Administrative State
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Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs was a presidentialexecutive order issued byPresidentDonald Trump (R) in January 2017 that established aregulatory budget by instituting a regulatory cap on federal agencies for the remainder of fiscal year 2017, including a requirement that agencies eliminate two old regulations for each new regulation issued. The order also put forth procedures for theOffice of Management and Budget (OMB) to determine annual regulatory cost allowances for agencies beginning in fiscal year 2018.^[1]

PresidentJoe Biden (D) revoked E.O. 13771 on January 20, 2021, viaE.O. 13992.

Background

See also:Regulatory review

In 2016, then-presidential candidate Donald Trump (R) campaigned on a platform that included a pledge to rein in what he considered to be burdensome federal regulations that slowed down economic growth—an agenda that his former chief strategistSteve Bannon characterized as the "deconstruction of theadministrative state." After taking the oath of office on January 20, 2017, President Trump launched his agenda by instituting a regulatory freeze. Ten days later, on January 30, 2017, Trump issued E.O. 13771, which called for any new regulatory activity by agencies to amount to a net cost of zero dollars by the end of the fiscal year.^[2][3]

In order to achieve the goal of E.O. 13771, the order required that agencies eliminate two old regulations for each new regulation issued. The order also required continued compliance with the cost-benefit analysis provisions foreconomically significant rules outlined in PresidentBill Clinton's (D)E.O. 12866, which E.O. 13771 identified as one of the major policies and initiatives guidingregulatory review and reform efforts by the executive branch. E.O. 13771 did not include any penalties for noncompliance by the end of the fiscal year, but it required noncompliant agencies to submit a report to the OMB detailing the agency's plan to achieve compliance.^[2][3][4]

TheOffice of Information and Regulatory Affairs (OIRA) later issued a series ofguidance documents outlining procedures for implementing E.O. 13771. In particular, the guidance specified that the two-for-one regulation provision only applied toeconomically significant rules, those with an anticipated economic impact of $100 million or more. Rules pertaining to national security, emergency actions, and statutory or judicial mandates were exempt from the order. The Trump administration later issuedE.O. 13777 on February 24, 2017, which established new regulatory reform officers and regulatory reform task forces to implement the provisions of E.O. 13771.^[4]

Provisions

Regulatory cap

E.O. 13771 required agencies to repeal two regulations for each new regulation issued and put in place a regulatory cap of zero for fiscal year 2017, with certain exceptions. It required the director of theOMB to provide guidance to agencies on how to implement the new requirements:^[1][5]

Submission of regulatory costs

Beginning with fiscal year 2018, the order required agencies to submit a total cost analysis detailing the expected regulatory costs of any new regulations and the offsets provided by the repeal of two old regulations. Regulations approved by theOMB director were included in theUnified Regulatory Agenda. The order prohibited the issuance of any new regulations not included in the agenda. TheOMB director was also required to assign an annual total incremental cost allowance, or a cap, for each agency's regulatory plan. Agencies could not exceed their total incremental cost allowances.^[1][5]

OMB guidance

See also:Guidance document

OIRA issued a series ofguidance documents to provide direction for agencies regarding compliance with E.O. 13771. The guidance provided the following clarification for implementation of E.O. 13771, according to an analysis by the American Action Forum:^[7]

Impact

2017

A November 2017OIRA report, titled "Regulatory Reform: Two-for-One Status Report and Regulatory Cost Caps," provided information about agency compliance with E.O. 13771 during fiscal year 2017, which closed on September 30, 2017. The report found that "in the first eight months of the Administration, agencies have far exceeded the two-for-one and regulatory cap requirements." The report included the following findings foreconomically significant regulatory actions subject to E.O 13771:^[4][8]

• Agencies issued 67 applicable deregulatory actions and three regulatory actions for a ratio of 22-to-1.
• Agencies saved a projected $8.1 billion in regulatory costs ($570.4 million per year).^[4][8]

OIRA released another report, titled "Regulatory Reform: Cost Caps Fiscal Year 2018," which provided information about agency cost caps for 2018 and the anticipated fiscal impact of the provision.OIRA reported that "in Fiscal Year 2018, across the federal government, agencies anticipate saving $9.8 billion in regulatory costs, or $686.6 million per year."^[4][9]

