<img height="1" width="1" style="display:none" src="http://b.scorecardresearch.com/p?c1=2&amp;c2=15743189&amp;cv=2.0&amp;cj=1&amp;&amp;c5=&amp;c15=">

Trump the deregulator

102317 coverpic-web
President Donald Trump holds up a pen he used to sign one of various bills in the Roosevelt Room of the White House in on March 27. From left are, Sen. Tom Barrasso, R-Wyo., Rep. Don Young, R-Alaska, Interior Secretary Ryan Zinke and Vice President Mike Pence. (AP Photo/Andrew Harnik)

On the campaign trail, Donald Trump promised his supporters "so much winning if I get elected that you may get bored with the winning." Judged only by what President Trump has accomplished in Congress, his first nine months in office have failed to deliver on that promise.

Despite Republican majorities in the Senate and the House, the president's greatest success in Congress has been the Senate's confirmation of a growing roster of his conservative judicial nominees. The core of Trump's legislative agenda, though, has yet to score a single victory. Efforts to repeal Obamacare have been thwarted so far by members of his own party in the Senate. And promised legislation on infrastructure and tax reform has not yet materialized.

But the president's legislative agenda is not the only way to measure his administration's success. Trump campaigned against the Obama administration's "bureaucratic red tape and overregulation" as much as he campaigned for any affirmative policy agenda of his own. As a deregulator, Trump has been winning, and winning big.

After his inauguration, Trump signaled deregulation as a priority for his administration with a series of executive orders requiring each agency to identify burdensome and outdated regulations for repeal, to cut twice as many regulations as it promulgates, and to reduce the social costs of regulation.

Perhaps even more importantly, Trump installed the conservative administrative law scholar Neomi Rao as administrator of the Office of Information and Regulatory Affairs within the White House's Office of Management and Budget. Though not well known outside the beltway, OIRA is the hub of the administrative state, responsible for ensuring that new agency rules are consistent with the president's agenda and that their benefits justify their costs. As former President Barack Obama's OIRA Administrator Cass Sunstein put it, OIRA is "a little office with a big impact." Given her deep understanding of the levers of the administrative state, Rao's impact as Trump's regulatory czar could be very big indeed.

In her first public address as OIRA administrator, Rao outlined a far-reaching program of "regulatory reform" designed to curb "the excesses of government and in particular, regulatory interference" through the development of a "smaller and more effective regulatory state." Echoing the president's own criticism, Rao asserted that "the previous administration imposed an incredibly high level of unnecessary regulatory burdens on the American people," and identified Trump's election as "part of a movement against government paternalism and meddling in the lives, property, and decisions of individuals."

"Rolling back these regulations," Rao said, "is essential to restoring more individual freedom, and to promoting economic growth, job creation, and innovation."

Much of that regulatory roll-back can be done without Congress. Indeed, Trump is using the same arsenal of executive actions to cut regulations that Obama used to instate those regulations in the first place.

Clean Power Plan

(AP Photos)

On the campaign trail, Trump targeted what he called the Environmental Protection Agency's "stupid" and "job-killing" greenhouse gas rules for repeal.

When Obama left office, the Clean Power Plan, his signature regulatory effort to control carbon emissions from the energy sector, was tied up in the U.S. Court of Appeals for the D.C. Circuit after the Supreme Court took the unusual step of blocking the rule's implementation pending litigation.

In March, Trump issued an executive order rescinding Obama's climate-related executive orders, and instructing EPA to review and, if appropriate, rescind the Clean Power Plan. "Did you see what I did to that? Boom, gone," he told a crowd in September. Although repeal will not be quite as simple as lighting a fuse, EPA Administrator Scott Pruitt, who litigated against the Clean Power Plan as attorney general of Oklahoma, is already setting the charges.

