The Trump administration released the Spring 2020 edition of the twice-yearly Unified Agenda of Federal Regulatory and Deregulatory Actions.
The Unified Agenda, around since the early 1980s, is hardly spellbinding reading and most people haven’t heard of it, but its purpose is to lay out regulatory priorities of the federal bureaucracy and report on recently completed actions.
Under Trump’s Executive Order 13771 on “Reducing Regulation and Controlling Regulatory Costs,” the administration directed executive branch agencies to eliminate at least two regulations for every significant new one added, and keep net new costs at zero. Trump’s emphasis on regulatory liberalization and cutting the number of rules and regulations has made the Agenda a more important gauge.
Unlike the year-end Agendas that also include agencies’ “Regulatory Plans,” this Spring compilation tends to appear with no fanfare. There was no showcasing or boasting of one-in, two-out progress via a “Regulatory Reform Results” landing page like we see with the fall editions.
Later on, the fall Unified Agenda is likely to provide heightened specifics on the two-for-one program for 2020. Up until this midpoint, the Trump administration has met the two-for-one goals, and still has until the end of the 2020 fiscal year to present the best face. (There’s not a fully direct correspondence between what’s in the Agenda and the final reports the Ofifice of Management and Budget prepares, but it’s close.)
For the time being, we can look at the numbers and see how 2020 is shaping up compared to the past. In Trump’s first year, the fall 2017 update spoke (criticisms abounded) of beating the two-for-one goal with a 22-to-one out/in ratio.
Then, the fall 2018 update claimed that agencies issued 176 deregulatory actions and 14 significant regulatory actions, for an overall ratio of 12 to one. Fifty-seven of the Deregulatory actions were considered “significant.” Comparing significant Deregulatory to significant Regulatory actions yielded a ratio of four to one, compared to 2017’s 22-to-one.
The 2019 fall update continued the progress with fiscal year 2019 presenting a 4.3-to-one overall ratio, and 1.7-to-one when significant rules out to significant rules in.
One suspects the low-hanging fruit is increasingly picked, so what are the prospects for Trump’s regulatory reform agenda, especially since the Democratic Congress is not on board with it?
The new Agenda shows agencies to have 3,939 rules in the pipeline and just issued (at what are called the Active, Long-term and Completed stages across some 60 departments, agencies and commissions), compared to 3,791 last year. Yes, that’s more rules, but on the other hand, in one of the curiosities of the administrative state, for federal agencies to eliminate a rule they have to replace it with a new one, so items officially classified as “Deregulatory” paradoxically also count as rules.
As it happens, despite all this, in calendar year 2019 (not fiscal as the Agendas and the annual reports are), the Trump administration ended up issuing “only” 2,964 rules. There are thousands of rules no matter who is president, but Trump’s count is the lowest I’ve seen since records started being kept in the 1970s (and, no, I don’t know why they took so long). So, the bump up isn’t necessarily a bad thing for 2020.
Let’s look at how things are going now at this stage.
There is a total of 677 rules designated “Deregulatory” among the 3,939 in the Spring 2020 Agenda, compared to 721 at this time last year. (We’ll look at these across rule-stage below.)
All rules count toward E.O. 13,771 cuts, particularly as they contribute to the requirement that net new regulatory costs don’t increase.
Still, most notable and illustrative in the two-for-one campaign are the subsets of rules in the Agenda classified as “economically significant”—meaning they have $100 million in estimated annual costs—and “significant.” As for the economically significant bit, 226 of 3,939 rules (again, across all stages) are classified as such, compared to 176 of 3,791 last spring.
That’s a big jump, but 35 of these economically significant rules in the pipeline are Deregulatory: 24 at the Active stage, seven recently completed, and four at the Long-term phase.
As implied already, an important modification of the Unified Agenda database in the wake of the two-for-one executive order has been the “EO 13771 Designation,” a simple radio-button search-selection option for each of the following:
Deregulatory; Regulatory; Fully or Partially Exempt; Not subject to, not significant; Other; Independent agency”
To get a better look at midstream two-for-one results here in Summer 2020, it is helpful to look separately at a grid of “Completed,” “Active,” and “Long-term” rule categories in the aggregate as well as split up not just into “economically significant,” but also “other significant” components. This is done in the table below.
As the table shows in the grey highlighted area, overall there are 677 “Deregulatory” actions and 334 “Regulatory” ones in the 2020 spring update; this means a broad ratio of more than two to one is met taking the entire flow and recently completed inventory into account.
