New Regulatory Task Forces Meet Same Old Obstacles(1)

By Cheryl Bolen

Agency regulatory reform task forces created early in President Donald Trump’s term are now up and running, yet they are encountering the same legal obstacles that agencies did when implementing the previous administration’s retrospective review initiative.

On Feb. 24, Trump signed Executive Order 13,777, Enforcing the Regulatory Reform Agenda, which required most federal agencies to establish regulatory reform officers and regulatory reform task forces to recommend rules for repeal, replacement, or modification.

“For agencies, deregulation is hard—something I’ve learned in the past three months,” said Neomi Rao, administrator of the Office of Information and Regulatory Affairs, in remarks Oct. 4 at the Heritage Foundation. Her office is within the White House Office of Management and Budget.

Even when an agency knows that a regulation is no longer working or is excessively burdensome, deregulation requires following a complex administrative process and then facing potentially years of uncertainty in the courts, Rao said.

Similar to Retrospective Review

Retrospective review was launched in January 2011 under former President Barack Obama and required agencies to periodically review their existing significant regulations to determine whether any should be modified, streamlined, expanded, or repealed.

In May 2012, to keep the initiative going, Obama signed Executive Order 13,610, Identifying and Reducing Regulatory Burdens, which required agencies to regularly report on the status of their retrospective review efforts to OIRA.

OIRA reported in August 2016 that the retrospective review initiative had achieved an estimated $37 billion in cost savings, reduced paperwork, and other benefits for Americans over five years.

Agencies had completed more than 800 retrospective reviews and removed more than 70 notable regulatory provisions from the books, OIRA said at the time.

Limited Public Information

This year, based on public information, the Department of Defense has identified 13 specific regulations for repeal recommended by the agency’s regulatory reform task force, said Sajeev Malaveetil, partner at Ernst & Young’s Government Contract Services practice.

Most of those regulations for repeal relate to clauses that are specific to contracts for transportation or for transportation-related services and are either redundant to other federal acquisition clauses or outdated—some dating back to 1991, Malaveetil said.

There is very little information in the public domain that provides insight into how DOD, or any other federal agency, is identifying and prioritizing regulations for repeal, Malaveetil said. Nor is there any insight into how the agencies are quantifying the cost savings of the repeal of these regulations, he said.

“However, in the small sample of regulations identified by DOD, it would appear that what is changing is not earth-shattering,” Malaveetil said. “What is needed is better coordination and transparency of regulatory reform initiatives.”

Information to Come

Regulatory reform officers and task forces in every agency are working on systematic efforts to evaluate and reduce regulatory burdens, Rao said, mentioning a new present-value calculator as one tool.

According to a guidance document issued in April, agencies are required to calculate the “present value” of regulatory actions and cost savings, and OIRA is working to assist agencies in their accounting, a spokesman said.

OIRA also is reviewing agency submissions for the fall unified regulatory agenda and will have more information about their actions in the coming months, Rao said.

The administration is trying to proceed with deregulation in a transparent manner, and agencies have been seeking public comment and engaging with stakeholders on the costs and benefits of regulation, Rao said.

FOIA Responses

Indeed, according to responses from a few agencies to Freedom of Information Act requests filed by Bloomberg BNA, the first focus of many task forces has been to seek public comment on what rules to repeal.

In a May 23 memorandum from the Department of Labor, there were concerns from its regulatory reform task force that broad outreach could result in unfocused feedback that isn’t actionable.

“The RRTF concluded that it will solicit stakeholder input through ongoing agency-specific engagements as it will be the most effective process for obtaining specific, actionable stakeholder input,” the DOL memo said.

Alternately, an April 24 memorandum from the Department of Energy identified “inward-facing regulations” that would save costs at its labs as an area most in need of improvement.

Democrats Still Wary

On Aug. 7, four Democrats sent a letter to the OMB requesting detailed information about agency task forces. Since then, these lawmakers haven’t raised objections to the task forces, but remain concerned about deregulation.

“While news cycles have been distracted with Republican infighting and presidential insults, the Trump administration has been quietly undermining key regulations that protect the everyday health and safety of the American people,” said Rep. Elijah Cummings (D-Md.), the ranking member of the House Oversight and Government Reform Committee, in a statement to Bloomberg BNA.

The administration has rolled back renewable energy standards, rules guaranteeing contraceptive coverage under the Affordable Care Act, and regulations that would require the federal government to consider flood risks when providing support to construction projects, Cummings said.

“There is nothing wrong with agencies using task forces to identify regulations that are outdated when underlying statutes have been amended or repealed, but the Trump administration is waging ideological warfare against middle-class Americans on behalf of massive corporate interests that stand to reap huge financial windfalls,” Cummings said.

Enforcing the Two-for-One Order

Trump established the regulatory reform task forces to enforce an earlier executive order that requires new rules to be offset by the elimination of at least two existing rules, known as the “two-for-one” order.

The two-for-one order puts “muscle” behind retrospective review and requires it to be an ongoing part of agency rulemaking, Rao said.

For fiscal year 2017, agencies across the administration “more than met” the two-for-one requirement, Rao said. Although numbers are still coming in, OMB officials have said agencies issued four final rules that were offset by at least 10 deregulatory actions, or two more than required.

Still, the small number of final rules requiring offsets under the two-for-one order seemed minimal to some analysts, who had anticipated larger cuts from a president who came into office pledging to slash regulations by 75 percent.

To assist in the effort, Rep. Bill Posey (R-Fla.) introduced a bill (H.R. 4003) on Oct. 10 to require that each new notice of proposed rulemaking identify the two rules that the agency intends to repeal.

“Mr. Posey thinks his bill is necessary to make federal agencies evaluate the rules that are already on their books before issuing new rules,” said his spokesman.

Congress Could Help

In a practical way, Congress could take more direct action toward regulatory overhaul and focus its legislation on deregulation, Rao suggested.

“If a regulation isn’t working, Congress can repeal it by statute,” Rao said. “Congress can simply deregulate through legislation and override an agency’s determination.”

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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