Week in Review

IN THE NEWS

• A federal judge temporarily halted enforcement of a U.S. Department of Education rule that grants private schools a bigger share of Coronavirus Aid, Relief, and Economic Security Act (CARES Act) aid than under a Title I funding formula. The interim rule rejected the typical funding that gives aid based on an equitable services model, opting instead for a model that funds schools based on enrollment, increasing funding allowed for private schools. The judge held that the statute was not ambiguous because “the U.S. Congress unequivocally and plainly instructed the Department” to use the equitable services formula. Senator Lamar Alexander (R-Tenn.) reportedly said that the rule violated congressional intent. There are multiple pending suits from various states and school districts battling the validity of this rule.
• The Centers for Disease Control and Prevention (CDC) changed its testing guidelines to state that individuals who do not have COVID-19 symptoms do not need to get a COVID-19 test, even if they have been in close contact with an infected person. Democratic politicians expressed concern that the Trump Administration pressured the CDC to change its guidance, but Brett Giroir, assistant secretary of the U.S. Department of Health and Human Services, reportedly stated that Trump Administration medical experts supported the idea, and there was no political pressure to change the guidelines. The Infectious Disease Society of America called for the “immediate reversal” of the guidance. In a statement, Susan R. Bailey, president of the American Medical Association, stated that “we know COVID-19 is spread by asymptomatic people,” and the guidance is a “recipe for community spread and more spikes in coronavirus.”
• The U.S. Court of Appeals for the Fourth Circuit held that a Virginia school board’s policy preventing transgender students from using the bathroom with others of their gender is unconstitutional under the Equal Protection Clause of the U.S. Constitution. Attorneys for the school board argued that the Constitution only protects against discrimination on the basis of biological sex, not on gender, but the court ruled that the board’s policy did classify students based on biological sex when it chose to ignore their preferred gender. In addition, the court held that transgender identity, like sexual orientation, is a “quasi-suspect classification,” which means that any policy that classifies transgender people as separate will be subject to heightened scrutiny when reviewed in court. Plaintiff Gavin Grimm reportedly celebrated the decision, saying that “all transgender students should have what I was denied: the opportunity to be seen for who we are by our schools and our government.”
• The Centers for Medicare and Medicaid Services (CMS) announced that nursing homes are now required to test staff for COVID-19, offer testing to residents for COVID-19, and report testing data to the U.S. Department of Health and Human Services. Under the new rule, nursing homes could face fines for noncompliance. CMS Administrator Seema Verma explained that CMS now requires testing to increase transparency and hold nursing homes accountable. CMS released the rule as nursing homes are still apparently struggling to access testing supplies. Richard Feifer, chief medical officer of Genesis Healthcare Inc., the largest U.S. nursing home company, reportedly said of his company that “we are very concerned about supply availability going forward.”
• A TikTok employee filed a lawsuit in federal court against the Trump Administration alleging that President Donald J. Trump’s executive order banning TikTok in the United States violated the employee’s constitutional right to due process. The employee argued that the order jeopardized the paychecks of the approximately 1,500 American TikTok employees and should not apply to U.S.-based TikTok workers. Alexander Urbelis, a partner in the law firm that filed the suit, reportedly stated that “this is about protecting the wages and salaries of families and employees.” TikTok filed a similar lawsuit against the Trump Administration on the same day, arguing that the order deprives the company of its property rights by prohibiting transactions with the company.
• A federal court held that a U.S. Department of Defense policy requiring immigrant military service members to serve a minimum of six months before becoming eligible for expedited citizenship violated the Administrative Procedure Act. Traditionally, noncitizen service members could become eligible for expedited citizenship a day after starting their service, but in 2017 the Defense Department began requiring noncitizen members to serve 180 days before becoming eligible for expedited citizenship. The court found that the Defense Department violated the Administrative Procedure Act because it failed to explain why it was changing its longstanding policy.
• The U.S. Environmental Protection Agency (EPA) issued an emergency exemption permitting American Airlines and Total Orthopedics Sports and Spine to use SurfaceWise2, a product that apparently kills viruses, including the novel coronavirus, on surfaces for up to seven days. SurfaceWise2 is the first long-lasting product EPA approved to disinfect surfaces to prevent the spread of the novel coronavirus. The emergency exemption only applied to specific companies in the state of Texas. EPA Administrator Andrew Wheeler said that he hopes that the product will increase consumer confidence in air travel. Although the new disinfecting process may increase consumer confidence, according to the Centers for Disease Control and Prevention, COVID-19 primarily spreads through the air when in close contact with individuals.
• Pennsylvania Governor Tom Wolf announced new funding for the Pennsylvania Primary Care Loan Repayment Program, which seeks to recruit doctors and health care workers in communities facing a shortage of practitioners. The program repays educational loans for qualifying practitioners who provide primary health care in areas designated as Health Professional Shortage Areas. Although shortages in health care practitioners are long-term problems affecting much of the country, David Skorton, president of the Association of American Medical Colleges, reportedly said that “with COVID-19, physician shortages in emergency medicine and other critical care are particularly urgent.”
• The U.S. Department of Labor issued a final rule changing the procedures for issuing non-binding guidance documents, which are statements of agency regulatory policy that, prior to a new rule, may be changed at any time without review. Non-binding guidance often explains what types of actions the agency considers to be a violation of an enforceable rule. The new rule requires that economically significant non-binding guidance must undergo a 30-day notice and comment review, and that the Labor Department makes such guidance available in a single database. On the same day, the Labor Department concluded a nine-month internal review of current guidance documents and rescinded more than 3,000 guidance documents, a 25 percent reduction of the agency’s total number of guidance documents. These actions are the Labor Department’s implementation of an executive order directing agencies to limit the use of non-binding guidance.

