October 24, 2017

Effects of regulatory executive orders yet to be seen, panel at ABA conference agrees

In early 2017, President Donald Trump issued two executive orders directed at regulatory reform with the aim of reducing costly burdens on businesses and government agencies. A panel comprised of representatives from industry, an advocacy organization and a government agency met to discuss the on-the-ground experience with these executive orders during an Oct. 19 program sponsored by the ABA Section of Administrative Law and Regulatory Practice

Experts discuss regulatory reform at a program sponsored by the ABA Section of Administrative Law and Regulatory Practice.

The panel included:

  • Moderator Christina McDonald, associate general counsel for regulatory affairs, U.S. Department of Homeland Security;
  • Anne Bechdolt, senior attorney for regulatory affairs, FedEx Express;
  •  Nicole Rataski Avramovich, senior regulatory affairs analyst, Bridgestone Americas Tire Operation;
  • Amit Narang, regulatory policy advocate, Congress Watch, Public Citizen; and
  • Daniel Cohen, assistant general counsel for legislation, regulation and energy efficiency, U.S. Department of Energy.

McDonald began by outlining both executive orders. Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” requires agencies to identify two prior regulations for elimination and equivalent cost offsets before issuing one new regulation. In addition, it provides that the director of the Office of Management and Budget will identify a regulatory cost allowance for each agency in fiscal year 2018 and beyond. Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” requires agencies to establish regulatory reform task forces and to designate regulatory reform officers.  McDonald then asked each panelist to describe their regulatory reform concerns related to these “new” executive orders.

Bechdolt said FedEx has both domestic and global regulatory concerns, and regulatory reform is necessary and ongoing to keep the company competitive. The company was started in 1973, and in 44 years has grown to delivering an average of 12 million shipments globally each business day and employs more than 220,000 people worldwide. FedEx interfaces daily with the Transportation Security Administration, Federal Aviation Administration, U.S. Food and Drug Administration, Occupational Safety and Health Administration, Department of Labor and the Department of Defense, among others.

Bechdolt said regulatory reforms are sometimes seen as contrary to safety and security initiatives. However in her experience, she said such reforms often lead to safety, security and environmental enhancements.

Avramovich said Bridgestone Americas Tire Operations also has global operations that span several product lines but the regulatory focus for her office is in safety and emissions. She said the idea that deregulation is better for business is not necessarily true, because a large company will start complying with regulations and putting the cost forward years before compliance date. So, going back and retroactively changing regulations is not necessarily a cost savings.

Narang said his organization, Public Citizen, tracks regulatory volume and that in 2016, some 457 regulations were withdrawn from consideration. In comparison, the next highest number going back 20 years is 386 regulations withdrawn in 2002. The Department of Interior leads the pack with the most withdrawn rules, mainly involving changes in endangered species lists. The Office of Information and Regulatory Affairs reports that between January and October of this year, 138 regulatory actions were under review. In comparison, during the same time period in 2009 when President Obama’s administration began, 463 rules were under review – which signals a regulatory review slowdown. Withdrawing rules that have not yet been reviewed is the “low-hanging fruit” for the Trump administration’s deregulation agenda, Narang said.

Cohen said the Department of Energy, like other agencies, established a regulatory reform task force to comply with Executive Order 13777, with the aim of evaluating and addressing regulations that impose burdens on the goal of the statute. To inform the work of the task force, Cohen said the agency sought input from outside entities, and asked its several advisory committees on various topics to consider regulatory reforms for potential action. He added that anyone can go to regulations.gov to see which actions are under consideration.

Since the new executive orders were issued, Bechdolt and Avramovich said their companies have monitored the federal registry for suggested rule modifications or updated cost analyses, but otherwise have not noticed any specific impact on their regulatory activity.

Cohen said that when the Department of Energy gets a request for regulation modification, it is helpful for them to understand the context of the request – how would this change be beneficial? Each rule is put in place to achieve some objective, but maybe it has become ineffective, for example. Bechdolt agreed, adding that the “why” is an important component to considering rule changes.

McDonald asked the panelists if there have been notable benefits, such as cost saving, since the new executive orders were issued.

“From our perspective, we plan and make our investment opportunities and we make our research plans well in advance, so since these executive orders were put in place in January we haven’t seen an impact on that decision process,” Bechdolt said. “It’s too early to tell because there haven’t been many actions taken or announcements made.”

Avramovich added that Bridgestone’s internal regulatory process is rigorous, often exceeding government standards. In that sense, deregulation will not affect how many companies operate because constantly improving their products is necessary in competition. She added that key posts have not been filled in the agencies, slowing down regulation activity.

“Businesses like stability, and often there is more of a cost burden to unraveling regulations,” Avramovich said. Bechdolt said the new executive orders inject uncertainty about pending regulations. “In some cases, though, there’s optimism.” She explained that regulatory reform was meant to be a routine process in regulatory review, looking at provisions that are outdated, unnecessary or overcome by new technologies. But looking at the federal register, she finds few instances of reforms sought due to technological advances. “We are optimistic that those updates will occur in time.”