Quick Reaction to the Regulatory Reform Officer/Task Force Executive Order

An incomplete description and analysis of the Executive Order — preliminary analysis only.

President Trump has signed an executive order mandating that regulatory agencies appoint a “Regulatory Reform Officer” (“the Officer”) and establish Regulatory Reform Task Forces (”the Task Force”) with the responsibility of identifying regulations that are not justified and can be rescinded or modified to make them less onerous. This order follows a previous order mandating that certain agencies follow a regulatory budget and repeal two regulations for every new one they promulgate, as well as another order establishing guiding principles for regulation. Today’s order creates a structure and accountability mechanism to pursue the administration’s regulatory reform agenda.

The Officer designated by the agency head and responsible for implementing the administration’s regulatory reform agenda. They are generally expected to lead the agency’s Task Force and are required to periodically report to the agency head and confer with agency leadership.

The Task Force is responsible for evaluating and recommending regulations that should be “repealed, replaced, or modified”. The Task Force is supposed to consult with outside stakeholders and identify regulations that:

(i) Eliminate jobs, or inhibit job creation

(ii) Are outdated, unnecessary, or ineffective

(iii) Impose costs that exceed benefits

(iv) Create a serious inconsistency or otherwise interfere with regulator reform initiatives and policies

(v) Are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision, in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility

(vi) Derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.

The rules identified by the Task Force as “outdated, unnecessary, or inefficient” are to be prioritized by agencies as they comply with the requirement to remove two rules for every new one established in EO 13771.

There is also a mechanism to keep the agency, the Task Force, and the agency employees who develop and issue regulations accountable. Waivers are available from OMB for agencies that “generally issue few or no regulations”.

What does the order actually do?

This order establishes a mechanism for implementing the Trump Administration’s reform efforts. The requirements used to evaluate rules track the principles listed in the Executive Order on Core Principles for Regulating the United States Financial System, including prioritizing economic growth, rationalizing regulations by eliminating inconsistencies, and eliminating unnecessary or ineffective regulation.

Additionally, the Task Force’s criteria also indicate that the administration wants agencies to take a hard look at the data underpinning the regulations and their costs and benefits. Requiring data be transparent and available to the public could weaken the information advantage agencies sometimes enjoy in litigation when rules are challenged. (It may also have implications for Chevron deference but I will leave that question to others).

Finally, by including an accountability mechanism the administration appears to be anticipating at least the possibility of agency resistance to its efforts and wants some tool to encourage progress.

What might it mean?

The order indicates that the administration is serious about regulatory reform and its chosen regulatory offset mechanism. It also creates relatively bounded criteria for evaluating whether a rule is worthwhile that is oriented towards economic growth and dynamism, simplification of the regulatory state, and transparency. The order also seeks to answer the question of how agencies will identify what rules to cut as they introduce new ones. This process should create a stockpile of identified rules that can be sacrificed.

What questions remain?

One of the big questions is the scope of the order. It is unclear whether it is meant to apply to independent agencies. The previous orders do not apply, and this order does not explicitly seek to include them, but it remains somewhat ambiguous.

Questions of application includes whether the Officers will be political appointees or career staffers. The agency head is responsible for designating the Officer and it may vary from agency to agency, depending on the agency’s internal dynamics (career staffers may be leery of declaring existing rules, including those they worked on, expendable). What sort of power the Officers will have will also likely depend on how much support they are given by the agency head, since the EO does not grant the Officers any specific powers. Likewise, the staffing of the Task Forces will likely vary between agencies and may impact their effectiveness given how significant an undertaking this type of holistic regulatory review is.