Trump’s New 2018 Deregulatory Agenda

Just in time for Christmas, the Trump administration released the Fall 2018 edition of the twice-yearly Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions, which, unlike prior editions, showcases progress on the president’s promises to cut red tape.

The occasion featured a White House announcement by the President, as well as a Wall Street Journal preview by Neomi Rao, who serves as Administrator of the Office of Management and Budget’s Office of Information and Regulatory Affairs. That’s the office of the regulatory czar.

In Trump’s first 2017 Agenda installment, which appeared back in July, 469 regulatory proposals that had appeared in former President Barack Obama’s Fall 2016 Agenda were withdrawn. Another 391 were reclassified for further review, for a total of 860 put on hold.

The December regulatory Agenda has brought the tally up to 1,579 regulatory actions withdrawn or delayed, broken down as follows:

  • 635 regulations were withdrawn.
  • 244 regulations were made inactive.
  • 700 regulations were delayed.

The Unified Agenda (the “Reguatory Plan” component is included in the Fall edition of the Unified Agenda each year) is hardly riveting reading for most people. It’s been around since the early 80sbut most have probably not heard of it. Basically, it highlights regulatory priorities of the federal bureaucracy.

The roundup has suffered in recent years from delays in its traditional April and October release schedule, and this year is no different. Trump’s Reg Plan is actually the latest ever. The tradeoff this time is that using the report as a vehicle to emphasize a red-tape cutting agenda is completely unique.

The Trump administration’s making a spectacle of the Agenda makes sense; This is, after all, the year of “one-in, two-out” for federal agency rules, as stipulated in Trump’s Executive Order 13771on Reducing Regulation and Controlling Regulatory Costs.

The White House claims that goal was easily met, with a 22-to-1 out/in ratio. According to Trump, Rao and the new Agenda, only three new significant regulatory actions were imposed, while 67 deregulatory actions were taken. Detail on these 70 actions appears in this chart (the three regulatory actions appear in bold type).

The bottom line from these 2017 rollbacks is said to be $8 billion in present-value savings, or $570 million on an annualized basis.

The new-under-the-sun message is “Agencies are now expected to regulate only when explicitly authorized by law.”

The low hanging fruit may make the job tougher next year, though, since Congress will need to act to remove final rules if agencies’ notice-and-comment process can’t move the job along.

But in anticipation of the Fall Agenda edition, Office of Information and Regulatory Affairs administrator Neomi Rao issued a September 17, 2017 memorandum to Regulatory Reform Officers at executive departments and agencies on “FY 2018 Regulatory Cost Allowances.” (Independent agencies get a pass, a major difficulty for broader regulatory liberalization.)

Where the no-net-new costs provisions of Trump’s 2-for-1 executive order were regarded as something of a mini “regulatory budget,” Rao’s directive took things further by calling on agencies to “prepare a proposed total incremental cost allowance” and articulate how it conforms to Trump’s deregulatory executive order.

Even more, where Trump’s E.O. 13771 called for and presumably achieved zero net new costs in 2017, Rao’s memorandum, now amplified by Trump, “expects that each agency will propose a net reduction in total incremental regulatory costs for FY 2018.”

Savings in 2018 are projected to be $10 billion, or $687 million on an annualized basis, as broken down by agency, here.

The problem is that regulations cost hundreds of billions, however.

In any event, using the OMB’s online database, selecting “Active” actions (which includes pre-rule, proposed rule, and final rules), 448 pending rules are flagged as “deregulatory,” and 131 flagged “regulatory” in the new Agenda. So that’s a better than 2-for-1 ratio next year, also.

However, there are 1,077 “Active” designations overall. Not everything the bureaucracy does is subject to Trump’s executive order, which is a loophole.

Overall, the Agenda shows Trump’s agencies to have 3,209 overall rules in play at the Active, Completed, and Long-term stages. Here is a comparison with former President Barack Obama’s final Unified Agenda:      

Fall Unified Agenda flows Obama 2016 Trump 2017
Active (these include pre-rule, proposed and final): 2,095 1,977
Completed: 665 470
Long-term: 558 762
Total: 3,320 3,209

Perhaps more important in the 2-for-1 campaign and in preliminary regulatory budgeting is the subset of rules in the Agenda classified as “economically significant,” which loosely means they have $100 million in effects. These are also closely related to the “significant” rules which fall under Trump’s E.O. 13771. Here’s how Trump and Obama compare:

Fall Unified Agenda “Economically Significant” rule flows Obama 2016  Trump 2017
Active (pre-rule, proposed, final): 113 71
Completed: 47 21
Long-term: 33 48
TOTAL:  193  140     

The overall flow of economically significant rules is 27 percent lower, but Trump’s figures also contain numerous “rules” that are withdrawals or holds of pre-existing orders, so the deregulation behind the scenes may be understated in that sense.

Future regulatory reforms from Congress will need to require that regulatory and deregulatory actions be classified separately (as Trump has done for the first time in the Agenda), while also harmonizing the confusing rule classifications that agencies use.

Furthermore, subjecting agency “guidance documents” to reform is vital as well, since these can be regulatory in effect but are nowhere to be found in the Unified Agenda.

Easily one of the most important modifications in the new Regulatory Plan and Unified Agenda is the transformative change in the rule roundup presented in OIRA’s database to capture the specifics of E.O. 13771.  Under “EO 13771 Designation” on OMB’s search page, there is now a radio-button search selection option for each of the following:

  • Deregulatory
  • Regulatory
  • Fully or Partially Exempt
  • Not subject to, not significant
  • Other
  • Independent agency

In the absence of regulatory reform from Congress, the liberalization actions being taken by the Administration, within the rule of law and statutory requirements, are aggressive. That aggressiveness also needs to be expanded to guidance documents.

Originally published to Forbes Online.