Overview of the Biden Administration’s efforts to “Trump proof” its policy decisions

Thank you for joining us this Saturday morning. Today, we survey a dynamic quietly roiling the administrative state and the nation’s business community.

In recent months, the Biden administration has fast-tracked major business regulations in a race to “Trump-proof” the new rules – a term that has peppered media reports recently. What does it mean? 

Since taking office, the Biden administration has published 111 more economically significant rules than the Trump administration at the same point in his presidency. In April, the Biden administration published 66 rules in April alone, more than the entire Reagan Administration. 

The exercise centers on a complex law passed in 1996 called the Congressional Review Act. The measure established a timeline and framework for undoing executive agency actions. In practice, it can only be deployed in the first months of a new presidential administration to unravel regulatory action from that final months of a previous administration.

Per the Wall Street Journal, “The law gives members of Congress authority to introduce resolutions of disapproval aimed at nullifying final regulations put in place by the executive branch. . . The disapproval resolutions will only go into effect if they clear both chambers of Congress and secure the president’s signature.”

Importantly, the Congressional Review Act allows the Senate to advance resolutions of disapproval by simple majority, as opposed to the 60-vote threshold required for most bills.

To the extent obscure parliamentary maneuvers can conjure excitement, former President Donald Trump and a Republican-majority Congress made a big splash in 2017 by employing the Congressional Review Act to undo an unprecedented volume of Obama-era regulations.

President Joe Biden’s team fears a repeat if he loses the election, which is why his administration is pushing forward on major and controversial new regulations now. His team believes it can safeguard the rules by enacting them before June.

Below is a list of some of the regulations moving forward in the frenzy:

• Noncompete: In late April, in a 3 -2 decision along party lines, the Federal Trade Commission (FTC) voted to prohibit noncompete agreements, except for senior executives, and to invalidate current contracts. This is the first industry-wide regulation issued by the agency in 50 years and impacts one in five workers. The U.S. Chamber took immediate legal action to block this move.
• Overtime thresholds: On April 23, acting Labor Secretary Julie Su approved a new rule raising the salary threshold to qualify for overtime pay. If fully implemented, this move will impact four million workers – expected to result in an income transfer of about $1.5 billion from employers to workers.
• Automatic flight refunds: The Department of Transportation issued a regulation that requires airlines to automatically refund passengers when a flight is canceled or rerouted, or when an airline loses baggage. This rule is expected to increase the cost of flying.
• Restrictions on boat speed: The National Oceanic and Atmospheric Administration is rumored to be nearing a decision on expanding boat speed restrictions. Currently, boats over 60 feet cannot exceed 10 knots in, to protect endangered whales. The proposed rules would expand that rule to prohibit boats over 35 feet from exceeding 10 knots. Drastic impacts to the recreational boating industry are on that horizon. 
• Coal power emissions: Last April, the Environmental Protection Agency issued new rules that force coal plants to close or undergo costly upgrades. This new regulation comes at a time when demand for power is on the rise, and many utility companies say coal-powered plants need to stay online longer to meet the country’s energy needs.
• PFAS Regulations: The Environmental Protection Agency issued new rules requiring water systems to limit PFAS in the drinking water supply. This move places a substantial strain on already-struggling municipal governments, which are trying to comply with the law.
• Reclassifying Marijuana: The Biden administration plans to reclassify marijuana to a lower category of drug, though full legalization would require an act of Congress. But this move will impact the multi-billion-dollar cannabis industry in a major way. 
• Net Neutrality: The Federal Communications Commission voted along partisan lines to reinstate net neutrality regulations, which require internet providers to treat all content equally. Supporters of the complicated policy say it is critical for a free and open internet, while opponents say it negatively impacts the ability to provide broadband services to everyone.

Though the Biden administration is racing against the Congressional Review Act, other risks threaten to derail the effort. Impacted industries and/or entities will likely take legal action to challenge the agency rules, potentially delaying them. For example, the U.S. Chamber of Commerce immediately sued the FTC over its ban on non-compete clauses, calling the decision an “unconstitutional” power grab and arguing the agency overstepped its authority.

These legal battles may become increasingly complicated if the U.S. Supreme Court overturns the legal doctrine known as Chevron deference. This legal principle holds that courts must defer to reasonable agency interpretations of vague laws passed by Congress. Conservatives have long argued Chevron deference allows agencies to effectively make up their own rules. TRC Nexus wrote on the subject earlier this year. If the Supreme Court does overturn Chevron deference, legal challenges to agency rules will likely grow, and with much less predictable outcomes.

In the meantime, while court battles and political campaigns are waged, businesses face an increasingly complex and unpredictable regulatory climate. TRC Nexus aims to keep business leaders informed of federal decisions impacting broad swaths of the business community. However, given the volume of changes, we may need help to capture everything. If you see a regulatory change impacting your industry, please send it our way so we can highlight it.

Thank you for reading.