Regulatory Reform Under the Trump Administration: What Businesses Need to Know

Regulations can have an enormous impact on the American economy and the businesses that operate within it. There is a division in the United States between those who think these regulations are more helpful than harmful, and those who view them as unnecessary and outright burdensome. The fact of the matter is that businesses — both large and small — must deal with regulations and their requirements every single day. For printers, suppliers and manufacturers, these regulations can range from safety and chemical requirements to recordkeeping and administrative requirements. In the United States, one of the key differences between our two major political parties is their views on regulation and government involvement, with Republicans generally advocating for less government intervention and Democrats generally advocating for more. The Republican Party believes that the government should provide only the most basic functions, and that citizens should be free from regulatory or legislative burden. The Democratic Party, on the other hand, believes that government should be active in improving the lives of citizens through regulations and legislative action. The opposing and sometimes strict viewpoints on the role of government play a huge part in how a president or other political leader will make decisions. Due to this, when the party in power changes, as it did in November 2016, there is always the likelihood that the regulatory realm will be affected in some way. Since coming into office, President Trump has made a number of clear policy choices aimed at reducing regulations. These policies have proven a key component of his presidential agenda thus far. In 2017, the president released two executive orders with the purpose of reducing regulatory burdens on businesses and generally reforming the regulatory process. The president signed Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” on January 30. This order directs agencies to repeal two existing regulations for every new regulation they propose, and to do so without increasing the total cost of regulations. This means that an agency could not simply eliminate two minor, low-cost regulations in order to implement a major and costly regulation. A number of organizations, including Public Citizen, Natural Resources Defense Council and Communications Workers of America have filed a lawsuit stating that this order exceeds the executive branch’s scope of power and that it harms the public by discouraging beneficial regulations from being considered or passed at all. The groups point to a lack of significant regulation thus far during the Trump presidency as evidence that the executive order prevents or discourages federal agencies from acting to implement statutory safeguards. Despite the legal challenges it faces, the order is still currently in effect and agencies must comply with its conditions. The United States isn’t the first country to experiment with such regulatory reform measures. In 2015, the Red Tape Reduction Act passed in Canada, implementing a “one-for-one” rule requiring regulators to remove a regulation each time they introduce a new one. Since its implementation, the rule has garnered some reduction in regulatory burdens for businesses. A 2014–2015 Scorecard Report by the Government of Canada states, “Annual net administrative burden to business was reduced by approximately $2.7 million: 11 regulations increased burden by over $500,000; 60% of this resulted from three new regulatory titles, with the balance from other regulatory changes (e.g., amendments). This new administrative burden was offset by 13 regulations that provided burden relief of over $3.2 million. This saves businesses an estimated 80,000 hours in time spent dealing with regulatory burden each year.” The United States’ application of a similar rule will not necessarily bring the same results, however. Starting with a two-for-one rule may prove to be more challenging, and implementation of these new procedures will be important in determining the order’s success. Following Order 13771, the president signed Executive Order 13777, “Enforcing the Regulatory Agenda,” on February 24, 2017, outlining the procedures for executing these new regulatory requirements in each agency. For each agency, this order requires the designation of a regulatory reform officer and the establishment of a regulatory reform task force. The task force for each agency must evaluate existing regulations and make recommendations regarding which should be repealed, replaced or modified. The task force is required to seek input from stakeholders, including state and local governments, small businesses, consumers, NGOs and trade associations. While we may see the effects of these executive orders in the long term, it is likely that changes in the near future will focus on rules that already have not proven impactful or controversial as these will be the easiest to repeal. Businesses may expect to see some deregulation in the coming years, and can look towards relevant agencies to provide input on how to move forward with certain regulations. For the printing industry, agencies such as the Department of Labor, the Environmental Protection Agency, the Small Business Administration and the Occupational Health and Safety Administration may potentially be looking at repealing or modifying relevant regulations. Many agencies are already working on preemptively preparing or implementing these changes behind the scenes. The Department of Labor, for example, has already begun establishing a task force and looking at regulatory reform. While the department has not announced which rules they will be investigating for review, a representative from the department stated that the two-for-one regulatory executive order has not been an impediment for them so far. The department is looking at mechanisms for stakeholder input, which will likely be in the form of roundtables or forums. SGIA has been active in ensuring our industry has a voice in the reforms that will take place in the coming years. In March 2017, the US Department of Commerce issued a public notice in the Federal Register calling for the manufacturing sector to submit comments on the impact of federal regulations on domestic manufacturing. SGIA, in conjunction with the Printing Industries of America and Flexographic Technical Association, stated in its comments that printing trade associations have long supported the development and implementation of programs and initiatives addressing the streamlining of regulations for printing operations. These programs would ideally provide a cost-effective solution to compliance with all regulatory initiatives. In April 2017, SGIA attended a stakeholder meeting held by the Environmental Protection Agency (EPA). The purpose of this meeting was to allow the public to comment on rules under the EPA that should be repealed, replaced, or modified as a result of Executive Order 13777. As SGIA’s VP of Government & Business Information, I addressed rules that are burdensome for the printing industry, such as national emissions standards and the spill prevention, control and countermeasure rule. It is still unclear what impact this drive for regulatory reform might have in the longer term. As of April 24, 2017, there were 10 draft rules under review by the Office of Information and Regulatory Affairs (OIRA). Typically, when a new administration comes into office, there are over 100 rules under review by this time — this was true of both Presidents Barack Obama and George W. Bush. While it seems that new rules are not being implemented in any significant measure for the time being, some agencies have already begun work on removing regulations. EPA Administrator Scott Pruitt has made moves to undo, block or delay more than 30 environmental rules since taking office. This may or may not be a result of the executive orders put in place this year, but at the very least it is indicative of a pursuit to deregulate. Pruitt has indicated intent to undo Obama-era regulations on climate change and water pollution. He has also delayed a rule requiring fossil fuel companies to rein in leaks of methane from oil and gas wells, as well as delaying the date of compliance for the spill prevention rule. With that, in the shorter term, it looks as though the two-for-one rule is having a chilling effect on the output and even the consideration of new regulations. The order introduces statutory and planning challenges not only for the federal agencies that would have to track down regulations to cut, but also administrative challenges for the industries, businesses and people that would have to adjust or dismantle processes from the struck regulations. Paired with the large number of unfilled appointees across federal agencies, it is likely that the executive orders issued on regulation so far will continue to keep regulatory rulemaking suppressed. Even then, in the longer term, both congressional and public pressure may propel agencies to speed up their review processes to push out stalled regulations and identify and cut any onerous ones. Trump Administration task forces installed within the various agencies are also beginning their work this summer to spur along the process. Amidst the uncertainty, advocacy groups and public discussion and comment will ultimately shape the regulatory future of this Administration. SGIA will continue to monitor the impact of these regulatory changes. Sign up at SGIA.org/firsttoknow to receive the most up-to-date regulatory and legislative information about specialty imaging.