How Will a Second Trump Administration Achieve Its Policy Goals Despite Prolific Federal Agency Rulemaking by the Outgoing Biden Administration?
In January’s edition of the Baldwin Bulletin, we discussed anticipated policy proposals from the new presidential administration for 2025 and beyond (see here). Following up on that editorial, this month we are discussing procedural avenues a new administration might consider to nullify, alter, or otherwise modify existing federal agency rulemaking that it deems contradictory to its own public policy objectives.
This article will summarize the various techniques available to an incoming administration seeking to amend or nullify existing Federal rulemaking. Then, we will apply this framework in the context of Federal rulemaking under Section 1557 of the Patient Protection and Affordable Care Act (“ACA”), which operates to prohibit discrimination in healthcare. Last, we will explore how the Congressional Review Act can be utilized as an alternative to public rulemaking and opine on how the incoming Trump Administration might utilize the CRA to nullify existing Biden-era rulemaking.
Part I: Understanding Administrative Opportunities to Revise, Nullify, or Otherwise Modify Existing Federal Agency Rulemaking
Generally speaking, an incoming administration has seven alternatives available for modifying federal rulemaking imposed under a prior Administration. Each methodology has its respective benefits; however, each process can be burdened to the extent that the Federal bureaucracy’s rulemaking capacity and authority are not carefully and methodically evaluated.
Available methodologies for modification of existing Federal agency rulemaking include:
| Option | Title | Detailed Explanation |
|---|---|---|
| Option One | Restatement and/or Rescission of Existing Rules | Utilizing this methodology, a current administration revises and re-publishes existing Federal agency rulemaking to adjust the existing policies to align more closely with the current administration’s policy perspectives. As discussed in more detail in Part One, Section 1557 of the Patient Protection and Affordable Care Act (“ACA”) has seen three successive publications of final interpretive rules by three different presidential administrations. President Trump is highly anticipated to see a new round of Section 1557 rulemaking following his 2025 inauguration. |
| Option Two | Legislative Veto of Existing Rules | As an alternative to restatement, one or both houses of Congress may seek to entirely rescind existing Federal rulemaking without offering a restatement or revised interpretation of the existing rules, effectively reinstating the status quo in place before the publication of the final rulemaking in question. In the “legislative veto,” nearly 300 provisions exist that enable both chambers of Congress (and, in some situations, a single chamber of Congress) to pass Congressional Resolutions that practically nullify an agency-sponsored rule or action. Ultimately, the “legislative veto” was deemed unconstitutional by the United States Supreme Court in 1983, as the practice was deemed to violate the Constitution.[1] |
| Option Three | No Enforcement Policies | A policy of no enforcement is a unique mechanism that countless administrations have employed. Consistent with this methodology, an administration, either working in concert with Congress or acting unilaterally, directs Federal bureaucratic institutions to refrain from enforcing certain Federal requirements. This operates as a limited-term rescission of existing rulemaking; however, upon the departure of the non-enforcing administration, the subsequent administration may easily lift the stay of enforcement of the existing rules. This is because the published rules were not restated or nullified. Instead, their enforcement was merely enjoined on a voluntary and temporary basis. |
| Option Four | Nullification of Final Rules under the Congressional Review Act (“CRA”) | The Congressional Review Act (“(CRA”) (1986) offers a fourth alternative for the nullification of existing federal agency rulemaking. Consistent with the provisions of the CRA, an incoming presidential administration is authorized to review and strike (or rescind) Federal agency rulemaking published during the final months of an outgoing administration. Respecting the 2025 transition of administrations, the lookback window into the Biden Administration will run from August 2024 through the end of the Biden presidency. This period is also referred to as the “midnight rulemaking period.”[2] For example, utilizing the CRA’s lookback period, the incoming Trump administration could lobby Congress to strike several Biden-era rules published after August 1, 2024, such as the US Department of Labor’s (“DOL”) final rule interpreting the Mental Health Parity and Addiction Equity Act of 2009 (“MHPAEA”). Since the final rule was published on September 9th, 2024, the rulemaking falls within the scope of a potential Congressional Resolution for strike and nullification. |
| Option Five | Nullification or Injunction by a Federal Judge | An administration may also look to the Federal judiciary to nullify or enjoin the enforcement of agency rulemaking. In recent years, conservatives have enjoyed significant successes along this route, considering judicial injunctions imposed upon a plethora of Biden-era rulemaking efforts (e.g., student loan repayment, worker’s rights under the Pregnant Workers Fairness Act; ERISA fiduciary rulemaking, rules related to reproductive healthcare privacy under HIPAA, portions of recent Section 1557 rulemaking, and others). The biggest issue with judicial intervention is that it brings into question the balance of the separation of powers in the United States. When judges enjoin or strike down legislation or rulemaking (thereby, effectively legislating), they are operationally infringing upon the territory of the executive and legislative branches of government. |
