27 Pages Posted: 24 Dec 2009 Last revised: 30 Dec 2009

Date Written: December 24, 2009

Abstract

Research has revealed a significant increase in regulatory activity in the last quarter of the final year of U.S. presidential administrations, with a great deal of regulatory activity occurring in the period between the election and the inauguration of the new president. Despite the expressed intent to minimize midnight regulation, the volume of regulatory activity at the end of the administration of George W. Bush spiked in a magnitude similar to that of other recent transitions. There was, however a difference. While the end of the administrations of Jimmy Carter and Bill Clinton exhibited the issuance of new regulations that imposed new regulatory burdens or tightened existing ones, the end of the Bush administration exhibited an increase in deregulatory actions, in which regulatory burdens were either removed or loosened. While the midnight regulation phenomenon has been studied extensively, there has not been separate attention paid to midnight deregulation.

This article examines whether as a theoretical or practical matter, the analysis of midnight deregulation should differ from the analysis of midnight regulation generally. As I have explained in prior work, midnight regulation generally occurs for three reasons, hurrying, waiting and delay. Hurrying refers to the tendency to work to deadline to accomplish as much as possible, including the desire to project the outgoing administration’s agenda into the future. Waiting refers to the desire to wait to take action until late in the term to avoid political consequences, score political points at the right time and force the incoming administration to focus on late-term actions at the outset of the administration. Delay refers to the possibility that some actions occur late in the term because of externally imposed delay. Midnight deregulation appears to be mainly a result of waiting, and for all three reasons, i.e. to avoid political opposition, score points with the base and force the new administration to deal with the midnight actions at the outset of the term. Because, as a normative matter, waiting is the most undesirable reason for midnight regulatory action, midnight deregulation may be even worse than midnight regulation. Further reinforcing this is the likelihood that the benefits of deregulation are concentrated while the costs are widely spread, which means that narrow interests, rather than general public interests, are behind midnight deregulation. In sum, this means that the need for reform of midnight deregulation is even greater than the need for reform of midnight regulation generally.