Week in Review

IN THE NEWS 

• A federal appeals court ruled that the federal government is allowed to take command of Illinois National Guard troops but affirmed a ban on sending them on operational assignments. The dispute stems from “Operation Midway Blitz,” an immigration enforcement push by Immigration and Customs Enforcement (ICE) that Illinois and Chicago argue exceeds federal authority. The U.S. Department of Homeland Security requested National Guard support after clashes near an ICE facility outside Chicago. The Trump Administration then approved the deployment of about 300 Illinois Guard members and 200 Texas Guard members for 60 days. While the temporary court order is in place, these troops cannot do law enforcement work.
• World leaders met in Sharm El Sheikh, Egypt, to discuss President Donald J. Trump’s Gaza Peace Plan, which both Israel and Hamas accepted. The plan includes provisions for a ceasefire, the release of Israeli hostages and Palestinian prisoners, withdrawal of the Israel Defense Forces from the Gaza Strip, and deployment of an “International Stabilisation Force.” The plan specifies a timeframe for restarting humanitarian aid, proposes a special economic zone, and outlines a strategy for short-term governance by a “Board of Peace,” headed by President Trump, former United Kingdom Prime Minister Tony Blair, other heads of state, and qualified Palestinian experts. The leaders of Egypt, Qatar, and Turkey joined President Trump and signed a broad memorandum outlining shared commitments for peace in the region.
• The U.S. Supreme Court declined to review a challenge to a Department of Homeland Security (DHS) rule that lets certain visa holders’ spouses work in the United States. The 2015 rule allows H-4 visa holders, the spouses of H-1B visa holders, to obtain work authorization if their spouse is pursuing permanent residency. Save Jobs USA, an organization representing U.S. technology workers, argued that the rule unlawfully gave work permits to non-citizens who should not be eligible under federal law. The U.S. Court of Appeals for the D.C. Circuit rejected that claim last year, citing to circuit precedent that the Immigration and Nationality Act allows DHS to authorize employment for certain nonimmigrants. By refusing to hear the appeal, the U.S. Supreme Court left the rule in place.
• Most major news outlets—including the New York Times, Washington Post, and The Associated Press—reportedly say they will not sign the Pentagon’s new press-access policy ahead of a Tuesday deadline. Secretary of War Pete Hegseth defended the policy—which requires visible badges and tighter rules such as a ban on encouraging illegal acts—saying reporting access is a “privilege.” The Pentagon Press Association reportedly said that the rules will discourage routine reporting by warning Defence Department staff not to talk to journalists without approval. So far, only One America News has reportedly signed the new policy agreement.
• A federal judge ruled that the U.S. Department of Homeland Security (DHS) violated a prior court order by reimposing immigration-related grant conditions on states. The court’s earlier order, issued in September, vacated those conditions, finding that they exceeded the agency’s statutory authority and coerced states into enforcing federal immigration policy. In the new ruling, Judge William E. Smith of the U.S. District Court for the District of Rhode Island found that DHS violated that order by requiring states to assist in federal immigration enforcement to receive Federal Emergency Management Agency funding. He ordered DHS to remove all contested conditions and “Compliance with Federal Immigration Law” clauses from grant award documents and to reissue them within seven days.
• A federal district court temporarily prohibited the Office of Management and Budget (OMB) from firing federal workers during the ongoing government shutdown. Judge Susan Illston of the U.S. District Court for the Northern District of California granted the request made by the American Federation of State, County & Municipal Employees and the American Federation of Government Employees, finding the unions would likely prove that OMB’s use of reduction-in-force procedures was illegal and beyond statutory authority. Prior to the court’s decision, OMB’s counsel stated that approximately 2,751 layoffs were anticipated across several agencies, with the most planned for the U.S. Department of Commerce and the U.S. Department of Health and Human Services.
• The U.S. Department of Energy (Energy Department) approved a $1.6 billion loan guarantee to American Electric Power Transmission (AEP) to replace and upgrade nearly 5,000 miles of power lines across Indiana, Michigan, Ohio, Oklahoma, and West Virginia, aiming to bolster grid reliability amid rising data center and artificial intelligence demand. The Energy Department said it was the first loan under the Energy Dominance Financing program and requires utilities to pass savings to customers. Supporters—including the Energy Department and AEP—reportedly claimed the financing would save customers money, add capacity, and create about 1,100 construction jobs. Critics pointed to the Energy Department’s recent cancellations of $7.6 billion in clean energy grants and a $4.9 billion loan for a wind and solar energy project as favoring fossil fuel upgrades.
• A federal judge vacated the U.S. Department of Defense’s (Defense Department) cap on university research “indirect cost” rates. Judge Brian E. Murphy of the U.S. District Court for the District of Massachusetts ruled for the university plaintiffs and declared the Defense Department’s 15 percent “Rate Cap Policy” was contrary to regulation, exceeded statutory authority, and was arbitrary and capricious under the Administrative Procedure Act. The policy directed the Defense Department to limit what portion of research grants universities can apply toward recovering administrative and facility costs. The ruling requires the Defense Department to stop enforcing the cap and to redesign its policy in line with federal rules.