| Option Six | Congressional Amendment or Repeal of Underlying Legislation | There is always the onerous route of actual Congressional legislative activity, that is, amendment or repeal of legislation according to standard Congressional rule and process. However, this route is often highly influenced by lobbying activities and time restrictions, so absent a unified, particularized, and highly significant policy objective, there is oftentimes a lack of Congressional concurrence regarding amendment or repeal of existing legislation or the related regulatory interventions. |
| Option Seven | Novel Legislative Mechanisms | Congress and the Office of the President can be nothing if not creative in interpreting and applying Federal legislative levers when faced with the burdens of agency rulemaking. In Project 2025 (a Heritage Foundation-created master plan of policy proposals for the second Trump Administration), Office of Management and Budget (“OMB”) Director Russ Vought opined that Congress should pass a Midnight Rules Relief Act (“MRRA”).[3] If passed, the MRRA would allow a sitting president to repeal multiple regulations at once by combining them into a single package, thus reducing floor debate and, more importantly, operating to extend the CRA’s lookback period from August to include the entire final year of the prior Administration. Biden’s regulatory agencies rushed to finalize rules in the first half 2024 to circumvent the CRA. Still, such a bill would amend the CRA, offering countless repeal opportunities for an incoming administration. However, it is essential to remember that the gavel always swings both ways – a proposition neither party likes to consider in the heat of policy debates. |
Part II: Section 1557 of the ACA – A Master Class in Policy Advocacy Via Federal Rulemaking
Perhaps the most often utilized, yet certainly the most expensive and rather time-consuming approach to modifying or altering existing Federal agency rulemaking, is the publication of new Final rules designed to amend existing rulemaking. Take, for example, the instance of Federal agency rulemaking issued under Section 1557 of 2010’s landmark healthcare reform legislation, the Patient Protection and Affordable Care Act (“ACA”).
If you remember, Section 1557 of the ACA provides that “an individual shall not, on the ground prohibited under Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or section 794 of title 29, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title 1 (or amendments).” In plain English, this means Section 1557 of the ACA was implemented to prohibit discrimination on the basis of race, color, national origin, sex, age, or disability in any health program or activity that receives Federal financial assistance, State-based health insurance Exchanges, and HHS health programs and activities.
In practice, Section 1557 has become one of the Federal government’s most powerful tools to ensure nondiscriminatory access to health care. Primarily due to the scope and authority of Section 1557, each of the last three presidential administrations has placed particularized attention on the interpretation and enforcement of Section 1557. Following, a Section 1557 rulemaking timeline is provided for informational purposes:
- Obama Administration Section 1557 Rulemaking: Initial Federal Section 1557 rulemaking was published by the former Obama Administration’s Department of Health and Human Services (“HHS”) Office of Civil Rights (“OCR”) on May 18, 2016.[4] The 2016 rulemaking provided for certain protections against discrimination, including sex-based discrimination, as interpreted by the Obama Administration to include pregnancy status and gender identity, among others.
- First Trump Administration Section 1557 Rulemaking: Thereafter, on June 19, 2020, the first Trump Administration issued revised final rulemaking under Section 1557, substantially and significantly curtailing the protections afforded under the Obama Administration’s 2016 rulemaking.[5] Perhaps the most significant modifications in the 2020 rulemaking were related to the termination of protections against sex-based discrimination, as interpreted by the Obama Administration’s 2016 rules, specifically respecting pregnancy status and gender identity. Among other restatements and generalized nullifications, the 2020 Trump Administration rules reinvented the interpretation of sex-based discrimination, even though less than two weeks after the publication of the first Trump Administration’s final Section 1557 Rulemaking, the US Supreme Court held that Title VII sex-based discrimination for purposes of employment necessarily incorporates pregnancy status and gender identity.
- Biden Administration Section 1557 Rulemaking: Then, on April 26, 2024, seizing upon the Supreme Court’s Title VII interpretation regarding sex-based discrimination, the Biden Administration issued its final rulemaking re-interpreting Section 1557, effectively reinstating and considerably expanding the scope of protections afforded under the Obama-era rulemaking, particularly respecting sex-based discrimination related to pregnancy status and gender identify.[6]
While each iteration of the Section 1557 rulemaking offers different assessments and conclusions respecting the necessity, impacts, and scope of authorities conferred under Section 1557, it is not difficult to chart the incessant volleying of the scope of sex-based discrimination protections across nearly a decade of Federal rulemaking and three presidential administrations. With each successive presidential administration, a new set of Section 1557 rules was issued, reinterpreting and ultimately nullifying critical public policy objectives implemented within the scope of the prior administration’s rulemaking activities.
