New Precedent Allows Congress to Dismantle (Some Of) Obamacare

New Precedent Allows Congress to Dismantle (Some Of) Obamacare

A repeal of finance regulation also allows Congress to nullify other regulatory actions the federal government took years ago—including those on Obamacare.
Christopher Jacobs
By

What does a ruling about automobile financing have to do with Obamacare? As it turns out, plenty.

This week the Senate acted to repeal a piece of regulatory guidance the Consumer Financial Protection Bureau (CFPB) issued back in March 2013. As a Politico report Wednesday noted, that precedent allows Congress to nullify other regulatory actions the federal government took years ago—including those on Obamacare.

1996 Law Allows for Expedited Process

The Senate action regarding the CFPB guidance came pursuant to the Congressional Review Act (CRA). That law, enacted in 1996, allows Congress to pass resolutions of disapproval regarding rules and actions agencies take. The CRA provides expedited procedures in both houses of Congress, allowing such resolutions to pass the Senate on a simple majority threshold, rather than the three-fifths (i.e., 60-vote) majority usually needed to break a Senate filibuster.

Until this week, Congress has generally enacted CRA resolutions of disapproval following a change in administration, when one party controlled both houses of Congress and the presidency. In 2001, Republicans passed, and President George W. Bush signed, a resolution of disapproval negating an ergonomics rule promulgated in the waning days of the Clinton administration. Last year, the Republican Congress passed and President Trump signed 14 resolutions of disapproval undoing Obama administration actions.

Action on CRA resolutions of disapproval undoing Obama administration actions had largely ended last year. The CRA provides that Congress can consider resolutions of disapproval under expedited procedures only within 60 legislative days of the rule’s “submission or publication date.” Because the Obama administration’s final regulatory actions occurred early in 2017, the 60 legislative-day clock ran out last year—or so it appeared.

However, as the Heritage Foundation’s Paul Larkin has argued for many years, the CRA contains a big catch. According to the law, the expedited procedures apply for the 60 legislative days following “the later of the date on which” Congress receives a required report on the regulatory action, or the action is published in the Federal Register. If an administration never officially submitted a report to Congress, the 60 legislative-day clock never began, and the current Congress can still pass a resolution of disapproval under the CRA-expedited procedures.

Congress did just that this week. A Government Accountability Office (GAO) opinion requested by Sen. Pat Toomey (R-PA) and issued last December concluded that an auto lending guidance document CFPB promulgated in March 2013 was in fact a “rule” pursuant to the CRA. Although the CFPB did not go through the formal notice-and-comment period required before publishing most regulatory actions, GAO’s legal team concluded that the document included “1) an agency statement, 2) of future effect, and 3) designed to implement, interpret, or prescribe law or policy”—the definition of a “rule” for CRA purposes.

Because the Obama administration did not consider the CFPB document a “rule,” it never submitted it to Congress, as required by the CRA. The 60 legislative-day clock never expired, because the Obama administration never started it by submitting the document to Congress. That meant the Senate could, and did, pass a resolution of disapproval negating the CFPB guidance this week, more than five years after CFPB first issued it.

Now Congress can do the same thing regarding Obamacare.

This Opens Lots of Doors for Obamacare Regs

To be sure, Congress cannot pass resolutions of disapproval regarding Obamacare rules that the Obama administration officially submitted years ago, which is most of them. But in some cases, the last administration may not have formally submitted sub-regulatory guidance, giving Congress an opening to repeal at least part of Obamacare’s regulatory structure.

For instance, one piece of guidance, published in December 2015, imposes restrictions that impede state flexibility under the Obamacare Section 1332 state innovation waiver process. Even though the Section 1332 waiver process contains many flaws inherent in the structure of the law itself, the guidance only added to these burdens on states.

I wrote early last year that the Trump administration should unilaterally revoke that guidance, but unfortunately, it has not done so yet. However, if the Obama administration never submitted that guidance to Congress, then Congress—using the precedent set this week—can pass a resolution of disapproval negating it. Alternatively, Congress can consider starting action on a resolution of disapproval, to get the Trump administration off the proverbial dime in revoking the guidance themselves.

The CRA precedent set this week also serves as a cautionary tale for the Trump administration, a warning to act thoroughly with its own regulatory actions. For instance, the guidance to state Medicaid programs issued earlier this year regarding work requirements likely meets the definition of a “rule” for CRA purposes. If the Trump administration never submits that action to Congress, a future Democratic administration and Democratic Congress could—and if given the chance, certainly would—act to undo the guidance, and thus the Medicaid work requirements.

But even as the Trump administration should act to cement its own regulatory legacy, Congress can act to negate portions of Obamacare through resolutions of disapproval. I know from experience that staff in Congress, and during the transition, compiled lists of rules that they can use CRA to target. During my time on Capitol Hill following Obamacare’s passage, staff kept a spreadsheet containing all the rules and notices the law generated—the source of the “Red Tape Tower” that used to appear around the Capitol.

During one appearance with the Red Tape Tower, at the 2013 Conservative Political Action Conference, Senate Majority Leader McConnell (R-KY) famously said that “Obamacare should be repealed root and branch—and I want you to know we’re not backing down from this fight.” This week’s vote on repealing the auto lending guidance set a precedent that lawmakers can use to do just that. It’s time for Congress to get to work.

Mr. Jacobs is founder and CEO of Juniper Research Group, a policy consulting firm based in Washington. He is on Twitter: @chrisjacobsHC.
Photo White House / public domain

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