Executive Actions Generally Impacting Regulatory Agency Authority

Date

4/24/2018

Action

U.S. Treasury Regulatory Reform Accomplishments Under President Trump’s Executive Orders

Key Provisions

Treasury issued a report discussing the steps the Department had taken to implement Executive Order 13777. Treasury, among other things, noted that it had reduced its regulatory agenda by approximately 100 regulations, on net, compared to the Department’s Fall 2016 regulatory agenda. Treasury also noted the three reports it has issued providing recommendations to make the U.S. financial regulatory system more efficient.

Date

2/24/2017

Action

Executive Order on Enforcing the Regulatory Reform Agenda

Key Provisions

Agencies must establish a Regulatory Reform Task Force. Task Forces are to make recommendations for the repeal or modification of existing regulations, focusing on regulations that (i) eliminate jobs or inhibit job creation, (ii) are outdated, unnecessary, or ineffective, or (iii) impose costs that exceed benefits. Task Forces are to report on their progress to the agency head within 90 days of the Order.

The Order does not specify the government entities to which it applies, but presumably it will not apply to independent regulatory agencies as is the case with January 30 Executive Order on Reducing Regulation.

Potential Impact

The Order is intended to give further impetus to the January 30 Order by requiring agencies to identify regulations to be repealed even in the absence of the issuance of a new regulation.

Important Link

Executive Order

Date

1/30/2017

Action

Presidential Executive Order: Reducing Regulation and Controlling Regulatory Costs

Key Provisions

Whenever an executive department or agency (“agency”) publicly proposes for comment or promulgates a new regulation, it generally must identify at least two existing regulations to be repealed.

Incremental costs of the new regulation must be offset by the elimination of at least two existing regulations and their associated costs. The total incremental cost of all new regulations, including repealed regulations, during the current fiscal year must be no greater than zero, subject to exceptions.

Beginning with FY 2018, the OMB will establish an incremental amount of new regulation-related costs per agency (taking into account repeals) that generally may not be exceeded without OMB approval.

The Order by its terms does not limit the agencies to which it applies. This contrasts with the January 20, 2017 Regulatory Freeze Memorandum which does not apply to independent regulatory agencies, such as the FRB, OCC, FDIC, SEC and CFTC. The Office of Information and Regulatory Affairs published guidance stating that the Order does not apply to independent regulatory agencies but encourages those agencies to “identify existing regulations that, if repealed or revised, would achieve cost savings that would fully offset the costs of new significant regulatory actions.”

Potential Impact

The Order will impose a significant deterrent to future rulemaking, as agencies will have to weigh the relative importance and costs of proposed and existing rules. The tone set by the Order is also likely to impact the actions of agencies to which it may not technically apply.

One thing to watch is the potential that the Order pushes agencies toward regulation through enforcement, which raises a different set of issues.

The Order will also place greater significance on the process under which agencies and the OMB evaluate costs associated with proposed and existing regulations.

In developing regulatory agendas, including repeals of existing regulations, agencies will have to consider and balance a variety of administrative law challenges and EO requirements.

Important Links

Date

1/20/2017

Action

Memorandum from Reince Priebus, Assistant to the President and Chief of Staff, to Heads of Executive Departments and Agencies regarding Regulatory Freeze Pending Review

Key Provisions

The Memorandum provides the following guidance regarding the Administration’s plan to ensure that the President’s appointees or designees have the opportunity to review new or pending regulations.

The Memorandum is directed at substantive rules of general applicability and not at orders in individual administrative proceedings. It also applies to any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.

The Memorandum applies to Executive Departments but not to independent regulatory agencies, which are defined to include the FRB, OCC, FDIC, SEC and CFTC.

Subject to certain exceptions, no regulation shall be sent to the Office of the Federal Register (OFR) until a department or agency head appointed or designated by the President reviews and approves the regulation.

Subject to certain exceptions, any regulations that have been sent to the OFR but not yet published in the Federal Register are to be immediately withdrawn and subject to the review process set forth above.

Subject to certain exceptions, in the case of regulations that have been published in the Federal Register but have not taken effect, as permitted by applicable law, the department or agency is generally directed to temporarily postpone their effective date for 60 days for the purpose of reviewing questions of fact, law, and policy they raise. In certain circumstances the Memorandum suggests that a department or agency should consider proposing for notice and comment a rule to delay the effective date for an addition period of time or proposing a further notice and comment rulemaking.

Potential Impacts

The Memorandum is intended to give the new Administration an opportunity to determine whether to proceed with proposed regulations or whether to allow final regulations that have been published in the Federal Register that are not yet effective to become effective.

The Memorandum will most likely be effective in situations involving regulations that have not yet been published in the Federal Register.

The Memorandum’s impact in other circumstances is likely to vary based on the timing status of the particular regulatory action. 

Important Link

Memorandum

Date

7/3/2017

Action

Clean Air Council v. Pruitt, No. 17-1145 (D.C. Cir).

Key Provisions

The Environmental Protection Agency (EPA) on June 5, 2017 decided to reconsider certain aspects of rule issued under the Clean Air Act (CAA) promulgated during the Obama Administration and announced that it had stayed the effectiveness of aspects of the rule.

In a 2-1 decision a D.C. Circuit panel invalidated the EPA’s action, finding that it lacked authority under the CAA to stay the rule.

Potential Impact

While the decision is largely based on language in the CAA, it underscores that while agencies have broad discretion to reconsider a regulation, they must do so in accordance with the Administrative Procedure Act (APA). In this case the court found the EPA did not have inherent authority to issue a brief stay of a final rule, nor did it have such authority under the CAA or the APA.

The court’s ruling will likely play an important role as agencies consider their approaches to rolling back existing rules and is likely to slow down such efforts. 

Important Links

D.C. Circuit Decision

Date

2/9/2017

Action

Complaint for Declaratory and Injunctive Relief Against the Executive Order on Reducing Regulation and Controlling Regulatory Costs (Public Citizen v. Trump, D.D.C., Feb. 9, 2017)

Key Provisions

The complaint seeks to invalidate the Executive Order and enjoin compliance with it. Based on: the APA, (repeal of rules based on the Order may be arbitrary and capricious); Separation of Powers (limitations on the President’s authority to amend federal statutes); the Take Care Clause of the Constitution (directs agencies to take action contrary to laws); Excess Agency Power (no governing statute authorizing agencies to act  on the basis of offsetting costs); OMB Director Excess Power (OMB only has power derived from Congress or valid Presidential Orders); Weighing of Costs and Benefits (only requires consideration of costs and does not offset those costs with benefits or “sunk” costs).

Potential Impact

This challenge will have to overcome a range of defenses, such as standing and ripeness that the government will likely assert that might not apply where an agency takes a formal action to attempt to rescind or rollback an existing rule.

As agency heads are appointed and agencies take up their new agendas over the next six months, the significance of this Order should be evaluated in perspective, whether the challenge is successful or not. The message that it conveys to agency heads is clear and that tone is likely to be a guiding principle of this Administration whether or not the Order remains in effect in whole or in part. 

Important Links

Complaint

Interim Guidance