White House Formalizes Agency Duties to Curb Regulations

Ten weeks into the Trump administration, the White House has moved to centralize monitoring of regulatory agencies’ obligations to rework obsolete or burdensome rules to achieve an overall governmentwide reduction in costs imposed on the economy.

Fleshing out President Trump’s Jan. 30 executive order Reducing Regulation and Controlling Regulatory Costs” (EO 13771), Dominic Mancini, acting administrator of the White House Office of Information and Regulatory Affairs, on Wednesday published guidance for implementing the requirement  that agencies remove two rules for every new one introduced.

“The incremental costs associated with EO 13771 regulatory actions must be fully offset by the savings of EO 13771 deregulatory actions,” Mancini wrote. “In addition, agencies planning to issue one or more EO 13771 regulatory actions on or before Sept. 30, 2017, should” for each such action identify the two to be repealed and the resulting cost offsets.

For fiscal 2018, it noted, the director of the Office of Management and Budget is required to set a “cap” on incremental costs of all regulations finalized during that fiscal year—putting each regulatory agency on an “allowance” that can be exceeded only with the director’s approval.

The much-encouraged deregulatory actions suggested are “informal, formal, and negotiated rulemaking; guidance and interpretative documents; some actions related to international regulatory cooperation; and information collection requests that repeal or streamline recordkeeping, reporting, or disclosure requirements,” the guidance said.

Estimates of costs savings for removing regulations are to be done the same way they are for adding regulations “but in reverse,” Mancini wrote. “Only those impacts that have been traditionally estimated as costs when taking a regulatory action should be counted as cost savings when taking an EO 13771 deregulatory action.”

Once agencies are accustomed to working within the caps in the Trump administration’s regulatory plan, they can “bank” cost savings and deregulatory actions should they need them in future years to meet their quota. “Surplus EO 13771 deregulatory actions and costs savings do not expire,” the memo said.

Agencies this year will not be allowed to count as cost savings the repeal of significant proposed rules that were pending from the Obama administration when Trump signed his order.

The two-for-one mandate has been welcomed by many in the business community who point to its successful use in British Commonwealth nations. And Trump’s approach was welcomed by many in Congress. Among those working on broader regulatory reform is Sen. James Lankford, R-Okla., who said soon after Trump acted, “Now is the time to pull back on over-burdensome federal regulations through executive actions, but we must also pursue regulatory improvements through the legislative process. Requiring agencies to identify existing regulations for repeal before they promulgate new regulations is a successful practice to ensure cumulative regulatory burden is properly controlled.”

By contrast, the memorandum seems vague and may not fully reflect the extent to which current regulations were required by statute, said Steven Schooner, the Nash & Cibinic Professor of Government Procurement Law at the George Washington University Law School who worked at the Office of Federal Procurement Policy in the Clinton White House. “A regulation is an action that is promulgated at a certain time, but most regulations tweak existing regulatory systems,” he told Government Executive, so the impact of this executive order remains unclear.

“To the extent that the benchmark—two-for-one reductions—is completely arbitrary, the lack of precision in the guidance suggests, on the one hand, that there's no need to panic, and, on the other hand, there's no reason to expect that the initiative will prove particularly meaningful,” Schooner said. But the administration “has made clear—and OIRA will not mistake the message—that the administration is opposed to new regulation and favors deregulation.”

Amit Narang, regulatory policy advocate for the liberal-leaning Public Citizen, which filed a lawsuit against  the order, said, “The updated guidance does nothing to cure the profound legal issues.”

“The guidance makes clear that the focus of the executive order remains squarely on regulatory costs, instead of maximizing the benefits of regulations to society,” Narang said. “This is a deeply flawed approach that rigs our regulatory process against protecting the public and in favor of minimizing costs to corporate special interests.”