03.28.2017 2

Why Congress still needs to defund economy-killing regulations to bolster Trump

By Robert Romano

One of central planks President Donald Trump ran on in 2016 was get rid of economically harmful, job-killing regulations.

The process appears straightforward enough. Whatever can be done by executive action can be undone by executive action. If regulations were initiated via the regulatory process under the Administrative Procedures Act (APA), surely that works in reverse, right?

Not so fast.

In 1983, the Supreme Court unanimously decided in Motor Vehicle Manufacturers Association v. State Farm Mutual that in rescinding any regulation issued by a prior administration an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis, “for the change beyond that which may be required when an agency does not act in the first instance.”

While perhaps well-intentioned, in determining that the National Highway Traffic Safety Administration and thus every other agency had to provide a basis for rescinding any of its regulations — just as it must for issuing them — the outcome is that it is functionally more difficult to rescind an existing regulation than it is to either modify it or never have issued it in the first place.

This leaves every single regulatory rescission enacted via executive action under the APA subject to judicial review, where ultimately, the rescinding agency will have to argue not only that rescinding the regulation in question is rational based on the statutory scheme, but prove that enacting it was irrational to begin with.

The problem with that proposition is that in the administrative state regulations almost always, with some notable exceptions, have some basis in law for being enacted. And even when they don’t, as in Massachusetts v. EPA in 2007 when the Supreme Court ruled carbon dioxide could be regulated under the terms of the Clean Air Act even though the law never contemplated doing so, the courts have tended to uphold and expand the regulatory scheme of the administrative state.

This puts the Trump administration in an uphill situation when it comes to relying solely on executive action and the regulatory process under the APA to rescind regulations.

Ultimately, each and every case will be subjected to heightened scrutiny, coming down to whether five justices agree that the regulation did not rationally rest in the statutory scheme in the first place or agree with the administration’s rational basis for rescinding the rule. And that may just come down to whether they like the regulation or not.

It does not matter that the 1983 decision promised this would not mean regulations last forever, writing “we fully recognize that ‘[r]egulatory agencies do not establish rules of conduct to last forever,’” citing the 1967 case, American Trucking Assns., Inc. v. Atchison, T. & S. F. R. Co. After all, the court added in the 1983 case, “the forces of change do not always or necessarily point in the direction of deregulation. In the abstract, there is no more reason to presume that changing circumstances require the rescission of prior action, instead of a revision in or even the extension of current regulation.”

The point is, the assumption in each of these cases will be that the original regulation was properly enacted and is rationally based on the statutory scheme Congress enacted, and in rescinding the regulation it will be up to the Trump administration to prove otherwise in court.

That’s a losing battle.

The Trump administration would be better served if Congress were to affirmatively act to defund economically damaging regulations — for example via upcoming votes on the April 28 continuing resolution and the debt ceiling — to prohibit the use of funds in implementing those regulations.

It is a much better argument in court that the administration lacks funds to implement certain regulations because of steps Congress took via Article I to prohibit their implementation and so must be rescinded.

We’ve already seen what courts will do when given the opportunity to expand the administrative state. That is why Congress must act, said Americans for Limited Government President Rick Manning in a statement. “The election of a new president does not absolve Congress of its Article I responsibilities to defund harmful regulations,” Manning noted.

“Members need to provide President Trump with every tool and direction related to any regulations that need to be rescinded or reworked. There’s no excuse for continuing to abdicate Congress’ basic, constitutional power of the purse, particularly when doing so leaves it up to chance and courts to ultimately uphold any attempted regulatory rescissions by the Trump administration. Instead, Congress must strengthen the president’s hand, by acting affirmatively to prohibit funds for any regulations deemed harmful to the economy,” Manning concluded.

In the end, executive action alone is no silver bullet in the face of a judiciary that intends to affirm the administrative state, and solely relying on it means leaving the deregulatory agenda to chance and worse, liberal federal judges who will find every reason in the world to keep these economy-killing rules in place. President Trump and Congress need to be smarter this time — and defund these regulations.

Robert Romano is a contributing editor at Americans for Limited Government.

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