Posted on September 15, 2017 by Seth Jaffe
In June, I posted about Foley Hoag’s brief in support of those challenging Executive Order 13771, the so-called “2 for 1” EO. By ignoring the benefits of existing and proposed regulations, the Order ignores the purposes behind the legislation pursuant to which regulations are promulgated. The Order is thus the
definition of arbitrary and capricious.
Late last week, OMB issued a memorandum to executive agencies, requiring them to develop “Regulatory Cost Allowances” for FY 2018. The memorandum is only one page. In that one page, it uses the word “cost” 11 times. The word “benefit” does not appear.
The memorandum notes that the purpose of the Order is to “lower regulatory burdens” and “to be prudent and financially responsible in the expenditure of funds, from both public and private sources.”
I hate to beat a dead horse, but one would have thought that the absolute size of the “regulatory burden” is not what’s relevant; what’s relevant is whether that regulatory burden is exceeded by the benefits of proposed regulations. One would also have thought that requiring expenditures of private funds for regulatory compliance would be seen as “prudent” if those compliance costs are exceeded by the benefits.
Indeed, one would have thought – and I do still think – that seeking to lower regulatory compliance costs without regard to the benefits provided by government regulations is just plain crazy.