WHAT WE’RE READING THIS WEEK

• In a recent paper, Michael Barr, Howell Jackson, and Margaret Tahyar discussed the actions that the Federal Reserve System, the U.S. Department of the Treasury, and the U.S. Congress have taken to address the coronavirus pandemic. Barr and his coauthors noted that the Federal Reserve tried “to adhere to some undefined line” between monetary and fiscal policy by relying on the Treasury Department to absorb initial losses from the first wave of crisis response programs. The Federal Reserve, however, expanded its role in the second wave of programs by “entering the unknown territory of lending.” Barr and his coauthors reiterated that the Federal Reserve lacked spending power, but Congress and the White House decided to rely on the Federal Reserve to respond to the economic crisis rather than provide additional fiscal support through legislative or executive actions.
• In a paper for the Kleinman Center for Energy Policy, Mark P. Nevitt, professor at Syracuse University College of Law, wrote that addressing climate change will require reallocating resources and directing resources away from vulnerable communities that already face the harmful effects of climate change. Nevitt proposed five principles to guide an “equitable managed retreat” to confront climate change: encouraging and acknowledging climate change’s true cost; embracing climate transparency so that consumers are aware of risks that climate change inflicts; retreating from communities vulnerable to the effects of climate change in advance rather than rebuilding in response; favoring voluntary managed retreat that is proactive rather than a responsive retreat; and regulating managed retreat for those facing forced evacuation due to climate change. Nevitt advocated a well-managed climate retreat as a more productive response to climate change than responding retroactively.
• The U.S. Government Accountability Office (GAO) released a report that compares benefits available to injured workers under the Federal Employees’ Compensation Act against the benefits available to all workers under the Federal Employees Retirement System. GAO found that injured workers with a 25-year career before their injury were likely to receive more money from Federal Employees Retirement System benefits than from Federal Employees’ Compensation Act benefits. GAO also found that injured workers with careers as short as 15 years could receive higher benefit payments by retiring rather than seeking Federal Employees’ Compensation Act benefits if the Trump Administration enacts cuts to the benefits as indicated in the budget proposals for the years 2019 through 2021. GAO recommended that the U.S. Department of Labor and the U.S. Social Security Administration take steps to help recipients consider their options.

FLASHBACK FRIDAY

• In an essay in The Regulatory Review, Reeve T. Bull, research director of the Administrative Conference of the United States, advocated trial-and-error decision-making as the best practice for regulators. Bull argued that the “unpopularity of modern bureaucracy” is at least partially caused by pushback against methodologies and lack of adaptability in favor of greater reliance on trial-and-error efforts that will yield progressively better outcomes. Although Bull acknowledged that government regulation cannot match the flexibility of the free market that allows for use of trial and error, he asserted that regulators could create a better system by allowing for variations of regulations to see what works best.