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Burning The Midnight Oil

- December 20, 2016

Despite Americans Voting For A New Direction, Obama And His Administration Are Unleashing One Final Flood Of Job Killing Regulations On The American Worker


TOP TAKEAWAYS

  • As Obama prepares to leave office, his lame duck administration is rushing to finish a litany of new rules and regulations it wants to impose on the American economy and use to jam up the incoming President-elect and Republican Congress.
  • Based on a review of Obama's own final regulatory agenda, the non-partisan American Action Forum has estimated the total price tag of Obama's "midnight" regulations could reach $75 billion.
  • Just six weeks after Election Day where the president's party was roundly defeated, his administration has already released several multi-billion dollar midnight regulations, including regulations affecting the U.S. transportation and energy sectors.
  • In January, President-elect Trump and Congress can use the Congressional Review Act to undo Obama's lame duck regulations with a simple majority vote in both chambers and the signature of the president.

"Federal Agencies Are Rushing Out A Final Volley Of Executive Actions In The Last Two Months Of Barack Obama's Presidency." "Federal agencies are rushing out a final volley of executive actions in the last two months of Barack Obama's presidency, despite warnings from Republicans in Congress and the reality that Donald Trump will have the power to erase much of their handiwork after Jan. 20." (Bob King and Nick Juliano, "Obama's Agencies Push Flurry Of 'Midnight' Actions," Politico, 11/27/16)

"The Obama White House Is Engaged In A Frenzied, Final Effort To Put In Place As Many New Rules And Regulations As Time Allows." "As the future Trump administration begins to take shape, the Obama White House is engaged in a frenzied, final effort to put in place as many new rules and regulations as time allows. The goal: to complete several major regulations and other executive actions before President Obama leaves office on Jan. 20." (Juliet Eilperin, "In A Race To The Finish, Obama Administration Presses Ahead With Ambitious Rules," The Washington Post , 12/1/16)

Obama's Goal: Jam Up President-Elect Trump And The Incoming Republican Congress, Forcing Them To Spend Time Undoing The Lame Duck Actions Of The Outgoing President. "While Republicans are already warning that they will reverse some of the rules Obama will issue during the last months of his presidency, White House officials are determined to move ahead, reasoning that having more rules in place will force the new administration to choose which ones are worth the time and effort of reversal." (Juliet Eilperin, "In A Race To The Finish, Obama Administration Presses Ahead With Ambitious Rules," The Washington Post , 12/1/16)

THE POTENTIAL PRICE TAG FOR OBAMA'S MIDNIGHT REGULATIONS: UP TO $75 BILLION

An Analysis From The American Action Forum Of The Administration's Final Regulatory Agenda Estimated That Obama's Midnight Rules And Regulations Could Cost Between $44 Billion And $75 Billion. "With the recent release of the administration's final regulatory agenda, it has largely answered these questions. An American Action Forum (AAF) review of the data found at least $75.3 billion in planned regulatory costs, including the majority ($44.1 billion) during the 'midnight' regulatory period from November 2016 to January 2017. This would be in addition to the more than $150 billion in final regulatory costs already published in 2016. … The $75 billion estimate contains roughly 40 monetized figures out of what will be hundreds of potential final rules. It is unlikely regulators in the Obama Administration will have the opportunity to enact the full slate listed here. Still, there is a degree of uncertainty. The public does not know the cost of proposed rulemakings not yet published, nor the countless other rules that will be final in the coming weeks. There is the possibility of direct or interim final rules omitted from this agenda, but those measures, if significant, are likely to face legal challenges." (Sam Batkins, "Lame Duck Regulatory Agenda Projects $44 Billion In Midnight Costs," American Action Forum, 12/2/16)

When Obama Thought He Would Be Succeeded By A Democrat, The Administration Had A November And December Regulatory Agenda That Would That Would Only Cost $5.2 Billion, A Clear Indication Obama Is Now Trying To Rush Out Regulations Before The End Of His Term. "At the beginning of the year, the administration forecasted roughly $5.2 billion in regulatory costs for November and December. Although it's not certain the outcome of the recent election changed the calculus for regulators, the output for December alone could top $24 billion, according to Unified Agenda data." (Sam Batkins, "Lame Duck Regulatory Agenda Projects $44 Billion In Midnight Costs," American Action Forum, 12/2/16)

Obama's Final Regulatory Agenda Includes 20 "Economically Significant" Rules. "With little time to propose and finalize rulemakings by January 20, 2017, the administration listed 20 new economically significant measures, up from 14 in the spring agenda." (Sam Batkins, "Lame Duck Regulatory Agenda Projects $44 Billion In Midnight Costs," American Action Forum, 12/2/16)

  • "Economically Significant" Regulations Are Those With An Estimated Price Tag Of $100 Million Or More. "As many as 98 final regulations under review at the White House as of Nov. 15 could be implemented before Trump takes office. Seventeen regulations awaiting final approval are considered 'economically significant,' with an estimated economic impact of at least $100 million a year." (Bob King and Nick Juliano, "Obama's Agencies Push Flurry Of 'Midnight' Actions," Politico, 11/27/16)

