This Week in Regulation

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The Trump Administration releases a report on the state of its regulatory agenda, the ACA replacement bill fails, and more…

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IN THE NEWS

  • The Trump Administration released a report on the state of its regulatory agenda. The report claimed the “Administration produced cost savings estimated at $22 million,” in part because the Trump Administration has implemented about half the number of economically significant regulations as were implemented up to this point last year. The report applauded the Trump Administration’s regulatory agenda as providing “greater information and transparency about regulatory actions.” Public Citizen responded to the report on the agenda by saying, “the only winners from this unified agenda are the corporate interests whose deregulatory wish lists the administration has adopted wholesale.”
  • The proposed bill to replace the Affordable Care Act (ACA) reportedly “lacked the votes to pass” in the Senate. U.S. Senator Jerry Moran (R-Kan.), one of the two senators whose decision not to back the bill catalyzed U.S. Senate Majority Leader Mitch McConnell’s (R-Ky.) announcement that the bill “will not be successful,” said the replacement bill “fails to address healthcare’s rising costs.” The Congressional Budget Office (CBO) predicted that if the bill became law, 22 million people “would be uninsured” in 2026. In light of the bill’s breakdown, McConnell said the Senate will vote instead on a bill that repeals the ACA “combined with a stable, two-year transition period.” McConnell, who said the repeal bill “will allow us to wipe the slate clean and start over with real patient-centered health care reform,” expressed confidence that President Trump would sign the repeal bill. McConnell said the vote will take place “early next week.” The CBO determined that if the repeal bill became law, 32 million people would lose their insurance in 2026.
  • A group of regulatory experts sent a letter to U.S. Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) that called for Congress to “enact regulatory modernization” that “strengthens the use of rigorous cost-benefit analysis, requires agencies to better address outdated past rules, and enhances the public’s access to the rulemaking process.” The group stated that “the kinds of regulatory reforms described above can generate economic gains by reducing unnecessary regulatory costs and uncertainty while continuing to protect and enhance the health and safety of Americans.”
  • A group of coastal California cities and counties filed separate but nearly identical lawsuits against oil, natural gas, and coal companies. The lawsuit claimed the companies knew that the unrestricted use of fossil fuels “changes our climate” in a potentially “catastrophic” way, but the companies have worked to “conceal their knowledge,” “discredit the growing body of scientific evidence,” and “create doubt in the minds of the public about the consequences of their fossil fuel pollution.”
  • The U.S. Environmental Protection Agency (EPA) proposed to leave in place its current nitrogen dioxide pollution concentration standard. EPA explained that “nitrogen dioxide is a highly reactive gas” that “primarily gets in the air from the burning of fuel” and “can irritate airway in the human respiratory system.” After a review of the standard, which was implemented in 2010, EPA determined the current standard did not need to be changed because it provides “the appropriate public health protection, with an adequate margin of safety, including for older adults, children, and people with asthma.”
  • The U.S. Court of Appeals for the Ninth Circuit declined to hear a challenge brought by environmental groups against EPA’s decision not to extend restrictions on the use of chlorpyrifos, a pesticide. The court held that the environmental groups failed to go through the requisite administrative process for objections, so the environmental groups’ “complaints arrived at our doorstep too soon.”
  • Keith A. Noreika, the Acting Comptroller of the Currency, urged the Consumer Financial Protection Bureau (CFPB) to delay publication and implementation of its arbitration agreements rule “until his staff has had a full and fair opportunity to analyze the CFPB data so that he is able to fulfill his safety and soundness obligations.” Notwithstanding Norieka’s request, the CFPB published the rule, which will allow consumers to pursue a class-action lawsuit instead of forcing the use of arbitration where there is a dispute over bank and credit card accounts. U.S. Congressional Republicans have introduced legislation to overturn CFPB’s arbitration rule under the Congressional Review Act, which allows Congress to disapprove the rule with a simple majority vote.
  • Elon Musk, chief executive officer of Tesla and SpaceX, called for “proactive” regulation of artificial intelligence (AI) because “by the time we are reactive in AI regulation, it’s too late.” Speaking at the U.S. National Governors Association, Musk warned, “AI is a fundamental risk to the existence of human civilization.” Musk said the “first order of business” for regulating AI “would be to try to learn as much as possible, to understand the nature of the issues.”
  • The U.S. District Court for the District of Columbia denied a request for a restraining order against the Presidential Advisory Commission on Election Integrity. The Lawyers’ Committee for Civil Rights Under Law filed the request, asking the court to compel the Commission to release its records to the public and to allow the public to attend and participate in a July 19th Commission meeting, pursuant to the Federal Advisory Committee Act (FACA). The court held that the Lawyers’ Committee had not shown that the Commission had violated FACA, and, in fact, that the Commission’s “disclosures to date are sufficient.” However, the court allowed future petitions to be brought against the Commission if the “circumstances change.”
  • The U.S. Senate Committee on Appropriations approved the Energy and Water Development Appropriations Bill for the 2018 fiscal year. Among those who would receive what U.S. Senator Lamar Alexander (R-Tenn.) called “record levels of funding” are the U.S. Army Corps of Engineers and the U.S. Department of Energy’s (DOE) Office of Science. The bill would also set aside funds “for energy programs that encourage U.S. economic competitiveness,” for storing nuclear waste, and for “DOE environmental management activities.” Although subcommittee ranking member U.S. Senator Dianne Feinstein (D-Calif.) supported the bill, she was reportedly disappointed that agencies that are not involved in defense would lose funding.
  • The U.S. House of Representatives voted in favor of two bills that would reportedly “streamline the federal permitting process for a variety of oil and natural gas pipelines.” Under one bill, the Federal Energy Regulatory Commission (FERC) would assume the role of “lead agency” during the authorization process for pipeline projects. The other bill would prohibit the running of any “border-crossing facility for the import or export of oil or natural gas, or the transmission of electricity, across an international border of the United States without” permission from FERC or the Secretary of Energy. Rep. Fred Upton (R-Mich.) reportedly said the cross-border bill would help “jumpstart our nation’s energy security,” while Rep. Kathy Castor (D-Fla.) reportedly criticized the bills for ignoring “the threat of climate change.”
  • Uruguay became the first country in the world to regulate legal marijuana production, distribution, and sale for adult recreational use. Eduardo Blasina, the founder of the Montevideo Cannabis Museum, reportedly stated that the “great responsibility we have in Uruguay is to show the world that this system of freedom with regulation works better than with prohibition.” In the United States, the recreational use of marijuana has been approved in eight states, and its medicinal use has been approved in more than two dozen other states.

WHAT WE’RE READING THIS WEEK

  • In an article for the online supplement to the University of Pennsylvania Law Review, Caroline Cecot, a Legal Fellow at the Institute for Policy Integrity and affiliate faculty at Antonin Scalia Law School, George Mason University, and Michael A. Livermore, an associate professor at the University of Virginia School of Law, evaluate how likely President Donald Trump’s “one-in-two-out” executive order is to achieve its purpose “of helping agencies ‘be prudent and financially responsible in the expenditure of funds.’” Cecot and Livermore conclude that the executive order is “not calibrated to maximize social welfare” because it only considers costs, not benefits.  Furthermore, they argue that the order “might not have any impact on total regulatory burdens” and is unlikely to increase “presidential oversight of the regulatory process.”
  • In a report, Susan Dudley of the George Washington University Regulatory Studies Center and Melinda Warren of the Weidenbaum Center on the Economy, Government, and Public Policy at Washington University in St. Louis analyze the U.S. budget from 1960 to 2018. Dudley and Warren examine how the 2018 fiscal year budget aligns with President Trump’s goal of “reducing regulatory burdens.” Still, the authors conclude that the 2018 budget would assign more money to regulatory agencies than last year’s budget did, although they also note that the budget boosts “staff and resources for agencies responsible for immigration and border protection, while reducing staff and resources at other agencies.”
  • In a recently released paper, Kai Purnhagen and Peter Feindt, both members of the faculty at the Netherlands’s Wageningen University, discussed whether moving to “principles-based regulation” could offer improvements to the current governance of the European agricultural sector. Principles-based regulation consists of “widely formulated goals as legally binding principles” rather than detailed rules, an “output-oriented focus” on regulatory intervention, and “increasing individual responsibility for reaching the goal.” Purnhagen and Feindt argue that the current system is complex, contains “implementation gaps,” and is inefficient and ineffective, and that a principles-based approach could improve the system.