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President Trump Issues “One In, Two Out” Executive Order Affecting Federal Rulemakings

On January 30th, 2017, President Donald Trump issued an Executive Order on Reducing Regulation and Controlling Regulatory Costs, mandating that for every regulation issued by a federal department, two regulations be identified for repeal. The order additionally states that for the 2017 fiscal year, the total cost of any new regulation should be no greater than zero after being offset by the elimination of existing costs of at least two prior regulations, unless otherwise authorized by the Director of the Office of Management and Budget (OMB). Beginning in fiscal year 2018, the executive order requires the Director to identify the total incremental costs allowed, on a per agency basis, for new and repealed regulations; the executive order prohibits regulations from exceeding those cost caps. Exceptions exist for regulations issued with respect to the military, national security, and foreign affairs, as well as regulations related to department organization or personnel.

Intent

The stated purpose of this order is to decrease regulatory burdens on the private sector, particularly small businesses , as well as to reduce regulatory costs by the federal government. Proponents of the new rule argue that it will save businesses and the government money and promote domestic economic expansion. Critics of the order argue that it runs against public interest by requiring federal agencies to sacrifice previously existing protective rules if they wish to introduce a new protective rule. The order itself offers no guidance for implementation of its requirements, but instead instructs the Director of the OMB to “provide the heads of agencies with guidance.” According to some observers, it is likely that the order will result in a “broad reworking of how regulators calculate new rules’ costs and benefits, creating an opening to restrict use of metrics the GOP has long claimed overstate the health and economic benefits of regulations while understating costs.”

Potential Conflicts

Section 5 of the order states that “Nothing in this order shall be construed to impair or otherwise affect (i) the authority granted by law to an executive department or agency, or the head thereof; or (ii) the functions of the Director relating to budgetary, administrative, or legislative proposals.” Because most federal agencies, such as the Environmental Protection Agency (EPA), derive their authority and budgets from Congressional statutes, the order is expected to result in tension between how the order is interpreted by departments and the OMB. It is likely that the executive order will not directly affect statutorily mandated rulemakings, such as the new rules mandated by The Frank R. Lautenberg Chemical Safety for the 21st Century Act which amended the Toxic Substances Control Act last year. However, it appears that the executive order could require a very different approach for how agencies, including EPA, analyze the costs of new and existing regulations, adding to the agencies’ overall work and internal costs in promulgating new rules and perhaps indirectly diluting the scope and effect of those rules. In the meantime, agencies have no guidance at all in how to promulgate regulations to meet the requirements of the executive order. With this uncertainty now in play, the executive order may expand the bases for public comment on the new TSCA rules recently proposed by EPA — and perhaps dilute their scope.

UPDATE: The White House has just released interim guidance on this executive order.

This blog article was researched and written by Brown University Class of 2018 student Aisha Keown-Lang. Ms. Lang is studying biology and political science at Brown University with the goal of going into bioethics and public health. Her special interest in genetics stems from her research in the Li Lab at UCSF and the Gerbi Lab at Brown. After having worked with children in the Providence school system for nearly three years, her commitment to improving scientific literacy and expanding health services in underserved communities remains strong. Ms. Lang is currently a writer for Brown’s Science Cartoon Program (SciToons), which aims to communicate scientific research and ideas to a diverse audience.

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Ms. Grimaldi maintains a diverse environmental law practice focusing on chemical and product regulation and litigation defense. Her practice areas include Proposition 65, California's Safer Consumer Products Regulations, California's Rigid Plastic Packaging Container Act and the federal Toxic Substances Control Act. Ms. Grimaldi graduated from the University of California Hastings College of the Law magna cum laude and holds a Bachelor of Science Degree in Bacteriology from University of California, Davis. Prior to attending law school, she worked as a research assistant in laboratories at the University of California, San Francisco Cancer Research Institute and at the University of California, San Francisco School of Medicine.