Distrust of Obama Administration Behind Drive to Deregulate

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By Cheryl Bolen

A deep distrust of the cost-benefit analysis of regulations used by the Obama administration is in large part supporting President Donald Trump’s ambitious deregulatory agenda.

Public comments made by current and former administrators of the Office of Information and Regulatory Affairs, an agency within the Office of Management and Budget that reviews all significant federal regulations, reveal their suspicions.

Agencies know that OMB leaders are laser-focused on costs, and that is going to lead to a reduction in the number and scope of rules emerging from agencies, said Howard Shelanski, former OIRA administrator during the Obama administration.

“That tone and that kind of focus on costs—that builds off of an inaccurate picture of what came before—is going to further tamp down what agencies do,” Shelanski said recently at an administrative law conference hosted by the American Bar Association.

Tone Set

“It is our position that the previous administration failed to follow the law in many, many circumstances,” current OMB Director Mick Mulvaney told Bloomberg Government in an interview this year. “And that they simply imposed regulation without proper regard to the cost side of that analysis.”

Mulvaney’s comments have since been “debunked” as untrue, Shelanski said. But more recent comments by current OIRA Administrator Neomi Rao reveal a continuing distrust of the prior administration.

“The last administration was able to justify many of its costliest regulations by using so-called benefits calculations that relied on some very tenuous assumptions,” Rao told the Heritage Foundation in a speech on Oct. 4.

Rao later said at the administrative law conference that the benefits of regulation must “truly outweigh” the costs, and that benefits and costs must be based on accurate information and reasonable assumptions.

Unlawful?

“We believe that rolling back unnecessary and unlawful regulations is essential to restoring regulatory freedom and to promoting economic growth, job creation and innovation,” Rao said.

Much of the work at OIRA continues to reflect long-standing principles of review, including checking rules for evidentiary basis, cost-benefit analysis, legal justification, and presidential priorities, Rao said.

OIRA also is working with agencies to fine-tune their analysis and it is developing metrics for government-wide measurement of regulatory cost burdens, Rao said.

“I think we’ve made some real progress towards stopping the expansion of regulatory burdens,” Rao said. “But we know that there’s much more that can be done.”

Political Priorities

“There’s an ethos, a culture, a mission at the top political levels of agencies to focus overwhelmingly on deregulation quite apart from the two-for-one executive order,” Shelanski said.

This is seen in the slow pace of rules that should be done—and have to be done as a matter of law—moving to OIRA for review, Shelanski said.

It is also seen in the clear priority at a lot of the executive branch agencies to get rid of large regulatory programs established by the Obama administration, Shelanski said.

“So, we’re in a situation where there are some very good motivations behind some of what is being done,” Shelanski said. “There are some questionable assumptions behind other aspects of what is being done.”

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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