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Deep State Guide to Resisting Trump's Executive Orders on Guidance Document Abuse

[R]egulatory overreach gravely undermines our constitutional system of government. Unelected, unaccountable bureaucrats must not be able to operate outside of the democratic system of government…imposing their own private agenda on our citizens. A permanent federal bureaucracy cannot become a fourth branch of government, unanswerable to American voters. In America, the people must always reign.

—President Donald Trump, remarks at signing of executive orders on transparency in federal guidance and enforcement, October 9, 2019

Competitive Enterprise Institute founder and “despairing optimist” Fred L. Smith, Jr. lamented to me once: “It’s so hard to centrally plan deregulation!”

Agencies, rather than Congress, already do most of the lawmaking, and it’s reached the point that regulatory agencies don’t need to write notice and comment rules anymore—that’s for chumps. They can use guidance, memoranda, directives, notices, circulars, bulletins, and other regulatory dark matter—there’s a whole word-cloud.

Because such deterioration cannot be merely painted over, we’ve long pressed for replacing administrative state “reform” with Article I restoration. That is, re-establishing Congress’s primacy in lawmaking. Since Congress won’t act, this necessitates interim steps like an executive order restraining abuse of those agency guidance documents.

This happened. On October 9, 2019, president Trump issued executive orders (EO) 13891 and 13892, on, respectively, “Promoting the Rule of Law Through Improved Agency Guidance Documents” and “Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication.”

What the orders do

One can find worthy descriptions of 13892’s directives regarding fairness and not blindsiding people, and affirmations of the non-authority of stand-alone guidance. These safeguards are aimed at administrative state casualties like the Environmental Protection Agency abuse victims behind Trump at the signing ceremony, and the many others that groups like the New Civil Liberties Alliance have showcased.

The 13891 “Improved Agency Guidance Documents” EO seeks to enable the much-needed infrastructure for disclosure, and for guidance document content and characteristics.

Mirroring the U.S. Code and the Code of Federal Regulations, 13891 would create what one might call an informal “Code of Federal Guidance” at each executive branch agency via a “single, searchable, indexed database” mentioned in Section 3(a). Creating those indexes will be streamlined at the outset by an agencies-wide rescission of guidance that “should no longer be in effect,” per the order’s Section 3(b). The order discusses actively “rescinding” documents, but those not added to the database would be void regardless. Where guidance is retained, it shall be affirmed that it lacks “the force and effect of law,” also mentioned in Section 3(a).

The Office of Management and Budget (OMB) is directed to issue to agencies a detailed implementation memorandum for creating both the “compendium” and the “scrub”—that memo could appear any day now. Agencies then get 120 days to comply. The final OMB guidance on Trump’s signature “one-in, two-out” E.O. 13771, by contrast, took two months to be issued. We don’t have that kind of time, as you’ll see below.

Yet another OMB implementing memorandum to executive agencies will require that they issue new regulations describing “processes and procedures” (Sec. 4) for issuing guidance. These include, for each guidance instrument, certification of its non-binding nature (Sec. 4(a)(i)), and procedures for the public to petition for revocation or alteration (Sec. 4(a)(ii)).

For the subset of “significant guidance documents” (defined in Sec. 2(c), see here for history/evolution of the term) there are further requirements (Sec. 4(a)(iii)A-D). These are:

  • Semi-Administrative Procedure Act (APA) processes for public notice and comment (subject to “good cause” waiver); public response from the agency before finalization; plus signoff by a presidentially appointed official;
  • Office of Information and Regulatory Affairs review under EO 12866 to affirm benefits justify costs, as well as adherence to other regulatory oversight executive orders in effect. Certain specified review already technically exists for a smaller subset of “economically significant” guidance, but not really in practice; nor, for that matter, is “economically significant” actually formally defined anywhere in law.

Unfortunately these Sec. 4 procedures won’t materialize for a year, since the EO gives agencies 300 days after the OMB implementation memo. Alas, that will be election time, give or take.

Care will be needed to preempt certain exploitable loopholes in the their content and omissions. These should be incorporated not only into the Office and Management Budget’s new memo(s), but also an affirmation EO and perhaps further orders.