On December 29, 2017, the last federal working day of the 2017 calendar year, theFederal Register closed with the fewest number of totalfinal rules (not limited toeconomically significant rules) since the mid-1970s, according to the Competitive Enterprise Institute, an organization that describes itself as a free-market group.Click here to view Ballotpedia's analysis of additions to theFederal Register during 2017.^[10]

2018

At the close of the 2018 fiscal year, the Trump administration reported that $23 billion in savings were accrued from 176 deregulatory actions. OIRA reported that agencies issued 57 applicable deregulatory actions and 14 regulatory actions for a ratio of 4-to-1. At the time of the report, the administration had issued 65% fewereconomically significant rules—defined as rules that impose costs exceeding $100 million per year—than the Obama administration and 51% fewer than the Bush administration.^[11][12]

The Trump administration projected that regulatory costs would decrease by $18 billion in the coming 2019 fiscal year.^[12]

2019

At the close of the 2019 fiscal year, OIRA issued an update on the Trump administration's 2-to-1 regulatory policy. The update featured the following highlights:^[13]

• Agencies accrued $13.5 billion in savings from 150 deregulatory actions.
• Sixty-one deregulatory actions were deemed significant.
• Agencies issued 35 significant regulatory actions.
• Comparing significant deregulatory to significant regulatory actions yielded a ratio of 1.7- to-1—just shy of the administration’s 2- to-1 goal.^[13]

Looking ahead to the 2020 fiscal year, OIRA anticipated that agencies would accrue $51 billion in regulatory cost savings. From 2017 to 2019, agencies eliminated $50.9 billion in regulatory costs.^[13]

2020

OIRA issued an update on the Trump administration's 2-to-1 regulatory policy as part of the Fall 2020 edition of theUnified Agenda of Federal Regulatory and Deregulatory Actions. The update featured the following highlights:^[14]

• Agencies eliminated $198.6 billion in overall regulatory costs across the federal government.
• Agencies eliminated 5.5 regulations for every new significant regulation added.
• Agencies issued 538 deregulatory actions overall.^[14]

Noteworthy events

Lawsuits challenging E.O. 13771 (2017-2020)

California v. Trump

California,Oregon, andMinnesota filed a joint lawsuit in theUnited States District Court for the District of Columbia on April 4, 2019, arguing that E.O. 13771 is unconstitutional and violates theAdministrative Procedure Act (APA). InCalifornia v. Trump, the states claim that the executive order is unconstitutional because it exceeds the president's authority, violates theseparation of powers, and undermines the president's responsibility to faithfully execute the law. The states further argue that the executive order violates the APA because it has resulted in agencies acting in excess of their authority in order to comply with the order.^[15][16]

JudgeRandolph D. Moss dismissed the case on April 2, 2020, because the plaintiffs failed to demonstrate that they had Article III standing to sue.^[17]

Public Citizen v. Trump

A group of organizations and unions, including Public Citizen, theNatural Resources Defense Council, and the Communication Workers of America, filed a lawsuit,Public Citizen v. Trump, in theUnited States District Court for the District of Columbia on February 8, 2017. The lawsuit claims that E.O. 13771 cannot be lawfully implemented because it would require agencies to violate existing statutes. JudgeRandolph D. Moss found that the plaintiffs lacked standing and dismissed the case on February 26, 2018.^[18][19]

The plaintiffs filed an amended complaint in April 2018. On February 8, 2019, the court ruled that the plaintiffs demonstrated standing, but not sufficient standing to advance to summary judgment. Judge Moss ruled on December 20, 2019, that the plaintiffs lacked standing because they could not demonstrate that the executive order would impact specific regulations affecting their members. A spokesperson for Public Citizen toldSafety + Health on January 16, 2020, that the organization would not appeal the decision.^[20][21]

See also

• Regulatory review
• U.S. Office of Information and Regulatory Affairs
• U.S. Office of Management and Budget
• Significant regulatory action

External links

• Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs (2017)
• RegInfo.gov
• Regulations.gov
• Search Google News for this topic

