Week in Review

IN THE NEWS

• The U.S. Supreme Court issued an order temporarily blocking the federal government from deporting a second group of noncitizens designated as members of a Venezuelan gang. In the unsigned, one-paragraph order, the Court noted that the case was pending before the U.S. Court of Appeals for the Fifth Circuit and directed the federal government not to remove any of the group members from the country “until further order of this Court.” Justices Clarence Thomas and Samuel A. Alito, Jr. dissented. In a subsequent statement joined by Justice Thomas, Justice Alito argued that the Court was wrong to issue the order with such speed and without further explanation.
• President Donald J. Trump issued an executive order aimed at reforming the higher education accreditation process. According to the order, accreditors—which serve as “gatekeepers” in determining whether colleges and universities receive federal student loans and Pell Grants—have failed “students, families, and American taxpayers” by routinely approving institutions with low graduation rates and high debt burdens among their students. The order also contends that accreditors have improperly compelled the adoption of diversity, equity, and inclusion (DEI) programs. The order directs the Attorney General and the Secretary of Education to investigate and hold accreditors accountable through “denial, monitoring, suspension, or termination of accreditation recognition” to prevent “unlawful discrimination and ideological overreach.”
• The U.S. Court of Appeals for the D.C. Circuit raised questions about President Trump’s executive order that bars individuals diagnosed with gender dysphoria from serving in the military unless they do so under their biological sex, presumptively disqualifying transgender service members. In oral argument in Talbott v. United States, the U.S. Department of Justice argued that the order is essential to military service and lethality due to the “significant clinical distress” and “impairment of functioning” portrayed by transgender service members. The panel of judges, however, pressed the Administration to provide empirical support for its claims, highlighted the absence of individualized assessments, and questioned the sweeping nature of the exclusion.
• The U.S. Office of Personnel Management (OPM) proposed a rule that would reclassify an estimated 50,000 federal employees as “at-will” employees. The reclassification would make employees easier to fire by removing the requirements that federal agencies take intermediate disciplinary steps before firing and allow fired employees to appeal their dismissals. OPM explained that these individuals carry out policymaking and policy-implementing duties, asserting that the proposed rule is intended to hold accountable employees who underperform, tolerate corruption, or refuse to further President Trump’s policy goals. The American Federation of Government Employees and the American Federation of State, County and Municipal Employees previously sued the Trump Administration over a related executive order, arguing that the order violated restrictions limiting the reclassification of federal positions and guaranteeing civil protections for involuntarily reclassified employees.
• The U.S. District Court for the District of Columbia issued an order blocking the Trump Administration from shutting down news organizations funded by the U.S. Agency for Global Media (USAGM), including Voice of America, Radio Free Asia, and Middle East Broadcasting Networks. The court found that USAGM demonstrated an “absence of ‘reasoned analysis’” before eliminating these programs. Judge Royce C. Lamberth, who issued the order, noted that the efforts to freeze USAGM funds that had already been appropriated were likely unconstitutional. The ruling requires the Trump Administration to restore all USAGM employees and contractors who had been placed on administrative leave to their prior status.
• The Federal Trade Commission (FTC) issued a final rule amending the Children’s Online Privacy Protection Rule to enhance safeguards for kids’ personal information online. The rule introduces a “mixed audience” website category, identifying sites that attract both children and adults but do not primarily target a child audience. The rule also mandates that biometric identifiers, such as fingerprints, be classified as “personal data” and created detailed notice requirements for data use and third-party disclosures. Common Sense Media hailed the updates for giving parents more control and transparency. The Interactive Advertising Bureau, however, warned of higher compliance costs for businesses.
• The FTC filed a lawsuit against Uber, accusing the company of violating the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act. The FTC alleges that Uber enrolled customers in its premium subscription without permission, obstructed users from canceling these subscriptions, and did not provide advertised discounts. According to the complaint, Uber also imposed unauthorized charges on consumers through misleading and confusing policies. The FTC seeks a permanent injunction and monetary relief. Uber reportedly responded to the lawsuit by asserting that its subscription sign-up and cancellation processes are clear and legal.
• The U.S. Food and Drug Administration (FDA) announced that it will take steps to replace all artificial food dyes in U.S. food products with natural alternatives by the end of next year. FDA also plans to authorize four new natural food dyes, accelerate the review of other natural alternatives, and revoke the authorization of the artificial food dyes Citrus Red No. 2 and Orange B in the coming weeks. FDA Commissioner Martin A. Makary cited studies that link artificial dyes with ADHD, obesity, diabetes, insulin resistance, and cancer as the reason for the ban.

WHAT WE’RE READING THIS WEEK

• In a recent Brookings Institution article, Marta Wosińska, a senior fellow at the Center on Health Policy at Brookings, examined the possible impact of President Trump’s proposed pharmaceutical tariffs on drug prices, supply chains, and domestic manufacturing. Wosińska contended that these tariffs will likely raise prices on imported drugs, potentially leaving generic drugmakers with margins too thin to justify new domestic manufacturing plants. She argued that tariffs work best when paired with supportive measures, such as FDA inspection funding, targeted subsidies for generic drugmakers, and flexible mechanisms to prevent or relieve drug shortages.
• In a recent Journal of International Economic Law article, Giulia Claudia Leonelli, a law professor at the London School of Economics, and Francesco Clora, a professor at the University of Copenhagen’s Department of Food and Resource Economics, evaluated the environmental subsidies in the Inflation Reduction Act (IRA) to understand their legality and impacts in light of the World Trade Organization’s Agreement on Subsidies and Countervailing Measures (ASCM). Leonelli and Clora advocated a focus on the environmental effectiveness of subsidies rather than their trade-distorting effects. Leonelli and Clora noted that the IRA’s renewable energy tax credits distort trade, but do not have protective or discriminatory applications. They contended that international cooperation is key to ensuring policies remain in line with ASCM and do not turn protectionist. Leonelli and Clora argued that evaluating green energy subsidies under the ASCM requires a focus on environmental externalities.
• In a recent Brookings Institution article, Hanna Halaburda, an associate professor at New York University Stern School of Business, argued that blockchain technology— originally intended as a tool for decentralization—has become concentrated in the hands of a small group of dominant actors. Halaburda contended that decentralization in blockchain platforms promotes competition, security, and fairness because no one entity can control “the trajectory of technological advancement.” She suggested that regulators should promote decentralized and transparent governance in blockchain entities and implement anti-collusion policies. In addition, Halaburda urged that greater regulation is needed to prevent the monopolization of blockchain technology and ensure blockchain technology remains “an open and resilient digital infrastructure.”

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Arie Freiberg, an emeritus professor at Monash University, suggested that regulatory agencies should pay greater attention to the effects that complaints, investigations, and disciplinary hearings can have on regulated individuals. Freiberg argued that regulators should adopt a trauma-informed approach by providing information to regulated individuals, connecting those individuals with resources for advice and support, and upholding standards of procedural justice. Freiberg contended that, despite the adversarial nature of investigations and disciplinary processes, regulators can balance their primary duty of protecting the public with appropriate concern for the well-being of regulated individuals.