epa blog 1As Donald Trump settles in as the 45th president of the U.S., he seems to be targeting the Environmental Protection Agency (EPA) quite specifically. What are some foreseeable impacts of the Trump Administration’s Executive Orders and regulatory overhaul in respect to the EPA and the consumer products industry?

Executive Orders (EOs)

First and foremost, we need to look into the EOs that are impacting regulatory agencies across the board. On 30 January 2017, the President ordered EO No. 13771, on Reducing Regulation and Controlling Regulatory Costs, requiring at least two existing regulations to be eliminated for every new regulation that is issued. In addition, the cost of a new regulation should be offset by the repeal of the prior regulations.

EO 13771 also directs the head of each agency to provide an Annual Regulatory Cost Submission to the Office of Management and Budget (OMB), which shall identify the approximate incremental cost of each new regulation as well as the savings of those to be repealed, for the respective fiscal year. The Director of the OMB, Mick Mulvaney, shall include all approved regulations in the Unified Regulatory Agenda. Only regulations that are included in the Unified Regulatory Agenda may be issued, unless approved in advance by the Director.

Another EO issued by Trump is No. 13777 on Enforcing the Regulatory Reform Agenda. Per EO 13777, every federal agency will be designated a Regulatory Reform Officer (RRO). The RRO’s primary function will be to ensure their respective agency carries out the ordered regulatory reform initiatives.

The RRO will lead a Regulatory Reform Taskforce (TF), which will be expected to do the following:

  • Go over every regulation of their office, determine which should be repealed or modified, identify costly and unnecessary regulations;
  • Every 3 months, report to RRO, who reports to OMB;
  • Consult with relevant trade associations for input; and
  • Support Trump’s goal to get rid of at least “75 percent of the repetitive, horrible regulations that hurt companies [and] hurt jobs” (speech at the Conservative Political Action Conference).

Presidential Executive Order No. 13781 on a Comprehensive Plan for Reorganizing the Executive Branch of 13 March 2017 directs the OMB to develop a plan that would reorganize federal agencies and eliminate those agencies, parts of them, and/ or their programs that are found to be unnecessary and/ or inefficient.

Every agency has 180 days from the date of the EO to submit a plan for reorganization to the Director of the OMB, who must review the plans along with any public suggestions regarding it. Mulvaney will have 180 days to propose a plan for the reorganization of the entire executive branch to the President.

The 9th of September, 2017, will mark 180 days after EO No. 13781 was published, and therefore, the deadline for the EPA to submit its review to Director Mulvaney. The general public will then find out – via the Federal Register – the changes that Scott Pruitt, Trump’s appointed EPA Administrator, believes will make the EPA more efficient. The notice in the Federal Register will invite the public to provide comments and suggestions that they feel the government should consider.

Hiring Freeze

The President has also implemented a hiring freeze on federal civilian employees, as well as a regulatory freeze. Neither of these actions are uncommon for new presidents; they allow the new president to show that they have the control.

In regards to the hiring freeze, the ability of the EPA to allocate staff and resources in order to meet requirements of the revised Toxic Substances Control Act (TSCA) may be limited. On the other hand, the EPA’s newly-appointed Administrator, Scott Pruitt, has declared that he intends to keep TSCA implementation a priority.

dollar-499481_6402018 Budget

Finally, specific to the EPA, Trump’s proposed budget for fiscal 2018 would cut the agency’s budget by approximately 30 percent, decreasing it from $8.7 billion to $5.7 billion. The EPA’s budget has not been so low in 40 years. Reasoning behind the significant cut includes that it will promote greater efficiency and reduce duplication of regulations and/ or policies, while maintaining priorities, such as the safety of chemicals in consumer goods.

Significant details of the proposal include funding for EPA employees who issue regulations would be cut by 40 percent, and the ENERGY STAR program would be eliminated. ENERGY STAR is a championed program among consumers, non-government organizations (NGOs), and companies; its elimination would not only harm the environment, but consumers, as well. Many companies already manufacture electrical and electronic products that conform to the program’s requirements for energy efficiency, which increases consumer demand. According to an NPR article and EPA estimates, not only did ENERGY STAR save consumers and companies a combined $34 billion, but it prevented the emission of more than 300 metric tons of greenhouse gases in 2014 alone. The financial loss to both businesses and consumers would be substantial, but the environmental impact cannot be ignored, either.

What’s Next?

As it is still early in the new president’s administration, we have yet to see which implications the discussed EOs, freezes, and cuts will have on the consumer products industry. Although the reasoning behind these policies is to make the Federal Government more efficient and less costly to the public and to businesses, they may have the opposite effects. The costs of funding the reviews themselves must be taken into account; the identification of regulations for repeal, replacement, or modification will take many dedicated man-hours. Due to the hiring freeze and budget cuts, the staff assigned to these tasks will essentially have to perform the work of two people, or, at the very least, set aside their primary job functions so that they can efficiently perform their new tasks. Additionally, fewer federal regulations may lead to more state and/ or local regulations, which could result in a greater quantity of rules and regulations, confusion, and potentially higher costs for manufacturers, retailers, and consumers.

Why not watch our on-demand webinar for further insights? “Brexit & Trump: What They Mean for Environmental Regulatory Compliance“, presented by Dr. Chris Robertson, of Edif ERA, and Lynn L. Bergeson, of Bergeson & Campbell.

 

References:

The Hill article on regulatory freeze: http://thehill.com/regulation/administration/316585-trumps-regulatory-freeze-goes-further-than-obamas

TSCA overhaul: http://www.natlawreview.com/article/tsca-reform-implementation-update

EO No. 13771: https://www.whitehouse.gov/the-press-office/2017/01/30/presidential-executive-order-reducing-regulation-and-controlling

EO No. 13777: https://www.whitehouse.gov/the-press-office/2017/02/24/presidential-executive-order-enforcing-regulatory-reform-agenda

The Week article on EO No. 13777: http://theweek.com/speedreads/682178/trump-signs-executive-order-creating-task-forces-identify-regulations-repeal

CNBC article on EO No. 13777: http://www.cnbc.com/2017/02/24/trump-signs-another-executive-order-in-push-to-slash-regulations.html

EO No. 13781: https://www.whitehouse.gov/the-press-office/2017/03/13/presidential-executive-order-comprehensive-plan-reorganizing-executive

NY Times article on EPA budget: https://www.nytimes.com/2017/05/19/climate/trump-epa-budget-superfund.html?_r=0

NPR article on Energy Star: http://www.npr.org/sections/thetwo-way/2017/04/26/525584142/energy-star-program-for-homes-and-appliances-is-on-trumps-chopping-block

Whitehouse Budget Blueprint: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf