Trade Compliance

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Trump Administration Challenged Over Regulatory Executive Order

Posted February 22, 2017


Several public advocacy groups and a prominent labour union have petitioned for a legal injunction against the Trump administration over a recently announced executive order stipulating that federal agencies repeal two regulations for every new one adopted.

Seeking to prevent the executive order from being implemented, Public Citizen, a progressive consumer rights advocacy group; the Natural Resources Defense Council, a nonprofit international environmental advocacy group; and the Communications Workers of America, the nation’s largest communications and media labour union, filed a complaint earlier this month attempting to obtain a court ruling declaring the president’s regulatory fiat to be unlawful.

Calling it “arbitrary, capricious, an abuse of discretion, and not in accordance with law,” the groups allege the directive will force the repeal of regulations or prevent agencies from adopting regulations that are “needed to protect health, safety, and the environment, across a broad range of topics — from automobile safety, to occupational health, to air pollution, to endangered species.”

Furthermore, the plaintiffs argue that federal agencies cannot lawfully comply with the president’s order because doing so would violate the federal Administrative Procedure Act, which gives them their rule-making authority.

The executive order requires agencies to keep new regulations “budget neutral” by requiring that any costs associated with any new regulations be offset by the elimination of two that currently exist, along with their associated costs; but without taking into account the value of the benefits of public protections, contend the plaintiffs.

“By irrationally directing agencies to consider costs but not benefits of new rules, it would fundamentally change our government’s role from one of protecting the public to protecting corporate profits,” said Public Citizen President Robert Weissman.

The plaintiffs also claim the order will make it almost impossible for agencies to adopt new regulations, citing the executive order’s mandate to balance costs. “With these requirements, agencies may just give up on rulemaking,” the plaintiffs assert.

An example cited in the complaint of “adverse effects” that could potentially result from the order and how it “directs agencies to act unlawfully and why it is unconstitutional” is the rule jointly proposed by the National Highway Traffic Safety Administration and the Federal Motor Carriers Safety Administration that would mandate speed-limiting devices on heavy commercial vehicles.

“NHTSA and FMCSA estimate net benefits of $500 million to $5 billion annually from the rule, including fuel savings and the prevention of thousands of traffic injuries and deaths,” the complaint states. “To promulgate the speed-limiting device regulation, the agencies would have to repeal regulations with costs of $200 million to $1.5 billion annually, without regard to the net benefits of the new regulation and the repealed regulations.”

Proponents of the executive order, however, believe it will help address the federal government’s “regulatory juggernaut” that stifles economic growth and harms small businesses. As reported previously, the trade group representing U.S. manufacturers has welcomed initial efforts by the new president to alleviate their regulatory burden and eliminate rules imposed by the preceding administration that “go too far or are too complex”.