HALFWAY BETWEEN ELECTION DAY AND INAUGURATION, THE OBAMA ADMINISTRATION HAS ROLLED OUT BILLIONS IN MIDNIGHT RULES

The Interior Department's "Stream Protection" Rule - Up To $29 Billion In Lost Coal Production

Yesterday, The Interior Department Released Its Final Stream Protection Rule Which Would Tighten "Restrictions On Coal Mining." "The Interior Department on Monday issued a rule putting tighter restrictions on coal mining near streams, one of several environmental rules President-elect Donald Trump has targeted to undo once he takes office in January." (Amy Harder, "Rule Tightens Restrictions On Coal Mining Near Streams," The Wall Street Journal, 12/19/16)

A Report From Environmental Consulting Firm Ramboll Environ Estimated The Stream Protection Rule Could Cost The U.S. Coal Industry Up To $29 Billion Annually In Lost Production. "The impact of sterilized coal reserves on annual production will occur over several years, as the proposed rule is implemented and operators adjust to meet operational considerations and contractual obligations. Once the decrease in access to demonstrated reserves is fully realized, the lost value of produced coal is estimated at between $14 billion and $29 billion annually." ("Economic Analysis Of Proposed Stream Protection Rule," Ramboll Environ, 10/15)

  • The Rule Could Kill Over 280,000 Jobs, Including 77,000 Jobs In The Coal Industry. "The decline in annual coal production will have a direct impact on employment. At the national level, the implementation of the proposed SPR is predicted to eliminate between 112,757 and 280,809direct and indirect jobs. Nationally, direct mining job losses are predicted to be in the range of 40,038 and 77,520." ("Economic Analysis Of Proposed Stream Protection Rule," Ramboll Environ, 10/15)

The Transportation Department's Vehicle To Vehicle Communications Rule - Up To $5 Billion Annually In Costs

On December 13, The Transportation Department Announced A Proposed Rule That Would Mandate "Vehicle-To-Vehicle" (V2V) Communications For "All New Light Vehicles In The U.S." "The Transportation Department on Tuesday proposed a rule mandating so-called vehicle-to-vehicle communications on all new light vehicles in the U.S. that would feed information to motorists to help them avoid collisions. Officials hope the technology can help cut traffic fatalities that topped 35,000 in 2015 and are more than 90% of the time tied to human mistakes." (Mike Spector, "Regulators Call On Cars To Chat With Each Other," The Wall Street Journal, 12/13/16)

The National Highway Traffic Safety Administration Estimated The Costs Of The Proposed Rule At Between $2.2 And $5 Billion Annually, With A Extra Cost Per New Vehicle Estimated At $135 To $301. "Table VII-14 presents the total annual costs and cost per vehicle. The total annual costs would range from $2.2 (the lower bound for 2021) to $5.0 billion (not shown, upper bound for 2024). The cost per new vehicle would range from $135 to $301 (lower bound for 2021 and upper bound for 2024). The lower and upper bounds represent the two technology implementation approaches (one-radio and two-radios) that the agency believes can meet the proposed rule and the security and privacy specifications." ("Federal Motor Vehicle Safety Standards; V2V Communications," U.S. Department Of Transportation, 12/13/16)

The Transportation Department Rule On High Speed Trains - $4.6 Billion In Costs

On November 22, The Federal Railroad Administration (FRA) Announced A Proposed Rule Setting Safety Standards For High-Speed Trains. "BACK TO THE FUTURE (OF SUPER FAST TRAINS): FRA proposed safety standards Monday for the high-speed trains of the future, our Lauren Gardner reports for Pros. The rules would require bullet trains traveling faster than 125 mph - up to 220 mph - to operate on tracks without grade crossings that are separate from those where slower trains ride. When operating below that threshold, though, high-speed trains could share the rails with traditional passenger trains." (Brianna Gurciullo, "Butler Picked For DOT Landing Team," Politico's Morning Transportation , 11/22/16)

FRA Estimates The Rule Would Cost $4.6 Billion Over A 30 Year Period. "Over the same period, FRA estimates industry would incur approximately $4.6 billion in quantifiable costs, with a present value of $2.0 billion (when discounted at a 7-percent rate) or $3.2 million (when discounted at a 3-percent rate)." ("Passenger Equipment Safety Standards: Alternative Compliance And High-Speed Trainsets," Federal Railroad Administration, 12/6/16)

The Transportation Department Rule On Training For Truck And Bus Drivers - $3.67 Billion In Costs

On December 8, The Federal Motor Carrier Safety Administration (FMCSA), Part Of The Department Of Transportation, Issued A Final Rule Covering "Minimum Training Standards For New Truck And Bus Drivers." "The Federal Motor Carrier Safety Administration (FMCSA) will issue minimum training standards for new truck and bus drivers." (Tim Devaney and Lydia Wheeler, "Overnight Regulation: Obama's Reg Czar Under Pressure; Fight Looms Over Trump EPA Pick," The Hill, 12/7/16)

