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Top Ten Regulatory Policy Stories of 2018 (IMHO)

Responsive Government

While regulatory policy developments might not lead evening news broadcasts or dominate newspaper headlines, they can have an enormous impact on our day-to-day lives. Regulatory policy has been a particular hotbed of activity during the Trump administration, which swept into office determined to undermine or corrupt the institutions responsible for keeping Americans and their environment secure against unacceptable risks of harm. So, it is no surprise that 2018 was another busy year in regulatory policy. Here are 10 of the biggest stories I’ve followed, in no particular order:

  1. First full year of the Executive Order 13771 “regulatory budget.” The single most significant step that the Trump administration has taken on regulatory policy was its issuance of Executive Order 13771, which required executive branch agencies to eliminate at least two existing regulatory actions for each new one they issued. It further required agencies to ensure that the cost savings achieved by deregulatory actions offset the costs of the new regulatory actions by enough to meet their annual regulatory budget. September 30, 2018, marked the end of the agencies’ first full fiscal year under this regime, and the result has been a spectacular dereliction of agencies’ congressionally mandated missions to protect the public. The administration trumpeted the large ratios of deregulatory actions to regulatory ones, as well as the supposed net cost savings it achieved in fiscal year 2018. What these numbers ignore, of course, is the enormous costs imposed on innocent members of the public through things like increased air pollution, more dangerous workplaces, and greater risk of fraud and theft by financial institutions. In point of fact, not a penny was actually saved; instead, costs were simply transferred from the companies that create them to anyone who breathes air, drinks water, buys products, has a bank account or eats food.  
  2. Widespread attacks on regulatory science ramp up. While attacks on the science undergirding our regulatory safeguards have been an ongoing preoccupation of the Trump administration, this past year saw them taken to an entirely new and more audacious level. The most notable example was the Environmental Protection Agency’s (EPA) proposed “censored science” rule, which would arbitrarily and severely restrict the kinds of scientific studies the agency could consider when deciding whether and how to protect public health and the environment. The EPA and other agencies also took unprecedented steps to insulate their decision-making from objective science, including stacking advisory committees with industry officials and shutting down long-standing advisory committees entirely.  
  3. The continued discrediting and growing irrelevance of cost-benefit analysis. Critics of cost-benefit analysis (myself included) have long contended that the practice is endlessly subjective and highly susceptible to politicized manipulation. For its part, the Trump administration has offered these critics no shortage of help in making their case by rolling out several analyses in which the numbers were tortured and contorted – often to laughable lengths – in an effort to justify some of its extreme regulatory rollbacks. The cost-benefit analysis for the EPA’s and the National Highway Traffic Safety Administration’s (NHTSA) joint proposal to roll back part of the Obama-era greenhouse gas standards for cars was perhaps the low point. Among other things, it depended on disregarding foundational economic principles such as the shape of the demand curve. Not content merely to muck up its cost-benefit analyses one at a time, the EPA even launched a novel rulemaking this year that would drastically overhaul how the agency conducts all its analyses so they are even more rigged against strong protections. Among other things, the rule is likely to mandate that EPA ignore “co-benefits” of its rules. (So, for example, while rules that reduce greenhouse gases also tend to reduce a variety of other deadly pollutants, under this rule, Trump’s regulators would simply ignore all that prevented pollution and saved lives.) Most significantly of all, the cost-only focus of the Executive Order 13771 makes regulatory benefits irrelevant in the administration’s decision-making, relegating cost-benefit analysis to the policy equivalent of a vestigial organ.  
  4. Kavanaugh confirmation. It was no surprise that the confirmation hearings to elevate then-D.C. Circuit of Appeals Judge Brett Kavanaugh to the U.S. Supreme Court attracted significant public attention, even before the allegations about his despicable behavior toward women. What was surprising was how much the parts of the hearings focused on legal issues raised the profile of fairly technical issues of administrative law and regulatory policy. Republicans touted Kavanaugh as a kind of “new” Justice Antonin Scalia, owing to his experience and expertise in administrative law issues. His career on the D.C. Circuit gave him the unique opportunity to develop an extensive record on issues related to agency design, judicial deference to agency determinations, and the application of the Administrative Procedure Act’s “arbitrary and capricious” standard to agency policy decisions. Before the focus of the hearings shifted to rape, beer-liking, and weight-lifting, members of the Senate Judiciary Committee spent considerable time probing Kavanaugh’s views on these and other important matters of regulatory policy.  
