Regulation Czar Neomi Rao Discusses Deregulatory Agenda

In his State of the Union address last month, President Donald J. Trump patted himself on the back for the economic boom and the steady drop in unemployment over the past year. Many economists agree that he ought to take some credit, and suggest his deregulatory push has played a role. To discuss the Trump administration’s regulatory achievements, Neomi Rao, the president’s appointee for administrator of the Office of Information and Regulatory Affairs (“OIRA”) last week joined the Federalist Society’s Free Lunch Podcast.

Last year was “a banner year for regulatory reform,” Rao said in the beginning of the podcast.

When Trump took office, he signed Executive Order 13771, ordering agencies to eliminate two regulations for every new regulation added. It also capped the net cost of new regulations to zero dollars. This means that for every new dollar in regulatory costs, one offsetting dollar had to be cut from regulatory costs elsewhere.

Rao said that the administration lived up to Trump’s campaign promise – and then some. For every new regulation added, 22 regulatory actions were cut, which she said far exceeded his promise. Additionally, the net savings for Americans on regulations was $8 billion, also exceeding his promise. The administration also halted 1500 new rules proposed under the previous administration because, Rao said, it wants to analyze the scope and content of all regulations.

But more important than these small changes, according to Rao, the administration is striving to make structural and cultural reform, which would hopefully extend into future administrations. “We want to continue with the momentum from the past year and with the success that we had,” she said.

For example, Rao indicated that agencies must properly follow the Congressional Review Act (“CRA”), which Rao claims requires them to submit proposed regulations to OIRA, so it can determine whether it imposes a cost of $100 million or more. If it does, then OIRA sends the proposed regulation to Congress for approval. Agencies that don’t comply, she said, risk some of their rules losing legitimacy.

As Cause of Action Institute has pointed out over the past year, there are hundreds of rules that are currently vulnerable to be repealed under the CRA that have yet to be received by Congress. For example, last month Cause of Action Institute released an investigative report revealing the IRS has dodged compliance with the CRA and other oversight mechanisms by suggesting that its rules have no economic impact, a suggestion that we have argued is false and intended to shield the agency’s actions from oversight.

Apart from the economic effect of excess regulations, Rao said OIRA is working to make sure the government is more respectful of the separation of powers and more transparent. Because only Congress has the power to make laws, Rao said it can be dangerous to increase the power of the executive branch to the extent that it is making a lot of rule changes. To improve transparency, OIRA will ensure that agencies comply with a federal law that requires they give public notices of new rules and regulations so that the public and stakeholders have an opportunity to voice their support or opposition. Additionally, Rao said OIRA will be working to reduce paperwork for businesses to save them cost and time.

The Trump administration has made progress in the past year to cut regulatory red tape. Hopefully the administration can continue going in this direction with a series of structural changes to scale back the administrative state.

Tyler Arnold is a communications associate at Cause of Action Institute.

The White House Should Follow Arizona Governor Ducey’s Lead and Implement an Online Portal Where Americans Can Suggest Regulations to Eliminate

On January 9, 2017, Arizona Governor Doug Ducey announced a new program designed to reduce outdated and burdensome regulations and to promote economic growth and job creation. His goal is to eliminate 500 regulations by the end of 2017.  To achieve this goal, Governor Ducey created a website—RedTape.AZ.Gov—where Arizonans can “crowdsource” recommendations on which regulations should be eliminated and submit those recommendations directly to the governor’s office.[1]  The website provides an easy, streamlined way for citizens to assist in the regulatory reform of their state.  This approach recognizes and honors what F.A. Hayek called the knowledge problem, that is, that the information necessary to make informed and efficient decisions is decentralized and that the top-down model is doomed by its arrogance.

President Trump’s White House should follow suit if it is serious about reducing the strain old regulations put on the country. President Trump issued Executive Order 13,777 on February 24, 2017, which requires that agencies designate a Regulatory Reform Officer (RRO) to implement a regulatory-reform agenda that implements, inter alia, Executive Order 13,771, which requires agencies to remove two regulations for each new one they issue.[2]  Neither of those orders contain a way for ordinary Americans to provide transparent input into this important process.  Several agencies have decided to open public-comment periods so that stakeholders and the public can provide input, but this approach leaves the comments scattered by agency and makes it difficult to aggregate.[3]  In addition, not every agency has decided to offer a public-comment period, leaving ordinary Americans without a voice.

