Embracing Ossification: Trump and the Shifting Politics of Procedural Controls

Image of Stuart Shapiro - Commentary Author
By: Stuart Shapiro
April 10, 2018

In 1992, Thomas McGarity coined the phrase “the ossification of the rulemaking process,” to describe the challenges agencies faced in promulgating regulations.  These challenges included procedural steps required by law and by executive order, and judicial review of regulations by the courts.  As a result of the increased difficulty of issuing regulations, according to McGarity, agencies were turning to non-regulatory means of setting policy.

The idea that requirements for agencies to follow certain procedures when issuing new regulations were stifling government attempts to improve public health has since been a common argument made by supporters of government regulation.  Among the examples of such procedural requirements that have been criticized on ossification grounds are the mandate that agencies conduct cost-benefit analysis of their regulations, requirements that agencies demonstrate the quality of the information they use in rulemaking, and virtually any new regulatory reform statute considered by Congress.

As noted by McGarity, the concerns about ossification also extended to judicial review. Regulatory supporters bemoaned the lack of deference in the courts to agency expertise.  Finally, even the requirement that agencies solicit public comment before finalizing a regulation, which dates back to the Administrative Procedure Act passed in 1946, has been criticized as disproportionately helping business interests and not living up to its promise of encouraging broader participation in regulatory decisions.

Meanwhile many of these same requirements, particularly hard look judicial review, cost-benefit analysis, and the Information Quality Act have been championed by opponents of regulation as necessary to ensure that regulatory policy is rational and democratic.  The continual efforts in Congress to reform the regulatory process, many of which would add new procedures, are generally sponsored by opponents of regulation concerned with the growth of the regulatory state.

These debates have been going on for decades.  But in 2017, a funny thing happened.  The Trump Administration made deregulation a priority.  Arguably this administration has given the elimination of existing regulations a more significant place in its rhetoric than any previous administration.  The President has continually emphasized his desire to cut regulations.

These attempted deregulatory actions included proposed repeals that have not yet been finalized, delays of regulations that may or may not be repealed, and announcements of an intent to repeal regulations.  Many of the attempts at deregulation have been found wanting by the courts.  Why have the courts held up Trump’s deregulatory efforts?  Because the administration has, by and large, carelessly managed the procedural requirements of the regulatory process.

This has led to a shifting political dynamic. Groups that have supported regulation, particularly the regulatory efforts of the Obama Administration have taken to the courts to stop the Trump Administration’s attempts to deregulate.  Their arguments before the courts have been myriad; but in many cases they have cited the failure of President Trump’s agencies to follow the strictures of the regulatory process. 

The Trump Administration has tried to delay the implementation of regulations for long periods of time without accepting notice and comment on the delays.  In numerous cases however, often at the behest of environmental advocacy groups, courts have ruled that these delays violate the Administrative Procedure Act.  In these decisions (See e.g. California v. Bureau of Land Management, No. 17-03804, 2017 WL 4416409, at *7 (N.D. Cal. Oct. 4, 2017); Becerra v. Dep’t of Interior, No. 17- 02376, 2017 WL 3891678, at *1 (N.D. Cal. Aug. 30, 2017)), courts have told agencies that in order to delay enforcement of a regulation, notice and comment is necessary.

As the Trump administration attempts to push through actual repeals of Obama administration regulations, one can fully expect this litigation to continue.  Because the Obama Administration spent years building a legal record to support its regulations, attempts to repeal them will need to be similarly constructed and detailed.  Repeals will have to meet the standard of not being arbitrary and capricious and the existence of a rulemaking record supporting the original regulation may make that a particularly high barrier to climb

While the short-circuiting of notice and comment by the Trump Administration has been one target for pro-regulation interest groups, it is far from the only one.  Allegations surfaced that the Trump Department of Labor had initially conducted a cost-benefit analysis of a proposed regulation designed to repeal an Obama rule (Federal Register 82 FR 57395) that had outlawed the practice of “tip sharing.” The analysis however was never made a part of the public record when the proposed rule was made public.  Interest groups that typically criticized cost-benefit analysis called for the release of the analysis or the withdrawal of the proposal.  Meanwhile traditional supporters of cost-benefit analysis were conspicuously silent.

The Northern District of California cited another regulatory procedure often criticized for hobbling regulation in a decision striking down an attempt to deregulate.  In this case it was the Regulatory Flexibility Act, which requires agencies to assess the impact of their regulations on small businesses.  Trump’s Department of the Interior ignored this requirement when attempting to reverse an Obama Administration rule to reduce methane emissions from oil and natural gas production on federal lands. The court found that ignoring the RFA (along with other procedural requirements) was sufficient justification to enjoin the deregulatory effort.

In a recent paper, Aaron Nielson coined the term, “sticky regulations.”  He points out that just as it is hard to create new regulations because of the procedural environment put in place by the three branches of government, it is also hard to remove them.  Nielson focuses on the benefits of sticky regulations to agencies looking to make their work-products permanent and to regulated entities seeking certainty in the regulatory environment.  The reactions to President Trump’s attempts to deregulate show that those who benefit from regulations and the interest groups that represent them also may prefer regulations that are sticky, or a regulatory process that has at least some degree of ossification.

This has scrambled attitudes toward judicial review and procedural control of rulemaking.  It turns out that these attitudes depend not only on one’s sentiment regarding the regulatory status quo (if we have too many regulations, then rulemaking should be harder; if we have too few, then rulemaking should be easier).  They also depend on the direction of regulatory preferences of the current administration.  Procedures enhance the standing of the regulatory status quo. 

As debates over regulatory reform continue, this shifting politics of procedural controls is important. Many of the bills being considered by Congress would add procedures to the regulatory (and deregulatory process).  In doing so, they would privilege the status quo, making it harder to regulate and harder to deregulate.  Arguments about how such bills will make it harder to regulate should take a backseat to debates about whether the procedures being contemplated can stand on their own merits. Do requirements for participation increase the likelihood of useful information being brought before regulators, and meaningfully give a sense of involvement to affected parties?  Will requirements for analysis lead to demonstrably “better” regulations, and increase the transparency of the regulatory process?  For requirements such as formal rulemaking, how will they improve the decisions made by regulatory agencies?

These are all very much open questions.  Whether such procedures ossify the regulatory process is also an open question.  But the deregulatory efforts by the Trump Administration have shown that procedures have similar effects on attempts to deregulate as well as attempts to regulate.  Advocates on all sides of regulatory debates should therefore hesitate before using ossification arguments.  Making it harder for agencies to create new policies cuts both ways.