Pursuant to the executive order, EPA issued a notice of proposed rulemaking on Oct. 10 that, if finalized, would repeal the Clean Power Plan on the ground that the Obama administration's rule was based on a misinterpretation of the Clean Air Act. EPA regulated too broadly, opponents charge, by setting emissions limits based on an anticipated transition to cleaner sources of energy production instead of limiting the Clean Power Plan to technologies that could be implemented at individual power plants. In addition, the proposed repeal rule offers corrections to EPA's assessment of the costs and benefits of the Clean Power Plan. If EPA finalizes those corrections, they would offer an alternative ground for repeal: The rule's costs exceed its benefits to the United States.

EPA has also said it will soon invite comment on possible alternatives to the Clean Power Plan. But it is unclear when, if ever, the administration will replace the Clean Power Plan after repealing it.

Congress's failure to pass climate change legislation means that federal policy in this field is confined to agency rulemaking under the Clean Air Act. As a result, the Trump administration is poised to win on one of the major planks of his platform by simply withdrawing the past administration's regulation.

Auto standards

In 2012, Obama's EPA and the Department of Transportation jointly promulgated greenhouse gas and fuel economy standards for new vehicles through model year 2025. At that time, the agencies agreed to complete a "midterm evaluation" in which they would "carefully consider" the increasingly stringent standards and decide by April 2018 whether the future standards remain appropriate.

After Trump won the 2016 election, Obama's EPA hurriedly issued a proposed determination that the future standards set in 2012 remain appropriate.

The auto industry and other stakeholders filed more than 100,000 comments on the proposed determination, yet EPA issued its final determination less than two weeks after the close of the brief comment period. According to many commenters, that document did not adequately respond to the concerns raised in comments.

EPA's final determination came just one week before Trump's inauguration, but more than a year ahead of schedule. Despite the agencies' joint commitment in 2012 to a "collaborative, robust and transparent" midterm evaluation, EPA issued the final determination on its own, without involving DOT.

After inauguration, the auto industry complained to the Trump administration about the substance of the final determination as well as the hasty process EPA used to get it on the books before Trump took office.

The message was received. In March, EPA and DOT jointly gave notice of their intent to reconsider the past administration's final determination of the midterm evaluation. Two weeks later, Trump went to Detroit and promised the auto industry his administration would "fight to keep the automobile production in the United States of America, not outside," and would "work tirelessly to eliminate the job-killing regulations."

In August, EPA and DOT jointly requested comment on reconsideration of the final determination. A new, joint final determination is expected in April, as the agencies agreed in 2012.

Open Internet Order

Environmental regulation is not the only target of the Trump administration's deregulatory agenda. The Federal Communication Commission's "Open Internet" rule, commonly known as "net neutrality," is also on the chopping block.

Congress has long maintained a hands-off policy toward Internet regulation. In the 1996 Telecommunications Act, Congress declared that "[i]t is the policy of the United States ... to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation." Nevertheless, after Obama announced his support for reclassifying broadband as a telecommunications service, the FCC quickly moved to subject the Internet to the common-carrier model of regulation that governs telecommunications. Interested parties challenged the new rule on the ground that it exceeded the FCC's statutory authority. But the full U.S. Court of Appeals for the D.C. Circuit upheld it, over the dissent of two judges who argued that "turning Internet access into a public utility is obviously a ‘major question' of deep economic and political significance," and thus Congress must clearly legislate on the matter to justify such a rule.

Immediately after his inauguration, Trump named FCC Commissioner Ajit Pai as chairman. Pai had vociferously dissented from the FCC's Open Internet Rule and signaled his hope to repeal it through regulation.

It came as no surprise in May when Pai proposed a rule that would "roll back the prior administration's heavy-handed Internet regulation."

Transgender bathroom access

In January 2015, a midlevel official in Obama's Department of Education sent a letter interpreting the agency's regulations to require a school to let a biologically female transgender student use the boys bathroom in accord with the student's "gender identity."

The student whose case had prompted the letter had sued the school, alleging violations of Title IX and the Equal Protection Clause. The Court of Appeals for the Fourth Circuit sided with the student, even though the Department of Education regulation in question allows schools to "provide separate toilet . . . facilities on the basis of sex."

