Week in Review

IN THE NEWS:

• The U.S. Court of Appeals for the D.C. Circuit unanimously upheld a district court order blocking the Internal Revenue Service (IRS) from sharing taxpayer address data with U.S. Immigration and Customs Enforcement (ICE). The court stated that the IRS’s automated data-exchange procedure “indisputably contravenes” the requirements of Section 6103, which bars the IRS from disclosing taxpayer information to other federal agencies except for specified non-tax criminal investigations. The court found, however, that ICE submitted requests for information on 1.28 million people without providing valid taxpayer addresses. The IRS had already disclosed 47,289 taxpayer addresses to ICE before the U.S. District Court for the District of Columbia froze the procedure in November 2025.
• The U.S. Securities and Exchange Commission (SEC) proposed rescinding a rule under the Investment Advisers Act of 1940 that limits political contributions by investment advisers and their employees when the advisers work with government clients. The SEC explained that the rule had caused unintended consequences, including advisers restricting their employees’ political contributions and facing challenges when hiring or promoting employees who have made contributions. The SEC noted that other requirements that are not being rescinded could prevent political contributions from influencing government contracts while giving advisers more flexibility to manage their risks. The SEC stated that removing the rule would impose one-time costs on advisers, but explained that those costs would likely be offset by ongoing savings from allowing advisers to tailor their policies to their particular circumstances.
• The Bureau of Land Management proposed changes to the authorization processes for oil and gas production sites in the National Petroleum Reserve in Alaska. The Bureau aims to streamline the permitting process for oil wells, pipelines, roads, and other infrastructure. If adopted, the rule would require the Bureau to issue a decision within 60 days of receiving an application for site approval, based on a Bureau-prepared environmental impact statement. The Bureau cited permitting inconsistencies and delays across the National Petroleum Reserve in Alaska as rationale for this rule, noting that a drilling project called the Willow Master Development Plan permit took nearly five years to finalize.
• President Donald J. Trump issued an executive order directing the U.S. Department of Agriculture (USDA) to strengthen enforcement of the Packers and Stockyards Act and expand interstate market access for eligible meat products. The order directed USDA to expand investigations into potential unfair, discriminatory, or deceptive practices by meatpackers, increase enforcement resources, and coordinate with the U.S. Department of Justice on potential antitrust actions. The order called for USDA to support measures that will modernize farming, including expanding interstate market access through streamlined inspection programs, technical assistance and training for small processors, and modernized inspection practices. It also directed USDA to take steps to establish a loan program for small and regional beef processors.
• President Trump issued an executive order directing the U.S. Department of Defense and the U.S. Department of Veterans Affairs (VA) to overhaul how both departments share military personnel files and medical records. The order requires the two departments to establish updated information technology systems that enable records sharing from the moment an individual enters military service, and to deploy new digital tools using artificial intelligence to streamline veterans’ access to benefits within 180 days. Within 30 days, the Defense Department must share all personnel files, health records, and service treatment records with the VA immediately when a service member is discharged. The order also directs the Secretary of Defense to update the Transition Assistance Program so that every departing service member is connected to a job opportunity or enrolled in a training program before separation.
• The U.S. Department of Homeland Security (DHS) issued an interim final rule allowing certain children born in the United States to foreign government employees who are not U.S. citizens to voluntarily register for lawful permanent residence. The interim final rule amended DHS regulations to clarify that these children are not considered eligible for birthright citizenship when neither parent is a U.S. citizen and one parent is a qualifying foreign government employee. The rule aligned with Executive Order 14,418, which defines foreign government employees to include ambassadors, foreign embassy and consulate employees, foreign government employees acting in an official capacity, and employees of international organizations. The rule applies to children born on or after September 4, 2026.
• President Trump issued an executive order to review regulations affecting ranchers and support the domestic cattle industry. The order stated that the national cattle herd has fallen to a 75-year low while consumer demand for beef has grown almost 10 percent over the past decade. The order directed the Secretary of the Interior to determine within 90 days whether the gray wolf and the Mexican wolf have met the recovery criteria for delisting under the Endangered Species Act and, if the criteria have been met, to begin the delisting process to combat the wolves’ predation of cattle. The order also required USDA to review authorities that would permit mandatory country-of-origin labeling for beef products and to provide an economic analysis of mandatory labeling under current conditions.
• The U.S. Environmental Protection Agency (EPA) reopened the public comment period on a proposed rule that would change the regulatory definition for wetlands. EPA stated that the additional 30-day comment period would allow for the consideration of more options for definitional changes before finalizing the proposed definition, which was originally introduced last fall and received over 220,000 public comments. The proposed definition would narrow the scope of protectable wetlands, excluding areas that only hold water intermittently or lack a continuous surface connection. EPA explained that it reopened the public comment period to improve the durability of the proposed definition by increasing transparency and seeking additional input from local authorities with experience managing water resources.

