Deep Dive Episode 55 – Regulatory Reform Report Card: Agency General Counsel Perspective

This episode brings you the audio from the opening panel of the Federalist Society’s 7th annual Executive Branch Review Conference. The panel featured General Counsels from the Department of Transportation, Department of Energy, Department of the Treasury, Department of Agriculture and the EPA. The speakers take stock of the current administration’s regulatory reform agenda two years on.


Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

Dean Reuter:  Good morning. Good morning and welcome. Thank you all for being here this morning. Welcome to The Federalist Society’s Seventh Annual Executive Branch Review Conference. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. We’ve got a packed schedule this morning, so I’m going to be very brief with my opening remarks.

First, thank you for enduring a few scheduling changes and some security we put on here today. We very much appreciate your flexibility. I want to also welcome those of you watching and joining us on the live stream and/or C-SPAN. Now, I just mentioned that this is our Seventh Annual Executive Branch Review Conference, and The Federalist Society is very proud to be hosting it. The Society, through the Executive Branch Review Conference and the Regulatory Transparency Project, continues to shine a light on what some call the fourth branch of government, the administrative state.

We use the Executive Branch Review and the Regulatory Transparency Project to monitor not only recent developments coming from the administrative state, but to discuss the broad legal principles and important questions concerning the structure of the administrative state and its use of power in adopting regulations and subregulatory rules, conducting investigations, bringing enforcement actions, overseeing adjudications and appeals, and much, much more, all while being intentionally insulated from the most direct and familiar forms of political accountability. Today’s exercise, today’s conference, though several addresses and panel discussions, will reflect that focus on the administrative state.

I’m going to say no more about the contents so we can get right to the experts. I’m very pleased to introduce the moderator of our first panel, which is going to give us an insider’s account on the administrative state from the perspective of five big agency general counsels. Adam White, our moderator, is a Research Fellow at the Hoover Institution and Director of the C. Boyden Gray Center for the Study of the Administrative State at the George Mason University’s Antonin Scalia Law School. I took a breath before venturing into saying that.

Prof. Adam White:  It’s a long business card.

Dean Reuter:  It is. Welcome, Adam. He also teaches administrative law at the law school. He’s a member of ACUS, which should mean a lot the ad law folks here in the crowd today. His legal career began at Harvard Law School, after which he clerked for Judge Sentelle right here in Washington D.C. on the D.C. Circuit Court of Appeals. He’s been a long-time leader among The Federalist Society’s many, many members. Please join me in welcoming Adam White.

Prof. Adam White:  Well, thank you, Dean. Thank you to The Federalist Society for organizing today’s discussions. It’s a real privilege to get to moderate this opening conversation.

From its opening days, the Trump administration and President Trump prioritized a regulatory reform agenda, beginning with executive orders charting a course for their agencies, and then followed by action within the agencies themselves. More than two years later, it’s a worthwhile point at which to stop and take stock of the reforms as they’ve progressed and as they continue to progress. In the agencies, general counsels play a unique and crucial role in regulatory reform. They operate at the intersection of law and policy, working not just to advance the agency’s policy agenda, but also to adhere to the rule of law. And so we’re honored and privileged to be joined today by several of the Trump administration’s general counsels and deputy general counsels to discuss the regulatory reform agenda so far. Let me briefly introduce them in the order that they’ll speak, and then we’ll move quickly to the conversation.

First, we’ll hear from Steven Bradbury. Steven is General Counsel for the U.S. Department of Transportation. He served previously in the Bush administration Justice Department’s Office of Legal Counsel. He has extensive experience in private practice, practicing on regulatory and constitutional issues.

He’ll be followed by George Fibbe, the Energy Department’s Deputy General Counsel for Litigation, Regulation, and Enforcement. Before joining the administration, he practiced with the firm of Yetter Coleman, was head of litigation for an international mining corporation, and was General Counsel for a private solar power company.

Next, we’ll hear from Steven Vaden. Steven is General Counsel for the U.S. Department of Agriculture. He previously practiced law with Jones Day. He also, I’m happy to say, serves on the Executive Committee for The Federalist Society’s Administrative Law Practice Group.

Then, we’ll hear from Brent McIntosh. Brent is General Counsel for the U.S. Department of the Treasury. Previously, in the Bush administration, he served as the White House’s Deputy Staff Secretary under the White House Counsel’s Office and in the Justice Department’s Office of Legal Policy.

