Trump Regulatory Chief Lauds Career Staff for Paring Back Rules

Far from being dictated to by industry lobbyists, career staff at regulatory agencies are “coming up with fresh ideas and being very helpful” in implementing President Trump’s regulatory reform effort, Neomi Rao, administrator of the White House Office of Information and Regulatory Affairs, said on Friday.

“I have very strong respect for the expertise of career staff,” many of whom are motivated by “competition between agencies” in not wanting to be last in paring back rules that “are no longer helping the American people,” she told an audience at the Brookings Institution.

Summarizing “a banner year” in a deregulatory effort that contrasts sharply with the Obama administration’s, Rao hailed Trump’s effort at a cumulative reduction in rules, saying, “He didn’t go after them with little scissors, but with big beautiful gold scissors like the ones he used to cut red tape” in a recent White House ceremony.

Trump’s executive order requiring two regulations to be cut for every new one added, she said, has been exceeded, and for the first time on record aggregate new costs of regulations governmentwide were below zero. With only three new regulatory actions, that meant a savings of $8 billion, and a goal of saving $10 billion next year. OIRS has been “transparent” on its website in displaying how savings are calculated, she added.

“Lifting regulations can really stimulate the economy, create jobs and promote innovation,” said Rao, a law professor and veteran Capitol Hill staffer, citing some “stale” rules that go back to the George W. Bush administration. Curbing regulations also “promotes constitutional government and enhances individual liberty.”

She said she hopes her office of 45 mostly career staff will “change the culture” of regulation, “carefully reconsidering the direction, scope and content of regulations,” as well as “institutionalize long-standing good-government regulatory practices.” She described a need to crack down on “bad regulatory practices” and “respect other parts of the government,” such as Congress, whose statutes “mean what they say.”

By bad practices, Rao said she meant targeting “regulatory dark matter,” such as agency- generated guidance, FAQ’s and information collecting that can function as a “back door to imposing more regulation.” Such supplementary documents, she said, unfairly exclude the public and violate due process.

Under the previous administration, Rao said, regulators performing cost-benefit analysis “tended to overstate the benefits and understate the costs.” The solution is analysis that is “more rigorous,” she said, in the service of rules that “solve actual problems.”

The Trump effort does not mean “dismantling important health and safety regulations,” Rao said, stressing that the effort involves both regulation and deregulation. “I hear critics say we just want to help big business, but often the burden was put in place by big business or powerful interests. That can blunt and stifle innovation,” she said.

Rao acknowledged the past regulatory reviews of the Obama and Clinton administrations, saying she spoke last year to Obama OIRA chief Cass Sunstein, who encouraged her to remember the burdens of excess paperwork. Cross-cutting regulatory areas is where OIRA can “add value,” she said.

Most of the implementation process has been “cooperative” within agencies, Rao said, though it varies by agency. The administration’s regulatory reform officers, both political appointees and career staff, “don’t keep tabs,” Rao said. But the two-for-one executive order “gives the process some real teeth.”

Some agencies “are easier than others in respecting presidential priorities,” she said. “We give them a little push to think about the broader picture,” she added. The “high number of vacancies makes it harder.”  

In the long run, many reforms will require long-rulemakings and statutory changes by Congress. Rao said she hopes the effort will be “bipartisan and persist.”

Under questioning, she said the White House is examining whether independent financial agencies—which are not generally subject to OIRA’s centralized rule reviews—should be brought into the loop. “I see no constructive reason to treat them differently,” she said.

Also being considered: OIRA review of certain Treasury Department and Internal Revenue Service rules.

Rao said her office is also working to solve the recently surfaced problem of fake comments being submitted to regulatory agencies during public comment periods.