A new development involving the Congressional Review Act
by Jarrett Dieterle
Over the past year, a debate has broken out in the regulatory reform community over how to properly construe the reach of the Congressional Review Act. Traditionally, most observers viewed the CRA as a tool by which Congress could repeal new regulations that had been issued within the last 60 legislative days. In recent months, however, some legal scholars have argued that while this is broadly correct, it’s far from clear when the CRA’s 60-day clock should start ticking.
Paul Larkin from the Heritage Foundation and others have pointed out that, under the text of the CRA, the clock cannot start until the regulation in question has been submitted to Congress. Because many agency rules were never officially submitted to Congress—even ones that were promulgated many years ago—the 60-day clock was never activated for those rules and Congress could thus still repeal them via the CRA.
Another component of this debate has been clarifying what, exactly, constitutes a “rule” for CRA purposes. The text of the CRA incorporates the Administrative Procedure Act’s definition of “rule,” which as Larkin points out, “has been recognized as quite broad.” This broader interpretation of the term “rule” could encompass informal agency actions like policy statements or guidance, which do not go through the more formalized process of notice-and-comment rulemaking under the APA.
Congress has so far appeared reluctant to embrace this broader interpretation of the CRA’s text and use it to repeal rules and other agency action stretching back into previous administrations. But that could be changing. The Wall Street Journal editorial board and other media outlets are reporting that Senator Pat Toomey, R-Pa., recently asked the Government Accountability Office to issue a determination as to whether a 2013 leveraged lending guidance document from the Obama Administration constituted a “rule” for CRA purposes.
The GAO finally has issued its ruling, concluding that the lending guidance was in fact a rule under the CRA, meaning it is eligible for repeal under the act. Further, under Senate precedent, the publication of a GAO report such as this one is treated as the official trigger for the CRA’s 60-day legislative clock. As the nonpartisan Congressional Research Service has noted:
“In some instances, an agency has considered an action not to be a rule under the CRA and has declined to submit it to Congress… In the past, when a Member of Congress has thought an agency action is a rule under the CRA, the Member has sometimes asked GAO for a formal opinion on whether the specific action satisfies the CRA definition of a ‘rule’ such that it would be subject to the CRA’s disapproval procedures.
GAO has issued 11 opinions of this type at the request of Members of Congress. In seven opinions, GAO has determined that the agency action satisfied the CRA definition of a ‘rule.’ After receiving these opinions, some Members have submitted CRA resolutions of disapproval for the “rule” that was never submitted…
Members have had varying degrees of success in getting resolutions recognized as privileged under the CRA even if the agency never submitted the rule to Congress. It appears from recent practice that, in these cases, the Senate has considered the publication in the Congressional Record of the official GAO opinions discussed above as the trigger date for the initiation period to submit a disapproval resolution and for the action period during which such a resolution qualifies for expedited consideration in the Senate…”
It remains to be seen if Congress will pursue a resolution of disapproval under the CRA to repeal this particular rule on leveraged lending, but the potential implications run deep. Congressmen could ask GAO to issue more opinions determining whether past agency actions constitute rules for CRA purposes, and then seek to repeal them. The law firm Cleary Gottlieb observed in a memorandum on this development:
“The GAO’s Leveraged Lending Opinion casts a shadow of uncertainty over the applicability and future viability of the Agencies’ leveraged loan supervision regime, and critically, other agency actions that could be characterized as ‘rules’ subject to Congressional disapproval. In fact, if Congress seeks to address other agency ‘rules’ that were never submitted to Congress under the CRA, the total volume of agency interpretations and statements of policy that could potentially become subject to Congressional disapproval would be very large indeed.”
The Red Tape Rollback project (of which the R Street Institute is a partner) has been compiling a list of agency actions and rules that were never properly submitted to Congress and are therefore potentially still eligible for repeal via the CRA. We’ll see where Congress goes from here, but it’s possible it could be on the brink of adopting a broader interpretation of the CRA.
C. Jarrett Dieterle is a governance policy fellow at the R Street Institute.