The attack on gas-powered vehicles exists on multiple fronts, including through federal and state regulation.

Regarding federal regulation, much of the attention has been focused on the Environmental Protection Agency’s (EPA) de facto electric vehicle mandate.

However, there is another Biden EPA action that would likely lead to an even worse result. In its closing days, the Biden administration granted a waiver allowing California to move forward with its gas-powered car ban (Advanced Clean Cars II). There’s nothing de facto about this. California got the EPA’s green light for this rule that would prohibit the sale of new gas-powered cars by 2035.

Practically, this will mean that California will likely be imposing a ban on the entire nation. Other states can adopt California’s standards. In fact, 11 states plus Washington, DC have already followed California’s lead, based on California Air Resources Board information. Plus, given the interstate nature of the car industry, manufacturers will likely build cars to meet these standards, which means no gas-powered cars. At a minimum, manufacturers would produce far fewer gas-powered cars than today.

The Clean Air Act waiver

Under the Clean Air Act (Section 202), the EPA is authorized to establish emission standards for new motor vehicles. However, there is a process by which California may be granted a waiver to allow it to impose even more stringent standards (Section 209). This exception exists due to the extreme and unique localized air problems that California has faced in the past.

California has used this exception, with the help of the EPA, to go way beyond simply establishing standards to assist with localized air pollution problems. It is killing off gas-powered cars within the state and across its borders.

Congress didn’t give the EPA the authority to kill off gas-powered cars on its own, even though the Biden EPA thought otherwise. If the EPA doesn’t have this authority, it makes no sense to think the EPA can give California power to do something the agency itself can’t do.

The California rule is also focused extensively on greenhouse gas emissions. The EPA may only grant California a waiver for one of its more stringent rules to meet “compelling and extraordinary circumstances.” The entire point of the waiver process is to allow California to address issues unique to California.

However, there is nothing special about a car emitting greenhouse gases in California compared to a car in Texas. Those greenhouse gas emissions will have the same effects.
 
In 2007, when the EPA for the first time denied a California waiver request (the first such request for greenhouse gas regulation), EPA Administrator Stephen L. Johnson wrote:

EPA has considered and granted previous waivers to California for standards covering pollutants that predominantly affect local and regional air quality. In contrast, the current waiver request for greenhouse gases is far different; it presents numerous issues that are distinguishable from all prior waiver requests. Unlike other air pollutants covered by previous waivers, greenhouse gases are fundamentally global in nature. Greenhouse gases contribute to the problem of global climate change, a problem that poses challenges for the entire nation and indeed the world. Unlike pollutants covered by the other waivers, greenhouse gas emissions harm the environment in California and elsewhere regardless of where the emissions occur. In other words, this challenge is not exclusive or unique to California and differs in a basic way from the previous local and regional air pollution problems addressed in prior waivers.

He was absolutely right, and this helps to show why the EPA was wrong in granting the waiver in the first place.

Fortunately, Rep. Kevin Kiley (R-CA) has introduced a Congressional Review Act (CRA) resolution of disapproval to repeal the EPA’s decision to grant California this waiver for Advanced Clean Cars II. Sens. Shelley Moore Capito (R-WV), Deb Fischer (R-NE), and Markwayne Mullin (R-OK) have introduced the resolution in the Senate. The legislators have also introduced resolutions on waivers for two other California rules, including one to kill off gas-powered trucks.

The CRA provides important procedural benefits, especially by getting around the Senate filibuster. There appears to be wide support for the resolutions in both the House and Senate, likely even on a bipartisan basis. Attacks on consumer freedom, driving up prices for vehicles, and making it more difficult for Americans to travel, especially for low-income individuals, are a toxic mix that legislators certainly should recognize is bad policy. Allowing one state to, in effect, create national policy that will lead to such outcomes would be worse.

The Congressional Review Act hang-up

The CRA applies to rules as broadly defined under the Administrative Procedure Act (APA) but does not include rules of particular applicability. The APA says that a “‘rule’ means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy…”

Improper GAO Meddling.  The Government Accountability Office (GAO) issued an “observations” document about whether the waivers are rules for purposes of the CRA and found they are orders and not rules.

