The Regulatory Week in Review: March 17, 2017
IN THE NEWS
- The Congressional Budget Office (CBO) released its cost estimate of the American Healthcare Act—the replacement for the Affordable Care Act proposed by Republicans in the U.S. House of Representatives—estimating that the legislation would reduce the federal deficit by $337 billion over a ten year period, largely due to reductions in federal spending on Medicaid and the elimination of nongroup health insurance subsidies, but would also lead to 21 million additional uninsured people by 2020, and 24 million by 2026.
- President Trump issued an executive order to institute a “Comprehensive Plan for Reorganizing the Executive Branch.” The order is designed to “improve the efficiency, effectiveness, and accountability of the executive branch by…eliminate[ing] unnecessary agencies” and programs. The order requires each agency head to submit a proposed re-organization plan to the Director of the Office of Management and Budget (OMB), provides for an opportunity for the public to submit comments, and requires OMB to submit a comprehensive plan to the President. The order specifies a number of considerations to be taken into account in formulating the plan, including whether agency functions are redundant and whether agency costs outweigh benefits.
- President Trump released a partial outline of his proposed budget to Congress—a budget which, if it became law, would have significant implications for many regulatory agencies. The budget proposes, among other steep decreases in funding, a 31% cut to the U.S. Environmental Protection Agency (EPA), the U.S. Department of State (DOS) by 28%, the U.S. Department of Health and Human Services (HHS) by 16%, the U.S. Department of Labor (DOL) by 21%, and the U.S. Department of Education (DoED) by 14%, but proposes a 10% increase in funding to the U.S. Department of Defense (DOD) as well as significant increases to the U.S. Department of Homeland Security (DHS) and the U.S. Department of Veterans Affairs. President Trump said that, under the proposed budget, “every agency and department will be driven to achieve greater efficiency and to eliminate wasteful spending.”
- The U.S. House of Representatives passed three pieces of legislation related to litigation this week. The Fairness in Class Action Litigation Act would place limits on class action lawsuits, which the bill’s supporters reportedly say are needed to curb frivolous and overly broad class actions, but whose opponents reportedly say would make it virtually impossible for plaintiffs to bring class actions. The Innocent Party Protection Act seeks to prevent attorneys from joining additional defendants to a lawsuit in order to bring the case in a venue considered friendlier to the plaintiff. The Lawsuit Abuse Reduction Act would amend the Federal Rules of Civil Procedure to require judges to sanction attorneys who file lawsuits deemed to be without merit, and would require those attorneys to pay the opposing parties’ attorney fees. The American Bar Association opposes the Fairness in Class Action Litigation Act and the Lawsuit Abuse Reduction Act.
- The American Bar Association gave U.S. Supreme Court nominee Judge Neil Gorsuch—whose Senate confirmation hearing is set to begin this coming Monday—its highest rating of “Well Qualified.” ABA ratings are made “based on integrity, professional competence and judicial temperament and not philosophy, political affiliation or ideology.” Senator Chuck Grassley (R-Iowa), the Chair of the Senate Judiciary Committee, stated that the rating was “no surprise given Judge Gorsuch’s sterling credentials and his distinguished” judicial record as an appellate judge, and Judge Gorsuch has also reportedly received broad support among “prominent lawyers across the political spectrum.”
WHAT WE’RE READING THIS WEEK
- Writing in The New York Times, University of Chicago Law School professor Daniel Hemel and Valparaiso University School of Law professor David Herzig discuss what they call “the G.O.P. health care plan’s fatal flaw:” the Senate’s “Byrd rule” for budget reconciliation. The Byrd rule “allows budget-related legislation to pass the Senate without the prospect of a filibuster,” but not if the legislation’s budgetary effects “are merely incidental to the non-budgetary components.” Because the proposed legislation imposes a financial penalty on individuals who forgo health insurance coverage for more than two months, which is payable not to the federal government, but to their insurer—meaning that it will not directly affect federal revenue—Hemel and Herzig argue that the penalty’s “impact goes beyond just taxes and spending,” and thus will violate the Byrd rule.
- Purdue University recently released a study finding that estimates of how much methane is released from natural gas-burning power plants “could be off by a wide margin.” Purdue University Professor Paul Shepson, one of the authors of the study, reportedly explained that “although burning natural gas is much cleaner than coal or oil, methane (which is mostly what natural gas consists of) has the potential to be even more damaging over the short term than coal or oil if it isn’t handled properly.” Although the study found that the amount of methane emissions that escape from power plants may be greater than estimated, Shepson continued, “natural gas-burning power plants are still cleaner, relative to burning coal.”
- Writing for the Financial Times, Barney Jopson and Lauren Leatherby argue that some of the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) are particularly vulnerable under the Trump Administration and current Congress. The authors contend that the Volcker Rule, which greatly limits proprietary trading by banks, is the part of Dodd-Frank that “big Wall Street banks would most like to see scrapped.” They also argue that the structure of the Consumer Financial Protection Bureau’s (CFPB) funding will likely be targeted as a way of reining in the CFPB’s power.