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OMB Issues Guidance on Implementation of “One In, Two Out” Executive Order
On February 2, 2017, Dominic J. Mancini, Acting Administrator of the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) issued interim guidance in a questions and answers format (Q&A) to implement President Trumps’s recent Executive Order (EO) regarding the costs of agency rulemaking, Memorandum: Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, Titled “Reducing Regulation and Controlling Regulatory Costs.” More information on the EO is available in our blog item EPA Issues Report to Congress on Implementing Amended TSCA Provisions, President Trump Issues Memo and Order on Reducing Federal Regulations.
The OMB memorandum, issued for regulatory policy officers and executive departments and agencies and managing and executive directors of certain agencies and commissions, states that it explains three requirements specified in the EO:
Agencies planning to issue one or more significant regulatory action on or before September 30, 2017 (the end of FY 2017), are directed to provide: (1) “[a] reasonable period of time before the agency issues that action, identify two existing regulatory actions the agency plans to eliminate or propose for elimination on or before September 30, 2017”; and (2) “[f]ully offset the total incremental cost of such new significant regulatory action as of September 30, 2017.”
The memorandum’s Q&As cover 23 questions under three categories: Coverage; Accounting Questions; and Process and Waiver Questions. A few of the stated answers include:
This guidance about the meaning and implementation of the EO will provide greater direction to the broad goals of the Trump Administration’s desire to “reduce regulation.” On its face, this “2 for 1” directive is a clear message to the agencies to reduce the regulatory burdens of their work, mostly regardless of the particular mission or underlying legislative requirements of the affected programs.
One obvious target of such effort is the U.S. Environmental Protection Agency (EPA), widely criticized during the Trump campaign and in the party platform as causing harm to the economy and hindering economic growth. Like any broad campaign rhetoric that becomes more substantive as the specifics are rolled out, it is interesting to see what the possible exceptions are or to speculate where implementing the broad rhetorical goal will lead to unpredictable outcomes. An example might be how reductions in record-keeping costs in one EPA program might offset new regulatory costs in another: this ironically may give new internal value to some parts of EPA which have routinely been more heavy-handed in imposing regulatory requirements. “Burdensome and unnecessary” requirements imposed by the enforcement office may be of help in the ability to propose new water program regulations -- or any number of odd fellow combinations may come to the surface.
Other unanticipated consequences will also include those regulations that are actively supported by the affected regulated entity. The pesticide industry is one example where a regulation establishing the allowable amount of a pesticide used on food -- the tolerance -- is essential for completing the registration process allowing the use of a new pesticide. So this kind of regulation fosters innovation and economic return to the industry, and without this regulation, the product will not make it to market. So the new Administration policies must allow for and distinguish between a sort of “good” regulation and a “bad” regulation -- all fitting within the broad rhetorical directive of a “2 for 1” approach to reducing regulatory burdens.