Trump's Executive Order On Regulatory Costs Undermines Congressional Authority

Last week, President Trump issued his seventh executive order since assuming office, which was intended to dismantle government regulations. But Mr. Trump forgot that he leads just one branch of a divided government, and seems to have overstepped his authority with an unworkable order that directs executive agencies to ignore the congressional statutes that give them power.

Mr. Trump directed all agencies to ensure that the “incremental cost” of all new regulations is no greater than zero. He also directed that agencies must identify two regulations to repeal for every new regulation proposed. The order seeks to extend the president’s authority, but it suffers from a fundamental problem: It conflicts with congressional legislation and undermines agencies’ abilities to implement their responsibilities faithfully. 

Agencies do not simply regulate for the sake of it. Each regulation is aimed at implementing a specific provision of a congressional statute. Agencies are often prohibited from considering costs or required to weigh both costs and benefits when issuing regulation. Rarely, if ever, are agencies permitted to account for the aggregate costs of all their regulations when deciding how and whether to proceed with a particular regulatory action. This is certainly true for many environmental statutes.

Consider the Clean Air Act: it requires the Environmental Protection Agency (EPA) to establish national ambient air quality standards (NAAQS) for air pollutants, which “are requisite to protect the public health.” Section 108 of the Act outlines the factors that EPA should consider when setting the standards, and cost is not one of them. As the late Justice Antonin Scalia noted in Whitman v. American Trucking Associations (2001) , the statutory language is “absolute.” Justice Scalia, reflecting on the proper role of the judiciary, wrote that the statute “unambiguously bars cost considerations from the NAAQS-setting process, and thus ends the matter for us as well as the EPA.”

Other provisions of the Clean Air Act require agencies to weigh both costs and benefits. For example, Section 111 directs EPA to establish to establish performance standards for sources of air pollution that reflect the “best system” of pollution reduction, “taking into account the cost” of achieving the standard. Congress has thus made clear that EPA must account for environmental benefits as well as compliance costs when setting these standards. This is the language the Obama-administration EPA relied on to set emission standards through the Clean Power Plan and its methane rule for oil and gas operations, among other things.  

When the costs of regulations are monetized, the benefits typically must be, too. This was the rule articulated by the Ninth Circuit Court of Appeals in Center for Biological Diversity v. National Highway Traffic Safety Administration (NHTSA) (2008) . In that case, NHTSA had established fuel economy standards in accordance with the Energy Policy and Conservation Act of 1975, which requires NHTSA to determine the “maximum feasible average fuel economy” for cars. NHTSA had conducted a lopsided cost-benefit analysis when setting the standards in which it monetized economic costs and some environmental benefits, but did not monetize the benefits of reducing greenhouse gas emissions. The court said that NHTSA “cannot put a thumb on the scale by undervaluing the benefits and overvaluing the costs of more stringent standards.”

The other component of Trump’s executive order – the requirement to identify two regulations to repeal for every one that is proposed – is also fundamentally flawed. While it is true that some regulations are promulgated at the discretion of the agency, these regulations are nonetheless tied to statutory directives and cannot be withdrawn willy-nilly. Agencies must initiate a lengthy rule-making process when withdrawing regulations, which involves publishing a proposed rule to withdraw the existing regulation and accepting public input on the proposal, and they must provide a reasoned basis for the decision that is premised in the authorizing statute from congress – not in some half-considered White House policy prescription. That was the Supreme Court’s message in Massachusetts v. EPA, the case that set in motion the EPA’s greenhouse gas regulations. As Justice Stevens wrote in that case, decisions not to regulate cannot rest on “reasoning divorced from the statutory text.” This is one of many Supreme Court cases upholding congressional authority and protecting the balance of powers between congress and the executive branch.

Unsurprisingly, groups have decided to take legal action against the executive order. On February 8, the Natural Resources Defense Council, Public Citizen, and the Communications Workers of America filed a lawsuit seeking to block implementation of the order. Their complaint focuses on the same problems noted above, alleging that the order “exceeds presidential authority and usurps Congress’s legislative authority” by asking agencies to make decisions about whether to issue or repeal regulations based on factors that are inconsistent with the statutes they are implementing. The complaint cites several examples of regulations that are currently under development and would be affected by the order if the court does not intervene, such as motor vehicle safety standards and occupational health and safety standards.

Some commenters have suggested that Mr. Trump’s hasty executive order was simply a political stunt an attempt to appear to cut regulations and that the practical effect of the order will likely be limited by the types of statutory directives and legal considerations noted above (this article is one example). “Pay as you go” and “one in-two out” have a nice sound bite quality, and plainly play to the anti-regulatory agenda. While the order recognizes that agencies can only follow its directive “to the extent permitted by law,” it is at the very least confusing, and makes it harder for agencies to do their jobs. 

More likely, it is an effort by the Trump administration to send a signal and exert greater control over the other branches of government. Whatever the order’s true intent, it will neither serve the interests nor protect the wellbeing of the American people.

Michael Burger is the Executive Director of Columbia’s Law School’s Sabin Center for Climate Change Law.

Jessica Wentz is a Staff Attorney at Columbia’s Law School’s Sabin Center for Climate Change Law.