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The Trump administration might be deregulating more than you know (or could know)

- August 24, 2018
A coal-fired power plant in Glenrock, Wyo. (J. David Ake/AP)

Since President Trump took office last year, his administration has been working to undo many Obama-era regulations affecting clean water, national parks, energy production and more. Most recently, President Trump’s Environmental Protection Agency has proposed weakening Obama-era regulations on coal-fired power plants.

But there could be still more deregulating underway than most government watchers realize. Trump — like many presidents of both parties — is using the White House’s Office of Management and Budget (OMB) to change regulations before they are issued. And while these changes can be significant, the public has little or no ability to learn about them.

Here’s how we did our research

Rulemaking is a crucial, if often overlooked, part of making public policy. When Congress passes a law, it often tasks a specific agency with implementing it. That’s because these agencies are staffed by subject-matter experts with appropriate training. And it means that the executive branch must often decide how to put laws to work, which can profoundly shape their effects in the real world.

To ensure that the public can observe this policymaking, the relevant agency must first publish a “Notice of Proposed Rulemaking” in the Federal Register that solicits public comments. This notice offers detail on how the agency plans to implement the law. After “considering” those comments and, at times, making changes based on them, the agency typically promulgates a legally binding “Final Rule” that defines how the law will be put into effect.

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With thousands of rules issued each year, one might assume that the agencies craft these regulations somewhat autonomously, relying on civil servants’ neutral expertise and public commenters’ feedback. But because these rules are often consequential, the White House rarely leaves rulemaking to chance. A Clinton-era executive order requires the OMB to act as a gatekeeper by reviewing all “significant” government regulations, an order designed to make the OMB review process more transparent than it had been under previous administrations. This order also authorizes the OMB to offer “suggested policy changes” to the issuing agency, so that the agency can modify its rules to better fit “presidential priorities” and other goals.

To determine how the OMB exercised its power, we studied more than 1,500 final regulations that the OMB reviewed between 2005 and 2011 under Presidents George W. Bush and Barack Obama. We determined whether the OMB sent the rules back to agencies with suggested changes or accepted them as is. We also analyzed a set of more than 120 significant rules using plagiarism software to see whether the agencies accepted the OMB’s suggested changes.

Our goal: assess whether the OMB was more likely to request changes to rules issued by liberal, neutral or conservative agencies. We used two standard metrics for determining agency ideology: one based on expert opinions and one based on a survey of federal executives.

Here’s what we found

1. Both Republican and Democratic presidents rewrite rules from left-leaning agencies

Under both Republican and Democratic presidents, the OMB was more likely to recommend changes to rules proposed by liberal agencies, such as the Environmental Protection Agency (EPA) and the Department of Labor, than those submitted by neutral or conservative agencies.

Without cataloguing the precise changes requested by the OMB, we can’t know whether Democratic and Republican presidents seek the same sorts of shifts. It could be that Republican presidents use the OMB to water down these rules while Democrats try to toughen them, or vice versa. Nonetheless, a number of scholars have noted that since the 1980s, the OMB has had a deregulatory bent, favoring business over consumer and environmental interests. While these scholars found individual instances of this, our work is the first step toward a large-scale quantitative assessment.

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2. Some deregulation may occur away from public view

The Clinton-era executive order that established the modern OMB review also requires agencies to document and publish any substantive policy changes that result from that review. This was meant to ensure transparency in the process. Years ago, however, the Government Accountability Office (GAO) pointed out that that rarely happens. That’s why we used plagiarism software to determine how much an agency changed a rule in response to OMB review.

Overall, in more than three-quarters of the rules we studied, we found that the OMB indicated that it required agencies to make changes. Moreover, our detailed analysis of approximately 120 rules indicates that on average, agencies alter about 20 percent of the rule’s text. In 5 percent of the rules, the agency changed the text by more than 70 percent.

Why so many — and such broad — changes so late in the regulatory process? Presumably, at this stage, the agency has already adjusted rules based on public and expert input, leaving little to be done. What’s more, the OMB could have raised its concerns during the public comment period, or in earlier interactions with the agency.

In at least some cases, it may be because business interests lobby the OMB more heavily than do public interest groups during the OMB review.

3. Trump is doing what his predecessors did — but more of it

While presidents of both parties have relied on the OMB to review rules, Trump’s OMB appears to be more actively involved in reviewing those rules.

Under Trump, the OMB reviewed more than one-third of all rules issued by nonindependent agencies, the vast majority of which were not economically significant. This means that the OMB specifically chose to review these not because of a traditional consideration, such as a large economic impact, but because of the president’s policy, political, or other considerations.

Further, Trump appointed Neomi Rao, a scholar at Center for the Study of the Administrative State at George Mason University‘s Antonin Scalia Law School, to direct the OMB’s gatekeeping role over the rulemaking process. Rao has advocated requiring OMB review for independent agencies like the Federal Election Commission and the Federal Communications Commission. Congress insulated these agencies from presidential control to protect their independence and expertise; OMB review would give the White House a larger say.

Meanwhile, interest groups have stepped up their lobbying at the OMB — meeting with that office over 80 percent more under the Trump administration than under Obama.

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Calls for greater public access are as old as the Magna Carta. Much has been done to improve transparency during rulemaking over the last several decades. Yet OMB review continues to be difficult to follow, raising concerns about improper influence and corruption.

Simon F. Haeder (@simonfhaeder) is an assistant professor in the department of political science in the John D. Rockefeller IV School of Policy & Politics at West Virginia University.

Susan Webb Yackee is a Vilas Distinguished Achievement Professor of Political Science and the director of the La Follette School of Public Affairs at the University of Wisconsin at Madison.

Correction: This article originally stated that Neomi Rao was affiliated with George Mason University’s Mercatus Center. Prior to her appointment at OMB, her correct affiliation was with George Mason’s Antonin Scalia Law School.