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Trump order seeks cost-neutral regulations

President Trump on January 30 issued an executive order to reform the federal regulatory process by, among other things, requiring agencies to target for elimination two existing regulations for every new regulation issued. The executive order also requires agencies to establish a cap on the incremental costs of the rules they plan to issue each year and leaves it to the Office of Management and Budget to define how the reform process will work and to define key terms, such as "incremental costs."

The executive order does not require that two regulations be repealed when a new regulation is issue, only that the regulations be identified for elimination. The action does not relieve agencies of their obligations under the Administrative Procedure Act to provide notice and opportunity for comment through normal rulemaking procedures.

Section 4 of the executive order states that for purposes of the order the terms "regulation" or "rule" means an "agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency." This raises the question of whether it might apply to, for example, the Compliance, Safety, Accountability program or other programs that have not been adopted through a formal rulemaking process.

Trump's order is essentially a statement of broad policy, and crucial details are left to OMB guidance regarding:

  • Processes for standardizing the measurement and estimation of regulatory costs;

  • Standards for determining what qualifies as new and offsetting regulations;

  • Standards for determining the costs of existing regulations that are considered for elimination;

  • Processes for accounting for costs in different fiscal years;

  • Methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and

  • Emergencies and other circumstances that might justify individual waivers of the requirements of this section.

The executive order states that the OMB director is to consider phasing in and updating these requirements. However, it is likely that this guidance will take some time as the Senate has not yet confirmed Trump's choice for OMB director, U.S. Rep. Mick Mulvaney (R-South Carolina).

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