The Trump administration has released the Fall 2020 edition of the twice-yearly Unified Agenda of Federal Regulatory and Deregulatory Actions, bookending four years. Its purpose is to lay out regulatory priorities of the federal bureaucracy and report on recently completed — and for Trump substantially deregulatory — actions.
With us since the early 80s, the blockbuster Unified Agenda informs a breathless public excited to hear about regulatory priorities of the federal bureaucracy.
Actually it bores people, but Trump’s regulatory cuts and unique liberalization agenda have distinguished the beefy report, with the administration proclaiming that agencies continue to meet the requirement to eliminate at least two significant regulations for every new rule added, and to to not merely maintain net-zero new costs but generate substantial savings. (See Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs has largely steered Trump’s regulatory program.)
In a statement regarding the new Agenda, the Administration asserts that in fiscal year 2020, agencies “achieved regulatory cost savings of more than a hundred billion dollars” and issued “more than three deregulatory actions for every regulatory action.”
For comparison with this week’s three-to-one announcement, back in fiscal year-end 2017, the Administration claimed a rules-out to rules-in ratio 22-to-1 (naturally criticisms abounded). The 2018 count was 176 deregulatory actions and 14 significant regulatory actions, for an overall ratio of 12 to one). The 2019 fall update continued the progress with a 4.3-to-one overall ratio (and 1.7-to-one when significant rules out were mapped to significant rules in).
Granted, it gets more difficult for any administration acting unilaterally (without Congress) to streamline; but given the (incomplete) subset of regulatory items under Office of Management and Budget green-eyeshade purview, it worked well.
Overall, the new Agenda shows that agencies have 3,852 rules in in the pipeline (at the active, completed, and long-term phases), compared to 3,752 last year (2019). Trump’s low count had been 3,209 in fall 2017.
Trump’s total flow for each of the past three years exceeds Obama’s exit total of 3,320. A distinction, however, is that many items are classified “deregulatory” via the “E.O. 13771 Designation.” That’s a reporting innovation under Donald Trump that Biden would be wise to retain. By longstanding convention a deregulatory measure also counts as a “rule,” which confuses things. (Plus many rules are routine safety directives from bodies like the Federal Aviation Administration and Coast Guard rather than newfangled regulatory initiatives.)
In any event, there were 653 “Deregulatory” rules spread across the active, completed and long-term stages in the new 2020 Fall Agenda, for a “net” rule count, one might say, of 3,199. In the prior two years these deregulatory numbers also hovered in the 600s.
The administration emphasizes “significant rulemakings” in its year-end two-for-one updates, one of which we should see reported out of the administration shortly. It should largely track what we see in the new Agenda but give more accessible specifics on the exact rules cut and where that $100 million in costs were reduced.
The Unified Agenda emphasizes a related subset of rules classified as “economically significant,” which loosely means they sport $100 million in annual economic effects. In the Fall Agenda, 261 of the 3,852 rules across all stages of completion were classified economically significant, with 36 of them deemed Deregulatory.
Along with the ability to flag rules as “Deregulatory,” the Unified Agenda’s “E.O. 13771 Designation” includes radio-button selection options for each of the following (which, incidentally, a Biden administration had best retain, even if they ditch other elements of the executive order):
- Fully or Partially Exempt
- Not subject to, not significant
- Independent agency
So to get a more comprehensive look at the one-in, two-out results in this fourth year of the program, it is helpful to look separately at a grid of “completed,” “active,” and “long-term” rule categories in the aggregate, and also split up into “economically significant” and “other significant” components. This is done in the table below (click it to see a bigger image):
As the table shows in the light-grey highlighted area, overall there are 653 “Deregulatory” actions and 338 “Regulatory” ones in the 2020 Fall update. That’s a broad ratio of nearly two-to-one when taking the entire flow, including the more directly relevant recently completed inventory, into account.
However, we don’t know what all the “other,” “not subject to” and “partially exempt” encompass. These in part represent the presence of vast transfer programs governed by agencies, curricula that are also regulatory in character, but escape that designation. There are 2,276 rules of this type, plus another 585 from independent agencies that fly under the E.O. 13,771 radar (and for which we can only be grateful they appear in the Agenda at all).
It is worrisome that the bulk of the administrative state’s rules get placed in these sketchy categories, because in a new administration the potential for any scrutiny of them will be zero. This is a long-winded way of saying these classifications, as well as agency guidance documents, need audit. Non-significant rules can be added without being offset, and some might be more significant than admitted by their creators if “swamp” has any meaning.
