Trump Regulatory Reform Should Focus on Smarter Rules, Analysts Say

As agencies take up President Trump’s push for regulatory reform, they should take cues from foreign governments that have learned to “regulate smarter” and exploit digital technology, a new paper argues.

“How we regulate, not just what we regulate, will likely be the critical determinant of success or failure” of Trump’s recent orders directing agencies to cut onerous or obsolete rules,” wrote Deloitte analysts Jitinder Kohli and W. Bruce Chew. “By skillfully applying new digital technologies like data analytics and crowdsourcing with innovative techniques, it is possible to pursue a regulatory reform agenda that does not sacrifice protections.”

The paper, “How to Implement President Trump’s “One in, Two Out” Regulation Initiative” encouraged regulators to give greater weight to the difficulties in compliance. “Coaching small businesses to better understand regulation and more easily comply breaks with the ‘catch-bad-behavior’ model of enforcement,” the analysts said. “But ultimately, it contributes to the goals of regulation — better compliance that leads to greater protections.”

Kohli, who formerly ran the regulatory reform office in the United Kingdom, and Chew, who leads federal research for Deloitte, cited the experiences of Britain, Canada, Denmark, the Netherlands, Australia and New Zealand to glean this lesson: “Costs matter more than the number of regulations.”

On Jan. 30, Trump signed an executive order calling for agencies to identify two regulations for elimination each time they write a new one. On Feb. 24, he signed a directive that agencies name a lead person to run regulatory reform.

 “Where a government agency is required to identify reductions in the costs of regulation, it makes sense to look first in places where regulation affects the largest number of businesses,” the authors wrote. “By making effective compliance intuitive, businesses will be more likely to do what’s necessary to comply, and, as a result, society will be more likely to benefit from effective protections.”

Their five recommendations included assessing where burdens lie, building a portfolio of possible reductions, seeking cost-cutting innovations in inspection and enforcement, and embracing a “coaching and encourage mindset.”

Amit Narang, regulatory policy advocate for the liberal organization Public Citizen, was skeptical. “The report paints a rosy scenario where implementation of the executive order will not result in sacrificing basic public health and safety protections,” Narang told Government Executive. “‎In reality, the EO puts costs to corporate America ahead of protecting the public. Any regulations that are able to make it through the EO's arbitrary budget caps are destined to be the weakest and least effective for American workers and consumers.”