Finally, Matt Leopold is General Counsel for the U.S. Environmental Protection Agency. He previously served in the Justice Department’s Environmental and Natural Resources Division, and he was General Counsel for Florida’s Department of Environmental Protection. So please join me in welcoming our speakers.

Let’s begin the conversation with a very broad question: What are each of your agencies doing to advance the regulatory reform agenda? What should the audience and the other agencies know and learn from your experience? Steven?

Hon. Steven Bradbury:  Great. Well, thanks, Adam. And I really want to thank Dean and Leonard and the whole Federalist Society for inviting me to participate in this panel.

I guess greetings from inside the administrative state. We’re spending most of our time trying to comply with the law and do things in a better, more efficient way, and a big part of that is regulatory reform. I’m happy to be the regulatory policy officer for DOT, so as Adam said, there’s a real intersection of law and policy in a big regulatory agency like the Department of Transportation. And one of the big initiatives we focused on is process, tying to implement the President’s executive orders on administrative reform. And one of the things you may have seen is we put out an extensive order on the rulemaking process at the Department of Transportation. It’s a comprehensive restatement, reset, and reform of all of our rulemaking procedures from soup to nuts, so the entire process.

And it’s available publicly on our website. I invite you, if you haven’t looked at it, to take a look. It summarizes the regulatory reform task force structure put in place under the President’s executive orders, the policies we apply in undertaking rulemaking, the reform which is very significant in our department of requiring that all regulations, both significant and non-significant, come up through the General Counsel’s Office for approval, and up to the Secretary for approval, with very few exceptions. It makes it very clear that our policy is wherever permitted by law, the benefits, the estimated benefits of a rule must outweigh the costs of the rule. It puts down in clear language the requirements of the Information Quality Act that we’re going to rely on the best data, the best scientific information, etc. And it provides clear rules for sufficient and adequate public participation in rulemaking, advance notices, and sufficient comment periods.

And then, very importantly, we have some new policies we put in place for the most expensive rules, rules that we categorize or that OIRA has categorized as economically significant with a very high dollar impact of at least $100 million a year on the U.S. economy and high impact rules where the impact is going to be $500 million dollars or more on the U.S. economy or significant net loss of jobs. And for these rules, we’ve provided by policy that there will be extra procedures, more extensive opportunity for public participation, and then opportunity for formal hearings on disputed issues of fact, complicated fact like scientific fact, economic questions, etc., that will really have a material impact on the analysis or the outcome of the rulemaking.

And we’re having the opportunity for interested parties during the comment period to request that those issues go to a formal hearing before an administrative officer at DOT. And then, the resolution of that issue, the findings of that administrative officer will go into the rulemaking record and have to be considered by the agency. And the agency will need to make a decision whether to change the proposal, stick with it, drop the rulemaking, etc. And that needs to be explained in the rulemaking record. And that does not eliminate or negate OIRA’s ability to review the whole process for OMB. So we also provide updated rules for contacts with interested parties during the informal rulemaking process. So again, I invite you to take a look at that. It’s on our website.

And just a final note, we also issued two general counsel memos in recent months on guidance documents. One is on guidance documents, making it clear that they’re not going to have the force and effect of law, that they’re going to be put out for public comment, at least in an informal way, and when they’re significant, and that some cost-benefit assessment will be done. And then, finally, a general counsel order on enforcement actions at DOT to ensure due process is provided in enforcement actions. All three of these documents are on our website, available for the public to see. And it’s our intent, Adam, that later this year, we’re going to undertake rulemakings to codify all three of these policy statements, these procedural requirements in DOT rules. So that one of the things that we’re doing.

Prof. Adam White:  Great. Well, thank you, Steven. Next, from the Energy Department, George Fibbe.

George Fibbe:  Thank you, Adam. And I’d also like to thank The Federalist Society and Dean for inviting me to join the panel.

Just briefly, on the Department of Energy, I will say that one of the most interesting and challenging things as a lawyer at the Department of Energy is the wide range of issues that we deal with in the Office of General Counsel, which many folks don’t know all of the different things the Department of Energy is involved in, from the safety and security of our nuclear weapons to environmental cleanup issues, cyber security, the electric grid, our strategic petroleum reserve, LNG export authorizations, national labs, as well as energy efficiency and renewable energy issues. So it’s a broad range. And so as you’re looking at the Department of Energy, for me as a traditionally commercial trial lawyer, one of the most interesting things is to be able to dig into many new issues, and the Department of Energy certainly provides them.

