President Trump has signed an executive order entitled “Reducing Regulation and Controlling Regulatory Costs,” also known informally as the “2-for-1 Order,” that directs agencies to take a number of actions aimed at deregulating a variety of industries. The Order is considerably vague, relying instead on the Office of Management and Budget (OMB) to issue additional implementation guidance. As a result, it remains unclear how this new regulatory approach will operate in practice.
2-for-1 Regulatory Identification Process
The Executive Order, signed January 30, 2017, directs each department or agency to identify two regulations to be repealed any time it proposes or finalizes a new regulation. It is worth noting that the Executive Order never expressly requires these regulations to actually be repealed; rather, merely identified. Importantly, the Order provides that this 2-for-1 regulatory identification process need only be followed if it is permitted by law. That is, Congress often passes laws that require certain administrative agencies to promulgate implementing regulations. To this end, the Order cannot and does not block regulations required by statute. Instead, only discretionary regulations would be eligible for elimination.
Critics of the Executive Order view this 2-for-1 regulatory identification process as an illogical approach to industry deregulation, arguing that this approach demonstrates a dearth of understanding about how and why regulations are actually issued. For example, in its examination of costs, the Executive Order ignores expected long-term cost savings, and only focuses on annualized regulatory costs. Accordingly, agencies might be required to eliminate regulations whose benefits greatly outweigh their regulatory costs, simply to meet this arbitrary regulatory standard. Supporters contend, however, that a requirement to eliminate regulations in order to promulgate new ones forces agencies to review and update existing regulations. This perceived lack of periodic of review and update is something that has long troubled many in regulated industries. Continue Reading