Shining a Light on the “Midnight Rule” Boogeyman

An Analysis of Economically Significant Final Rules Reviewed by OIRA

By Mike Tanglis

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Introduction and Executive Summary

“The Midnight Rule Relief Act will hold outgoing administrations accountable and ensure President Obama, and any future president, cannot slip through more costly red tape during his final days in office.”- Rep. Tim Walberg (R-Mich.)

Critics of regulations often deride rules that are finalized during the presidential transition period between Election Day and Inauguration Day as “midnight” regulations. This term is intended to suggest that these rules are rushed, last-second projects.

Some of the most vocal of these critics have turned to data from the Office of Information and Regulatory Affairs (OIRA), which acts as a centralized clearinghouse for federal regulations, to make their case. During presidential transitions since 1988, OIRA has completed reviews of substantially more final rules than during the same months of non-transition years.

Critics equate the increased quantity of completed OIRA reviews with an assumption that they are rushed and, therefore, less carefully conducted.4 Rep. Tim Walberg (R-Mich.) made this claim inMarch 2016 when his bill, the “Midnight Rule Relief Act,”5which would place a moratorium on rule makings during the presidential transition period, advanced in the U.S. House: “Cutting cornersand rushing through regulations leads to carelessly crafted rules that harm small businesses and their ability to thrive and create good-paying jobs. The Midnight Rule Relief Act will hold outgoing administrations accountable and ensure President Obama, and any future president, cannot slip through more costly red tape during his final days in office.”

The Midnight bill passed the U.S. House on July 7, fittingly at 12:03 a.m.7 But the bill’s advocates failto acknowledge a fact that completely undercuts their case: The average rule completed during the Transition Periods at the end of the administrations of Presidents Bill Clinton and George W. Bush took longer, and underwent more days of OIRA review than the average rule over the past 17 years.

The disparity between perception and reality even holds true for the rulemaking that Walberg cites as the poster child for why the “Midnight Rule Relief Act” is needed. Walberg points to the “EnergyEfficiency Standards for Clothes Washers,” a rule completed in 2001 by the outgoing Clinton administration. Walberg claims the rule’s entire rulemaking process was less than five-and-a-half months. His estimate is off by more than five-and-a-half years. The entire rulemaking process was actually more than six years, with many public hearings and requests for comments.

This study focuses on Economically Significant rules, which are defined as those expected to have an effect on the economy of $100 million or more in a single year. It uses various measures to compare the time devoted to regulations completed between Election Day and the inauguration of the incoming president (hereinafter, “Transition Periods”) with those completed during non- Transition Periods.