As reported by AHCA/NCAL:

Yesterday, President Trump issued an Executive Order (EO) on Reducing and Controlling Regulatory Costs. As of yet, there is not a full and complete understanding as to how all aspects of this order will be implemented. An initial analysis and understanding is below. AHCA will continue to provide updates on the implementation of this EO as details are available.

The EO’s stated purpose was to help manage the costs associated with federal regulations. Toward that end, the EO states: “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

While described as a fulfillment of President Trump’s “2-for-1” campaign promise, this EO also includes additional regulatory restrictions that are likely to affect agency and department planning. These include:

  • No regulations may be PROPOSED, without inclusion of a regulatory “pay-for” that eliminates 2 existing regulations and offsets the cost of the new rule. This means that at the earliest stage, agencies and departments will have to account for how they will meet the 2-for-1 requirement and how a rule will result (with the accompanying rule-eliminations) in AT LEAST zero economic cost. It appears that a rule’s benefits will not factor into these calculations.
  • Every fiscal year, agencies and departments will be given “regulatory budgets” from the Office of Management and Budget (OMB) as part of the budgeting process, capping the total incremental cost of all new regulations from each agency and department. For FY17 that limit will be 0. In future fiscal years, agencies and departments will have individualized budgets.
  • Agencies and departments will only be permitted to develop new regulations if they have been identified in the most-recent Unified Agenda (the semi-annual government-wide regulatory planning document), unless prior approval is given by the director of OMB.
  • All of the above is subject to the qualification “unless otherwise required by law.”

Like many executive actions, this order requires further clarification. Some questions/issues include:

  • How are costs measured? The EO envisions further guidance from OMB on this piece.
  • Whether and how will agencies and departments be permitted (or encouraged) to coordinate with other agencies and departments to allow for accompanying rule elimination to take place outside of the issuing agency?
  • How expansively will “exceptions” and “unless otherwise required by law” be interpreted?  These terms define where agencies and departments are permitted to exceed caps the 2-for-1 requirement.
  • How will guidance and other interpretive policy statements be treated? This administration has indicated that guidance documents are on par with rules, but the EO is ambiguous on this point.

This initial summary and analysis was provided by the Podesta Group. AHCA will provide more updates as they are available.