However, we don’t necessarily know what all the “other,” “not subject to” and “partially exempt” are really getting at or referring to. These in part represent the presence of vast transfer programs governed by agencies that are also regulatory in character but escape that designation—and there are 2,928 of them. This could be something of a red flag since the bulk of the administrative state’s rules get placed in these categories. These classifications, as well as agency guidance documents, need audit.
Moreover, shadowing all this discussion over whether one-in, two-out is a success is the fact that independent agencies are exempt. That’s a big whoop, there. None of that legacy of the administrative state is Trump’s doing (but given his own regulatory impulses, he does contribute his own swamp creatures).
Rules Continue to Meet Trump’s Two for One Directive, but It Appears to Be Getting Tougher
For recently Completed rules, the counts are 108 Deregulatory and 35 Regulatory, for a healthy ratio of three to one for midstream (remember, what really counts will be the full fiscal year).
Likewise, in the “Active” (pre-rule, proposed, and final) category, there are 516 “Deregulatory” and 230 “Regulatory” actions in the pipeline, slightly topping that two-to-one ratio. The table depicts both of these elements.
The E.O. 13,771 directive applies to “significant” rules added, but non-significant rules can be employed to offset them. Still, I like to look at significant rules as opposed to non-significant ones on the chopping block for a better apples-to-apples comparison.
As the table details, of the 108 Completed “Deregulatory” actions in the spring 2020 Agenda, just seven are in the “economically significant” category. Another 31 completed deregulatory rules in the table are deemed “other significant.”
As for completed “Regulatory” actions, 35 appear in the 2020 Spring Agenda, with 15 of them deemed “economically significant” and 16 “other significant.”
Completed significant deregulatory actions do exceed the number of completed significant regulatory actions, but not by a two-to-one ratio. This is why (and the executive order allows it), enlisting other Deregulatory but not significant measures is needed to make the ratios work.
That move is still acceptable as far as the executive order’s no-net-cost mandate is concerned, but troubling if one’s hope is rollback of the administrative state as a phenomenon. As it stands, the attainment of no net new costs remains on track, at least for these categories of rules in E.O. 13,771.
Significant “Active” Deregulatory and Regulatory Actions Need Attention
Active actions—those sitting in the pipeline at the “pre-rule,” “proposed,” and “final” rule stages—m \ight be thought of as rules in the production process. The table above shows that a total of 516 Deregulatory actions in play well exceed 230 Regulatory ones, for a healthy two-to-one margin overall when non-significant Deregulatory rules are included. As non-completed actions, these rules bear no obligation to meet the two-for-one goals, but their trajectory might be regarded as a leading indicator.
Of more concern are the costlier subsets of Active rules. There are 50 economically significant Regulatory actions in the table, but just 24 economically significant Deregulatory actions in play. In the “other significant” category, things are better with 159 Deregulatory actions outweighing 137 Re-regulatory ones. Since active rules encompass both proposed and final undertakings, there is time to course-correct as rules in the pipeline move closer toward finalization. Still, the unfavorable ratios of significant active Regulatory to significant active Deregulatory rules highlight the limits of unilateral executive regulatory liberalization.
Warning Signs: “Long-term” Planned Regulatory Actions Greatly Outstrip Deregulatory Ones
The “Long-term” rules category makes the concern over maintaining one-in, two-out even clearer. Here, agencies unabashedly show they plan more regulating than deregulating. Future Unified Agenda editions may show changes, but for now, agencies anticipate 69 “Regulatory” actions but only 53 “Deregulatory” ones. And the situation is worse for the costlier “economically significant” and “significant” subsets.
The fact that only four economically significant long-term Deregulatory actions are listed as planned this deep into Trump’s term (see the table) is not inspiring to classical liberal as opposed to administrative sensibilities. By contrast, 14 economically significant Regulatory actions are planned. These are warning signs because the costlier rule subsets are presumably where tomorrow’s cost savings need to come from for the streamlining program to continue to achieve its goals.
A generous interpretation of the inversions of two-for-one at the long-term stage is that agencies have focused on meeting the administration’s immediate short-term goals for two-for-one streamlining at the “Active” phase, and will eventually get around to these longer-term significant rule reductions. They have done so thus far.
Others might be inclined to ascribe what we observe to the “resistance” to the Trump administration by some careerists. Rolling back regulations requires going through the lengthy public notice-and-comment process; it takes time, and the administrative state works to the advantage of agencies desiring to maintain vast regulatory edifices. Alongside, agencies may substitute guidance documents for formal regulations; however Trump has addressed that issue as well with an executive order that could be more important and durable than the two-for-one directive.