New Administration Orders Federal Agency Action to Reduce Regulatory Burden on Manufacturing
Continuing the flurry of Presidential directives on a wide array of matters, on January 24, 2017, President Trump ordered a series of actions designed to support the expansion of U.S. manufacturing by reducing regulatory burdens and expediting permit reviews and approvals. More focused in approach than some of the other Presidential announcements, the Memorandum on Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing ("Memorandum on Manufacturing") prescribes a process that offers concrete opportunities for regulated companies to engage.
The Memorandum on Manufacturing directs the Secretary of Commerce to take two actions:
- Conduct immediate outreach to stakeholders, seeking input on the impact of federal regulations on domestic manufacturing. The outreach establishes a 60-day public comment period on steps the federal government should take to streamline permitting and reduce regulatory burdens. The Secretary is further directed to consult with the Secretaries of Agriculture and Energy, the Administrators of the Environmental Protection Agency and Small Business Administration, the Director of the Office of Management and Budget, and "such other agency heads as may be appropriate" in carrying out this process.
- Submit a report within 60 days of completion of the comment period setting forth a plan to expedite federal permitting processes and reduce regulatory burdens on domestic manufacturing. The report is expected to identify priority actions and deadlines, and may also include recommendations for needed changes to existing statutes or regulations, as well as actions that can be taken immediately under existing authority to change policies, practices, and procedures.
In an Executive Order signed January 30, 2017 and titled Reducing Regulation and Controlling Regulatory Costs, President Trump has required that for every new regulation, two must be revoked, further pressing the federal government to reduce regulatory burden on U.S. businesses. The Executive Order also imposes a regulatory cost constraint, mandating that the incremental cost of any new regulation be offset by elimination of the costs of at least two existing regulations. In addition, for fiscal year 2017 (now in progress), agencies must ensure that the total cost of all new regulations, including repealed regulations, does not exceed zero, unless otherwise required by law or approved by the Office of Management and Budget (OMB). Given the time required to revoke an existing rule, this restriction could effectively halt all efforts to finalize new rules this year. For fiscal year 2018, which begins in October 2017, agencies will be limited to an incremental cost increase for new regulations, with the allowed amount to be set by OMB.
The process set in motion under the Memorandum on Manufacturing and reinforced by the January 30, 2017 Executive Order invites the regulated community to make the case for change. This will not be a matter of simply identifying statutes, regulations, guidance documents, and permitting requirements that companies dislike, but will require instead carefully reasoned arguments and supporting data that explain how unreasonable, ineffective, and/or costly the current requirements are and advocate for better alternatives. Building a credible administrative record will be critical, since changes to existing regulations will surely be challenged by well-funded opponents.
Clark Hill attorneys are experienced in putting together effective strategies and advocacy efforts for regulatory change that fully comply with administrative law requirements.