In the aftermath of President Trump’s disgraceful decision to pull out of the Paris Agreement, we are fighting back today against another presidential order that will do great damage.
The Union of Concerned Scientists filed a friend of the court (“amicus”) brief in a case brought by Earthjustice, the Natural Resources Defense Council, Public Citizen and the Communications Workers of America, challenging the so-called “two-for-one” executive order. This executive order requires federal agencies to repeal two regulations for every new one they issue, and ensure that the costs of any new regulation are fully offset by the cost savings of repealing existing regulation. UCS has critiqued this order forcefully before here and here.
UCS does not often go to court, but we are now because this “2-for-1” order goes against everything we stand for. It is profoundly irrational, substituting a slogan for the hard work of government and willfully requiring the government to ignore the best science. The executive order seems to assume, without a shred of evidence, that there are stacks of regulations sitting on a shelf that can be easily repealed without causing any harm. And it directly prevents federal agencies from protecting Americans from new threats to health, safety, or the environment. Just think about this: if this order had been in place, we probably wouldn’t have been able to take lead out of gasoline, or mandate seat belts, or keep toxics out of kids’ toys.
Already, the executive order is having its intended effect. A headline captures it: “under Trump, agency rulemaking grinds to a halt.” As one example, EPA was poised to issue a regulation to prevent the discharge of mercury into public sewer systems, but has pulled the rule because it will have to find two rules to repeal in order to go forward.
It is also flatly illegal. UCS is fortunate that a venerable Boston law firm with a long history of public service, Foley Hoag, agreed to represent us pro bono to challenge this executive order. Our attorneys have written a compelling brief showing the many ways that this executive order violates the law. Here is a summary:
The order forces agencies to ignore statutory mandates. Our attorneys point out that Congress’ “goal in enacting environmental, public health, consumer protection, and safety statutes was to achieve benefits for society, not to save costs. If saving costs was the only relevant factor, Congress could simply have chosen not to legislate.”
When an agency makes regulations to implement a statute, courts will insist that they “live up to their mandates to consider the public interest” that congress sought to advance in passing the law. They are not allowed to “avoid or dilute their statutorily imposed role as protectors of the public interest values.” But that is precisely what the two for one rule does—it requires agencies to essentially ignore the public interest in new safeguards, no matter how needed they are, unless they can somehow find two old safeguards that are cost the same amount.
The executive order not only violates statutes that mandate specific safeguards and protections, but a general, landmark law known as the National Environmental Policy Act (NEPA). The law was enacted in the early 1970’s when environmental values were systematically ignored, resulting in catastrophes such as the Cuyahoga river catching fire, and urban smog that resembles what we see in cities in developing countries today. The law requires all federal agencies to take environmental impacts into account when making decisions such as issuing permits and regulations. As one judge wrote in an early decision interpreting this law, “NEPA mandates a rather finely tuned and ‘systematic’ balancing analysis [of] economic, technical, and environmental factors] in each instance.”
The 2 for 1 rule violates this statute. In order to comply with 2 for 1, agencies will be forced to forego the “finely tuned and ‘systematic’ balancing analysis” and focus solely on the issue of the cost of a new regulation, and the costs of existing ones.
The order compels agencies to take “arbitrary and capricious action”. When agencies issue regulations, their decisions must not be “arbitrary and capricious.” Agencies act arbitrarily and capriciously when they rely “on factors which Congress has not intended it to consider” or “entirely fail to consider an important aspect of the problem.”
Our attorneys show that the executive order actually compels agencies to act arbitrarily and capriciously. This is because the order requires agencies to focus on the costs, and ignore the benefits. For example, if a proposed new Department of Energy regulation requires companies manufacture washing machines to add energy-efficient controls at a cost $10 million, but those controls save purchasers $30 million in energy costs, the agency must ignore the $30 million in benefits of these savings in the “2 for 1” calculus. In order to issue this regulation, DOE would have to repeal two existing regulations that cost at least $10 million to go forward with the new regulation—even though the benefits of the regulation exceed the cost by a factor of three!
But it gets even worse: when calculating the costs of existing regulations to be repealed, agencies cannot consider the sunk costs of the existing regulations, meaning the costs that businesses have already incurred to comply. So, to build upon the prior example, if DOE were to repeal two other appliance efficiency regulations that cost industry $10 million to comply, but $8 million of those costs have already been incurred, DOE’s repeal of two existing regulations would only give it $2 million as an offset to the new $10 million “cost” of the new regulation. DOE would have to find and repeal numerous other regulations with present day costs of $8 million in order to reach the $10 million in offsets.
Have you ever heard of a more rigged (and arbitrary) system?
The four plaintiffs in this suit, and now UCS, have asked the court to rule that the executive order is invalid on its face. If we prevail, the government will not be allowed to enforce it.