"Let's cut the red tape, let's set free our dreams," Trump said as he symbolically cut a ribbon on stacks of paper representing the size of the regulatory code at an event at the White House in December 2017.

"Let's cut the red tape, let's set free our dreams," Trump said as he symbolically cut a ribbon on stacks of paper representing the size of the regulatory code at an event at the White House in December 2017. Evan Vucci/AP

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Senate Committee Considers Trump’s Deregulation Crusader for Top Regulatory Role

At the same time, one of the administration's key initiatives to cut red tape is being challenged in court.

As a Senate committee considers the nomination of Paul Ray to lead the Office of Information and Regulatory Affairs, the cornerstone policy of the Trump administration’s deregulation effort is being challenged in court. 

Ray has been a champion of Executive Order 1377, which Trump signed on Jan. 30, 2017, requiring agencies to cut two regulations for every new one implemented. Ray, as the former deputy administrator and acting administrator of OIRA until two months ago, worked on implementing the order after arriving at OIRA in July 2018. 

But less than a month after Trump signed the order, the nonprofit Public Citizen, nonprofit Natural Resources Defense Council and the Communications Workers of America ALF-CIO, filed a lawsuit against the administration arguing that the order “exceeds President Trump’s constitutional authority, violates his duty under the Take Care Clause of the Constitution, and directs federal agencies to engage in unlawful actions that will harm countless Americans, including plaintiffs’ members.” The case is ongoing.

The executive order is a key component of the administration's regulatory rollback agenda. “We’ve found very widespread compliance with the order. I think agencies have achieved some very important changes,” Ray said during his confirmation hearing before the Senate Homeland Security and Governmental Affairs committee on Dec. 4. The administration soon plans to release data showing the extent to which it has slashed unnecessary red tape, he said.

In addition to the “two-for-one” executive order, Ray said if confirmed, he would continue his work in, “promoting cost-benefit analysis; making the regulatory process more democratic; facilitating interagency review; responsibly updating federal statistical and information policy; vindicating Congress’s right to review regulations; and leaving OIRA an even better place to work than I found it.”

Ray would also continue to implement the April Office of Management and Budget memo that established a review process for agency guidance that OIRA deems “major,” meaning any new rule that would have an economic impact valued at $100,000,000 or more. 

Hal Scott, Emeritus Nomura Professor of International Financial Systems at Harvard Law School, has raised legal and policy questions about that memo, and Public Citizen criticized it for its “power grab” over independent agencies. 

“I certainly believe that every agency could use some additional eyes . . . on cost benefit analysis to ensure that the cost benefit analysis is of the highest possible caliber,” Ray said. Although the Trump administration has not advocated a stance on increasing OIRA’s scope, he said, “there’s a compelling case to be made” for that.

The Senate Homeland Security Committee hasn’t yet sent the nomination to the full chamber for a vote. 

“In public remarks [Ray] has embraced long-standing and bipartisan principles for how the government should analyze proposed regulations,” Susan Dudley, director of The George Washington University’s Regulatory Studies Center told Government Executive upon his nomination. “[This] is encouraging and makes him a solid candidate for the position.”

Other observers expressed concerns about the administration’s approach, if not Ray himself. Peter Shane, a former OMB career official who helped draft and review executive orders during the Reagan administration, wrote “The Paul Ray confirmation is at least an opportunity to correct” the Trump administration's “unlawful and unwise” approach to regulations.