Week in Review

IN THE NEWS 

• The U.S. Environmental Protection Agency announced a final rule that revised the definition of “waters of the United States,” limiting the agency’s authority to address water pollution. The revised rule is designed to conform with the U.S. Supreme Court’s recent ruling in Sackett v. Environmental Protection Agency, which concluded that the Clean Water Act’s application is restricted to “relatively permanent, standing or continuously flowing bodies of water.” The revised rule does not, however, change the current exclusions from the “waters of the United States” definition, including ditches and artificial lakes or ponds.
• The Biden Administration announced a list of 10 prescription drugs that will be subject to price negotiations through Medicare for the first time. Medicare, which covers 66 million Americans, will now negotiate drug prices to reduce costs for seniors who currently pay high out-of-pocket costs for prescriptions. The 10 initial prescription drugs were chosen based on criteria determined by Medicare including requirements that the drug has been on the market for at least seven years, and there is no generic or biosimilar competition. The negotiated prices will take effect in 2026, and the program aims to save $25 billion in prescription drug costs by 2031.
• The U.S. Department of Health and Human Services (HHS) announced its recommendation to the Drug Enforcement Agency to reclassify marijuana from a Schedule I substance that has no accepted medical use to a Schedule III substance, which consists of drugs “with a moderate to low potential for physical and psychological dependence.” The Drug Enforcement Agency will now begin its independent review of HHS’s recommendation. The Biden Administration took steps to ease marijuana restrictions last year by pardoning all prior federal marijuana offenses.
• The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency jointly issued a proposed rule establishing a minimum long-term debt requirement for certain insured depository institutions. The proposed rule aims to improve the ability for long-term debt to absorb losses in the event of a covered entity’s failure and to reduce costs to the Deposit Insurance Fund by lowering the risk of loss to investors. The proposal is also intended to improve financial stability by decreasing the likelihood and speed of deposit withdrawals by uninsured depositors in the event of stress.
• The U.S. Department of Labor proposed a new rule clarifying existing regulations on who can act as a third-party representative when the Occupational Safety and Health Administration conducts workplace inspections. The proposed changes seek to clarify that representatives may be employees or non-employees who are “reasonably necessary” to conduct an effective and thorough inspection. A third-party representative may be deemed reasonably necessary because they have relevant knowledge, skills, or experience that may be helpful during an inspection. Assistant Secretary for Occupational Safety and Health Doug Parker explained that the proposal aims to “make workplaces safer by increasing opportunities for employees to be represented in the inspection process.”
• A federal judge held that a New Jersey law that sought to prevent new and renewed immigrant detention contracts between federal officials and state, local, or private organizations was unconstitutional. This decision allows New Jersey’s last private immigrant detention center, operated by CoreCivic, to remain open. The ruling put New Jersey Governor Phil Murphy, who signed the original law, at odds with the Biden Administration, which had argued that closing the detention center would be “catastrophic” to federal immigration authorities.
• U.S. Representative Andy Kim (D-N.J.) reintroduced the Department of Defense Ethics and Anti-Corruption Act, which aims to limit the influence of defense contractors and foreign governments by imposing a four-year ban on their ability to hire former senior Pentagon officials. The bill also mandates defense contractors to submit annual public reports on their hiring of former Pentagon officials and restricts senior government officials from owning stock in major defense contractors that receive a revenue of more than $100 million from the Pentagon. Kim stated that the bill is meant to ensure greater transparency over defense contractors and “make sure that Americans know our defense force has their backs.”
• Chinese Foreign Ministry Spokesperson Wang Wenbin announced that China will no longer require a negative COVID-19 test result for incoming travelers, marking a significant step in the reopening of China’s borders after three years of isolation. This move follows the easing of China’s “zero-COVID” policy in December 2022, whose extensive lockdowns contributed to economic slowdown and public unrest.

WHAT WE’RE READING THIS WEEK

• In a recent Brookings Institution article, Wendy Castillo, a lecturer of Public and International Affairs at Princeton University’s School of Public and International Affairs, argued that collecting more accurate race and ethnicity data in the census will improve equity in federal resource allocation and promote greater understanding of societal inequities. Castillo recommended combining the race and ethnicity census questions into one with a free-text space for individuals to elaborate on their identity. In addition, Castillo suggested that the census collect follow-up questions for deeper insights into racial and ethnic subcategories. Castillo also argued for consultation with Native nations to accommodate Indigenous understandings of race and Tribal membership.
• In a Yale Journal on Regulation article, Paul Heidhues, a professor at the University of Dusseldorf and his coauthors identified possible regulations that could make the search market more competitive and lessen the harms flowing from Google’s current monopoly position. Heidhues and his coauthors argued that a monopoly in the search market is harmful because it can lower the quality of search services and reduce innovation. Heidhues and his coauthors further highlighted that these consequences are concerning because searches play a critical role in search engine users’ interactions with the economy beyond the engine itself. In turn, Heidhues and his coauthors proposed several regulatory solutions to restore competition in search markets, such as undertaking enhanced review of potential mergers involving search engines.
• In a recent study issued by the Center for Progressive Reform, Federico Holm, Clean Energy Policy Analyst at the Center, and James Goodwin, Senior Policy Analyst at the Center, concluded that the notice-and-comment rulemaking process does not allow individuals in marginalized communities to participate meaningfully in the regulatory system. Holm and Goodwin found that the system is dominated by comments from sophisticated “repeat players” such as representatives of corporations, who overload agencies with information, while comments from individual members of the public often lack depth and purpose. Holm and Goodwin urged agencies to provide better resources to help individuals engage in the regulatory process.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Monika U. Ehrman, a law professor at the Southern Methodist University Dedman School of Law and Robin Kundis Craig, the Robert C. Packert Trustee Chair in Law at the University of Southern California Gould School of Law, discussed how the Sackett v. Environmental Protection Agency decision has weakened water quality protection by limiting agencies’ authority under the Clean Water Act. Ehrman and Craig cautioned that this decision signals the Court’s potential willingness to overturn Chevron deference and noted that it may do so in Loper Bright Enterprises v. Raimondo next term.