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President Trump Issues ‘Two-for-One’ Regulations Executive Order

On Behalf of | Jan 31, 2017 |

On Monday, January 30th, President Trump issued an executive order providing that, unless otherwise prohibited by law, in the event an executive department or agency proposes or promulgates a new regulation, it must identify at least two existing regulations to be repealed. Additionally, the order provides that for fiscal year 2017, the total incremental cost of all new regulations, including repealed regulations, to be finalized this year, may not exceed zero, unless otherwise required by law or consistent with advice provided by the Director of the Office of Management and Budget (“OMB”). The order further states that, to the extent allowed by law, any new incremental costs associated with new regulations must be offset by the elimination of existing costs associated with at least two prior regulations.

For future fiscal years, the order directs that the head of each agency identify, for any regulation that increases incremental cost, the regulations that will be used to offset that cost, and must provide the agency’s best estimation of the total costs or savings associated with any new or repealed regulation. Also for future fiscal years, the Director of the OMB is directed to identify a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations. Any regulation that has an associated cost exceeding the related agency’s total incremental cost allowance will not be permitted in that fiscal year, unless required by law or approved in writing by the Director of the OMB. The total incremental cost allowance identified by the Director may allow an increase or require a reduction in total regulatory cost.

The executive order also addresses the issue of how the ‘two-for-one’ concept may be implemented. It gives broad authority to the Director of the OMB to provide agencies with guidance that addresses implementation issues, including (but not limited to): processes for standardizing the measurement and estimation of a regulation’s costs; standards for determining what qualifies as new and offsetting regulations; standards for assessing the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; oversight methods with respect to the issuance of rules with costs offset by savings at different times or different agencies; and, emergencies and other situations that might justify individual waivers. The order further prescribes that the Director of the OMB consider phasing in and updating these requirements, and that, unless otherwise required by law or approved by the OMB Director, no regulation may be issued by an agency if it was not included by the Director in the most recent Unified Regulatory Agenda.

While the executive order states that it applies to regulations proposed or promulgated by executive departments and agencies, specifically excluded are regulations related to a military, national security, or foreign affairs function of the United States. Additionally, the White House has stated that the order does not apply to independent regulatory agencies, such as the Securities and Exchange Commission and the Consumer Financial Protection Bureau.

The complete text of the executive order is available