WHAT WE’RE READING:

• In a recent article in the Yale Journal on Regulation, Yifat Naftali Ben Zion, an assistant professor at Tel Aviv University, and Omer Pelled, an assistant professor at Bar-Ilan University, argued that third-party litigation funding is more like a limited partnership than a loan. Ben Zion and Pelled suggested that the funders should be viewed as limited partners, meaning that they invest capital and cannot control litigation strategy, while plaintiffs act as general partners who control the litigation strategy and owe a fiduciary duty to funders. Ben Zion and Pelled explained that adopting this framework would help regulators address concerns over conflicts of interest and predatory lending because laws pertaining to fiduciary duties are designed to combat incentive misalignment in financial partnerships.
• In a recent report, the U.S. Government Accountability Office (GAO) examined how the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers used local vendors in disaster response contracting. GAO found that although both agencies had policies, training, and outreach intended to encourage contracts with firms based in declared disaster areas, neither agency had a consistent process for collecting and monitoring data on local vendor use. GAO also reported that some contracting officers misunderstood which areas counted as “local” under federal rules, and other contracting officers did not provide the required written justifications for several contracts awarded to nonlocal businesses. GAO recommended that FEMA and the U.S. Army Corps of Engineers create processes to collect and monitor reliable data on local vendor use, clarify how contracting officers should identify local disaster areas, and ensure compliance with required documentation when post-disaster contracts are awarded to nonlocal vendors.
• In a recent Brookings Institution essay, Richard G. Frank, the director of the Center on Health Policy, and Samuel Peterson, a senior research assistant in the Economic Studies program, mapped the extent of vertical integration across five major health insurance organizations: CVS-Aetna, Elevance, Humana, Kaiser Permanente, and UnitedHealth Group. Vertical integration occurs where insurers control multiple stages of the healthcare supply chain. Frank and Peterson found that the five insurers account for 69 percent of Medicare Advantage enrollment and 46 percent of commercial insurance enrollment, covering about 126 million members in total. They noted that substantial shares of spending within each organization flow to related entities, including pharmacy benefit managers, physician practices, and home health services. Frank and Peterson concluded that while vertical integration creates opportunities for care coordination that could benefit patients and payers, it may also create opportunities to evade regulations and hide profits through internal financial transfers.

EDITOR’S CHOICE:

• In an essay in The Regulatory Review, Kenneth W. Costello, a regulatory economist and independent consultant, argued that attempting to address social and political problems through utility regulation could harm ratepayers and lead to inefficiencies in energy markets. Costello contended that lobbying by special interest groups influenced state legislators, gubernatorial administrations, and public utility commissions to pressure utilities into supporting the renewable energy transition. Costello argued that the costs associated with the related renewable energy initiatives led to higher utility bills in states such as California, because utilities can pass on the costs of new developments to ratepayers through surcharges and rate increases. Costello questioned whether utility regulation that favors specific vendors and interest groups is an appropriate mechanism for promoting the renewable energy transition, since consumers bear the costs and low-income households face a disproportionate impact.