Trump’s 2020 Unified Agenda on Regulation: An Update on One-in, Two-out
As just explored at Forbes, the Trump administration in early December released the fall 2020 edition of the twice-yearly Unified Agenda of Federal Regulatory and Deregulatory Actions. With us since the early 80s, the Agenda reports on rules recently completed and lays out regulatory priorities of the federal bureaucracy.
For Trump, the Agenda caps four years of noteworthy deregulatory actions.
Since the release, the administration has slightly reclassified some of the rules contained within, so I wanted to do an update for legacy purposes when it comes time to review things in 2021 and beyond.
Trump’s 2017 Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs has piloted Trump’s regulatory program in a way unlike any predecessor. Cutting rules has since distinguished the beefy Unified Agenda, with the administration proclaiming that agencies continue to meet the requirement to eliminate at least two significant regulations for every new rule added, and to maintain net-zero regulatory costs.
In a statement, the administration asserts that agencies in fiscal year 2020 achieved regulatory cost savings topping $100 billion, while issuing “more than three deregulatory actions for every regulatory action.” The same held back in spring of 2020, so if the administration gets around to its year-end two-for-one updates, it can report that the initiative remains in fairly good shape for the year as a whole.
For comparison, in Trump’s first year, the administration claimed a rules-out-to-rules-in ratio of 22 to one (the claim was much criticized but that goes with the territory). In 2018 the count was 176 deregulatory actions and 14 significant regulatory ones, for a ratio of 12 to one. A year ago, the fall ratio was 4.3 to one (and 1.7-to-one when significant apples out were mapped to significant apples in).
So it gets more difficult for any administration acting alone, without any help from Congress, to streamline, but given the (incomplete) subset of regulatory items under Office of Management and Budget purview, the results as such were helpful and the mere act of disclosure even more so.
In the new fall 2020 Agenda pipeline, agencies have 3,852 rules scattered among the active, completed, and long-term phases, compared to 3,752 in 2019. Trump’s low count had been 3,209 in 2017.
For the past three years, Trump’s total flow has exceeded Obama’s exit total of 3,320. However, any deregulatory measure also counts as a “rule,” and there have been several hundred of these each year under Trump. These get flagged “deregulatory” under Trump’s new “E.O. 13771 Designation.” Biden would be wise to retain this helpful categorization even when he ditches the one-in, two-out bit. In addition, we are unwisely instructed by convention to ignore routine safety directives from bodies like the Federal Aviation Administration as regulatory phenomena, and there are lots of such things.
For 2020, there are 653 “Deregulatory” rules spread across the active, completed, and long-term stages. If you like, that gives a “net” rule count of 3,199.
The Unified Agenda allows the isolation of the costliest subset of rules, known as “economically significant,” which means they either inflict or relieve $100 million in annual economic effects (usually the former). In the new Agenda, 261 of the 3,852 rules are classified economically significant, with 36 deemed Deregulatory.
Along with the ability to isolate the “Deregulatory,” the Unified Agenda’s “E.O. 13771 Designation” allows examination of the following (features the Biden administration should also retain):
- Fully or Partially Exempt
- Not subject to, not significant
- Independent agency
So, to get a more complete picture of look at the one-in, two-out results it is helpful to look at a grid of “completed,” “active,” and “long-term” rule categories in the aggregate, and also split up into “economically significant,” “major,” and “other significant” components. This is done in the table nearby (click for a larger image)
In the light-grey highlighted area can be see the 653 “Deregulatory” actions and 338 “Regulatory” ones in the fall update. Broadly, that’s a nearly two-to-one for the entire flow, but what matters are the rules actually completed.
However, we don’t know what all the “other,” “not subject to” and “partially exempt” encompass. These in part represent the presence of vast transfer programs governed by agencies that are also regulatory in character, but not treated as such. There are 2,276 rules of this type, plus another 585 independent agency rules that do not but should get swept up in E.O. 13,771. Presumably, we can be grateful these appear in the Agenda at all.
It is big problem that most of the administrative state’s rules get shunted into sketchy categories, because in a new administration the potential for any scrutiny of them will be zero. Already, over a dozen Small Business Administration rules related to the Paycheck Protection Program are deemed economically significant, yet get designated neither regulatory nor deregulatory. These classifications, as well as agency guidance documents, need audit and accountability for the classifiers Even under E.O. 13,771, “non-significant” regulatory actions can be added without being offset, and some might be more significant than admitted by their creators were one to dig and question.
