Under Trump, regulation slows to a crawl

Before he took office, Donald Trump promised to roll back the reach of the federal government, saying that he would end the "regulation industry" on the first day of his presidency. The effect has been immediate and dramatic: According to data compiled by POLITICO, significant federal regulation since Trump’s inauguration has slowed to an almost total halt.

From Inauguration Day until the end of May, just 15 regulations were approved by the Office of Information and Regulatory Affairs (OIRA), the White House department that reviews important new federal rules. That’s by far the fewest among comparable periods since recordkeeping began in the 1990s: Ninety-three rules were approved during the same period in Barack Obama’s administration, and 114 under George W. Bush.

The pace of minor rules has also slowed down, though not as dramatically: The Trump administration published 1,005 regulations in the Federal Register from Inauguration Day until the end of May, still fewer than the Obama and Bush administrations but not as extreme a drop. Most of those are small tweaks to requirements and procedures. Under the Trump administration, the government has adjusted the drawbridge schedule of the Atlantic Beach Bridge and designated an airspace near a ranch in Montana. But it hasn’t done much else.

The near-total freeze in regulations is likely to keep GOP supporters happy, converting on a long-held conservative dream of a government that stays out of the way. “It’s a reason to celebrate,” said Stephen Moore, a fellow at the Heritage Foundation who informally advised Trump during his campaign.

But rulemaking is the key way a White House shapes policy, and for an administration that has struggled to populate federal agencies and get laws passed through Congress, the rulemaking gap denies the administration its biggest chance to make an impact on how America runs. The slowdown has begun to concern some business groups, who worry that key regulations simply aren’t being issued as expected—and liberals warn it could leave the government playing catch-up with major changes.

“It’s slowed to a crawl, and I’m sure for some folks, that’s a demonstration that the administration is putting their money where their mouth is,” said Amit Narang, a regulatory expert at Public Citizen, a watchdog group. “But for us, this is really alarming.”

Asked about the slow pace of rulemaking, the Trump administration was alternatively defensive about the process and eager to portray it as a promise kept. An official at the Office of Management and Budget said in a statement that “simply counting regulations is a simplistic approach,” noting that during the Bush administration—whose officials were not exactly regulatory zealots—OIRA reviewed more significant rules than under Obama. But the official then argued that “this administration as a whole agrees with hard-working Americans: unnecessarily burdensome regulations choke economic growth.”

In that sense, the inaction could be counted as one of the successes of the Trump agenda. Chief strategist Steve Bannon said at a conservative conference in February that Trump’s goal was the "deconstruction of the administrative state,” applying the brakes to a regulatory system that had grown too big and unruly and is a drag on the economy. Trump imposed a regulatory freeze on his first day in office—a typical move for new presidents—and then signed an executive order clamping down on regulation, requiring an agency to identify two regulations to eliminate for each new one it wants to issue. In addition, under the order, the economic costs of the two so-called deregulatory actions must equal or exceed the economic cost of the new regulation.

The “two-for-one” order, signed January 30, applies only to “significant” regulations with an economic impact exceeding $100 million or meeting other specified criteria, and it may be working in a counterintuitive way: Although it was touted as a way to roll back old rules, its main impact appears to be simply erecting obstacles to new regulations. So far, the Trump administration has issued exactly zero rules that have had to comply with the “two-for-one” policy. “You can certainly make the case that it’s had a pretty big effect on the regulatory output,” said Sam Batkins, a regulatory expert at the American Action Forum.

The slowdown is causing problems for certain industries, which had been expecting rules and are struggling to plan in their absence. For instance, the Federal Aviation Administration was expected to release a rule early this year on the operation of commercial drones over people, but it has not yet done so. Lisa Ellman, co-executive director of the Commercial Drone Alliance, said she suspects that the “two-for-one” policy could be creating complications for the FAA. She argued that new drone rules should be considered deregulatory actions because they effectively reduce the red tape on drone operators; forcing the FAA to find two regulations to eliminate, she added, will only hurt the growth of the industry.

“The commercial drone industry wants to be regulated,” she said. “That’s why the industry is very hopeful that there’s an exception.”

Pharmaceutical distributors, too, are awaiting a rule from the Food and Drug Administration that could simplify a patchwork of state rules. Patrick Kelly, executive vice president for government affairs at the Healthcare Distribution Alliance, wrote in comments to OMB that his organization was concerned the rule, which was already overdue, could be obstructed by the order. “We urge completion of the FDA rule as expeditiously as possible, and without any requirement to identify two offsetting regulations for repeal,” he wrote.