The area where — one of the areas, rather, where we actually function as a more traditionally regulatory and enforcement agency is in the area of commercial equipment and home appliance energy efficiency standards. And so a lot of folks — it’s not necessarily common knowledge. Certainly, people in the manufacturing industry and other areas are very familiar with this role for the Department, but it’s less well known. But that’s one of the areas where regulatory reform, in particular, is important. And we’ve been doing some of the same types of activities that Steve alluded to at the Department of Transportation.

So at the Department, when I talk about energy efficiency standards, we regulate energy efficiency for a wide range of products from dishwashers to home air conditioners to the, of course, refrigerators, and even kegerators, I’m told. And so as we looked at our processes and our procedure for how we do this, we looked very hard at what DOE calls its own process rule. And we’ve issued a proposed update to the process rule that, again, addresses a lot of these same issues in terms of how much discretion should the Department build into its rulemaking process, and where should it build that in, as well as issues like opportunity to be heard early in the process, whether we are going about the rulemaking process in an efficient way.

So for example, at the Department, when it comes to these efficiency standards, we issue both the standards themselves as well as test procedures because if you’re going to have a standard, some of you need to know how to measure it. And so whether we sync those up timing-wise in a way that makes sense for the industry and sort of makes logical sense is one of the issues that we’re grappling with and have put out in this rule.

When I was in private practice in-house, one of the issues that I would always look at with our internal legal budget was are we spending our money where our risk is, and do some analysis, and come up with metrics for how do we really do that. Are we overfocused on some issues and under on others that are important? And so, similarly, with the rules at the Department of Energy and the standards for energy efficiency, one of the issues that’s discussed in our proposed rule is how do we look at significant energy savings? And so is our process geared and do we have our internal resources geared toward those areas where we can determine that we’re going to be able to achieve the most good in terms of energy savings and maybe less bureaucratic churn on issues where there’s less to gain.

So that’s one of the issues that we’re dealing with at the Department, as well as on the enforcement side considering issues like due process and is there enough process and opportunity to be heard early in the process for regulated parties. So that’s just a quick overview, and I look forward to the conversation. Thanks, Adam.

Prof. Adam White:  George, I think I speak on behalf of everybody when I say please don’t overregulate kegerators.


Prof. Adam White:  Next, from USDA, Steven Vaden.

Hon. Steven Vaden:  Well, let’s see if I can get that on. Can you hear me? Okay, good.

Well, at USDA — one of my predecessors, Marc Kesselman, said that the Department of Agriculture is kind of like the federal government for rural America. If you can think of an agency that exists for the rest of America, we have a mini version of it in the Department of Agriculture that is focused on rural America. So the breadth of issues that we see in terms of regulations in the Department of Agriculture are almost mind-bogglingly broad. Many of my colleagues are going to talk about specific reforms to processes and things that they have instituted in their department, so I thought that I would share with you today two concrete examples of how these changes in processes work, and what we have done with regard to specific rulemaking proceedings at the Department of Agriculture and how they come into play.

And I think the key theme of these two rulemaking proceedings is transparency because the key requirement of the Administrative Procedure Act, when you boil down all the legal language, is the agency needs to tell you what it’s doing and the actual reason that it’s engaged in it. And that reason at least needs to make some type of common sense based on the record that it’s reflected. As we know, that’s not always been the case, which is the reason why there has been such a focus on regulation. So I’m going to focus on two regulations that we dealt with at the Department of Agriculture and show you how these values that we hold came into fruition with regard to these two rulemaking proceedings.

The first is the Organic Livestock and Poultry Practices Rule. That is a rule that was put out by the prior administration which sought to set standards for everything from how much square feet a chicken had if it was going to have an organic standard in terms of its living space, including whether or not it got to go outside to see the sun, and how much space a calf or a cow would have if it was going to be transported by truck to slaughter. What we found when looking at this rule, which was caught in suspension by then-Chief of Staff’s previous executive order ordering all regulations which had not gone into effect to be placed in suspension, was that there were some problems with it. Now, as a new administration coming in, obviously, we have the option of withdrawing the rule. But before we did that, we wanted to put out for notice-and-comment what we thought were the problems so that in case we had made a mistake of the type that the prior administration has made, we could be called upon it by the public.