This GAO document has rightfully come under serious scrutiny and criticism, and not just because it is incorrect. GAO has no role to play in ascertaining whether an agency action is a rule under the CRA once an agency sends the action to Congress. GAO’s proper role when it comes to figuring out if an agency action is a rule is no mystery to GAO because it regularly explains it.

On the top of GAO’s CRA legal decisions page, it states:

The Congressional Review Act (CRA) requires agencies to submit major and non-major rules to Congress and GAO. GAO issues decisions on agency compliance with CRA when requested by Congress.

Yet GAO decided to issue observations when requested by some members of Congress even though it has nothing to do with agency compliance with the CRA. The House Committee on Oversight and Government Reform and the House Committee on Energy and Commerce sent a letter to GAO on April 1 that pointed out:

In passing the CRA, Congress intended for GAO to help safeguard congressional authority through published observations on agency attempts to side-step CRA requirements. GAO’s decision to adversely opine on an agency’s efforts to comply with the CRA is a distortion of its role and could make agencies less likely to follow the intent of this important statute in the future.

The letter points out other major concerns regarding GAO’s decision to issue this unusual observations document:

[T]he action by the Executive Branch to classify the decision as a rule should have nullified the possibility of GAO’s intervention. Instead, and pursuant to a request by three members of the Senate minority, GAO issued a highly unusual adverse declaration after only a matter of weeks. The speed of GAO’s conclusion raises further questions about ideological bias as GAO has typically taken more than three months to study far more conventional questions of CRA compliance.

This entire process is, at a minimum, a bad look for GAO, which is supposed to be independent. Legislators should stay on this issue and show the leadership of the House committees sending the letter to GAO.

It should be noted GAO merely provides advisory opinions. Congress is in no way bound by GAO, especially when GAO had no business weighing in on the matter in the first place. An excellent article by attorneys Michael Buschbacher and Jimmy Conde provides a lot more background and analysis on GAO’s role and further gets into the question of whether the waivers are rules.

The Senate parliamentarian also recently said that the waivers are not rules, although it is possible she was deferring to GAO on the matter. It isn’t clear because there is little transparency on such decisions. Former Chief Counsel to Sen. Mitch McConnell (R-KY), Michael A. Fragoso, wrote a very important op-ed on the waiver and CRA process issues, noting that the Senate never authorized the parliamentarian to determine the scope of CRA review.

The Senate, Fragoso cautions, should not outsource to unaccountable bureaucrats and the Senate parliamentarian the power to determine what statutes mean.  

The Waivers are Rules. My colleague Marlo Lewis will have a much more detailed analysis soon on why the EPA’s waiver greenlighting California’s gas-car ban is a rule for CRA purposes and the Buschbacher and Conde article and Fragoso op-ed are also extremely insightful. The following is a concise explanation as to why the waivers are rules, using the Advanced Clean Cars II waiver as the example.

As I will explain, the waivers are generally applicable statements of policy and future effect designed to implement, interpret, or prescribe law or policy. But GAO claims otherwise. GAO says the waiver is an order particularly applicable to California.

1) Rules v. orders

Under the APA, an “‘order’ means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.” [Emphases added].

To figure out what an order is, we have to first figure out whether the agency action is a rule. The phrase “other than rulemaking” indicates this. The 1947 “Attorney General’s Manual on the Administrative Procedure Act” makes this same point, “Since the definition of adjudication is largely a residual one, i.e., ‘other than rule making but including licensing’, it is logical to determine first the scope of rule making.” Or as a 1952 University of Miami law review on the APA written by attorney Ivan C. Rutledge succinctly stated, “So an order is that which is not a rule.”

GAO fails to take this approach in the observations document as well as in a different waiver decision from 2023 that it points to in its observations document. The first question GAO and anyone should be asking is whether the Advanced Clean Cars II waiver meets the definition of a “rule” and only then we can figure out whether an action is an “order.”

We never need to get to the order question. The waiver decision gives the green light for California to go forward with a rule that will ban new gas-car sales by 2035 within its state and will have broader effects beyond its borders. It is hard to imagine many EPA actions that are more generally applicable. This isn’t some action that regulates an industry and may have some indirect effect on Americans. This action will directly affect Californians, the people in states that have adopted the California standards, and likely every American.

