Howard Shelanski was administrator of the federal Office of Information and Regulatory Affairs from 2013 to 2017.
Since taking office, President Trump has signed executive orders instructing officials to reconsider regulation of the financial sector and requiring executive departments and agencies to find two rules to repeal for every new one they issue. But translating those promises into action is going to be a lot harder than the president thinks.
Here’s the rub: It generally takes a new rule to change or remove a regulation that is already on the books. Under long- standing Supreme Court precedent and a law known as the Administrative Procedure Act, agencies must provide a reasoned explanation when they want to change established policy.
Put another way, if an agency wants to abandon a rule it already has in place, it must justify that decision by going through the painstaking process of providing an opportunity for public comment and building a factual record subject to review by the courts. Agencies then have to show that their original decisions were either wrong or have been superseded by events. The law thus requires agencies to be both transparent and accountable, not just in issuing new rules but also in repealing existing rules. The more recent the regulation suggested for repeal, the harder that task tends to be.
Much of the case for eliminating regulations from the past eight years is based on broad claims that those rules are too costly for society. Yet sweeping demands for cutting these regulations often ignore that agencies had to take such costs into account before they issued most of the significant rules targeted for repeal.
Before an agency can publish a significant regulation, it must show the White House Office of Information and Regulatory Affairs, part of the Office of Management and Budget, that the rule has likely benefits for society that justify any costs. The fact that most rules have documented benefits means that one-sided rhetoric focusing only on regulatory costs will not be enough to justify repeal of a rule whose underlying record is based also on the benefits of that rule.
Repealing rules therefore requires federal agencies to explain why the factual and scientific bases for the predicted benefits of their rules were wrong or no longer adequate to justify those rules.
Trump’s executive orders on regulation show some recognition that the regulatory process makes repeal harder than a tweet or stump speech might suggest. The executive orders on financial regulation require a review of the regulations in place and do not mandate repeal. The executive order requiring two rules to be erased for each new rule published requires that an agency identify the rules it would move to eliminate to compensate for a new rule — but not that it necessarily repeal them before issuing a new regulation.
In practice, it turns out to be hard for agencies to find rules to eliminate and, when they do, the repeal process can take significant time. The effect of the deregulatory executive orders may therefore be more to create roadblocks for new regulations than to eliminate existing rules.
Congress has more tools than the president does to uproot regulation, although under current law it can quickly eliminate only a few specific regulatory actions. Even those few, quick repeals would be significant and could be harmful. To cause a more sweeping elimination of rules, however, Congress would have to engage in a potentially lengthy and contentious legislative process. Congress may well be headed in that direction, but, as it goes, it should not make it any easier for the executive branch to mandate repeal of regulations. Congress should keep its focus on careful regulatory reforms that strengthen rather than undermine the transparency and accountability of our regulatory system — a system that overall does a good job of protecting us from new rules that would impose unnecessary costs and from regulatory repeals that would eliminate important protections.
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