President Trump is making a long-term mistake by issuing executive orders to roll back and stop regulatory overreach instead of relying on Congress, business groups say.
“In four years, if there is a different president, this regulatory budget is gone,” said Sam Batkins, director of regulatory policy with the conservative group American Action Forum.
Batkins’ group specialized in tracking the number and cost of regulations during former President Barack Obama’s two terms in office. What he is focused on now is an executive order on deregulation, the “two-for-one” regulatory budget order, issued last month to stop agency overregulation.
The executive order calls for agencies to get rid of two regulations for every new regulation the agencies seek to impose. Trump called the order a “big one” and the first step toward cutting overall regulation by 75 percent, with two of its main targets being the Environmental Protection Agency and regulations imposed on the energy industry.
Environmentalists sued Trump over the order Wednesday, saying that “when you make policy by tweet, it yields irrational rules,” said Rhea Suh, the president of the Natural Resources Defense Council, a top environmental group that led the lawsuit. “This order imposes a false choice between clean air, clean water, safe food and other environmental safeguards.”
Christopher Guith, policy vice president for the U.S. Chamber of Commerce’s Institute for 21st Century Energy, said environmentalists are overblowing the effect of the order by reacting to it as though it calls for the “dismantling of the regulatory agencies” such as the EPA. What it does is force the agencies to take a better account of what they are doing to make their rules “much less onerous,” he said.
Sources tracking Trump’s executive order point out that the lawsuit came less than 24 hours after an appeals court on the West Coast heard arguments from Trump lawyers over a lower court’s decision to halt the executive order on banning immigrants from seven Muslim-majority countries.
That makes it even more urgent to begin discussions on safeguarding a regulatory budget through legislation, as Trump’s directives are proving to be vulnerable to legal attacks.
On top of that, “if a Democrat is in the White House, Executive Order 13-771 no longer exists,” Batkins said. “So, certainly, you want participation from Congress, and you want that legislative seal on any regulatory budget,” or it goes away.
Sen. Mike Lee, R-Utah, is expected to reintroduce legislation from the last Congress that creates a regulatory budget. The Regulatory Budget Act would give Congress the authority to approve a regulatory budget for the agencies. It would be similar to a fiscal year spending budget, but for regulations. The bill also would place a cap on the costs imposed by regulations. Other lawmakers are also expected to begin pushing for more regulatory oversight from Congress.
But it is not certain if there will be enough support to pass such a measure in Congress, especially given the Senate’s 60-vote threshold to consider bills.
In the meantime, congressional Republicans have been using the Congressional Review Act to pass resolutions to reject major, last-minute energy regulations from the Obama administration.
House Natural Resources Committee Chairman Rob Bishop, R-Utah, suggested last week that passing the resolutions is only the beginning of Congress’ deregulation push, and that more substantive action to combat regulatory overreach will be taken in support of Trump’s infrastructure plan.
“This committee has played an important role at the beginning of this session with the Congressional Review Act,” Bishop said. Two resolutions passed by the House, along party lines, and heading to the Senate focused on repealing midnight rules on controlling methane from fracking wells and major regulations imposed on the coal industry.
But the resolutions can repeal regulations only within 60 days of finalization. Bishop anticipates the committee will move on from its role in supporting the Congressional Review Act strategy to “play an important role as we pivot toward infrastructure proposals, which is not just about investment but also regulatory burden.” So regulation will get a second look as lawmakers make the shift to delivering on Trump’s infrastructure plan.
Guith said the chamber has started a major campaign to back congressional efforts in passing resolutions of disapproval under the Congressional Review Act. He was in western Colorado last week to discuss how the effort would help the energy industry there.
Guith pointed out that the Chamber is also gearing up to support more substantial legislation such as the Regulatory Accountability Act, which would target regulations beyond the short-term Congressional Review Act effort. The House passed its version of the bill in the first week of January.
The bill would revise federal rulemaking procedures under the Administrative Procedure Act to require agencies to essentially prove why a new regulation should be enacted. Agencies would be required to assess the cost and benefits of enacting alternatives to the regulation, explain the legal authority used to enact the regulation, the nature of the problem the new rule is trying to solve and whether other regulations have contributed to the problem.
A letter sent last week to lawmakers by the chamber and more than 600 other groups called for the passage of the legislation in the Senate. The letter said Sen. Rob Portman, R-Ohio, is introducing the companion to the House bill in the Senate.
“With both the new presidential administration and the U.S. House of Representatives agreeing on the urgent need for regulatory reform, the Senate is presented with a once-in-a-generation opportunity to pass much-needed modernization of the Administrative Procedure Act (APA), whose rulemaking provisions have remained virtually unchanged since it was enacted in 1946,” read the letter that went to both the Republican and Democratic leadership.
“With the passage of [the Regulatory Accountability Act], Congress would be restoring the checks granted to it by the Constitution over a federal regulatory bureaucracy that is opaque, unaccountable and at times overreaching in its exercise of authority,” the letter said.
Trump started his first 100 days by instituting a regulatory freeze through March 21, which affected 30 EPA rules, including the agency’s ethanol mandate, called the Renewable Fuel Standard.
The refinery industry, which is asking Congress to repeal or reform the fuel program, is encouraged that the freeze could mean the administration will take up its concerns.
“While the regulatory freeze implemented by President Trump does not change the statutory compliance of the RFS, it does provide an opportunity to take a closer look at this fundamentally flawed policy,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers, the principal trade group representing the refiners.
“We look forward to beginning a dialogue with this new administration and Congress on why the RFS is in need of repeal or significant reform, as it is an outdated mandate that flies in the face of free market principles and current energy market conditions,” Thompson said.
The freeze stopped regulations that were finalized in the waning months of the Obama administration and about to go into effect in 2017. The rules’ effective dates were pushed off until the later half of March to allow the new administration to assess their impact and if it should take further action.
Many of the actions taken by the regulatory freeze affected EPA decisions on state plans under its national ambient air quality standards. Under those regulations, states must file plans with specific actions to reduce smog-forming ozone, for example.
Allowing some of the decisions to go forward sooner rather than later would allow certain cities and states to move from not complying with the rule to compliance. That would be good for business, as industries can begin development as federal restrictions are lifted.
A senior official representing state air agencies, which implement EPA programs in the states, said if Trump thinks the freeze will benefit businesses, he is mistaken.
“Many administrations do take a fresh look at things, but … freezing those regulations is actually going to jeopardize many in industry who are relying on some of those rules to lift controls to industry,” said Bill Becker, president of the National Association of Clean Air Agencies.
“The longer that designation process going from non-attainment to attainment is delayed, the longer industries are subject to the more stringent rules of non-attainment,” Becker said. “In a perverse way, this is actually working against the regulated industry they are trying to protect.”