Footnotes

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Gardner •A.L.A. Schechter Poultry Corp. v. United States •Association of Data Processing Service Organizations v. Camp •Auer v. Robbins •Chevron v. Natural Resources Defense Council •Citizens to Preserve Overton Park v. Volpe •Federal Trade Commission (FTC) v. Standard Oil Company of California •Field v. Clark •Food and Drug Administration v. Brown and Williamson Tobacco Corporation •Humphrey's Executor v. United States •Immigration and Naturalization Service (INS) v. Chadha •J.W. Hampton Jr. & Company v. United States •Lucia v. SEC •Marshall v. Barlow's •Massachusetts v. Environmental Protection Agency •Mistretta v. United States •National Federation of Independent Business (NFIB) v. Sebelius •National Labor Relations Board v. Noel Canning Company •National Labor Relations Board v. Sears, Roebuck & Co. •Panama Refining Co. v. Ryan •Securities and Exchange Commission v. Chenery Corporation •Skidmore v. Swift & Co. •United States v. Lopez •United States v. Western Pacific Railroad Co. •Universal Camera Corporation v. National Labor Relations Board •Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council •Wayman v. Southard •Weyerhaeuser Company v. United States Fish and Wildlife Service •Whitman v. American Trucking Associations •Wickard v. Filburn •Wiener v. United States Terms Adjudication (administrative state) •Administrative judge •Administrative law •Administrative law judge •Administrative state •Arbitrary-or-capricious test •Auer deference •Barrier to entry •Bootleggers and Baptists •Chevron deference (doctrine) •Civil servant •Civil service •Code of Federal Regulations •Codify (administrative state) •Comment period •Compliance costs •Congressional Record •Coordination (administrative state) •Deference (administrative state) •Direct and indirect costs (administrative state) •Enabling statute •Ex parte communication (administrative state) •Executive agency •Federal law •Federal Register •Federalism •Final rule •Formal rulemaking •Formalism (law) •Functionalism (law) •Guidance (administrative state) •Hybrid rulemaking •Incorporation by reference •Independent federal agency •Informal rulemaking •Joint resolution of disapproval (administrative state) •Major rule •Negotiated rulemaking •Nondelegation doctrine •OIRA prompt letter •Organic statute •Pragmatism (law) •Precautionary principle •Promulgate •Proposed rule •Publication rulemaking •Regulatory budget •Regulatory capture •Regulatory dark matter •Regulatory impact analysis •Regulatory policy officer •Regulatory reform officer •Regulatory review •Rent seeking •Retrospective regulatory review •Risk assessment (administrative state) •Rulemaking •Separation of powers •Significant regulatory action •Skidmore deference •Statutory authority •Substantive law and procedural law •Sue and settle •Sunset provision •Unified Agenda of Federal Regulatory and Deregulatory Actions •United States Code •United States Statutes at Large Bibliography "Administrative Law - The 20th Century Bequeaths an 'Illegitimate Exotic' in Full and Terrifying Flower" by Stephen P. Dresch (2000) "Confronting the Administrative Threat" by Philip Hamburger and Tony Mills (2017) "Constitutionalism after the New Deal" by Cass R. Sunstein (1987) Federalist No. 23 by Alexander Hamilton (1787) "From Administrative State to Constitutional Government" by Joseph Postell (2012) "Interring the Nondelegation Doctrine" by Eric A. Posner and Adrian Vermeule (2002) "Rulemaking as Legislating" by Kathryn Watts (2015) "The Checks & Balances of the Regulatory State" by Paul R. Verkuil (2016) "The Myth of the Nondelegation Doctrine" by Keith E. Whittington and Jason Iuliano (2017) "The Progressive Origins of the Administrative State: Wilson, Goodnow, and Landis" by Ronald J. Pestritto (2007) "The Rise and Rise of the Administrative State" by Gary Lawson (1994) "The Study of Administration" by Woodrow Wilson (1887) "The Threat to Liberty" by Steven F. Hayward (2017) "Why the Modern Administrative State Is Inconsistent with the Rule of Law" by Richard A. Epstein (2008) Agencies Administrative Conference of the United States •United States Civil Service Commission •U.S. Government Accountability Office •U.S. Office of Information and Regulatory Affairs •U.S. Office of Management and Budget