Other rules that appeared to be underway are now caught in place, leaving the affected parties in suspense. For example, on January 19 the Environmental Protection Agency issued a rule on the disposal of mercury by dentists that was subsequently pulled back under the White House regulatory freeze. Because of that, the rule now falls under the ”two-for-one” executive order—and that could pose a challenge for the agency. At a conference in March, a top EPA official said the rule was “tied up in the president’s executive order.” Almost five months after it was set to be published, it remains in limbo, despite the fact that EPA Administrator Scott Pruitt wants to publish it, according to the EPA official at the March conference.

Paul Calamita, a lawyer who represents local governments that will be affected by the rule, said his clients oppose the EPA rule, but he still sharply criticized the “two-for-one” policy that appears to be holding it up. “I can’t think of a single reg that could be removed in its entirety from the drinking water, wastewater or stormwater programs without a change to the statutes governing those regulations,” he wrote in an email, adding, “2 for 1 does not work and is not needed.”

The FAA and EPA did not respond to requests for comment. A spokesperson for the FDA said in a statement, “The FDA is working with the Administration to implement the executive order.”

It’s typical for regulation to slow down at the start of every new administration, as officials review rules currently in the pipeline, inevitably making changes to some rules and stopping others altogether. Like previous administrations, the Trump White House issued a memo on Inauguration Day instructing agencies to pull back final regulations that had yet to be officially published in the Federal Register and to delay the effective day for regulations that had not taken effect. This regulatory freeze allows the administration to get its political appointees installed at agencies and give them time to meet key stakeholders and develop a full understanding of the proposed regulation.

But the Trump administration has never really started the process up again. OIRA reviews all agencies’ significant regulations, ensuring the White House has complete control of how career officials are running the government. The agency issued two memos, one in February and one in April, with guidance for how agencies should implement the “two-for-one” order. But from Inauguration Day until the end of May, OIRA has completed reviews of only 40 rules—and 25 of those were withdrawn. Of the 15 that were approved, which covered topics ranging from updated Medicare payment rates to a prohibition on flights to airports in Tripoli, Libya, all were exempt from the “two-for-one” order for various reasons.

Regulatory experts warn that it’s still early to evaluate how the executive order is affecting the regulatory system. Another important reason behind the regulatory slowdown, they say, is the absence of leaders at agencies that develop and issue the rules. The Trump administration has been slow to nominate people for top positions; without those nominees in place, agencies often don’t have the personnel to move forward with controversial rules. Of 559 key positions that require Senate confirmation, the administration still hasn’t announced a nominee for 431 spots, according to a tracker maintained by the Washington Post and Partnership for Public Service.

The next few weeks will be a crucial period for the White House’s regulatory policy. Trump’s nominee to head OIRA, Neomi Rao, a law professor at George Mason University who worked in the Bush administration, has her confirmation hearing before the Senate Homeland Security Committee on Wednesday, where lawmakers have an opportunity to grill her about the executive order.

And any day, OIRA is expected to release its semi-annual “Unified Agenda,” a master plan for all significant federal regulations agencies intend to issue in the upcoming months. Under the executive order, agencies are expected to include not only their regulatory plans in the Unified Agenda but also how they intend to offset the cost of those regulations. That document will provide the best evidence for how OIRA will implement the executive order and how it will affect agency rulemaking.

Even without the Unified Agenda, there’s no debate that the White House sees a war on regulations as part of its mandate. The chief GOP wins in Congress this year have come not through new laws, but repealing existing rules: Through the little-known Congressional Review Act, Trump and the GOP Congress repealed 14 Obama-era rules on everything from workplace safety to individual retirement accounts. In a separate executive order, Trump directed each agency to designate an official as the “regulatory reform officer” who would issue reports on modernizing regulations. He has further directed officials to examine Obama-era rules, including the Clean Power Plan and multiple rules issued under Dodd-Frank, though those have not yet been repealed. Already, many agencies across government are preparing to undo Obama rules through the formal rulemaking process, most notably at the Federal Communications Commission, which has already begun repealing Obama’s net neutrality rule.

Can Trump simply block the regulatory system through the “two-for-one” order? Experts say it’s unlikely. Many rules have statutory deadlines, and agencies have statutory mandates on issues such as transportation safety or environmental protection. It won’t take long for consumer and environmental groups to start suing agencies to force them to issue rules, just as those groups did during the Bush administration. In fact, Public Citizen has already challenged the “two-for-one” order itself, arguing that it unconstitutionally blocks agencies from implementing congressionally mandated rules.

“The idea that Republican administrations can pretty much drag their feet for four years is not right,” said Phillip Wallach, a senior fellow at the Brookings Institution and regulatory expert. “I think they would find themselves in court all the time.”

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