The Trump administration is doing by fiat what it has struggled to accomplish through lengthy rulemaking — dismantling federal regulations designed to protect workers, consumers, investors and the environment.
President Trump formalized this strategy two weeks ago when he signed an executive order instructing agencies across the government to rescind, modify or simply stop enforcing regulations if they burden the economy. On Thursday, he signed another order to allow agencies to waive 50-year-old environmental laws to speed federal approvals of pipelines, highways and other projects.
The president took the actions even as he celebrated a drop in the unemployment rate announced Friday and said the economy is surging in “the greatest comeback in American history.”
His executive orders have resurrected a long-running debate about whether regulation hurts the economy.
“This is a huge win for pro-growth policies,” David McIntosh, president of the Club for Growth, said in a recent call with reporters.
The moves come on top of waivers that federal agencies had granted businesses and industries earlier in the health crisis. The White House will seek to make many of those roughly 600 deregulatory actions permanent, according to a former White House official speaking on the condition of anonymity to discuss internal deliberations.
As the virus spread across the United States earlier this year and the economy cratered, officials looked for places to pare back.
The federal consumer watchdog agency suspended requirements that financial institutions investigate disputed information on consumers’ credit reports. The Labor Department relaxed some worker protections, including how businesses report paid sick leave. The Food and Drug Administration cut the time it takes to approve new antimicrobial products from years to months.
Major conservative groups and trade associations, which decry many federal regulations as overreach, are rushing to present even more ideas. These include setting aside labor requirements on infrastructure projects; speeding up vaccine and treatment approvals; limiting corporate liability; lifting restrictions on telemedicine so people can see doctors across state lines; and loosening wetlands protections so farmers can install stocked fish ponds or other features.
Others warn that the president is overstepping his authority and that the executive orders will collapse in the face of legal challenges.
“The good news is that the president has once again assumed he possesses absolute power to say what the law is, but he does not,” Richard Lazarus, a Harvard University professor of environmental law, said in an email. “That is the job of the courts, and they will reject the president’s effort to sweep away critically important public health protections enacted by Congress and signed by prior Republican and Democratic presidents.”
Still, even if interest groups battle rollbacks in court, federal officials could just stop enforcing some regulations, said New York University School of Law professor Richard Revesz. “Agencies have a fair amount of discretion of when to bring enforcement actions,” he said.
For more than a century, Congress has created agencies and regulations to oversee activities it did not have the expertise to handle, mostly to protect the public.
In 1887, for example, the federal government established the Interstate Commerce Commission to manage the exorbitant rates railroads were charging farmers and merchants. The first federal mine safety statute passed in 1891, and Upton Sinclair’s portrait of the unsanitary meatpacking industry in “The Jungle,” spurred the creation of the FDA in 1906. Other regulations do things from protecting competition to bolstering financial stability to requiring equipment that make offshore oil spills less likely.
Trump’s executive order in May, however, freed the agencies from enforcing regulations that “may inhibit economic recovery” on a temporary or permanent basis.
“The point is to tell the agencies not to throw the book at someone acting in good faith,” said a senior administration official who spoke on the condition of anonymity to describe internal thinking about the policy.
The order Thursday directed agencies to waive requirements imposed by laws such as the Endangered Species Act and the National Environmental Policy Act if that could accelerate the construction of highways, pipelines and other projects. These laws require agencies to solicit public input on projects proposed in their communities and analyze in detail how they could potentially harm the environment.
The president said he was acting because of dire economic circumstances brought on by the pandemic. But his desire to weaken the 50-year-old National Environmental Policy Act predates the eruption of the coronavirus in the United States. In early January, he railed against the law and proposed fundamental changes to weaken it.
One sign of industry’s appetite for regulatory relief can be seen on the state level in Minnesota, where pollution regulators have received more than 500 requests for “regulatory flexibility” because of the coronavirus and been granted more than 93 percent of them.
As early as his first month in office, Trump made it clear he wanted to shrink regulation, directing agencies to identify two regulations to be repealed for every new one proposed.
The Consumer Financial Protection Bureau, which guards consumers from abuse by payday lenders, mortgage brokers, banks and other financial institutions, had already reduced its enforcement activities before the pandemic. Under President Barack Obama, the bureau filed an average of 3.1 cases a month over nearly six years. It has filed about half that number under Trump since the beginning of 2018.
In April, the bureau said it would consider the impact of the pandemic while weighing whether to cite or sue banks, debt collectors and other financial companies for violating the provisions of the Fair Credit Reporting Act that require them to promptly investigate disputed information on consumers’ credit reports.
The Consumer Financial Protection Bureau’s more relaxed approach comes despite the fact it has received a record numbers of complaints — about 36,700 in March and 42,500 in April. In the eight weeks after Trump declared a national emergency in March, the average number of complaints about prepaid cards increased by 84 percent compared with the previous eight weeks, and credit-reporting complaints were up by 29 percent.