Part III: The Congressional Review Act as an Alternative to the Federal Agency Rulemaking Process
Federal agency rulemaking is a costly and laborious endeavor. Rulemaking is the process used by federal agencies to create, amend, or repeal rules. Congress grants rulemaking authority to federal agencies to implement legislative statutes. Regulations issued pursuant to such authority carry the force and effect of law and can have substantial implications for policy implementation.
Rulemaking is governed mainly by standards set forth in the Administrative Procedure Act (“APA”) (5 U.S.C. § 551 et seq.). Typically, an agency must notify the public of a proposed rule before it goes into effect (5 U.S.C. § 553(b)). Notice is accomplished by publishing the proposed rule in the Federal Register. After the proposed rule is published, the public is allowed to submit comments on the proposed rule (5 U.S.C. § 553(c)). The agency may consider the comments before the final rule is published and takes effect. From planning and design, through proposal and public comment, to publication of a final agency rule, an administration can easily expect to wait a year or longer for a final rule to take effect. Further, most Federal rulemaking requiring significant activity by government or private actors is generally enforced on a delayed or phased basis to give the necessary parties time to read, digest, design, and implement compliance assuredness measures in accordance with the newly published final rules.
Depending on a new administration’s specific policy objectives, striking the rulemaking, consistent with the Congressional Review Act (“CRA”), allows an incoming administration to nullify existing rulemaking without engaging the entire rulemaking process, as defined under the APA. However, a critical note regarding CRA rule strikes is that, generally, once a rule has been struck (or nullified) by a new administration, the current administration is prohibited from offering a similar policy restatement via public rulemaking. Historically, this has been a significant mitigator against an incoming administration’s prolific utilization of CRA-based regulatory strikes. In fact, upon entering office, President Biden utilized CRA strikes to nullify a mere three final rules published by the outgoing Trump Administration.
Notwithstanding historical precedent respecting the utilization of CRA strikes, a primary initiative of the first Trump Administration was the “deconstruction” of the administrative state through measures such as the elimination of regulations issued during the preceding Obama presidency.[7] Utilizing the CRA, Congress passed, and President Trump signed, resolutions disapproving of sixteen (16) Obama-era midnight regulations promulgated toward the end of the Obama administration.[8] This number of CRA disapprovals was historically unprecedented and dwarfs the three resolutions that President Biden signed at the beginning of his presidency. Conventional wisdom predicts a second Trump Administration will endeavor a similar course of action, thereby seeking to nullify Biden-era rulemaking via multiple CRA strike resolutions.[9] Only time will tell.
[1] See: Larkin, Paul, The Return of the Congressional Review Act, The Heritage Foundation (Dec. 30, 2024), available at: The Return of the Congressional Review Act | The Heritage Foundation.
[2] Balla, Steven J. and Sarah Hay, Will History Repeat Itself? Forecasting CRA Use in a Second Trump Administration, George Washington University, School of Policy Studies (May 3, 2024). Available at: Will History Repeat Itself? Forecasting CRA Use in a Second Trump Administration | Regulatory Studies Center | Trachtenberg School of Public Policy & Public Administration | Columbian College of Arts & Sciences | The George Washington University.
[3] Tong, Noah, How Trump Could Roll Back Biden-era Healthcare Regulations, Fierce Healthcare (Dec. 6, 2024), available at: How Trump could roll back Biden-era healthcare regulations.
[4] See: Federal Register :: Nondiscrimination in Health Programs and Activities.
[5] See: Federal Register :: Nondiscrimination in Health Programs and Activities.
[6] See: Section 1557 of the Patient Protection and Affordable Care Act | HHS.gov.
[7] Balla, Steven J. and Sarah Hay, Will History Repeat Itself? Forecasting CRA Use in a Second Trump Administration, George Washington University, School of Policy Studies (May 3, 2024). Available at: Will History Repeat Itself? Forecasting CRA Use in a Second Trump Administration | Regulatory Studies Center | Trachtenberg School of Public Policy & Public Administration | Columbian College of Arts & Sciences | The George Washington University.
[8] Id. at: Will History Repeat Itself? Forecasting CRA Use in a Second Trump Administration | Regulatory Studies Center | Trachtenberg School of Public Policy & Public Administration | Columbian College of Arts & Sciences | The George Washington University.
[9] See, generally: Tong, Noah, How Trump Could Roll Back Biden-era Healthcare Regulations, Fierce Healthcare (Dec. 6, 2024), available at: How Trump could roll back Biden-era healthcare regulations.
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