WHAT WE’RE READING THIS WEEK

• In a recent report, the U.S. Government Accountability Office (GAO) examined the ongoing struggle of the U.S. Patient and Trademark Office (USPTO) to balance speed and rigor and found that USPTO examiners still feel pushed to hit production targets over doing deeper reviews. GAO notes the agency has made changes, such as revising performance plans, but has not assessed whether those changes improve quality. GAO also flags a gap in USPTO’s quality metrics: even though each legal requirement shows 92 to 98 percent compliance, only about 84 percent of patents meet all four requirements at the same time. To close these gaps, GAO urges USPTO to set an overall patent-quality goal and add measures that capture the economic or scientific value of patents.
• In a Brookings Institution essay, Elena Patel, co-director of the Urban-Brookings Tax Policy Center, argued that recent court decisions have grown the courts’ tax-making authority. In Loper Bright v. Raimondo, the U.S. Supreme Court ended court deference to federal agencies’ legal interpretations, making Treasury and Internal Revenue Service regulations easier to challenge, while in Moore v. United States the Court left unresolved whether Congress may tax unrealized income, Patel observed. She also noted upcoming litigation over whether Presidents may invoke emergency powers to impose broad tariffs that function like taxes. Patel contended that these decisions place courts at the center of defining taxing authority and increase uncertainty for agencies, businesses, and households.
• In an article in the Yale Journal on Regulation, Lisa Heinzerling, a professor at Georgetown Law School, found that Loper Bright v. Raimondo, a landmark Supreme Court ruling on administrative law, may not apply to the Clean Air Act (CAA). Loper Bright ended Chevron deference, which is judicial deference to a federal agency’s statutory interpretation. Heinzerling argued that because the decision targeted a specific section of the Administrative Procedure Act, other statutes which do not rely on that section may not actually be bound by Loper Bright. Heinzerling claimed that because the CAA “kicks out the Administrative Procedure Act in favor of an alternative framework for judicial review,” and excludes the statutory language at issue in Loper Bright, Chevron deference may still apply to the Environmental Protection Agency for the CAA. Heinzerling concluded that in spite of lack of support through statutory language, courts have incorrectly applied Loper Bright to the CAA.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Paul C. Light, professor emeritus at New York University’s Wagner Graduate School of Public Service, summarized some of the lessons learned on the federal service during the 2019 government shutdown. Light argued that the shutdown humanized federal employees and contractors, demonstrated the benefits provided by federal agencies, explored the increased risks to the public during funding lapses, and exposed issues with the Public Service Loan Forgiveness Program. Light also argued there was a “silver lining” to the shutdown—it offered an opportunity to implement bipartisan and publicly-supported reforms to “strengthen ethics in government, discipline the presidential appointments process, reduce campaign spending, improve fiscal efficiency and accountability, and streamline the bureaucracy.”