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How an Idea Becomes a Regulation

The Trump Administration recently released a list of 800 federal regulations that it is in the process of reforming or removing from the government rulebooks. You have read about some of these initiatives in the pages of ACWI Advance.

The President made regulatory reform one of the main planks of his campaign platform and since taking office has pursued it vigorously as a primary focus of his agenda.

In some cases, the President can remove a regulation (defined in the broadest terms) with the stroke of a pen. Others will require several years of adhering to the painstaking procedures required for altering or removing a rule from everyone’s favorite light reading – the Code of Federal Regulations – which currently runs to about 180,000 pages.

Imitating the old civics lesson about how a bill becomes a law, let’s take a quick and simplified look at how regulatory ideas become rules.

Most of what we consider federal regulations require a step-by-step process before they can take effect and enforcement begins. These procedures are spelled out in the Administrative Procedures Act, which Congress has amended to mandate environmental and small business impact studies.

The first step is for the White House Office of Management and Budget to review the draft regulation the agency wishes to issue. If it is deemed to be “significant” it must adhere to the process laid out in the APA.

In that case, the proposal can take many months to get to the point where it can gain approval from OMB to go forward.

The next step is the Notice of Proposed Rulemaking, which the agency publishes in the government’s official outlet for disseminating official announcements, the Federal Register.

That notice always includes a description of the rule and a call for comments by the public.
(To make things more complicated, if the agency wishes to take a more run-it-up-the-flagpole approach, it can publish what is termed an Advanced Notice of Proposed Rulemaking, also calling for public comment).

The public comment period is usually no longer than 60 days, but can be extended for the agency to gather additional responses, especially if it makes substantive changes in the proposed rule in reaction to suggestions made in the first round of comments.

How long an agency takes to issue a Final Rule varies considerably depending on how controversial the proposal is and how receptive agency officials are to making changes recommended in the comments.

Depending on an administration’s agenda, some officials are more open to comments from those they regulate than are others, as you can imagine.

Unfortunately, during the Obama era many of these officials were ideologically predisposed to view those they regulated as only being intent on exploiting workers, abusing customers and ruining the environment – you know, employers.

A final rule also sets the date when it will go into effect and sometimes a different date for when compliance efforts will begin. This can encompass anywhere from 60 days to several years.

Political pressure from Congress can slow down this process, as can the threats of lawsuits that are considered serious — meaning the suit might actually succeed in overturning the rule.

This process is not required for agency policy statements, “guidances” and memos interpreting existing rules, and even blog postings, all of which were used by Obama era agencies to skirt the APA.

The APA also applies when it comes to removing a rule that is already in place (with a few exceptions). This is one reason why the Trump administration hasn’t acted more quickly in some areas.

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