February 06, 2017

By: Marjorie Censer

Industry groups are praising President Trump’s plan to reduce government regulations as a positive first step.

Trump last week signed an executive order requiring that for every new regulation issued, at least two prior ones be selected for elimination. Additionally, he called for the cost of planned regulations to be “prudently managed and controlled through a budgeting process.”

Alan Chvotkin of the Professional Services Council, an industry group, said his organization supports the “philosophy” behind Trump’s executive order.

“We should only regulate for things that are necessary to regulate, and we ought to regulate to the minimum extent possible,” he said. “That’s what we’re supporting.”

While the rule notes an exception for national security, Chvotkin said it likely won’t provide any sort of blanket exemption for the Pentagon.

Alex Zemek, vice president of policy at the National Defense Industrial Association, told Inside Defense his group also backs the direction of the executive order.

It will push the Pentagon to consider which regulations “are most crucial,” he said, while also providing “an opportunity to think about what are ones that we’ve done in the past that might not necessarily have the intended consequences.”

However, the Project on Government Oversight opposes the executive order, arguing that its new requirements “could bring the already slow process of rulemaking to a grinding halt.”

In a blog post authored by Sean Moulton, open government program manager at POGO, the organization argues the executive order “completely ignores the benefits of regulations and sees them as nothing but a cost or burden.”

“The order makes no mention of benefits or even net cost, which is the cost after benefits are considered,” the post continues. “While regulations certainly cost money to implement, they typically deliver even more significant benefits. By law, every major regulation undergoes a rigorous cost-benefit analysis and only moves forward if it is determined that the benefits outweigh the costs.”

Roger Zakheim, a partner at Covington and Burling who previously worked as general counsel for the House Armed Services Committee, told Inside Defense the Pentagon has a unique stance.

While it will see the executive order applied to it, the Defense Department has “very active congressional oversight and regular annual legislation, which drives and addresses all of its policy, including regulation.” Additionally, Zakheim said, reducing Pentagon regulations has already been an area of focus for Congress.

“So, in some respects this executive order is truly not designed first and foremost for the Department of Defense,” he said.

Late last week, the acting administrator of the Office of Information and Regulatory Affairs issued interim guidance on the order. According to the guidance, the executive order’s requirements “apply agency-wide.”

“Regulatory savings by a component in one agency can be used to offset a regulatory burden by a different component in that same agency,” the order states.

Additionally, “[a]gencies that are not able to generate sufficient savings to account for new regulatory actions they must issue may submit a written request to the Director of [the Office of Management and Budget] to transfer savings from another agency before they submit a regulatory action for review that does not contain the needed offset.”

However, the guidance notes that, without the OMB director’s approval, the agency must find offset regulations.

Comments on the guidance are due this week.