  5. Massive expansion of the Congressional Review Act. Republican lawmakers dramatically expanded the destructive reach of the Congressional Review Act (CRA) when they used it to repeal a 2013 Consumer Financial Protection Bureau (CFPB) “bulletin” aimed at discouraging discriminatory automobile lending practices. This marked the first time the law’s expedited procedures were applied to an agency guidance document (as opposed to a rule) and an older regulatory action (as opposed to a recently issued one) at that. In today’s polarized and dysfunctional Congress, this action threatens to unleash a deluge of similar abuses of the CRA in the future.  
  6. The return of actual oversight.  The 2018 midterm elections saw Democrats capture control of the House of Representatives, breaking Republicans’ two-year control of all of the federal policymaking branches. The change in control opens up the possibility of real oversight of the Trump administration on a wide variety of its policy initiatives in 2019, including its approach to safeguarding the public through regulations.  
  7. Losses mount on attempts to delay Obama-era rules. Over the course of 2018, many of the Trump administration’s initial efforts to advance its anti-safeguards agenda were tested in the courts. According to a running tally maintained by the Institute for Policy Integrity, nearly all of these actions (18 of 19) failed. Many involved efforts to delay or suspend Obama-era regulations opposed by industry. In striking these actions down, the courts found several deficiencies, including agencies acting without legal authority and a failure to follow established administrative process.  
  8. Agencies turn to substantive replacements for Obama-era rules. If delaying Obama-era rules was Step 1 in the Trump administration’s anti-safeguards agenda, then issuing weaker and more industry-friendly replacements is Step 2. The past year has seen Trump administration agencies issue several such high-profile replacements, particularly in the environmental policy sphere. They include the disingenuously titled Affordable Clean Energy rule (to replace the Obama administration’s Clean Power Plan), the misleadingly monikered Safer Affordable Fuel Efficient (SAFE) Vehicles rule (to replace the Obama administration’s strict fuel economy standards), and the new “Waters of the United States” rule (to replace the Obama administration version). In every case, these replacement rules would seek to spare polluting industries from having to clean up their messes, allowing them to transfer millions of dollars of costs to the public and the environment, in the form of disease, injury and death.  
  9. Troubling decline in regulatory enforcement. Trump administration agencies have presided over a precipitous drop in meaningful enforcement of regulations, effectively allowing lawbreakers to get off scot-free and encouraging them to ignore their legal obligations. A July report from Public Citizen found that, during Trump’s first year in office, 11 of 12 agencies studied had seen a decline in total civil penalties assessed for regulatory violations as compared to the final year of the Obama administration. Similarly, 10 of those 12 agencies had brought significantly fewer enforcement actions during the first year of the Trump administration as compared to the final year of the Obama administration.  
  10. Ethical scandals force out Trump’s high-profile deregulatory champions. At the start of the Trump administration, EPA Administrator Scott Pruitt and Department of the Interior Secretary Ryan Zinke positioned themselves as key figures in the president’s anti-safeguards agenda. By the end of 2018, both had resigned from office in disgrace under a welter of ethics scandals. Administrator Pruitt went first in July, following such incredible allegations as receiving improper access to an oil industry lobbyist’s Capitol Hill condo and directing a subordinate to obtain for him a used mattress from a Trump hotel. Secretary Zinke was only recently forced out, thanks primarily to questions surrounding his involvement in a shady land deal involving a high ranking official at the oil industry giant Halliburton. Both agencies appear poised to continue pursuing their respective assault on public safeguards in the absence of their controversial former leaders.

Regulatory policy can often be dry and wonky, but as the above stories illustrate, 2018 was hardly a dull area for those following regulatory issues. Some of these stories astounded, others confounded, but all have the potential to leave a lasting legacy on the kinds of regulatory protections Americans can expect in the coming years, as well as on the longer-term legitimacy of the institutions we depend on to implement and enforce those protections.

In my next post, I’ll explore the top 10 regulatory policy stories I expect to follow in 2019.

Responsive Government

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