congressional Democrats submitted a comment letter to the Department criticizing the proposed rule)
  5. August 28 Treasury Department and IRS guidance on President Trump’s payroll tax deferral (Senator Minority Leader Chuck Schumer and Senate Finance Committee Ranking Member Ron Wyden recently sent a letter to the Government Accountability Office (GAO), requesting a determination on whether the guidance can deemed a “rule” for the purposes of the CRA). GAO has already ruled that it considers the guidance to be a rule for purposes of the CRA.

[1] Guidance, interim final rules, certain interpretive rules, and policy statements may be major rules.

[2] During the early months of the 115th Congress, there were several long parliamentary debates and arguments with GAO/CRS over what days counted as a “day of continuous session.” For example, the Congressional Research Service notes “It appears that, in some cases, if the deadline for introduction expires when the Senate is in a period of pro forma session, that chamber may permit a qualifying joint resolution to be submitted on the day the Senate returns to regular session. Members and staff are encouraged to consult with the Senate Parliamentarian or his or her assistants to determine the precise deadline for submitting a joint resolution aimed at any specific agency final rule.”