The White House subsequently issued Executive Order 13,781 on March 13, 2017.[4]  This order created a website that allowed the public to submit comments on ways to optimize and reorganize the federal government.  While Executive Order 13,781 is a step in the right direction, it contains two fatal flaws.  First, the comment period closed on June 12, 2017 when it should be kept open permanently.  Second, the White House said it received over 100,000 comments during the comment period, but those comments are not available to the public.[5]  Cause of Action Institute submitted a FOIA request to the Office of Management and Budget, which administered the website, seeking access to those comments.[6]  Even though that request is still pending, the White House can take immediate steps to launch an improved website.

To foster and promote transparent regulatory reform, Cause of Action Institute recommends the White House launch a new website devoted to receiving recommendations from the public.  The recommendations could then automatically be forwarded to each agency’s RRO.  To ensure a transparent comment process, the recommendations should be accessible to the public and easily searchable by agency, topic, regulation identifier number, and other filters.  The website could foster public discourse by allowing the public to upvote or downvote comments, respond to specific comments, and suggest related regulations to comment on.  Finally, the website should not have a deadline for submissions but instead permanently allow Americans to make recommendations to reform the administrative state.  By providing a central, permanent website for submitting and reviewing recommendations, the White House can achieve its regulatory reform agenda more efficiently and promote accountability while ensuring that all Americans have a voice in the process.

Travis Millsaps is counsel at Cause of Action Institute.

[1] Press Release, Gov. Doug Ducey, Governor Ducey Announces RedTape.AZ.Gov (January 9, 2017), https://azgovernor.gov/governor/news/2017/01/governor-ducey-announces-redtapeazgov.

[2] See Exec. Order No. 13,777, 82 Fed. Reg. 12285 (Mar. 1, 2017), https://www.whitehouse.gov/the-press-office/2017/02/24/presidential-executive-order-enforcing-regulatory-reform-agenda; Exec. Order No. 13,771, 82 Fed. Reg. 9339 (Feb. 3, 2017), https://www.whitehouse.gov/the-press-office/2017/01/30/presidential-executive-order-reducing-regulation-and-controlling.

[3] See Evaluation of Existing Regulations, 82 Fed. Reg. 17793 (proposed April 13, 2017), available at https://www.regulations.gov/document?D=EPA-HQ-OA-2017-0190-0042.

[4] See Exec. Order No. 13,781, 82 Fed. Reg. 13959 (Mar. 16, 2017), https://www.whitehouse.gov/the-press-office/2017/03/13/presidential-executive-order-comprehensive-plan-reorganizing-executive.

[5] See Reorganizing the Executive Branch, The White House, https://www.whitehouse.gov/reorganizing-the-executive-branch (last visited June 29, 2017).

[6] Press Release, Cause of Action Institute, White House Should Release 100K Public Comments on Reforming Government (June 19, 2017), https://causeofaction.org/white-house-release-100k-public-comments-reforming-government/.

Hundreds of Regs Vulnerable to Repeal under Congressional Review Act

Washington D.C. – Cause of Action Institute (“CoA Institute”) today released a list of 835 economically significant rules and regulations that are susceptible to repeal under the Congressional Review Act (“CRA”). While there is a 60-day statutory limit for rules to be reviewed by Congress under the CRA, hundreds of rules have not been properly reported to Congress giving the Trump administration an unprecedented opportunity to repeal costly rules dating all the way back to 1996 when the CRA was first signed into law.

“While Congress is currently reviewing and disapproving numerous regulations from the last year of the Obama Administration, we believe the CRA provides a broader opportunity and Congress should begin examining the rules we’ve identified as well,” said John Vecchione, Cause of Action Institute President and CEO.

Read Cause of Action Institute’s column in The Hill for more information on the CRA and how the Trump administration can pursue an aggressive anti-regulatory agenda by coordinating with Congress.

The Hill

The Congressional Review Act and a Deregulatory Agenda for Trump’s Second Year

By John J. Vecchione

A cold front may have killed-off nearly half of D.C.’s famous cherry blossoms, but Washington gridlock has emerged in full bloom. With the defeat of the Republican “repeal and replace” bill in the House, and the Democrats’ united opposition to the president’s agenda, it’s looking increasingly difficult for Congress to get things done.  Fortunately, there exists a stimulatory, free market weapon in the hands of the Congress and the President to stay on the offensive on deregulating and freeing the economy.

By simple majority vote, the Congressional Review Act (“CRA”) can overturn any regulation that affects a third-party. This is a powerful and underutilized tool. The CRA is not subject to the filibuster and provides the majority with a vast deregulatory agenda with a high chance of success.  Read More

CoA Institute is partnering with Pacific Legal Foundation and several other organizations on the Red Tape Rollback project, an effort to identify rules that have not been properly reported to Congress under the CRA.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org