There were three key mistakes with the rule as we saw it. First, there was a math problem. In terms of doing the cost-benefit analysis, the rule as put forward to the public claimed that the costs outweighed the benefits marginally. In going back and looking over the numbers, we determined that they did the math wrong. In particular, the mistake that they made was they had failed to discount the value of the benefits that were supposed to be gained in the future in order to reflect the current value of money. That resulted in, of course, the benefits being inflated in terms of their value versus the costs, which most costs of regulation come on the front end rather than the back end. When we did the math correctly and discounted so that the dollars were both current dollars rather than future dollars compared to current dollars, what we found was the costs outweighed the benefits. But we put this out for public comment, including showing the mathematical computations in case we had made a similar error.

Second, there was a  problem with Executive Order 12866 which, if you recall from the Clinton administration, still is in existence and kind of sets some key ground rules for all federal agencies when engaged in regulations. One of the least remembered parts of Executive Order 12866 is it says that typically, agencies should only regulate if there has been a market failure. If there hasn’t been a market failure, the market is doing its job in terms of being a private regulator, and agency should typically stay its hand. With the organics industry, one can hardly say that it is an industry which is suffering from a market failure. Indeed, organic farmers are booming. The National Census of Agriculture, which was released by USDA just a few weeks ago, revealed that this is the area of agriculture which is growing the greatest in terms of dollar amount and in terms of number of farmers entering the market.

There are numerous private industry groups which set independent standards in order to be able to display their seal on their products for all types of things. If you care about animal welfare, if you care about transportation, if you care about whether or not if it’s produced in a foreign country, if you care about whether or not the people who actually produced it were paid a living wage, there are seals for all of this available in the private market. If USDA moved into this space and regulated it and said, “This is the standard we want you to meet in order to be able to put the organic seal on it,” arguably, what we would be doing is freezing this progress in place because all of a sudden, there would be a stamp from the government that would say, “You can go this far and you needn’t spend another dollar to improve the quality of your good. You get to put this seal on it.” We would freeze innovation rather than spur it on.

And there was a third problem. There was no legal authority to issue this rule. If you go to the statute that governs the National Organic Program, it unsurprisingly specifies on what USDA may issue regulations about. And it talks about the things that you would expect there to be if you care about organic agriculture; namely, whether or not pesticides or other chemicals were used being the primary one. Were there hormones injected into the animal? There is nothing in there, my colleague from the Transportation Department will be thrilled to know, about transportation and how much space in the truck the cow has to have. Nothing at all, not even a reference to transporting it. And yet, this gigantic regulatory scheme was going to be put down on producers, and they were going to have to abide by it if they wanted to place the USDA organic seal.

So we put all this out for public comment. We asked for — tell us that we’re wrong in regard to how you interpret the law. Tell us we can’t do math, either. Tell us that Executive Order 12866 doesn’t say this. And then after taking all those comments into account, we ended up withdrawing the rule. And I think that even though there were people who obviously would have rather not gone through that rigamarole, going out and doing it the right way and giving the actual reasons why were taking the action, it was important for the public and it was important for organic farmers to know the reason why we did this is not because we have any particular animus toward organic farmers. It’s because we’ve got to follow the law, and we don’t want to get in your way in terms of new innovations that you may come up with to improve the quality of your produce and your animal agriculture.

And then the other example — and I’ll be quick here because it won’t take that long. There has been much interest in the press recently about antitrust issues and agriculture and large mergers. The prior administration put out a rule, known colloquially as the GIPSA rule, which sought to provide farmers an easier route to court if they wished to claim that the large companies to which they sold their poultry, to which they sold their hogs, the IBPs, the Tysons of the world, were treating them unfairly and not paying them a fair market price. There was one problem with this as well. It went against 75 years’ worth of case law. And not just any case law. It went against case law from circuit courts around the country, not all of them, but the majority of them, that said, “We find that the statute requires that in order to show a cause of action, there must be harm to the market as a whole,” a familiar concept to those of you who may practice antitrust law, not just harm to an individual producer.

