Business Ethos Blog

Reversing Regulations & Executive Orders

Dr. David Mielke, Retired Dean of the College of Business at Eastern Michigan University

Dr. David MielkeThe last 2 weeks we have talked about President-elect Trumps campaign promises to revive the coal industry and to exit NAFTA and its effect on the auto industry.  This week we will look at his promises to reverse some of the executive orders issued by the President and to reverse or eliminate regulations instituted by the present administration.  Are there executive orders and regulations that should be eliminated?  What are the likely targets?  Can President-elect Trump reverse the orders and regulations without new legislation?  Did President-elect Trump over promise or can he deliver?  What is the “Right Thing to do?”  Let’s look at some issues:

  1. President Obama issued more than 250 executive orders and more than 230 executive memoranda.  The administration issued tens of thousands of pages of new regulations that took on the force of law.  The regulators also made an unprecedented practice of issuing “guidance” that allowed the agencies to duck rule making while still forcing targets to comply, or risk enforcement action.  President Obama called it rule by pen and phone.
  2. Mr. Trump can instruct his new cabinet to immediately void all guidance   He can also order federal agencies to immediately cease work on regulations in process or due to be sent for publication in the Federal Register.
  3. The Congressional Review Act allows Congress to kill the many last minute regulations now making their way through Mr. Obama’s agencies, which probably means since late May this year and do so without the threat of a Senate filibuster.  This includes, for example, rules on truck emissions, fracking, food labels, exploration leases and an IRS rule to raise estate tax collections.
  4. It is also possible to place on hold regulations that went through a formal rule making, by having the Justice Department reverse its position and not challenge some of the rulings of the federal courts.  For example, the Clean Power Act injunction and the overtime time rule injunction.
  5. The EPA regulations are a likely target, such as the Clean Power Plan which targets the coal fired power plants, the Paris climate change agreement, the ozone rule that sets the ozone level in air at 70 parts per billion, down from 75 and the Clean Water rule which redefines the EPA’s jurisdiction under the Clean Water Act.
  6. The Fracking rule sets standards for well casing, transparency  and wastewater storage on federal land.  A federal court in Wyoming overturned the rule saying the Bureau of Land Management does not have the authority to regulate fracking.  Mr. Trump could drop the federal appeal of the court’s decision.  He could also immediately approve the Keystone pipeline.
  7. The Dodd-Frank financial reform law is a target, but since it was passed in 2010 and the rules have been finalized, new legislation would likely be necessary to replace it.
  8. The GOP tried to overturn the Labor Department’s controversial rule for financial advisers, but President Obama vetoed the legislation.  Once again, new legislation might be necessary to reverse the regulation.
  9. The 2015 net neutrality rules set by the Federal Communication Commission require internet service providers to treat all web traffic equally.  It is an independent agency, but Trump could appoint new commissioners who could rollback the rules.

One the campaign trail, Trump vowed to make slashing regulations a cornerstone of his administration and suggested as many as 70% of federal regulations can go and proposed a moratorium on new rules.  There is a long list of not just regulations but also executive orders, executive memoranda and agency guidance that could be in Trump’s crosshairs. He has the tools without new legislation to reverse the executive actions and memoranda, he can instruct his cabinet to void all agency guidance, he can instruct the Justice Department to stop the appeal of the injunctions federal courts have placed on President Obama’s regulations and he can ask the Congress to kill regulations under the Congressional Review Act.  What is the “Right Thing to do?”  Within the first 100 days in office, President-elect Trump should use all of the actions available to him to reverse the Obama actions that have stifled the economy.  Those actions can have an immediate effect and provide confidence that he will fulfill his campaign promises.  Congress can begin moving on some regulations that require new legislation.  Unlike his claims to revive the coal industry and exit NAFTA that may have over promised and will under deliver, he can meet his regulation promise and maybe even over deliver.