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White House Provides Additional Information on Efforts to Reduce Federal Regulations, Reform Federal Government

The White House has provided additional information on implementing a 30 January executive order directing federal agencies to reduce regulation and control regulatory costs. This effort is likely to affect import, export and other trade-related regulations issued by agencies such as U.S. Customs and Border Protection and the U.S. Department of Commerce, although the extent of this impact remains unclear.

EO 13771 requires executive departments or agencies publicly proposing or otherwise promulgating new regulations to identify at least two existing regulations to be repealed. In addition, any new incremental costs associated with new regulations must be offset by the elimination of existing costs associated with at least two prior regulations. This order does not apply to regulations associated with national security or foreign affairs functions; regulations related to agency organisation, management or personnel; or any other category of regulations exempted by the Office of Management and Budget. Some trade agency officials have said they are still trying to determine which of their regulatory actions might qualify for these exemptions. A 5 April memorandum from the Office of Information and Regulatory Affairs provides the following guidance to help agencies comply with EO 13771.

Agencies
A cabinet department is considered a single agency for purposes of EO 13771 compliance. The order does not apply to independent regulatory agencies.

Regulatory Actions
EO 13771 applies to (i) significant regulatory actions that have been finalised and impose total costs greater than zero, as well as (ii) significant guidance documents (e.g., significant interpretive guidance) reviewed by OIRA that have been finalised and impose total costs greater than zero. It covers regulations issued after noon on 20 January even if they are finalising a proposed rule issued before then.

Deregulatory Actions
Acceptable deregulatory actions include informal, formal and negotiated rulemakings; guidance and interpretive documents; some actions related to international regulatory co-operation; and information collection requests that repeal or streamline recordkeeping, reporting or disclosure requirements.

Both deregulatory actions and the associated cost savings may be “banked” for use in the same or a subsequent fiscal year, may be transferred within individual agencies, and could (upon OMB approval) be transferred between agencies.

Exemptions
The following categories of regulatory actions may qualify for a full or partial exemption (other categories may be approved as well).

  • expressly exempt actions (see above; full exemption)
  • regulations addressing emergencies such as critical health, safety, financial or non-exempt national security matters (offsets will still be required but after the emergency regulation has been issued)
  • statutorily or judicially required actions (offsets must be done as soon as practicable after the issuance of the regulation)
  • actions with de minimis costs (full or partial exemption)

In a parallel effort, the Trump administration has also signalled its openness to a restructuring of federal trade regulating agencies as part of a broader effort to improve the efficiency, effectiveness and accountability of the executive branch.

OMB announced on 11 April a comprehensive plan for reforming the federal government that will require agencies to act immediately to save taxpayer money and reduce their workforces while developing longer-term plans to modernise and streamline their operations. The agency said that it will work with all agencies to identify areas that should be eliminated, restructured or consolidated and that individual agency reform plans are due to OMB by September. These plans, as well as public comments submitted through 12 June, will be incorporated into OMB’s final comprehensive reorganisation plan, which the administration hopes to start implementing in fiscal year 2019.

OMB Director Mick Mulvaney characterised this effort as the first-ever attempt to rebuild the executive branch, which has “grown organically over the course of the last 240 years.” He emphasised that the focus is on securing “good government,” which could result in fewer agencies but also might mean “more [agencies] but smaller.” One suggestion that Mulvaney said business leaders recently made toward that end is to “restructure the government in terms of the functions that it performs.”

For example, he said, if the government determines that it wants to be in the business of trade, “let’s go find all of the functions of government that deal with trade and put [them] in one place.” Other administrations have had a similar idea, most recently an Obama administration proposal that was dropped after government officials and the business community expressed particular opposition to the idea of combining the DOC and the Office of the U.S. Trade Representative.

Mulvaney acknowledged that some changes may require legislative authority but expressed hope for “congressional buy-in to try and get some of this accomplished.” For one thing, he said, the White House has made clear by moving within President Trump’s first 100 days that government restructuring is a high priority. In addition, responding to speculation that members of Congress concerned about changes in committee jurisdiction might oppose a reorganisation, Mulvaney opined that lawmakers are as “frustrated as everybody else is … as to how poorly the federal government can function” and “probably have as much interest in finding the savings that may come from some of this as any other citizen is.”

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