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November 1, 2019

Immediately after President Trump’s Inauguration the Administration, Congressional Leaders and the business community worked together to begin the process of rolling back the aggressive regulatory agenda of the Obama Administration. Some Obama Executive Orders were quickly reversed by Trump Executive Orders, some rules were reversed by an agency, and some were unraveled by withdrawing the government from ongoing litigation.

Significantly, rules were also reversed legislatively using the Congressional Review Act (CRA). The CRA was enacted in 1996 to allow Congress to repeal rules issued by a president late in his/her term.  Prior to 2017, the CRA had been successfully used only once; in 2017 Congress and President Trump repealed 14 rules using the CRA.

The regulatory reform effort has been successful by any measure.  On January 5, 2018, American Action Forum (AAF) published a comprehensive report entitled “2017: THE YEAR IN REGULATION.”    AAF reported that 274 regulations were finalized in 2017 with an economic cost of $30.6 billion, but that:

81 percent of all regulatory costs finalized in 2017 came during President Obama’s final weeks in office. . . Of the $30.6 billion in finalized costs last year, $24.8 billion came from 38 rules published from January 3-19, 2017, in the waning days of the Obama Administration . . . [T]he imposition of just $5.8 billion in new regulatory costs in nearly a year is a considerable feat for the Trump Administration.

They concluded their report noting that:

2017 marked a sea change in the regulatory paradigm. . . [T]he Trump Administration’s latest regulatory agenda and proposed deregulatory measures heading into 2018 point to a continued shift towards reducing regulatory costs and new paperwork mandates. [You can read AAF’s full report here: https://www.americanactionforum.org/research/2017-year-regulation/]

In January, 2019, AAF released its second annual report on regulations in the Trump Administration – 2018: THE YEAR IN REGULATION – and reported that the deregulatory mission of the Trump Administration remained on track:

For the first time since the American Action Forum (AAF) began tracking final regulations published in the Federal Register (going back to 2005), federal agencies published net regulatory cost savings for a calendar year. AAF research found that in 2018 federal agencies finalized 324 regulations with estimated costs, savings, or paperwork impacts . . . resulting in cost savings of $7.8 billion.

And in March, 2019, the American Council on Capital Formation (ACCF) Center for Policy Research released a comprehensive paper on the Trump Administration’s regulatory reform agenda. In their paper, Trump’s Deregulatory Record: An Assessment at the Two-Year Mark, ACCF reports that:

  • There have been fewer new regulations under the Trump Administration than under Presidents Obama and George W. Bush;
  • The Administration has been “somewhat effective” working with Congress on de-regulatory legislation (i.e., Congressional Review Act disapprovals); and
  • There are currently 514 deregulatory rulemakings underway.

Obstacles to the DE-regulatory agenda in the Administration and the courts:

While crediting the Trump Administration for issuing fewer new regulations than previous administrations, the ACCF report notes that the DE-regulatory agenda is moving much more slowly. They particularly point to the number of unfilled positions in the Administration: while vacancies in key positions might serve the mission of stopping new regulations, the goal of de-regulation is hampered by unfilled positions in regulatory agencies.

And significantly, the ultimate success of the President’s de-regulatory mission may be decided not by Congress and the regulators, but by the third branch of government – the judiciary. As a banner headline in the March 29th Washington Examiner put it: The fate of Trump’s deregulatory agenda lies in the courts.

The ACCF report covers this issue in depth. One of the primary problems for the Trump Administration in this area is that a majority of the sitting district court judges in the country were appointed by Democratic presidents, and most of the cases challenging Trump Administration deregulatory actions have been decided in those district courts. The balance between GOP and Democratic appointees on the circuit courts is more even, but even there the DC Circuit hears a preponderance of this type of case and the GOP still has a significant minority of the judges on that court.

New York University’s Institute of Policy Integrity (IPI) tracks litigation arising from the Administration’s deregulatory initiatives. As ACCF reported, of the 30 cases in the IPI database in mid-January, the Administration won just two, and “28 were won by plaintiffs (either by a formal court decision or because the federal government capitulated before a judicial decision was issued).”

However, that loss ratio cannot be attributed only to Democratic-appointed judges. The ACCF report points out that the Administration is not necessarily winning cases heard by GOP-appointed judges. To a disturbing degree, adverse decisions have been a result of hasty/sloppy work or mistakes on the part of the federal agencies. Among the issues the report cites as being responsible for adverse rulings were “failure to consider the foregone benefits of a regulation,” “failure to supply formal analyses that are required to support a deregulatory action,” and “unlawful delay in the effective dates of rules.”

The President and Senate Majority Leader McConnell have made a determined effort to fill judicial vacancies as expeditiously as possible, and the wisdom of that commitment is easily seen in the de-regulatory cases being decided. But leveling the playing field in the district courts will not by itself ensure that the Trump deregulatory agenda succeeds – the Administration needs to quickly fill vacant regulatory positions and the agencies need to produce deregulatory proposals that will be upheld in court.

Click here to access the full ACCF report.

 

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