Two-for-One Executive Order Unlikely to Alter CPSC Activity for Now

CPSC is invoking its independent agency status to reject the January 30 executive order dubbed "One-in-Two-out." Further, the agency's current Democratic majority is not inclined to follow it voluntarily. The order instructs (bit.ly/2kXotWq) agencies to kill two old regulations for each new one passed. It also has related mandates for zeroing out or offsetting new incremental costs by eliminating others. "Incremental cost" is an accounting term that refers to the costs associated with a new activity; it is the difference between prior and new costs.

Independent agencies typically are exempt from executive orders and related presidential memoranda, and CPSC already has taken that stance on a memo freezing federal rulemaking a week earlier (PSL, 1/30/17). Meanwhile in the House, a similar bill – HR 674 by Rep. Michael McCall (R-Texas) – would take a related approach but one-for-one. With the Judiciary Committee, it includes language urging, but not requiring, connection between the axed and new rules. It would exempt rules that are under revision to be less burdensome, and it would mandate that the cost of a new rule be less or equal to the one removed.

The connection between removed and added rules is a primary problem raised related to CPSC, which regulates disparate products and hazards with little link other than the broad umbrella "consumer products." That is the issue behind the last sentence of CPSC Chairman Elliot Kaye's rejection of following the new order even voluntarily:

"This Executive Order does not apply to independent agencies, including the Consumer Product Safety Commission. While we have looked to follow in spirit EOs that advance sound public policy and do not conflict with our critical public health and safety mission, this EO clearly fails on both accounts. To voluntarily follow it would lead to poor public policy decisions by ignoring the many necessary benefits provided by consumer protections that save lives and protect all of America’s families. It would also be counter to our safety mission, as it would cruelly and unfairly have us pit vulnerable populations against each other when it comes to making safety decisions."

Commissioner Robert Adler echoed the independent agency exemption and focused on there being no mention of benefits in the order, just costs. "I see no place where the EO requires that each new rule replace the benefits of any withdrawn rules," he told PSL (his emphasis), adding, "If a replaced rule removes one dollar in costs but also removes ten dollars in benefits, that is a net loss to the public."

Commissioner Marietta Robinson stressed that she too did not deem the order to apply to CPSC, but she expressed concern that the Republicans on the panel had urged voluntary compliance to the earlier memo on freezing rules. She said that following the new order would "profoundly affect safety and children." She deemed the 2-for-1 idea for CPSC to be "ludicrous," pointing to the issue of disparate products and hazards that are "are not fungible or interchangeable" as well as that of choosing between groups of victims.

She asked if CPSC would have to repeal provisions for lead in toys or mattress flammability to pass a rule on carbon monoxide from generators. She further illustrated the dilemma by raising the analogy of FDA having to repeal approvals for two life-saving drugs in order to allow a third.

She said the order lacks clear guidance, making implementation difficult or impossible. Meanwhile, she pointed to writings that suggest anti-regulatory anger might be driven more by political rhetoric than by demonstrable harms.

On the incremental costs demand she too faulted the lack of consideration of off-setting benefits. She also noted that industry costs can go down after initial adoption of changes aimed at compliance, and she pointed to other writings that attack the idea of deregulation as cost-free.

She pointed to other, existing measures CPSC has in place for addressing costs, like the Regulatory Flexibility Act. She asserted that looking at regulations independently from others is the better way to make regulatory-relief changes.

Commissioner Ann Marie Buerkle expressed pleasure with the "focus on reducing excessive regulation," writing:

“As is often the case, when an Executive Order is issued there is discussion regarding its applicability to independent agencies. Even if just in spirit, our agency often seeks to heed Executive Orders regardless of whether or not they are definitively applicable.

"The regulatory state acts as a wet blanket on our nation’s economy, the effects of which are hardest felt by the American consumer and taxpayer. Whether we are eliminating ineffective, burdensome rules or providing third-party testing relief, we regulators must always strive to ease regulatory burdens."

Commissioner Joseph Mohorovic pointed to his opinion pieces January 9 and 10 on RegBlog (bit.ly/2k195r5 and bit.ly/2jCbr3L) and a recent speech (bit.ly/2k5I4VQ) asserting, "When you’re in a hole, the first thing to do is to stop digging." Acknowledging lack of OMB guidance, he issued a statement on regulatory principle broadly that included:

"I have long supported comprehensive efforts to rein in the regulatory excesses of federal agencies, which are needlessly contributing to the massive red-tape anchor on our economy. It’s a drag some have estimated at $2 trillion - $2,000,000,000,000. That anchor puts American companies and American workers at a competitive disadvantage internationally, and any part of it that isn’t giving us enough return on that staggering investment is dead weight that we need to cut loose."

He said swap-out programs in the U.K. and Canada were successful and applauded the order, saying, "I look forward to more regulatory reforms from this White House and this Congress to help us climb out of the hole we’re already in."