April 11, 2024 - The National Law Review (“NLR”) recently published an article noting that federal regulatory agencies are facing “a looming Congressional Review Act Deadline.” As we approach the 2024 elections, the Congressional Review Act (the “CRA”) may be, as the NLR describes it, “one of the most important deadlines” for agencies seeking to complete rulemaking before the end of the Biden Administration. This raises several questions: What is the CRA, how does it work and why is it potentially so important, especially as we approach November.
What is the CRA?
As explained by the Congressional Research Service, the CRA “is a tool Congress can use to overturn certain federal agency actions. The CRA requires agencies to report the issuance of “rules” to Congress and provides Congress with special procedures, in the form of a joint resolution of disapproval, under which to consider legislation to overturn rules. If a CRA joint resolution of disapproval is approved by both houses of Congress and signed by the President, or if Congress successfully overrides a presidential veto, the rule at issue cannot go into effect or continue in effect.” The NLR explains that “[b]ecause a CRA resolution requires only a simple majority in Congress and cannot be filibustered, it can provide an incoming Administration a mechanism to work with Congress to legislatively remove unwanted regulations in lieu of the lengthier, more onerous process to repeal a rulemaking through notice and comment proceedings.”
What are the rules around timing for the CRA?
The CRA process must be used within 60-days of-continuous-session period beginning on the day Congress receives the rule, subject to a “look-back” period that clicks in if, within 60 session (Senate) or legislative (House) days after a rule is submitted, Congress adjourns its session. If that happens, the periods to introduce and act on a disapproval resolution described above reoccur in their entirety in the next session of Congress (in this case, January 2025), beginning in each chamber on the 15th day of Senate session and the 15th House legislative day. The process of counting session and legislative days is quite complicated and calculating the actual bar dates for the CRA isas much an art as a science.
Why is the CRA used so infrequently?
Two practical reasons stand in the way of the broad use of the CRA and, prior to 2017, the CRA had rarely been used only once since its passage into law in 1996. First, the CRA can only be effective when one party holds the presidency and controls both the House and the Senate. Second, that party’s sweep must include a change in the party affiliation of the president under whose administration regulators would have presumably passed many rules with which the new party is unhappy.
Why did the floodgates open in 2017?
A “CRA perfect storm” is exactly what happened in 2016 with the election of Donald Trump as president, Republicans taking control of both the House and the Senate, and a change in the party affiliation of the president. Moreover, the Obama administration pushed out a significant number of rules in its waning days, leaving such rules vulnerable to the attack under the CRA by the incoming Republican-led Congress.
Unsurprisingly, Congress took full advantage of the perfect storm by revoking 16 rules during the Trump administration, 14 of which revoked Obama-era rules in the first four months of the Trump presidency. Notably, after a reverse governmental sweep in 2020, when the Democrats took control over the presidency and both houses of Congress, they took advantage of their CRA perfect storm to revoke three Trump-era rules (the Trump administration passed significantly fewer rules than its predecessor so there were many fewer CRA targets).
What is happening now and what could happen in 2025?
The NLR points out that “[b]ased on the current schedule issued by the House Majority Leader, May 22, 2024 is the next CRA deadline, meaning that any rules published in the Federal Register after that date would likely be eligible for CRA review at the beginning of the next Congress.” Thus, they surmise, “the possibility of Republicans sweeping Congress and the presidency puts additional pressure on federal agencies to complete the rulemaking process for high-profile regulations. To ensure complete protection from CRA disapproval, agencies must act prior to the CRA deadline in May.” We can only speculate that the federal agencies, particularly the SEC, are very mindful of the CRA deadline (irrespective of their views on the plausibility of a Republican sweep in November) and are acting accordingly. Most observers expect to see many of the major outstanding SEC rule proposals come up for a vote in the next few weeks.