Although recognizing that the Department of Education's interpretation of "sex" to mean "gender identity" was "not the intuitive one," the court deferred to that interpretation under the Auer doctrine, which requires deference to an agency's reasonable interpretation of its own ambiguous rule.

In May 2016, after the Fourth Circuit ruled in favor of the transgender student, officials from the Department of Education and the Department of Justice sent another guidance letter to every school that receives Title IX funding, requiring them to allow transgender students to use the restroom that corresponds to their gender identity.

In October 2016, the Supreme Court agreed to hear the case. But in February 2017, a month before the scheduled oral argument, Trump's Department of Justice and Department of Education issued a new guidance letter withdrawing the 2015 and 2016 agency guidance. The new letter noted that courts had reached different conclusions about whether the word "sex" in the Department of Education rule is ambiguous. Citing "the primary role of the States and local school districts in establishing educational policy," the new guidance letter rescinded the Obama-era guidance documents "to further and more completely consider the legal issues involved." The Supreme Court vacated and remanded the Fourth Circuit's judgment in light of the Trump administration's new guidance document.


In Obama's first term, when he was urging Congress to pass comprehensive immigration reform, he repeatedly insisted that he could not unilaterally halt deportations of non-criminal aliens.

"With respect to the notion that I can just suspend deportations through executive order, that's just not the case, because there are laws on the books that Congress has passed. ... Congress passes the law. The executive branch's job is to enforce and implement those laws. And then the judiciary has to interpret the laws. There are enough laws on the books by Congress that are very clear in terms of how we have to enforce our immigration system that for me to simply through executive order ignore those congressional mandates would not conform with my appropriate role as president."

But after Congress failed to pass the Development, Relief, and Education for Alien Minors Act in Obama's second term, he changed his tune. His administration, he said in Jan. 2014, was "not just going to be waiting for legislation." "I've got a pen, and I've got a phone, and I can use that pen to sign executive orders and take executive actions."

Within the year, Obama announced Deferred Action for Parents of Americans and Lawful Permanent Residents, an amnesty program that would have shielded from removal, and granted work permits to, illegal immigrants who are the parents of U.S. citizens or lawful permanent residents.

After the death of Justice Antonin Scalia, the Supreme Court split 4-4 on the legality of DAPA and of Obama's 2012 Deferred Action for Childhood Arrivals program, which granted renewable two-year deferral of removal to non-citizens who entered the United States as minors. The Supreme Court's split decision left in place a preliminary injunction issued by the U.S. Court of Appeals for the Fifth Circuit, blocking DAPA's implementation.

Of course, the pen and phone that produced DACA and DAPA could eliminate the programs just as easily. In June, Trump's then-Homeland Security Secretary John Kelly announced that he had rescinded the Obama administration's DAPA memo.

And in September, Trump announced that the Department of Homeland Security would begin "an orderly transition and wind-down of DACA." Existing work permits granted under the program will be honored until they expire or for up to two years, a "gradual process" that the president said would provide "a window of opportunity for Congress to finally act."

Iran deal

In 2015, the Obama administration signed an international agreement on Iran's nuclear program and related sanctions. As part of the deal — which was also joined by China, France, Russia, the United Kingdom, Germany, and the European Union — Iran agreed to reduce its stockpile of enriched uranium and to limit its capacity to produce weapons-grade uranium and plutonium, but only for the next 15 years. In exchange, the United States agreed to lift sanctions on other countries that do business with Iran, and to relax sanctions blocking the sale of arms to Iran beginning in 2021. The U.N. and E.U. also lifted economic sanctions, unfreezing Iranian assets worth billions of dollars around the world.

The Iran deal was not a treaty ratified by the Senate, so it is vulnerable to unilateral action by the White House to withdraw the United States from the pact. As Trump said Oct. 13, "our participation can be cancelled by me, as president, at any time."