The Environmental Protection Agency’s top enforcement official, Susan Bodine, said in a March 26 memo that her agency “will exercise the enforcement discretion” for “noncompliance” resulting from the coronavirus pandemic.
At the Labor Department, White House officials have discussed letting companies disregard reporting requirements written into the new paid-sick-leave benefits approved by Congress, said Karen R. Harned, executive director of the National Federation of Independent Business’s Small Business Legal Center, a trade group. Lawmakers created the benefits in February to allow employees working from home to collect a paycheck should they become sick with covid-19.
Small-business groups have also talked with the White House about paring back regulations related to overtime pay, given the surge of employees working remotely, Harned said.
“As employees are trying to get back to work, this is not the time to be bringing down the hammer on someone who forgot to dot an ‘i,’ ” Harned said. “We have been hoping they can really use their enforcement discretion.”
The Heritage Foundation had already proposed reversing a rule that took effect in January extending overtime pay to an additional 1.3 million workers.
The Labor Department has already moved to broaden an exemption for paid-leave benefits for companies with fewer than 50 employees.
A Labor Department official said in an email that the agency plans to keep the rule in place, but added that the department “is always considering ways to reduce unnecessary regulatory burdens, especially as the economy reopens.”
Vicki Shabo, a senior fellow at New America, a left-leaning think tank, said that “it’s hard to imagine how anything with respect to sick days and [Labor Department] regulations could be any weaker.”
“The regulations already require very little of employers and give them a lot of discretion, particularly around smaller businesses,” she said. “The idea you would further weaken these restrictions in the middle of a pandemic seems irresponsible and counter to public interest.”
The banking industry, for its part, has secured significant regulatory rollbacks since the virus outbreak began and is now pushing to make some permanent.
The $2 trillion economic rescue package passed by Congress in March delayed implementation of new accounting standards by two years and temporarily lowered the amount of capital that small banks, those with less than $10 billion in assets, must hold to ensure they can survive an economic downturn.
Banks had called for those changes long before the pandemic.
“With all of these temporary changes, I am deeply skeptical policymakers are going to allow any of them to expire,” said Jeremy Kress, an assistant professor of business law at the University of Michigan who researches financial regulation.
For big banks, financial regulators stepped in to offer relief in April when the Federal Reserve temporarily relaxed a key “leverage ratio” used to measure how much of a financial buffer banks need to absorb losses during an economic downturn. The Fed’s rollback lowered the amount of capital big banks must hold by $76 billion. Other regulators followed with similar concessions in May.
The rule change “will provide flexibility” so banks can “provide credit to households and businesses in light of the challenges arising from the coronavirus response,” the Federal Deposit Insurance Corp. said.
“That is a massive sea change in how we have always thought about the leverage ratio,” Kress said. “It is going to be very hard to undo them.”
The Transportation Department has already issued sweeping waivers from safety rules for truckers and railroads to help goods move throughout the country. Since March, the Federal Motor Carrier Safety Administration has stopped enforcing rules that cap truckers’ workday at 14 hours, with a maximum 11 hours behind the wheel if they are carrying essential supplies.
In May, the agency also finalized rules that eased mandatory breaks for truckers during work and between shifts.
“What we have done is to selectively look at regulations that are overly intrusive and burdensome,” Transportation Secretary Elaine Chao said.
Cathy Chase, president of Advocates for Highway and Auto Safety, opposes using the unusual experience on the roads, with relatively light traffic during the pandemic, as a basis for making long-term changes to truck safety rules.
“That would be using data from a time when our nation is in crisis to further an economic agenda by some segments of the trucking industry,” Chase said.
While many agencies have outlined how they might ease federal requirements in response to the executive order, others — including the Department of Health and Human Services, the FDA, the Interior Department and the EPA — refused to specify their plans.
At the Education Department, officials are considering extending a rule change that allows school districts to carry over unspent dollars targeting low-income students into the next year and another that has allowed using professional development funds for online instruction.
When — and if — the administration reverts to established regulatory enforcement depends on the economy, but not that alone.
Restoring regulations “needs to be timed so that they don’t stop the recovery with a lot of costs and regulations,” said McIntosh, of the Club for Growth. “What we’ve urged the administration to do is use that end phase to evaluate whether these regulations are really needed.”
CORRECTION: An earlier version of this story incorrectly said the Consumer Financial Protection Bureau would not enforce the Fair Credit Reporting Act. The bureau said that it would consider the disruptions caused by the pandemic in enforcement of the law. This story has been corrected.
Ian Duncan, Amy Goldstein, Chelsea Janes and Laura Meckler contributed to this report.
