Administration Provides Further Clarity on Executive Order on Reducing Regulation and Regulatory Costs

On Thursday, February 2, the Trump Administration provided an Official Memorandum with more details around its January 30th Executive Order entitled, Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs

The Administration clarified that the Executive Order applies only to significant regulatory actions and that federal spending rules that primarily cause income transfers from taxpayers to program beneficiaries (e.g., rules associated with Pell grants and Medicare spending) are considered “transfer rules” and are not covered by the Executive Order. However, in cases where these rules impose requirements on non-Federal entities, such as reporting or recordkeeping, agencies would need to account for these costs.

The Administration’s memo also clarified that the White House Office of Management and Budget (OMB) will address whether agencies should issue new significant guidance or interpretive documents on a case-by-case basis. The Trump Administration does state that any existing regulatory action that imposes costs and the repeal or revision of which will produce verifiable savings may qualify for the original Executive Order of eliminating two prior regulations for every new regulation that is issued.  However, agencies need to work with OMB to ensure that it will continue to be able to achieve their regulatory objectives after the deregulatory action is undertaken.  

The memo also discusses the possibility of waivers from the Executive Order.  Emergencies addressing critical health, safety, or financial matters, or for some other compelling reason, may qualify for a waiver from some or all of the requirements of the Trump Administration’s action.  

In addition, agencies are told to proceed with significant regulatory actions that need to be finalized in order to comply with an imminent statutory or judicial deadline even if they are not able to identify offsetting regulatory actions by the time of issuance.

At a minimum, the memo states that the agency should identify all of the associated regulatory actions to be repealed, along with cost saving estimates, no later than the date of issuance of the corresponding new significant regulatory action.  Agencies should also confirm that they will continue to achieve their regulatory objectives (such as health or environmental protection).

It should also be noted that the memo does clarify that regulatory savings by a component in one agency can be used to offset a regulatory burden by a different component in that same agency.