07 Mar The Shifting Regulatory Landscape
The regulatory regime in Washington is under review. President Trump and the Republican Congress are taking steps to reduce regulation and reform the process by which the Federal government imposes new requirements on the private sector. There are a number of tactics being employed. The goal is to ensure regulations are not unduly burdensome and economic activity is not unnecessarily curtailed. Since January, there’s been quite a bit of regulatory activity across government. If you haven’t been following it closely, TECHPol has the lay of the land.
The first item on the agenda in the House of Representatives after adopting its rules and electing the Speaker, was voting on regulatory reform legislation. The House has passed several bills both to change how regulations are formulated and nullify some regulations issued by the Obama Administration. Here’s a quick rundown:
- Midnight Rules Relief Act — The term “midnight rules” refers to regulations issued late in a President’s term. Under the Congressional Review Act (CRA), Congress can vote to nullify certain rules, one at a time, if they act within 60 legislative days. The bill would expedite this process by allowing Congress to disapprove multiple rules via one bill and apply the CRA window to the entire last year of a President’s term. (H.R. 21, Passed 238-184)
- REINS Act — The Regulations from the Executive in Need of Scrutiny Act would require Congress and the President to approve major rules — those with an economic impact of more than $100 million. (H.R. 26, Passed 237-187)
- Regulatory Accountability Act — This legislation combines a number of reforms that would 1) require agencies to choose regulatory solutions that are less costly; 2) end the practice of giving judicial deference to the agency’s regulatory and statutory interpretations; 3) prevent major rules from taking effect until court challenges are resolved; 4) require more transparency through additional disclosure about upcoming regulations and plain-language summaries of proposals. (H.R. 5, Passed 238-183)
- SEC Regulatory Accountability Act — The bill would require the Securities and Exchange Commission to check a few more boxes before promulgating a rule, including a cost and benefit analysis and examination of alternatives. (H.R. 78, Passed 243-184)
- SCRUB Act — The Searching for and Cutting Regulations that are Unnecessary and Burdensome Act would create a bipartisan commission to review regulations and make suggestions about those that should be repealed or modified. (H.R. 998, Passed 240-185)
- OIRA Insight Reform and Accountability Act — The Office of Information and Regulatory Affairs is the regulatory gatekeeper and ensures that agencies follow procedure and protocol when promulgating regulations. The bill would codify OIRA’s role and expand its purview to independent agencies. (H.R. 1009, Passed 241-184)
- Regulatory Integrity Act — The bill would requires agencies to be more transparent about their plans for regulations and give the public more opportunity to weigh in based on objective information. (H.R. 1004, Passed 246-176)
All of these measures are subject to Senate approval and will need to garner the support of 60 senators to move forward.
Disapproving Regulations under the CRA
Again, the CRA allows for Congress to disapprove rules issued by the Executive Branch if it acts within 60 legislative days. The law also provides for an expedited process in the Senate that requires a simple majority to pass a resolution of disapproval. So far this year, the House has voted on more than a dozen resolutions to invalidate Obama Administration rules under the CRA, and some have already become law. A few directly affect businesses, including resolutions to disapprove:
- OSHA’s enhanced reporting requirements for employee injury and illness — (H.J.Res. 83, Passed 231-191)
- “Blacklisting” rule for federal contractors with labor violations — (H.J. Res 37, House passed 236-187, Senate passed 49-48)
- SEC disclosure of certain payments by resource extraction companies (e.g., oil and mining) to foreign governments (H.R. Res. 41, Signed into Law)
The executive branch has been busy as well. On the day President Trump was sworn in, his chief of staff issued a memorandum to agencies to halt regulations until the President’s team is in place to review proposals. The President later signed executive orders (EOs) to slow the regulatory tide and set parameters for issuing new rules. In accordance with those directives, Federal agencies are reviewing rules and in some cases delaying implementation.
- Reducing Regulation — Under this EO, for every new regulation issued, two regulations must be repealed. A cap on regulatory costs is established to keep the overall impact neutral. Regulations that were not on the most recent, updated Unified Regulatory Agenda are not to be issued (unless otherwise required by law or in emergencies).
- Enforcing Regulatory Reforms — This EO requires agencies to designate a regulatory reform officer and create task forces to identify regulations ripe for repeal, replacement or modification.
- Reviewing specific regulations — Separate executive orders have been signed to require further review of the waters of the United States rule, financial regulations (like Dodd-Frank) and Obamacare requirements.
In light of the new Administration’s policies on regulation, the agencies are pulling back. In several cases, agencies have pushed back effective dates or even reversed rules. To name a few:
- The Federal Communications Commission voted to block rules requiring ISPs to take additional steps to protect privacy.
- In response to a presidential memorandum, the Department of Labor (DOL) delayed its fiduciary rule on investment advisors from April to June.
- The DOL also postponed a rule to set new limits on worker exposure to Beryllium until May.
- The Environmental Protection Agency has delayed regulations related to financial responsibilities for miners and extended the comment period to July 11.
The regulatory climate has changed quickly. As Congress seeks to meet the deadlines imposed by the CRA, the Trump Administration fills more agency positions, and agencies prepare their semi-annual regulatory submissions due March 31, there will be a lot more to digest. TECHPol will keep you updated.