The FMCSA Estimated The Cost Of The Rule To The Trucking Industry At $3.67 By 2029, Equal To $366 Million Annually After The 2020 Compliance Date. "FMCSA estimates the total cost of the rule to the trucking industry will total $3.67 billion by 2029, equating to about $366 million annually from the 2020 compliance date. The agency estimates those costs will be partially offset by a $2.389 billion benefit to the industry, coming by way of more efficient truck operation, fewer crashes and lower maintenance and repair costs." (James Jaillet, "FMCSA Establishes Training Standards, Curriculum For New Truck Operators," Overdrive, 12/7/16)

"For This Rule, Annual Costs Actually Exceeded Benefits, Yet The Agency And OIRA Went Forward With The Regulation Regardless." (Sam Batkins, "$6 Billion In Midnight Burdens," American Action Forum, 12/12/16)

The EPA Rule On Haze Reduction - $2 Billion In Costs

On December 9, The EPA Released A Proposed Rule That Would Require Texas Power Plants To Implement "New Pollution Control Requirements," Specifically Adopting 'Best Available Retrofit Technology' [BART] To Reduce Sulfur Dioxide" And Other Emissions. "U.S. EPA is again seeking to impose new pollution control requirements on Texas coal-fired power plants under its regional haze program, potentially triggering a high-stakes test of the incoming Trump administration's attitude toward air quality regulation. In a proposed rule released late Friday, EPA regional officials laid out a plan to require 14 plants to adopt 'best available retrofit technology' (BART) to reduce sulfur dioxide and particulate matter emissions that interfere with visibility in large national parks." (Sean Reilly, "EPA Issues New Rule For Texas Plants In Likely Test For Pruitt," E&E News' Greenwire, 12/12/16)

"State Regulators And Environmentalists Generally Agree That The Compliance Price Tag Will Be Around $2 Billion." (Sean Reilly, "EPA Issues New Rule For Texas Plants In Likely Test For Pruitt," E&E News' Greenwire, 12/12/16)

The Transportation Department's Final Rule On A Drug And Alcohol Clearinghouse - $1.35 Billion In Costs

On December 2, The Federal Motor Carrier Safety Administration (FMCSA) Announced A Final Rule To Create A "National Clearinghouse Of Truck Driver Drug And Alcohol Violations." "Four years after Congress called for a national clearinghouse of truck driver drug and alcohol violations, the Federal Motor Carrier Safety Administration (FMCSA) on Monday will publish the final rule that establishes the database. The purpose of the central repository is to prevent CDL holders with positive test results from moving to different states where the records would not follow them." (Kevin Jones, "FMCSA Posts Clearinghouse Rule," FleetOwner, 12/2/16)

The FMCSA Estimates The Rule Will Cost $1.353 Billion Over A Ten Year Period. ("Commercial Driver's License Drug And Alcohol Clearinghouse," Federal Motor Carrier Safety Administration, 12/5/16)

The EPA's Final Formaldehyde Rule - $72 Million Annually In Costs

On December 12, The EPA Published In The Federal Register A Final Rule Restricting Formaldehyde Emissions From Wood Products. "The Environmental Protection Agency (EPA) is moving forward with new emissions standards for composite wood products. The emissions standards will reduce formaldehyde exposure from composite wood products like hardwood plywood, medium-density fiberboard and particleboard that are sold or manufactured in the United States. The EPA says the emissions limits will have a positive impact on public health." (Tim Devaney, "New Regs For Monday: Wood, Battery Chargers, Renewable Fuel Standard," The Hill, 12/9/16)

EPA Estimates That The Rule Would Cost Businesses Up To $72 Million Annually. "Taking all of this into account, EPA estimated that the aggregate annualized costs for laminated product producers would be $26 million to $72 million using a three percent discount rate, and $26 million to $62 million using a seven percent discount rate." ("Formaldehyde Emission Standards For Composite Wood Products," Environmental Protection Agency, 12/12/16)

THE GOOD NEWS: THE INCOMING ADMINSITRATION AND CONGRESS HAVE A TOOL TO HELP UNDO OBAMA'S LAME DUCK MIDNIGHT RULES

With An Incoming Republican President And Congress, Obama's Midnight Regulatory Push "Could Quickly Vanish In A Series Of Votes Or Executive Actions In 2017. "Although this agenda puts the finishing touches on what was an active eight years for regulators, the fate of many of these measures lies with the next Congress and the incoming administration. The agenda might reveal $44 billion in midnight regulations today, but they could vanish quickly in a series of votes or executive actions in 2017." (Sam Batkins, "Lame Duck Regulatory Agenda Projects $44 Billion In Midnight Costs," American Action Forum, 12/2/16)

The Congressional Review Act "Essentially Allows Lawmakers And The President To Impose A Death Penalty" On Rules And Regulations "Using Simple-Majority Votes." "One powerful weapon at Republicans' disposal is the Congressional Review Act, a 1996 law that essentially allows lawmakers and the president to impose a death penalty on regulations they oppose. Come January, Congress can use the law to repeal any rule that an agency finished after this past May 30, using simple-majority votes - and afterward, agencies will be forbidden to enact any regulation that is 'substantially the same.'" (Bob King and Nick Juliano, "Obama's Agencies Push Flurry Of 'Midnight' Actions," Politico, 11/27/16)


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