As a presidential candidate, Trump promised that if he were elected the Iran deal would become "a totally different deal." As president, Trump has now taken steps to follow through on that promise, repeating his charge that "the Iran deal was one of the worst and most one-sided transactions the United States has ever entered into."

Although Congress did not ratify the Iran deal, it did pass a law requiring the president to report to Congress every 180 days on whether Iran is complying with the deal. On Oct. 13, Trump announced he would not certify Iran's compliance. In support of that decision, he alleged specific violations related to Iran's possession of heavy water — a substance used in nuclear reactors — and the operation of its centrifuges, which make nuclear fuel. And he said that Iran was impeding international inspectors and may be dealing with North Korea.

In view of these allegations, Trump authorized the Treasury Department to impose new sanctions on Iran's Islamic Revolutionary Guard Corps and indicated that Congress should impose new sanctions on Iran if the regime is unwilling to extend indefinitely the deal's 15-year sunset clause governing the restrictions on Iran's nuclear activities.

Paris agreement

The Obama administration signed the Paris climate accord in April 2016, along with 174 other nations. Each country set its own intended "nationally determined contribution" to the global project of greenhouse gas emission reduction. The United States recorded its intention "to achieve an economy-wide target of reducing its greenhouse gas emissions by 26-28 percent below its 2005 level in 2025. The United States also made a $500 million down-payment on a $3 billion commitment to a Green Climate Fund dedicated to helping developing countries adapt to climate change.

The Paris agreement is a nonbinding statement of signatories' intentions, not an enforceable treaty ratified by the Senate. As a result, the Trump administration could exit the agreement just as easily as then-Secretary of State John Kerry signed it.

In June, Trump announced that the United States would "withdraw from the Paris Climate Accord," which he called "the latest example of Washington entering into an agreement that disadvantages the United States to the exclusive benefit of other countries." The president's chief objection was that the Paris agreement bound the United States to the mast of stringent carbon reductions while other countries, China in particular, were free to increase emissions, attracting U.S. industry abroad for little actual reduction in global temperature.

By its own terms, the Paris agreement permits party states to withdraw no sooner than Nov. 4, 2020, but Trump said the United States would "cease all implementation" of the agreement in the meantime, and noncompliance does not trigger any sanction under the agreement.

Withdrawal from the Paris agreement did not have any direct effect on binding federal regulations, but it was consistent with Trump's prior rescission of Obama's climate-related executive orders and with EPA's proposed repeal of the Clean Power Plan, which some saw as a necessary component of U.S. compliance with the Paris agreement.


Trump campaigned for the presidency on a platform of Obamacare repeal. But so far legislative efforts to undo the sprawling Affordable Care Act have failed. That does not mean the Trump administration is powerless to make its mark on the law. The Act requires hundreds of regulations from federal agencies to be operational, regulations that are now open to revision by the new administration.

The Obama administration was notorious among conservatives for using regulations to fix defects in the Affordable Care Act that they believed only Congress could remedy. One rule, upheld by the Supreme Court in King v. Burwell, interpreted the phrase "Exchange established by the State" to include the healthcare exchange established by the federal government, thereby extending tax credits to plans purchased on the federal exchange.

Trump's very first executive order made a point of brandishing the regulatory pen to advance the new administration's policy of lightening the Affordable Care Act's compliance burdens. He ordered all agencies responsible for implementing the ACA to "exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, [etc.]"

In an Oct. 10 tweet reminiscent of Obama's "pen and phone" threat, Trump said that "Since Congress can't get its act together on HealthCare, I will be using the power of the pen to give great HealthCare to many people – FAST." In the days that followed, that power was exercised several times.

On Oct. 12, after a series of failed legislative efforts to repeal or re-write the Affordable Care Act, Trump signed another executive order requiring the relevant agencies to expand access to three types of health insurance plans to promote choice and competition. Specifically, the executive order seeks to allow small businesses to pool together to purchase health insurance in association health plans, to allow individuals to purchase temporary plans (short-term, limited-duration insurance), and to expand the use of health reimbursement arrangements.

