This year was easy; next year deregulating gets tough

Stopping pending regulations in their tracks was easy to do this year, but 2018 promises to be a whole new ballgame when it comes to eliminating existing rules, regulatory analysts told Bloomberg Government.

Data from the Office of Management and Budget (OMB) show the number of new rulemakings by agencies plummeted in the first 10 months of the Trump administration. Another 1,579 regulatory proposals carried over from the prior administration were killed or put on the back burner.

Legally, it is far easier to stop rules that haven’t yet gone into effect than it is to overturn established regulations. Once rules are in effect, agencies must initiate a new rulemaking, prepare a new legal analysis, and seek new public comment on why the rule should be eliminated.

“I think next year is going to be the year where you start to see the fruition of all of the kinds of mistakes and bad faith that the Trump administration has been operating under this year,” said Sam Berger, a senior policy adviser at the Center for American Progress who served five years at the OMB during the Obama administration.

On the opposite side, there’s a real sense now among manufacturers and regulated industries that they don’t have to “wait for new anvils to fall,” said Patrick Hedren, vice president of labor, legal, and regulatory policy at the National Association of Manufacturers.

Agencies Predict More Deregulation

The most significant change to regulatory policy in 2017, aside from President Donald Trump’s pledge to sharply cut regulations, stemmed from two executive orders signed in January and February.

The first, Executive Order 13,771, required agencies to eliminate two regulations for every new one they issued, and to fully offset the cost of the new regulation. To enforce this order, the president signed Executive Order 13,777 establishing regulatory reform officers and task forces within each agency to recommend rules for elimination.

As a result of these orders, agencies took 67 deregulatory actions—including rule, guidance, and paperwork reductions—and issued three significant regulations in fiscal year 2017, according to the Fall 2017 Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions.

Looking ahead to FY 2018, agencies intend to take 448 deregulatory actions and 131 regulatory actions, according to the unified agenda, which is a mandatory report to Congress issued semi-annually by the OMB’s Office of Information and Regulatory Affairs (OIRA).

‘Very Significant’

Historically, the regulatory burden has increased with each president, both Republican and Democratic, OIRA Administrator Neomi Rao told Bloomberg Government in an interview Dec. 14.

“And we’ve just turned that around, and that is very significant,” Rao said.

Agencies are going to be systematically revisiting their regulations, which will take time, Rao said. There is a lot of discretion and room to roll back regulations, but it must be done in a way that’s consistent with law, she said.

OIRA also is reviewing a number of guidance documents and in many cases encouraging agencies to instead move ahead with a rulemaking, so there is more process and the public has an opportunity to weigh in, Rao said.

Courts Will Strike?

Berger, with the Center for American Progress, said the administration hasn’t been following procedural law in attempting to overturn rules, and predicted that some of what he called illegal and “shoddy” efforts by agencies to deregulate will be struck down in court next year.

Additionally, the public will start to see the results of this administration’s refusal to allow agencies to respond to new problems through new rulemakings, Berger said.

“As that continues to accumulate and more and more problems that need to be addressed aren’t, sadly we’re going to see the consequences,” he said.

Despite the judiciary’s role in enforcing the Administrative Procedure Act, there’s nothing the courts can do to make sure agencies are doing everything they can to protect the public, Berger said.

Improved Optimism

But Hedren, the National Association of Manufacturers VP, praised the new climate in which industries aren’t constantly bracing for new burdens.

“That has improved the optimism among manufacturers in particular,” Hedren said.

That effect is likely to continue throughout 2018, during which time the White House is going to have to do some active management of the agencies in order to support its regulatory agenda, Hedren said.

“In 2018, we see an opportunity in a few relatively nascent areas where the White House can step out and take a much more affirmative posture in areas like 3-D printing, additive manufacturing, or unmanned aviation systems,” Hedren said.

New Regulation Possible

The White House appears to have a strong interest in tackling some of the more systemic issues in rulemaking, including driving agencies to—at the outset—justify each new regulation, Hedren said.

“I get the sense that they are increasingly pivoting away from reacting to Obama-era policies and are now really exploring how to promote good regulatory practices that maintain safeguards while better accounting for impacts to the stakeholders who bear most of the burdens of regulation, and especially to smaller businesses,” he said.

Significant systemic changes are possible, said Paul Noe, vice president of public policy at the American Forest and Paper Association. Noe served as counselor to the OIRA administrator for five years during the George W. Bush administration.

“I think there could be more done in the area of rigorous application of cost-benefit analysis to ensure that new regulations do more good than harm,” Noe said.

Read more of this Bloomberg Government article by Cheryl Bolen by clicking here.

Photo: Andrew Harrer/Bloomberg