The sinister workarounds (rubs hands together and chuckles like Montgomery Burns)

Opponents haven’t filed legal challenges that I’ve seen yet, but Public Citizen frets that “the orders appear to give the White House some troubling new authority to interfere in agency actions.” Actually, the order uses the phrase “consistent with applicable law” no fewer than six times. Criticism from implacable progressives who say guidance merely provides “regulatory certainty” ignores the years of recommendations that the bipartisan Administrative Conference of the United States has issued on making guidance fairer and clearer.

The Center for Progressive Reform worries that “literal compliance could be impossible. And even if it’s not, the sheer volume of documents in the database might make it unusable.” That, folks, is exactly why we call it regulatory dark matter. The agencies don’t know where all these rules are, either. As common among the radical left, untethered agencies can be lawless, but the public is expected to comply. They oppose notice and comment on significant guidance, even while admitting the “universe of ‘significant’ guidance is potentially very large.”

What if an agency wants to remain unanswerable and fly that guidance kite? Conceptually, the greatest vulnerabilities of EOs 13891 and 13892 are progressivism and the policy turn toward socialism (for which the unelected, “lawmaking” administrative state is taken as a given), bolstered by passivity in the face of these. A socialist or progressive may be about to be nominated for president in a one-time constitutional republic that now treats that alien ideology as normal.

An erosion can also be engendered by the undeniable fact that in many instances, industry “wants” guidance, either for good reasons or bad rent-seeking ones. Alas, the EOs presuppose the existence of the administrative state, and the practice of guidance itself. Policymakers should be careful—the innovative industries and jobs of the future haven’t been created yet, so there’s no need to reflexively pre-ordain anything and affirm “good” administration instead of Article I constitutional lawmaking (or even better, not legislating at all).

Vulnerabilities within the EOs

If you’re a deep stater or an “anonymous” with a big house in Great Falls or Potomac or some other upscale enclave, you’ll want to delay OMB’s memos if you can. Agencies get 120 days after the “database” memo, but if you stall things, the guidance regulations are allowed 300 days, and so won’t be out before the election. Take advantage of whatever got in the way of OMB from directing agencies to respond to prior queries on the extent of guidance,

The first EO sets up some bombs. The biggest internal vulnerability is that it does not even need to be revoked by a future president to jettison the database. Sec. 3(c) tells us:

The Director of OMB (Director), or the Director’s designee, may waive compliance with subsections (a) and (b) of this section for particular guidance documents or categories of guidance documents, or extend the deadlines set forth in those subsections.

So the future OMB director in a future administration, who may not be of a deregulatory mindset can elect to chuck the “single, searcdhable, indexed database.” That, in turn, would help defang the fairness order as a bonus for progressives, since without the database, it would be largely non-operational.

Then, if the “APA for guidance” on notice and comment for significant guidance bugs you, sit tight until a flip in administrations, and then pull out Sec. 4(b):

The Administrator shall issue memoranda establishing exceptions from this order for categories of guidance documents, and categorical presumptions regarding whether guidance documents are significant, as appropriate.

Again, regulatory review standards can be aside without even the president repealing the order. The right to petition for withdrawal may not be, however. The public input and opportunity to challenge can only be taken away by a president who revokes the order. But after the passage of time, even if non-repealed, the directive could be abandoned like the largely inert 2007 OMB Good Guidance Practices. While economically significant guidance is already subject to review under that document, one cannot find a compendium.

In prior definitions of guidance, some items omitted were precisely the kind of moves (such as adverse publicity) that government can use to “signal” and influence private sector behavior or “nudge” regulated parties.

While the new order scoops up more guidance than EO 13771’s “one-in, two-out” instructional guidance did, remaining exemptions include “rules of agency organization, procedure, or practice”  and “internal guidance directed to the issuing agency or other agencies that is not intended to have substantial future effect on the behavior of regulated parties.” This appears to mean that some of the most notorious inter-governmental guidance (such as the transgender restroom “Dear Colleague” letters from the Departments of Justice and Education) would be untouched by the Trump orders.

Nicholas R. Parrillo noted that “regulated parties are going to try to follow the agency’s wishes regardless of the format in which those wishes are expressed, or the formality with which they’re expressed.” He doesn’t recommend it, but notes that agencies that are “busy” may just leave those guidances in “draft” format for a long time. That would prevent their being reviewed as final or logged in a database. Take a cue from the sloth working at the DMV in Zootopia, y’all.

