Regulatory Reform in the Trump Era

• Author: Kerry Krutilla,John D. Graham,Keith B. Belton
• DOI: http://doi.org/10.1111/puar.12826
• Published date: 01 September 2017
• Date: 01 September 2017

Regulatory Reform in the Trump Era 643

Public Administration Review,

Vol. 77, Iss. 5, pp. 643–644. © 2017 by

The American Society for Public Administration.

DOI: 10.1111/puar.12826.

Regulatory Reform in the Trump Era

John D. Graham is dean of the

Indiana University School of Public and

Environmental Affairs (SPEA). From 2001

to 2006, Graham served as the Senate-

confirmed administrator of the Office of

Information and Regulatory Affairs in the

U.S. Office of Management and Budget. In

this capacity, he was responsible for federal

regulatory, information, and statistical

policies. He holds a BA degree (politics and

economics) from Wake Forest University,

an MA degree (public affairs) from Duke

University, and a PhD degree (public affairs)

from Carnegie-Mellon University.

E-mail: grahamjd@indiana.edu

Kerry Krutilla is associate professor

at the School of Public and Environmental

Affairs at Indiana University, Bloomington.

His research focuses on the economic

evaluation of federal regulations,

optimal investment in cybersecurity, and

distributional accounting formats for benefit-

cost analysis. He has conducted contract

research for the World Bank, the U.S. Agency

for International Development, and the

Departments of Energy and Agriculture, and

lectured or taught in Taiwan, Spain, Russia,

Vietnam, and Azerbaijan.

E-mail: krutilla@indiana.edu

Keith B. Belton is director of the

Manufacturing Policy Initiative at the School

of Public and Environmental Affairs at

Indiana University, Bloomington. Previously,

he served as a government relations

executive in the manufacturing sector

and as a policy analyst with the Office

of Management and Budget. He holds

a PhD in public policy from The George

Washington University.

E-mail: kebelton@iu.edu

Perspective

H aving campaigned on a deregulation

platform reminiscent of Ronald Reagan ’ s

1980 “regulatory relief” program, Donald

Trump is using presidential powers aggressively

in pursuit of regulatory reform. While the Trump

action plan is patterned after those of previous GOP

presidents Reagan, Bush 41, and Bush 43, one

executive initiative is quite innovative and deserves

careful monitoring. That innovation is the so-called

two-for-one executive order (EO) calling for the

elimination of two existing rules for each new rule

that is added, thereby ensuring offsets to the costs of

new rulemakings. In this article, however, we contend

that a more significant reform agenda is emerging

from the Congress without much media attention

and, importantly, with some bipartisan support in

the Senate.

The actions that comprise Trump ’ s deregulatory

agenda are controversial but hardly new to GOP

administrations: freeze or cut the budgets of federal

regulators; appoint regulators with strong deregulatory

philosophies; reaffirm and buttress the Office of

Management and Budget ’ s (OMB) regulatory

oversight role; use EOs and OMB guidance to target

key areas of regulatory law (e.g., financial and energy

law) for reform; appoint a conservative academic to

run OMB ’ s Office of Information and Regulatory

Affairs; require regulators to appoint reform officers

who will collaborate with the White House; and work

with the GOP Congress to repeal new regulations,

using authority under the Congressional Review Act.

Some combination of these steps was employed by

Reagan, Bush 41, and Bush 43.

What are we to make of Trump ’ s innovation,

the two-for-one provision of Executive Order

13771 (“Reducing Regulation and Controlling

Costs”) and Executive Order 13777 (“Enforcing

the Regulatory Reform Agenda”), which requires

offsets new regulatory costs? The answer is far from

obvious because the devil will be in the details of

implementation.

The two-for-one order is based on a premise that

most regulatory reformers share: regulators find it

more exciting to establish new regulatory systems

than to update outmoded rules or fix the unintended

consequences of existing regulations. Over time,

this bureaucratic tendency has led to an unchecked

expansion of an uncoordinated regulatory state.

Consequently, most federal regulations, now in

effect, were never evaluated to determine whether

they accomplished their intended purpose, whether

they were cost effective, how they interact with

other regulations, and whether they had significant

unintended consequences. To its credit, the Obama

administration scratched the surface on the immense

challenge of retrospective review through OMB

prodding and some laudable agency fixes. For

example, many gasoline stations in the United

States are no longer required to invest $3,000 in a

duplicative vapor recovery system at the pump, since

EPA now recognizes that automakers have effectively

solved the problem through redesign of fuel systems

with vapor recovery technology.

How can a determined president build on Obama ’ s

success and create an institutional incentive for

regulators to review and streamline the huge, existing

body of regulations? EO 13711 offers a potential

solution: use OMB permission to adopt a new

regulation as a carrot to induce the regulatory agency

to review the body of existing regulations and repeal at

least two that are underperforming or are outmoded.

Both the United Kingdom and Canada have used

variants of the two-for-one regime to induce some

housecleaning at agencies.

The primary objection to Trump ’ s two-for-one EO is

that it might cause federal agencies to repeal highly

beneficial regulations, including regulations having

benefits far exceeding their costs. However, OMB ’ s

implementing guidance for EO 13771 ratifies the

principle in the Clinton administration ’ s executive

order EO 12866, requiring that regulatory changes

Keith B. Belton

Kerry Krutilla

John D. Graham

Indiana University, Bloomington