Trump’s Two-for-One Directive is Met, but We’ll be Kissing It Goodbye in a New Administration
For recently Completed rules, pot that matters for the directive, the counts are 101 Deregulatory and 31 Regulatory, for a ratio of 3.2 to one. It’s actually better when omitting the four non-significant completed Regulatory rules (“Major” rules are contained within “Economically Significant” or “Other Significant” ones, so ignore that column for present purposes). Again, were the administration to update its year in report on E.O. 13,771 results, this piece and the spring counterpart are what matter.
But looking at the rest of the picture gives a way to anticipate sustainability of one-in, two-out.
In the “Active” (pre-rule, proposed, and final) category, there are 496 “Deregulatory” and 238 “Regulatory” actions, meeting a two-to-one ratio for anticipatory purposes (the executive order doesn’t intend that what’s in the pipeline meet the two-for-one stricture; only completed items). Unfortunately, the Deregulatory among these are likely wipeout targets in a Biden administration. Comparing these deregulatory targets item-for-item with what emerges in the future 2021 spring Unified Agenda should be telling.
As noted, E.O. 13,771 applies to “significant” rules added, but non-significant rules can be employed to offset them in pursuit of the no-net-new-cost directive. But looking at significant rules as opposed to non-significant ones on the chopping block gives a better apples-to-apples comparison when looking at rules at any stage.
As the table above details, of the 101 Completed “Deregulatory” actions in the fall 2020 Agenda, 14 rules are “economically significant,” with another 35 deemed “other significant.”
As for completed “Regulatory” actions, 31 appear, with 12 of them deemed “economically significant” and 15 “other significant.”
Completed significant deregulatory exceed the number of completed significant regulatory actions just shy of a two-to-one ratio (49 divided by 27). Enlisting all the other Deregulatory but non-significant actions obviously makes the ratios work better, topping three-to-one, which, as noted is permitted by the executive order in the attainment of no net new costs.
Significant “Active” Deregulatory and Regulatory Actions Need Attention
Active actions in the pipeline at the “pre-rule,” “proposed,” and “final” rule stages represent the body of rules in production process. As noted, the table above shows that the 496 Deregulatory actions in play well exceeds 239 Regulatory ones by a two-to-one gross margin. As non-completed actions, these rules bear no obligation to meet the two-for-one goals, but the trajectory of the underlying significant subsets might be regarded as a leading indicator.
Of greater note are the costlier subsets of Active rules. There are 52 economically significant Regulatory actions depicted in the table, but only 20 economically significant Deregulatory actions in process. These latter would likely vanish under Biden, so future regulation, not deregulation, is what to anticipate.
In Active rules’ “other significant” category, 159 Deregulatory actions outweigh 141 Regulatory ones. Since active rules encompass both proposed and final undertakings, there is time to course-correct toward more deregulation as rules in the pipeline move closer toward finalization. But after Trump there will be no machinery for that.
Warning Signs: “Long-term” Planned Regulatory Actions Greatly Outstrip Deregulatory Ones
The “Long-term” rules category makes the unlikelihood of maintaining “one-in, two-out” even clearer and show how easily the regulatory dogs will be turned loose after the Trump administration. Here, agencies unflinchingly demonstrate they intend that regulation swamp deregulation. In the new fall Agenda, agencies anticipate 69 Regulatory actions but only 56 Deregulatory ones.
The situation is magnified for the costlier “economically significant” and “significant” subsets. Only two economically significant long-term Deregulatory actions are anticipated. By contrast, 13 economically significant Regulatory actions are planned.
The long-tern horizon of the Unified Agenda of Federal Regulation points to the victory of those calling themselves the “resistance” to the Trump regulatory streamlining efforts. Since rolling back regulations requires a lengthy public notice-and-comment process, it takes time—more than Trump’s four years—to streamline. The administrative state architecture by design works to the advantage of agencies’ maintenance of vast regulatory edifices to which, unique and historic as it was, E.O. 13,771 was never a permanent threat. Still, whatever its shortcomings, there will be no regulatory cost savings without E.O. 13,771 or something like it.
Unless stopped, tomorrow’s executive branches will continue adding to the sweep of government. Agencies’ substitution of guidance documents for formal regulations where they can get away with it will also shield what they do from disclosure in the Unified Agenda. President Trump has addressed abuse of guidance documents via executive order, and, given that particular directive’s emphasis on sunshine and disclosure, it might be more durable than the two-for-one directive that a Biden administration would eliminate.
The spring 2021 Unified Agenda will tell some of the tale.