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Obama's Parting Gift: Midnight Regulations Incoming

Win or lose, the Obama administration isn't done expanding the government yet.  A large number of regulations are under development in several agencies that will cost billions of dollars in the economy and devastate companies already struggling to profit and expand in this sluggish economy.  Even if President Obama is defeated, his administrations can act during the "lame duck" period between the election and the inauguration to leave behind new regulations that will be difficult for a Romney administration to repeal - a practice known as creating "midnight regulations".

White House Not Being Forthcoming
Normally we might have a somewhat better idea of what exact regulations might be forthcoming, but this year is different. The Office of Information and Regulatory Affairs (OIRA), a White House agency, is normally required to submit a “Unified Agenda of Regulatory and Deregulatory Actions” every April.  This report would detail the major regulatory agenda for departments such as the EPA, and give timelines for enactment of new regulations, but the OIRA never released its report this year. This seems like a pretty obvious attempt to keep the public in the dark about any controversial upcoming regulations during an election year.

However, there are several regulations that have been in development for some time that are said to be likely candidates to become "midnight regulations: 


The Washington Examiner has reported an unusual buildup of EPA activity on a single regulation that would affect the coal industry. In addition, Senator Inhofe's staff in the Senate has prepared a report on upcoming EPA regulations that could be devastating to the economy as whole.

  • Coal Ash Regulation: could cost as much as $79 to $110 billion over 20 years, and would destroy hundreds of thousands of jobs because the costs of implementation would be devastating to coal mines and plants.
  • More Greenhouse Gas Regulations: The Obama administration may tighten Greenhouse Emissions regulations by the end of this month, a move that would further inhibit the coal industry and would (in addition to the Utility MACT regulation that is already taking effect) effectively make it impossible to construct any new coal power plants. Various EPA regulations on the coal industry are expected to cost in excess of $700 billion over the next several years. 
  • Ozone Rule: According to Senator Inhofe's report, the “EPA itself estimated that its ozone standard would cost $90 billion a year, while other studies have projected that the rule could cost upwards of a trillion dollars and destroy 7.4 million jobs.”
  • Stormwater Regulations: Senator Inhofe reports that this “could be the most expensive rule in EPA history.” It would actually require construction firms and property owners to be responsible for anything that ends up in runoff from stormwater off their property, presumably targeting anything in building materials that might wash off of rooftops and such during a rain. It also would give the EPA rule over anywhere that stormwater might concievably pool, even on private property.
  • Boiler MACT: creates regulations of industrial boilers so strict that even modern technologies struggle to meet them. Has been projected to reduce U.S. GDP by as much as $1.2 billion, and could cost as many as 800,000 jobs.
  • Cement MACT: would increase the costs of the most common kind of cement enough to potentially shut down many U.S. plants and require imports from other countries (likely China). Would cost tens of thousands of jobs.
  • Cooling Tower Regulations: According to a Mercatus Center study, this regulation may cost as much as $383.8 million per year, in order to protect fish threatened by the intakes for water-fed cooling towers for facilities such as power plants.

Health Care

Several of ObamaCare's major regulatory rulings may also come down during the "lame duck" period, and businesses are waiting with bated breath to see exactly what these regulations will entail:

  • Medicare and Medicaid regulators just approved a provision requiring that Medicaid reimburse physicians at Medicare rates, with the increase paid for by the federal gov’t.  This payment increase will cost taxpayers billions of dollars.
  • Minimum coverage requirements for all insurance plans under the exchanges.  These will certainly raise the cost of everyone's health care plans.
  • The actual regulation governing the individual mandate “tax” has yet to be released.  As Americans for Tax Reform points out, the Mandate will increase all Americans’ tax compliance time by adding another form for them to worry about when filing taxes.   That’s in addition to the violation of our liberties caused by forcing to buy a product.
  • Definitions of “full-time” and “part-time” for the purpose of employers who do not offer health coverage. The Wall Street Journal reports that businesses are already planning to cut workers’ hours in order to avoid the costs of having to cover all “full-time” employees, which are expected to be defined as working 32-hours a week.

Financial Services (Dodd-Frank)
Although the new Consumer Financial Protection Bureau seems to be holding its cards very close to its vest, it is also mentioned as a likely candidate to promulgate a few harmful regulations shortly after the election.  The CFPB essentially institutionalizes the policy of “too big to fail”, and businesses are nervously awaiting the regulations that it may release.

Although Congressman Reid Ribble and Senator Ron Johnson each introduced a bill that would have prohibited the President from issuing "midnight regulations", neither of their bills were even allowed to come to a vote.

However, provided that Republicans regain control of the Senate, Congress can still stop Obama's most destructive regulations by invoking the Congressional Review Act.  This would only require a simple majority vote, and could be used to undo a great deal of the regulatory train wreck that the current administration has set in motion.