The following was co-authored with Sam Batkins, director of regulatory policy at the American Action Forum.
It is not uncommon for presidential administrations to issue a large number of regulations in the interregnum between Election Day and the inauguration. These are often called “midnight regulations” because, for outgoing presidents, they are a final effort to shape the nation’s policies. But every president, regardless of electoral status, has a reason to accelerate the issuance of regulations in the waning days of a term: presidents up for reelection typically delay controversial regulations that could anger various constituencies until after the election, resulting in a surfeit of rules in the hopper the day after the election.
Given the slow pace of significant rule-making in 2012, after what had been an extremely active Obama administration regulatory agenda the preceding three years, most regulatory scholars expected the agencies to be very busy in the post-election period. However, the data reveal subdued regulatory activity, akin to the last reelection year (2004), with sharply fewer significant regulations as compared to the election years of 2008 and 2000.
Table 1 shows the regulatory activity around recent presidential elections. The developing pattern comports with the intuition that a reelected president has little compunction to issue regulations quickly—not with four more years of governing in the offing. As a result, no one should interpret the regulatory pause in 2012 as evidence of a new “go slow” approach by the Obama administration.
In the pipeline | At the start of the campaign season, Republican leaders on Capitol Hill worried about a flood of post-election regulations. Speaker of the House John Boehner and Senate Minority Leader Mitch McConnell warned the White House in a letter of their concern that a government “commitment [to transparency] will be further undermined by a final push to issue a set of ‘midnight regulations,’ with little opportunity for oversight.” Congressional Republicans were presumably hoping that GOP presidential candidate Mitt Romney would win the 2012 election, and that their letter would act as a prophylactic against a last-minute deluge of regulations by a vanquished Obama administration.
Figure 1 examines “economically significant” regulations published in the Federal Register during the midnight period, which correlates closely with White House review of significant measures. An economically significant regulation is a regulation that has an “annual effect” of at least $100 million, and thus must undergo review by the president’s Office of Information and Regulatory Affairs. The data reveal that the number of regulations formally issued between the most recent Election Day of Nov. 6 and Jan. 20 dropped off significantly from the same time period in 2011. The pace was generally on par with 2004, a period when President George W. Bush did not have to worry about cementing his regulatory legacy before the arrival of a Democratic administration. With only 11 significant regulations during the midnight period, the Obama administration issued the fewest midnight regulations in the last four election cycles.
In contrast, 2008 saw a marked increase in regulatory activity despite President Bush’s chief of staff, Josh Bolten, warning agencies to oppose “the historical tendency of administrations to increase regulatory activity in their final months.” The White House did not issue such a letter in 2012, although on Inauguration Day 2009 new White House Chief of Staff Rahm Emanuel issued a memo to claw back any of the last-minute Bush administration regulations.
During the months before Election Day 2012, there was evidence of a surfeit of regulations “in the pipeline” that could be rushed into place before the inauguration of a new president. For example, during the first nine months of 2012, regulators published an average of 315 pages daily, compared to just 271 pages the month before Election Day—a 14 percent drop. In October, 84 percent of all rules were under review at OIRA for more than 90 days, and the wait time for significant rules was 50 percent longer than in 2011. Today, just 58 percent of all regulations have been under review for more than 90 days.
While there was an increase in significant regulatory activity toward the end of 2012, the increase was moderate: from Election Day 2012 to Inauguration Day (49 publication days), OIRA concluded review of 22 significant regulations. During the previous 49 days in 2012, OIRA concluded only 12 significant reviews.
Examining the yearly data, shown in Figure 2, reveals that in all years when a president successfully runs for reelection, the number of regulations issued is lower than in the previous year, indicating either that the White House is understandably preoccupied with other activities or initiates a temporary slowdown in regulations, most likely so as to remove one potential source of ammunition for political opponents.
However, merely counting the “significant” regulations does not tell the entire story, so we examined all regulatory activity, including paperwork hours and independent agency activity to determine if there was any increase from the previous year. We found that there was a significant drop in total regulatory activity compared to the year before. From Nov. 1, 2011 to Jan. 20, 2012, regulators published final rules totaling more than $5.7 billion in compliance costs, inflicting nearly 46.5 million hours in associated paperwork burdens on the public. For perspective on those hours, assuming a 2,000-hour work year, it would take 23,235 full-time equivalent (FTE) employees to complete the required red tape.
The most recent midnight period added an estimated $1.8 billion in final compliance costs to U.S. businesses, along with 1.2 million paperwork burden hours. However, the administration did significantly increase the pace of Affordable Care Act implementation after the inauguration. In fact, the U.S. Department of Health and Human Services published a $2 billion exchange proposal, with 500,000 associated paperwork burden hours.
Conclusion | Despite some rhetoric to the contrary, the Obama administration did not accelerate the pace of its regulatory output immediately after the election because there was no need to do so with the president’s successful reelection. This corresponds to the pattern that has emerged in recent elections: If an administration is in its first term, there is an election-year pause in regulatory activity as the president hits the campaign trail. However, if the administration is nearing the end of its second term, it does not slow the pace of issuing regulations during the election year, and like all outgoing presidencies it accelerates activity in its waning days.