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Trump Deregulatory Effort May Just Be Getting Started

White House and conservative advocates prepare big plans for 2019.

Ten months after President Trump held a deregulatory “ribbon cutting” at the White House, his point person in that effort suggests that the push to pare back agency rules will only grow stronger in 2019.

 “I think the pace of reform is continuing to accelerate,” Neomi Rao, administrator of the White House Office of Information and Regulatory Affairs, told a panel at Bloomberg Government last week. “Some of the major deregulatory actions have just taken this much time to finalize.”

With many in the Republican Congress on board for the agency-by-agency effort, the broader effort to philosophically redirect regulatory policies may focus on curbing the impact of what Rao and others refer to as “regulatory dark matter.” That alludes to agency-generated guidance, FAQs and information collecting she says can function as a “back door to imposing more regulation.” Such supplementary documents, Rao has said, unfairly exclude the public and violate due process.

The topic is of great interest to the free market economists at the Competitive Enterprise Institute, who released a 30-page paper this week titled, “A Partial Eclipse of the Administrative State.”

“Bringing regulation and guidance under control and strengthening democratic accountability will require reining in the bureaucracies that enable and sustain rule by unelected professed experts,” wrote Clyde Wayne Crews Jr., the institute’s vice president for policy. “While interpretative rules and guidance are not subject to the Administrative Procedure Act’s notice-and-comment requirement, they are, as noted, subject to the formal submission requirement, at which they fare even worse than rules do.”

Such guidance is often written by agency specialists after a dispute has arisen among affected parties over how to interpret a regulation’s text. In a paper packed with data already assembled by congressional committees, Crews reported 608 significant guidance documents in play as of March 2018, and more than 13,000 created and released since 2008.

Crews’ recommendations noted that “Congress could stop agency overreach via regulation and guidance documents, but it has not. In the meantime, the president should supplement administrative actions already taken and issue a new executive order to strengthen review and control of sub-regulatory guidance.”

He wrote: “A new order focused on guidance—with a proper management framework that is compelling and comprehensive—could greatly amplify executive oversight of agencies. Moreover, since revoking or easing guidance does not require going through the notice-and-comment process, as revoking a rule does, the streamlining enabled and encouraged via this order may become more important as the two-for-one low-hanging fruit is picked,” a reference to Trump’s executive order requiring repeal of two rules for every new one implemented.

A new executive order, Crews said, should “nullify certain existing guidance in favor of congressional approval; restrain the issuance of new guidance; and require notice-and-comment” and review by the Office of Management and Budget.

Late September testimony before two House Oversight and Government Reform subcommittees highlighted an opposing view of Trump’s efforts to deregulate. “President Trump’s deregulatory agenda has resulted in an unprecedented corporate capture of our regulatory agencies and rulemaking process,” said Amit Narang, regulatory policy advocate for the liberal-leaning group Public Citizen. “Much of the attention has justifiably focused on the personnel that have been brought in through the ‘revolving door’ to direct the deregulatory agenda at these agencies, despite many having clear conflicts of interest due to previous work on behalf of corporations.”

Narang in testimony during the Obama administration defended the use of guidance as a way for agencies to communicate “agency interpretations and policies to both regulated entities and the public in a significantly more efficient and expeditious manner than under notice and comment rulemaking.”

Last week he challenged the Trump administration’s claims of cost savings under the two-for-one executive order Trump issued in January 2017. He said that was contradicted by OMB itself in a report last February. The annual cost savings for industry, Narang said, equate to about 0.001 percent of the GDP growth in the most recent quarter of this fiscal year. “This is certainly a drop in the bucket,” he testified.

A recently-released Public Citizen study of 13 health and safety rules that the Trump administration has repealed, delayed, or targeted found that these rules would provide the public with over $2 trillion in regulatory benefits.