Finally, it is the case that sometimes Trump’s moves are regulatory, so there’ve got to be some creative ways for the #resistance to use new barriers to guidance to perversely derail Trump’s attempts to reduce burdens by means of guidance.

Ground level vulnerabilities that already militate against the new EOs enforcement

Now let’s look at some ground-level workarounds. Most glaringly, the new EOs do not apply to independent agencies.

Further, several disciplinary measures supposedly already operative are ignored, even in violation of law, without consequence—and the same could happen to the EOs. For example:

Speaking of the OMB implementation memos yet to come, agencies appear to be ignoring an important April 11th OMB “Guidance on Compliance with the Congressional Review Act,” also directed at agencies and their procedures. In an attempt to reinforce regulatory agencies’ already mandatory (but ignored) compliance with the CRA, the OMB guidance reiterated the oft-ignored requirement that agencies submit both major notice-and-comment rules and certain major sub-regulatory guidance documents to both houses of Congress (and also to the Government Accountability Office) for archiving and to afford Congress an opportunity to issue a resolution of disapproval. This requirement applied, with certain exemptions to independent agencies (which escape OMB’s cost-benefit oversight) as well.

The memo also directed that “Agencies should not publish a rule [which includes guidance documents in this context]—major or not major—in the Federal Register, on their websites, or in any other publicly disclosed manner before OIRA has made the major determination.” Has anybody seen a compilation of “major rule” determinations? I’m not holding my breath. Like the waivers in the new EOs, the April memo also invites a compilation of all guidance that is to be deemed “presumptively not major.” Classical liberals and progressives will have different views on that score.

Critics have expressed concern over “weaponizing” the new “Code of Federal Guidance” database for CRA purposes against guidance. But guidance is already invalid if it hasn’t been submitted to Congress and GAO. Prepping it for the database gives agencies a chance to submit it like they were supposed to have done already, if they wish. That is a healthy pre-streamlining of the database.

Solutions

The first priority is to remain aware that the guidance headache is being pitched back to OMB. That means ensuring that the OMB implementation memos are rock solid and backfill loopholes. The second priority is, since we know OMB memos (like laws on regulatory oversight) do not necessarily inspire compliance, a follow-up “Affirmation of OMB” EO from Trump (ideally, one that explicitly asks independent agencies to take part).

Normal, routine disclosure parameters are needed such that if someone in the future monkeys around, it’s plainly obvious. As OMB gives the new guidelines for populating the “CFR for Guidance,” they should enable a checkbook-balancing of sorts between the new “CFR for Guidance” database and:

  • The biannual Unified Agenda and the Regulatory Plan in which agencies list priorities
  • The Report to Congress on Regulatory and Deregulatory Actions
  • Updates to the public on Trump’s two-for-one regulatory rollback effort
  • The Federal Register
  • The GAO rules database (for internal consistency, OMB’s implementation memoranda are going to need to reconcile “significant” and “major” as far as guidance is concerned)

Those documents, as well as the federal regulatory portal reginfo.gov need to be updated to reflect the new environmnent. OMB can dictate some of that, an affirmation EO can do more, and (eventually) legislation like the Guidance Out of Darkness Act, sponsored by Sen. Ron Johnson (R-WI) can cement things.

Ultimately, in addition to the “CFR for Guidance,” observers should be able to readily tell

  1. That guidance/rules are being received on both sides of the Hill and that the info gets summarized somewhere that a human being can locate it (right now Hill staff and the public cannot).
  2. That rules and guidance appear on GAO’s CRA page and in its database.
  3. Guidance is given thorough treatment on OIRA’s regulatory review page. Currently one finds nothing acknowledging the April memo or presenting results or determinations despite their being specified by that very body.

If the right infrastructure and “forms” are set up (like the “deregulatory” button now in the OIRA database), it’s less likely that a future administration will revoke them. And they’d lend themselves to legislative backup as well.

A CVS receipt may be the only thing longer than the forthcoming list of guidance documents. It is rare to see a branch of government yield power back to another branch of government—disciplining guidance is an invitation from the executive branch to Congress to reassume the lawmaking role it delegated away.

Written by Clyde Wayne Crews

Originally published in the Competitive Enterprise Institute

October 23, 2019