New Administration Looks to Ease Regulatory Burden on Business

By Richard P. Schweitzer

As he promised during his campaign, President Trump is taking immediate steps to ease the regulatory burden on U.S. businesses in an attempt to restore jobs and bolster the economy. Over the first few weeks of the new administration, this effort has taken the form of a series of memoranda and executive orders that seek to restructure the relationship between the federal government and the entities it regulates.

First, on Inauguration Day, White House Chief of Staff Reince Priebus sent a memorandum to all heads of executive departments and agencies imposing a temporary freeze on all new regulations until a newly-appointed agency official has an opportunity to review and approve the requirements. Thus, until they have approval from a Senate-confirmed department head, agencies must refrain from sending any new regulations to the Office of the Federal Register (OFR); withdraw any regulations that have been sent to the OFR but have not yet been published; or, for regulations that have been published in the OFR but have not taken effect, temporarily postpone their effective date for 60 days from the date of the memorandum as permitted by applicable law. The memo applies to all regulatory actions as well as to guidance documents.

Two For One

On January 30, President Trump signed an executive order that directs federal agencies to identify at least two existing regulations to be repealed for each new regulation proposed. The order will be in effect through the fiscal year, which ends September 30, 2017.

The order states that “the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the director of the Office of Management and Budget.” Moreover, “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.”

Because the federal agencies are unlikely to actually repeal two regulations in order to implement any new requirements, this order is expected to have a chilling effect on any new regulatory proposals in the near future.

Regulatory Issues

Third, on February 24, President Trump issued another executive order addressing regulatory reform. The order directs federal agencies to designate within 60 days a regulatory reform officer responsible for overseeing the implementation of regulatory reform initiatives and policies, including the termination of programs and activities that derive from or implement executive orders, guidance
documents, policy memoranda, rule interpretations and similar documents that have been rescinded.

Each agency will also have to establish a regulatory reform task force to evaluate existing regulations (using input from significantly affected entities including small businesses and trade associations such as GAWDA) and make recommendations on whether they should be repealed, replaced or modified. At a minimum each task force must attempt to identify regulations that (1) eliminate jobs or inhibit job creation, (2) are outdated, unnecessary, or ineffective, (3) impose costs that exceed benefits, (4) create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies, (5) rely in whole or in part on data, information, or methods that are not publicly available or are insufficiently transparent, or (6) derive from or implement EOs or other presidential directives that have been subsequently rescinded or substantially modified. Each task force must report on its progress within 90 days and at regular intervals thereafter.

Finally, another executive order dated March 13 directs the Office of Management and Budget to propose a plan to “reorganize governmental functions and eliminate unnecessary agencies….” This plan contains the following steps:

  • Within 180 days, each agency head will submit to OMB a reorganization plan;
  • OMB will publish a notice in the Federal Register asking for suggestions (presumably this activity is to take place in parallel with the agency plan development function); and
  • 180 days after close of the Federal Register comment period, OMB will submit a reorganization plan to the President.

Departure, Opportunity

How all of this will work is yet to be determined, but it marks a sharp departure from the regulatory approach of prior administrations from either political party. President Trump is trying to streamline the government and allow business leaders to make new investments in the American economy. This provides an opportunity for all businesses, small and large, to take advantage of the new environment in Washington.