The waiver is of future effect and the agency is implementing, interpreting, or prescribing law or policy. One only needs to look at EPA’s decision document to see how the agency is interpreting law and figuring out whether the agency can properly provide a waiver consistent with the Clean Air Act. It doesn’t look like a trial, hearing, or fact-gathering process because it isn’t such a process.

2) Generally applicable v. particularly applicable

GAO asserts that the waiver isn’t generally applicable but is particularly applicable since it only “concerned a specific entity—California— and addressed a statutory waiver specific to California’s Advanced Clean Car Program.”

GAO is treating California, a state of over 39 million people, as if it were a property owner seeking to get a permit to build a house. The property owner isn’t seeking the green light to impose a rule that will directly affect millions of people, nor is he an entity claiming to represent millions of people. Instead, the property owner is seeking permission for his own purposes that will not be applicable to anyone else.

It is unreasonable to pretend the EPA’s waiver would have nothing to do with Americans not being able to buy new cars and the waiver can be completely separated from its effect. The EPA’s waiver is the only reason why California’s ban on cars will become reality. It lights the fuse destroying the freedom to buy gas-powered cars. The agency action applies and affects numerous states and likely the entire nation. Nobody gets to opt out of being directly affected by EPA’s action. It is generally applicable.

GAO’s observation document has an even bigger error. It never mentions the states that have already decided to adopt California’s standards. The EPA waiver, while granted to California, was known to be the green light for all the other states that had adopted the California standard. Tell the people in those states that the waiver is just for California.

3) The purpose of the Congressional Review Act and common sense

Congress passed the CRA to help reassert its lawmaking power. It wanted to make sure that it had a chance to review agency actions that affect Americans. The waivers, with their major effect on the country, are precisely the type of agency actions that Congress would want reviewed under the CRA.

The CRA does exclude rules of particular applicability, but that’s not because Congress meant to exclude waivers that have major effects on the rights of non-agency parties just like other rules. Rather, Congress wanted to exclude CRA consideration of waivers, permits, or licenses that directly apply only to the particular parties seeking the waivers, permits, or licenses. They didn’t want to use the CRA to effectively pass private bills, which are bills that affect “a specified individual or a private entity rather than the population at large.” When figuring out whether the waivers are rules, the purpose of the CRA needs to be taken into account.

Further, policymakers wouldn’t even be concerned with the waivers right now and I wouldn’t be writing this article if the waivers were particularly applicable. It is because the waivers have such a major effect on the public that policymakers are rightfully focused on getting rid of them.

Let’s assume for the sake of argument that it is a close call regarding whether the waivers are rules or orders. I don’t claim that there is no credible argument they are orders. However, there is at a minimum a very strong argument they are rules, and given the purpose of the CRA and the sweeping effect of the waivers, they should be treated as rules.

Conclusion

The EPA is the reason why many, if not all, Americans may not be able to buy new gas-powered cars by 2035. This is unacceptable and Congress needs to take action to rescind this agency action and stop California from effectively dictating which cars can be sold and purchased in this country.

The CRA makes it politically feasible for Congress to get rid of these waivers. Legislators shouldn’t get sidetracked by last ditch efforts to complicate matters by claiming the waivers are not rules. This is a decision that legislators need to and should make on their own. It isn’t up to GAO, which has acted inappropriately on this issue, nor is it a matter for the parliamentarian.

I can understand why some legislators could be concerned about setting a bad precedent as it relates to Senate rules. However, this is a very narrow issue and a matter that isn’t within the authority of the parliamentarian in the first place, as Michael A. Fragoso so aptly points out.

Fragoso also makes a great point about setting bad precedent, and specifically if the Senate fails to decide for itself whether the waivers are rules:

Going forward, those opposed to CRA resolutions would be able to smother them in the crib with adverse GAO “observations” adjudicated by the parliamentarian, who will herself be mired in an endless morass of legalese about statutory construction and APA interpretation. 

Americans should be able to buy the types of cars they want to drive. Congress has a chance to stop the waivers and put the interests of the American people over the interests of the Biden EPA and California officials that put us in this bad situation. Legislators shouldn’t back down now. They need to see it through and enact these widely supported CRA resolutions that would rescind the EPA’s California waivers.

This article first appeared on the blog of the Competitive Enterprise Institute and is reprinted here by the author’s permission.

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