Another Obama administration rule unpopular with conservatives required corporations to provide contraceptive coverage in violation of their owners' religious beliefs. After the Supreme Court held in Burwell v. Hobby Lobby that the contraceptive mandate unlawfully burdened the exercise of religion, Health and Human Services promulgated a narrow religious exemption that was again challenged in the Supreme Court as unlawfully burdening religious employers. In the last year of the Obama presidency, the Court vacated the lower court decisions and remanded them for further proceedings.

With the contraceptive mandate litigation still pending on remand, Trump issued an executive order in May directing the Departments of Treasury, Labor, and Health and Human Services to "consider issuing amended regulations ... to address conscience-based objections" to the contraceptive mandate.

In response, the agencies issued interim final rules on Oct. 13, granting broad exemptions for employers with religious or moral objections to offering contraceptive coverage.

Cost-sharing subsidies

On Oct. 12, the Trump administration also announced it would cease the past administration's practice of funding cost-sharing reduction subsidies, or CSRs, that it says have not been appropriated by Congress. These payments subsidize deductibles and co-pays for patients with incomes below a specified level. The ACA requires insurance companies to offer plans with these subsidies, and it says that HHS "shall make periodic and timely payments" to compensate for the CSRs. But Congress has not explicitly appropriated funds for the reimbursement payments that HHS has been paying insurers.

The Obama administration formally asked Congress to fund the subsidies, which amount to about $7 billion annually. When Congress refused to pay up, HHS instructed Treasury to make the reimbursements anyway, out of a separate appropriation that covers other Affordable Care Act tax credits. Paying federal monies without an appropriation from Congress violates the Constitution. In a lawsuit brought by the U.S. House of Representatives, a district court ruled that Treasury's reimbursement of these subsidies is unlawful, but stayed its injunction of the unlawful payments pending appeal.

Because the Obama administration's CSR funding policy was set forth in nothing more formal than a 2013 PowerPoint presentation and the papers the administration filed in court, rescinding the policy required only a one-paragraph announcement from HHS. That announcement was supported by three pages of legal analysis from the attorney general, and it was followed by a presidential tweet that "ObamaCare is imploding." The Trump administration has thus sided with the district court and sidestepped the appeal that is pending in the U.S. Court of Appeals for the D.C. Circuit.

The true test

On the campaign trail, Trump criticized Obama's penchant for unilateral action and threatened to "undo all of Obama's executive orders." But as president, Trump has learned just how useful the executive pen can be.

Trump's resort to executive orders and administrative action is not merely a response to congressional intransigence. Because so much of Obama's legacy was the product of executive orders and agency rules and guidance, it is only natural that the Trump administration would dismantle that legacy with the same administrative tools that built it in the first place.

But the exercise should also teach an important lesson about the transience of executive branch policymaking. What the Trump administration accomplishes today by executive order, rule-making and guidance, the next administration can undo just as easily.

Lasting change will be accomplished only through Congress. Although Trump's core legislative agenda has been slow to ramp up, Congress has not been inactive when it comes to undoing the legacy of Obama. In the first five months of Trump's presidency, Congress used the Congressional Review Act 14 times to repeal Obama-era regulations.

It remains to be seen whether that deregulatory energy can be redirected toward affirmative legislation. Since Republicans could lose their bicameral majority in November 2018, the true test of Trump's legacy won't be in his executive actions, but in what laws the White House can work with Congress to pass in the next year.

Adam Gustafson is a partner at Boyden Gray & Associates, a constitutional and regulatory law firm in Washington, D.C. During the previous administration, the firm represented parties challenging EPA's Clean Power Plan, the FCC's Open Internet Order, Homeland Security's DAPA immigration policy, and the IRS' Affordable Care Act regulation. The firm filed comments in EPA's midterm evaluation of the greenhouse gas emissions standards.