Welcome

Trump Agencies Racing to Finalize New Regulations by Year’s End

Sept. 25, 2020, 9:30 AM

Federal agencies appear on track to issue at least a dozen high-priority regulations by the end of 2020, racing to enact President Donald Trump’s agenda in the waning days of what may—or may not—be his sole term in office.

Underscoring that sense of urgency, this month the Trump administration unveiled a pair of proposed rules—one empowering the Department of Homeland Security to expand its collection of biometric data from those seeking to enter the U.S., and one from the Department of Labor that could redefine what it means to be an independent contractor—each with just a 30-day window for public comment, rather than the more typical 60 or 90 days.

“Regulation tends to pick up near the end of a presidential term as agencies try to promulgate their priorities while they have the opportunity to do so,” said Stuart Shapiro, associate dean of faculty at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy.

Such rules often—but not always—have weaker analysis because of the rush to complete them, Shapiro said. “This administration is likely to be no different,” he said. “However, any regulation promulgated between now and the end of the term is vulnerable to reversal by the Congress under the Congressional Review Act if the Democrats win the presidency and the Senate.”

A sample of 11 priority proposals agencies unveiled for the first time in the spring 2020 unified regulatory agenda, which listed 601 new items, shows that five already have been submitted to or cleared by the Office of Information and Regulatory Affairs, one of the first steps in the rulemaking process. Among them, DOL’s independent contractor rule.

OIRA is an agency within the White House Office of Management and Budget that reviews significant federal rules at the proposed and final stages.

Four others were scheduled to be completed this month or later this year. Just two have missed their deadlines: one (RIN: 2050-AH09) by the Environmental Protection Agency to designate per- and polyfluoroalkyl (PFAS) chemicals as hazardous under the Superfund law and another by the IRS to set reporting requirements for virtual currency brokers (RIN: 1545-BP71).

Full Agenda

The spring 2020 unified agenda listed 3,939 agency actions, according to an analysis by Daniel Pérez, senior policy analyst at the George Washington University Regulatory Studies Center. Actions in the agenda are categorized as active, long-term, or completed.

The 2,698 actions listed as active include those 601 items published for the first time in the spring agenda, according to the analysis.

Four agencies have drafted proposed rules that already have been reviewed by OIRA. They include:

  • an EPA proposal (RIN: 2060-AU40) to revise national air quality standards;
  • a proposed rule (RIN: 0575-AC86) by the Agriculture Department to revamp citizenship requirements for its multi-family housing programs;
  • one by the Interior Department’s Bureau of Land Management (RIN: 1004-AE59) that would change how oil and gas production on federal lands is measured and reported;
  • and another by DHS (RIN: 1615-AC39) to require immigrants’ sponsors to repay the cost of their public benefits.

Agriculture has been slow to publish the rule from its Rural Housing Service with the new multi-family housing program citizenship requirement. OIRA reviewed and cleared the proposal in July, but it hasn’t been published in the Federal Register, typically the next step in the rulemaking process. A USDA spokesperson didn’t respond to an emailed inquiry about the rule.

All this from an administration that early on vowed to repeal at least two regulations for every new one it added to the books and, earlier this year, defeated a lawsuit challenging that initiative.

“The president’s deregulatory agenda continues to be a top priority for this administration,” a senior administration official said in an email. “As in all previous years, this year agencies have taken aggressive steps to exceed the goal set by the president of two deregulatory actions for every regulatory action.

“They have also finalized a number of the administration’s highest priority rulemakings and have successfully implemented important reforms, including building their guidance portals under EO 13891. We look forward to delivering a full report on our successes to the American people this fall,” the official said.

Picking up the Pace

Agencies have picked up the regulatory pace in the last few months, said Susan Dudley, director of the George Washington University Regulatory Studies Center and former OIRA administrator during the George W. Bush administration.

“Some of the observed uptick in regulations may simply be because the rulemaking process involves multiple steps that take years from initiation to completion, but the higher pace may also reveal a desire to complete regulatory priorities in the event President Trump doesn’t get a second term,” she said.

Regulations that are rushed may be vulnerable to being overturned by the courts on procedural or legal grounds, Dudley said. The Employee Benefits Security Administration, for example, released three major proposals this summer that impact fiduciary responsibilities and benefits plans focused on environmental, social and corporate governance funds—all of which came with that short, 30-day comment window that could leave the agency vulnerable to legal challenges.

Still to Come

Another big-ticket IRS rule package that appeared for the first time in the spring agenda is a set of proposed revisions (RIN: 1545-BP50) to the IRS’s rules for the contentious opportunity zone tax breaks to address foreign investors’ eligibility. That one is scheduled for release in December.

Under the 2017 tax law, investors can reap capital gains tax breaks for funneling money into funds that finance investments in more than 8,700 census tracts, called opportunity zones, across the U.S. While they can get involved through U.S. corporations and partnerships that have capital gains to invest, foreign individuals generally only owe U.S. tax on capital gains from U.S. real estate or gains “effectively connected” to a U.S. business, which are subject to withholding.

Another administration target is the Supplemental Nutrition Assistance Program, often known as food stamps. Agriculture is drafting a rule (RIN: 0584-AE71) it expects to release in October to deter retailer fraud and abuse in that program.

Environmental rules, too, have been at the forefront of Trump’s regulatory agenda, and a proposed rule setting new air pollution standards was published in August with a 49-day comment window, though the anticipated EPA pronouncement on PFAS chemicals that the agency had sought to unveil in August has been delayed.

Rush at the End

An EPA rule (RIN: 2070-AK65) streamlining its reviews of new chemicals is still scheduled to be released this month, as is a draft Equal Employment Opportunity Commission rule (RIN: 3046-AB15) requiring employers to submit employee pay data.

And, currently under OIRA review, EPA’s final rule (RIN: 2080-AA14) aimed at opening up data used to support the agency’s regulatory decisions, a change critics argue would exclude privacy-protected health data now used to justify stricter environmental standards. OIRA is also looking at an EPA’s final rule (RIN: 2060-AT90) published Sept. 14 allowing methane emissions from oil and gas wells, and which also raises the bar for determining a significant pollutant under the Clean Air Act.

“Every administration sees a rulemaking rush at the end of the term—often motivated by a combination of reasons both innocuous and nefarious,” said James Goodwin, senior policy analyst at the Center for Progressive Reform.

The Trump administration’s rush is different in that it’s not only trying to lock in the president’s policy priorities, but “tear down” rulemaking procedures as well, Goodwin said.

To contact the reporters on this story: Cheryl Bolen in Washington at cbolen@bgov.com; Lydia O'Neal in Washington at loneal@bloombergtax.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.