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New Order: Cut Two Regulations for Each New One

You can read the order here [1]. Key text:

Sec. 2.  Regulatory Cap for Fiscal Year 2017.  (a)  Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.

(b)  For fiscal year 2017, which is in progress, the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget (Director).

(c)  In furtherance of the requirement of subsection (a) of this section, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.  Any agency eliminating existing costs associated with prior regulations under this subsection shall do so in accordance with the Administrative Procedure Act and other applicable law.

I wrote about this “one in, two out” idea here [2]. As crazy as it sounds, this is actually an approach that both the UK and Canada have used to pare back the regulatory burden.

And the final order is surprisingly limited, thanks to section (b). An agency making $5 billion worth of new regulation doesn’t have to repeal $10 billion worth—it just has to offset the $5 billion while cutting twice the number of regulations. It could enact five $1 billion rules and repeal ten $500 million rules.

Section (c) seems to say that each new regulation has to be offset specifically by the two repealed regs it’s paired with—a “pay-as-you-go” system—but frankly the wording is kind of garbled.

Starting next year, agencies will be given a “regulatory budget” they have to stick to, instead of just keeping incremental costs at zero. This will be handled by the director of the Office of Management and Budget, a position for which Trump has chosen Mick Mulvaney [3].


Brian Knight of the Mercatus Center has some more thoughts here [4].

Robert VerBruggen is managing editor of The American Conservative.
Follow @RAVerBruggen [5]

5 Comments (Open | Close)

5 Comments To "New Order: Cut Two Regulations for Each New One"

#1 Comment By grumpy realist On January 30, 2017 @ 5:03 pm

Yes, it will be very interesting to see how the FAA starts implementing this. So in exchange of writing regulations for drones we’re going to get rid of regulations on airplanes?

Hope you like wrangling over which end of the plane you’re willing to have crash first.

#2 Comment By Amos Newcombe On January 30, 2017 @ 5:19 pm

Can someone tell me what “one regulation” means? Is it one single numbered paragraph from the Code of Federal Regulations? Alternatively, tell me how many “regulations” are in this section of the CFR: [6]

Because it seems to me that talk of “one regulation” or “two regulations” is meaningless.

#3 Comment By kalendjay On January 30, 2017 @ 8:24 pm

One possibility for the two-for-one reg is a recreation of the “plain English” Act, which promised to force policy promulgators to state exactly what it is an act or regulation is supposed to do.

If you look at your IRS regs, you will see endless provisos, exceptions, and throat clearings in an attempt to explain the law, and describe some actual behavior or activity a person or entity is supposed to follow.

You can easily imagine new regs just bundling the old regs into simpler sentences, laying down common principles, clarifying or restating agency rulings, and eliminating the uncertainties of “shall” and “will”. Reg reformers may actually end up doing very little: Along the way will come many attorney general rulings to placate industry and correct misapprehensions. But at least you’ll get simpler prose.

#4 Comment By Howard On January 31, 2017 @ 3:02 am

@Amos Newcombe — Exactly. Other issues: When the order refers to “cost”, whose “cost” does that mean? Cost to the federal government seems most likely, not cost to those affected by the regulation. Also, note that the number of regulations has no real relationship with the scope or the impact of regulations. We may see the scope and impact of regulations dramatically increase as the result of this order, because now regulations will be written in the broadest possible terms rather than targeting particular circumstances, and they may become more expensive to the affected public in spite of becoming less expensive to the government.

#5 Comment By Grumpy Realist On January 31, 2017 @ 10:06 am

Kalendjay–that’s usually because someone writes a clear draft in the beginning which covers 99% of the cases, then someone points out that it screws up X, someone else points out that it doesn’t deal with case Y, unsoweiter…..