Trump’s Two for One Directive is Met, but We’ll be Kissing It Goodbye In a New Administration
For recently Completed rules, the counts are 96 Deregulatory and 31 Regulatory, for a ratio of three to one. It’s actually a little better if we leave out the non-significant completed Regulatory rules.
Likewise, in the “Active” (pre-rule, proposed, and final) category, there are 503 “Deregulatory” and 239 “Regulatory” actions in the pipeline, meeting a two-to-one ratio for contemplative purposes (the EO doesn’t intend that what’s in the pipeline meet the 2-for-1 stricture). Expect the Deregulatory among these to be wipeout targets in a Biden administration. Therefore comparing these deregulatory targets with what emerges in the future 2021 Spring Unified Agenda should be telling.
As emphasized here, E.O. 13,771 order applies to “significant” rules added, but non-significant rules can be employed to offset them in pursuit of the no-net-new-cost directive essence of the E.O.. But looking at significant rules as opposed to non-significant ones on the chopping block gives a better apples-to-apples comparison.
As the table above details, of the 96 Completed “Deregulatory” actions in the Fall 2020 Agenda, 14 rules are “economically significant,” with another 34 deemed “other significant.”
As for completed “Regulatory” actions, 31 appear in the 2020 Fall Agenda, with 12 of them deemed “economically significant” and 15 “other significant.”
So: Completed significant deregulatory exceed the number of completed significant regulatory actions just shy of a two-to-one ratio. Enlisting other Deregulatory but not necessarily significant measures makes the ratios work even better (and as noted the executive order allows that, because the central objective is the no-net-cost mandate).
According to the administration, the attainment of no net new costs is not merely on track, but unambiguously achieved with substantial regulatory savings of nearly $100 billion claimed in 2020.
Significant “Active” Deregulatory and Regulatory Actions Need Attention
Active actions in the pipeline at the “pre-rule,” “proposed,” and “final” rule stages represent the body of rules in production process. The table above shows that the total of 503 Deregulatory actions in play well exceeds 239 Regulatory ones, by a healthy two-to-one margin overall when non-significant Deregulatory rules are included. As non-completed actions, these rules bear no obligation to meet the two-for-one goals, but their “non-compliant” trajectory might be regarded as a leading indicator.
Of more concern are the costlier subsets of Active rules. There are 52 economically significant Regulatory actions depicted in the above table, but just 20 economically significant Deregulatory actions in play.; and even those would be expected to vanish under Biden.
In the “other significant” category, 162 Deregulatory actions handily outweigh 141 Regulatory ones. That’s good; since active rules encompass both proposed and final undertakings, there is time to course-correct as rules in the pipeline move closer toward finalization. Still, the unfavorable ratios of significant active Regulatory to significant active Deregulatory rules highlight the limitations of unilateral executive regulatory liberalization no matter who is president.
Warning Signs: “Long-term” Planned Regulatory Actions Greatly Outstrip Deregulatory Ones
The “Long-term” rules category makes the concern over maintaining “one-in, two-out” even clearer; and it reveals how easily the regulatory dogs will be turned loose once the Trump administration ends. Here, agencies unabashedly demonstrate they plan more regulating than deregulating. In the new Fall Agenda, agencies anticipate 68 “Regulatory” actions but only 54 “Deregulatory” ones.
The situation is worse for the costlier “economically significant” and “significant” subsets. Only two economically significant long-term Deregulatory actions are planned. That would likely drop to zero under a Biden presidency. By contrast, 12 economically significant Regulatory actions are planned. These costlier rule subsets are presumably where tomorrow’s cost savings would need to come from, so we are hereby warned not to expect cost savings without E.O. 13,771.
Ultimately, what we observe over the long-tern horizon in the Unified Agenda of Federal Regulation points to the victory of those calling themselves the “resistance” to the Trump administration regulatory streamlining efforts.
Rolling back regulations requires going through the lengthy public notice-and-comment process; it takes time—more than Trump’s four years. And the administrative state by design works to the advantage of agencies’ maintenance of vast regulatory edifices to which, unique and historic as it was, E.O. 13,771 was never a permanent threat.
Meanwhile, expect a slew of Biden executive orders adding to the scope of government, and agencies’ substitution of guidance documents for formal regulations where they can. Trump has addressed the abuse of guidance documents via executive order, and, given that particular directive’s emphasis on sunshine and disclosure, could be more durable than the two-for-one directive that a Biden administation would eliminate on day one.
It is not wise to cede control of the regulatory enterprise to unaccountable agencies. There are a number of Trump actions regarding administrative state apparatus that Biden should retain, even if from the latter’s perspective he has to hold his nose. But that nose is already covered by a mask — so let’s hope for caution.