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Undoing the Obama Agenda – Congressional Review Act, Budget Reconciliation, and Executive Actions

President Barack Obama pledged to govern by “a pen and a phone” in light of congressional Republican opposition in 2014. On the campaign trail, President-elect Donald Trump pledged to eliminate scores of those regulations and undo Executive Orders signed by President Obama. With continued Republican control of the House and Senate, the President-elect can keep his promise, but there are some limitations.

Set out below is a summary of the tools the Trump Administration and 115th Congress can use to undo policies put in place by the Obama Administration.

CONGRESSIONAL REVIEW ACT

The Congressional Review Act (CRA), which was signed into law in May 1996, allows Congress to overturn a final rule issued by a federal agency under certain circumstances. While only one rule has ever been overturned under the CRA (in 2001, the outgoing Clinton Administration’s ergonomics rule was overturned), congressional Republicans may use the CRA to reverse a number of rules finalized in this last year of the Obama Administration.

Only 17 days into his last three months as president, Obama is on track to meet or exceed the number of economically significant rules finalized by Presidents George W. Bush and Bill Clinton as their terms ended.  The Administration’s fall regulatory agenda provides a list of the potential rules that could still move forward in the remaining days.  The White House is currently working with agencies to prioritize which rules to push between now and January 20.

Congressional Review Act Chart

How CRA works:

  • The CRA provides “fast track” procedures for the Senate to consider a resolution of disapproval. After a Senator introduces a resolution of disapproval, it is referred to the appropriate committee of jurisdiction. The resolution can be discharged from committee after 20 days if at least 30 Senators sign a petition. Once discharged from (or approved by) the committee, any Senator can make a non-debatable motion to proceed to consideration of the resolution, and the resolution only needs a majority vote to pass.
  • Before a rule can take effect an agency must provide notice to Congress. Upon receipt of the final rule, the House and Senate have 60 days to pass a resolution of disapproval (includes weekends and holidays but excludes periods where at least one chamber is gone for more than three days pursuant to an adjournment resolution). If the current session of Congress adjourns sine die (officially ending the 114th session) before the end of the 60-day period, the clock is reset, and the 115th Congress has an additional 60 days starting on the 15th legislative day of the new session, which starts January 3, 2017.
  • The House does not have a fast track process; Republicans can bring a disapproval resolution to the floor under regular order. Like the Senate, the House must consider a resolution of disapproval within 60 days of receiving the final rule, and only a majority is required to pass.
  • Once both chambers pass a resolution of disapproval and it is signed by the President, the regulation is struck down.

The Nitty-Gritty:

  • The Congressional Research Service estimates any rule finalized after May 30, 2016, can be subject to the CRA if a resolution of disapproval is considered before the end of March 2017 (timeframe will shift depending on the actual 2017 congressional schedule). More than 1,400 rules fall within the CRA window. Most are minor, but more than 150 significant rules were finalized since May 30, 2016 (e.g., fracking, methane, Artic drilling, school nutrition standards, etc.).
  • The CRA only applies to final rules. The Trump Administration can withdraw any proposed rule on its own accord (including draft final rules that are still under Office of Management and Budget (OMB) review on January 20, 2017). See below on “Executive Actions.”
  • A resolution of disapproval can only be used to strike down an entire rule, not parts of a rule.
  • A resolution of disapproval can only be used to target one rule to maintain privileged status in the Senate. Multiple resolutions cannot be bundled together. Nevertheless, the House today passed H.R. 5982, the Midnight Rules Relief Act, in an attempt to streamline the CRA process.
  • Although the Senate has an expedited process, time may be a limiting factor in considering the rules promulgated by the Obama Administration. Each disapproval resolution must be considered on its own with ten hours of floor debate. Republican leadership will have to prioritize CRA votes with an ambitious legislative agenda, the confirmation of President-elect Trump’s team, and the budget process.
  • If the resolution of disapproval is enacted and signed by the President, it strikes down the rule and prevents the agency from ever promulgating “substantially the same” rule without explicit authorization from Congress. The CRA does not define “substantially the same” or who would make such determination (i.e., Congress, White House, or courts). There is an ongoing debate within the Obama Administration about which rules should be pushed forward given the looming threat of the CRA and the possibility that a successful disapproval resolution would prevent a future administration from advancing a similar rule. But in an interesting twist, it would be technically possible for a Trump Administration to promulgate a rule started under Obama with the express intent of teeing it up for congressional disapproval and therefore taking it off the table for good.

In addition to the CRA, Members of Congress can advance legislation to delay or strike down a rule. For example, there is speculation the new Congress may seek to delay the effective date of any rule not already implemented. However, this approach is subject to a filibuster in the Senate and will require 60 votes to be successful. With Republican control of the House, Senate, and White House, it is also likely more legislative riders survive the appropriations process (i.e., funding prohibitions that prevent an agency from implementing an unpopular rule).

The Trump Administration can also seek to modify, replace, or withdraw existing regulations that have already been finalized. However, these efforts would be subject to the Administrative Procedure Act, which would require a new public notice, comment period, and/or litigation.

BUDGET RECONCILIATION

The budget reconciliation process is an expedited procedure for considering certain tax and spending legislation. A reconciliation bill is considered “privileged” because it is not subject to filibuster in the Senate and the scope of permitted amendments is limited. Thus, controversial tax and spending provisions can be passed with a simple majority vote, and not the typical 60-vote threshold that can be required in the Senate.

The reconciliation process is triggered only when the House and Senate agree to a budget resolution. This is the blueprint for the fiscal year’s overall budget plan. Once it is agreed to by both chambers, it becomes operative for enforcing budget limits in Congress; it does not go to the President for signature, and it does not become law. The resolution may include reconciliation instructions to increase or decrease spending, revenues, or the public debt limit.

In the Senate, the so-called “Byrd Rule” (which was codified in the 1990 Budget Act) prohibits the addition of “extraneous” provisions to a reconciliation bill. The most important of these prohibitions applies to provisions that raise deficits in any year after the period covered by the reconciliation instruction (most commonly 10 years), unless such “out-year” deficits are fully offset. Byrd Rule challenges are enforced through parliamentary points of order raised by Senators. Unless waived by a three-fifths vote in the Senate, a non-compliant provision must be removed from a reconciliation bill, or the bill would lose its privileged status.

EXECUTIVE ACTIONS

President-elect Trump does not need congressional support to undo some parts of the Obama regulatory agenda. For example, Trump can unilaterally withdraw or suspend any proposed rule that the Obama Administration did not finalize, including draft final rules still under OMB review.

Trump can also revoke, modify, or supersede any of the more than 230 Executive Orders issued by President Obama. For example, when President Obama took office in 2009, he revoked Executive Orders issued by President George W. Bush dealing with stem cell research, the “Mexico City policy” (bars funding for international groups that provide abortion), and several EOs limiting the power of labor unions under federal contracts. It is likely Trump will revoke a number of significant EOs on his first day in office. Likely candidates include those dealing with immigration, gun control, labor, and the environment.

Finally, Trump has promised to pull the United States out of a number of international accords and agreements, including the Paris Climate Agreement. However, there are some practical limitations. Under the agreement, any country can withdraw, but there is a four-year withdrawal process. The transition team reportedly is looking at ways to exit earlier, including withdrawing from the underlying United Nations Framework Convention on Climate Change or issuing a presidential order to remove the U.S. signature from the Paris deal. Nonetheless, unraveling the Paris Climate Agreement will be more complicated than Trump likely anticipated on the campaign trail.

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