This regulation put forth by the prior administration tried to overrule those precedents. The administrative law practitioners in the room know if a court finds that a reading of the statute is required by the plain words of the statute, you cannot overrule that with a regulation. The only way to do that is for Congress to pass a statute to change the words that’s actually in the text. Yet, the prior administration put that out in the hopes that one of the few circuits that had not opined on this issue might go their way, and then it would go up to the Supreme Court, and that would be the only body that could decide the issue. Meanwhile, if you’re a farmer who thinks you’re getting squeezed, posit whether you’re going to have the means that it takes in order to get your lawsuit all the way up to the Supreme Court. It was certainly a “make lawyers wealthy” scheme. I don’t know whether it would put an extra dollar in farmers’ pocket.

We ended up explaining in our proposed rule to pull it back all of this 75 years’ worth of legal history, citing case, after case, after case showing why, at the very least, this was going to do nothing but tie up the courts. And I’m happy to report that when this was challenged in the Eighth Circuit at the end of last year, the Eighth Circuit found, unsurprisingly from my point of view, that it was not arbitrary and capricious for an agency to refuse to try to stimulate a circuit split that only the Supreme Court could solve.

Prof. Adam White:  All right. Next, from Treasury, Brent McIntosh.

Hon. Brent McIntosh:  Thanks, Adam. And I want to thank The Federalist Society for having us all here today.

I have nothing so sexy as the Organic Livestock and Poultry Practices Rule, but I would like to just quickly address three, I think, distinct and perhaps unorthodox challenges that we grapple with at Treasury in dealing with the administrative state. The first is that a lot of the administrative actions we take actually arise in the national security space and the law enforcement space. When you look at things like — we have at least three major topics there. One is the investment security regime, CFIUS, which has recently been the subject of a thoroughgoing reform bill. The second is our sanctions practices, and the third is Anti-Money Laundering and Bank Secrecy Act practices.

So those are three spaces where, when you look at the cost-benefit analysis, the cost-benefit analysis is not susceptible to easy quantitative analysis because what is the benefit — if you take, for example, the sanctions regime. What is the benefit of peeling off members of the Venezuelan military from Mr. Maduro to Mr. Guaidó? Or if you look at the money laundering space, what is the benefit of preventing a terrorist attack, or detecting early an Al-Shabaab plot, or something like that? And so we have to be creative in attempting to discern the costs and benefits of administrative actions in these spaces because they are not things where you can easily look at the numbers, and do the math, and just look at the costs, for example, on American industry and the benefits to Americans.

And so we’ve done things like in the money laundering space, for example, we’re actually bringing in outside consultants to help us focus on where the risks actually lie in our Suspicious Activity Reporting regime. And similarly, we’re working with private industry to say to banks, for example, in the SAR reporting regime, “What are innovative ways that you can comply with your responsibilities here and still get us the information we need without the same set of burdens that have been imposed on you for 40 years? How can we be more effective and more efficient?” And one of the things we’re doing there is we’re actually getting together the Treasury components that work on these issues, like, for example, FINSA and the bank regulators who interact with private industry and trying to get them talking about how the burdens and benefits map onto one another and where we can be more effective and more efficient.

The second challenge that I think is somewhat unorthodox is in the financial regulation space. We were tasked early on in the administration by the President in an executive order to look at the set of financial regulations in America post Dodd-Frank under a certain set of what he called core principles, things like empowering Americans to make informed choices, ensuring American competitiveness, ensuring that regulations are tailored to the actual problem that they are attempting to address.

Why is that particularly difficult for us? The truth is because we’re not, in most of these cases, the actual regulator. We were looking across a regulatory space where the regulations are often set by a set of banking regulators, only one of which is a part of Treasury. In many cases, the markets regulators are involved, the SEC and the CFTC. In many cases, the states play a very substantial role in our federal system in these matters. And also, this is a place where there is very substantial importance for regulatory harmonization across international boundaries. And so we are working with our partners and allies across the world in the U.K., the E.U., Japan, and other places to ensure that we’re not allowing regulatory arbitrage that would create risks in the financial system.

So we put together a series of reports over 2017 and 2018 to evaluate and make recommendations as to the reform of financial regulation. And some of the recommendations were things we could do ourselves, some of them were recommendations to Congress, and some of those recommendations actually ended up in S.2155, the bill that made changes to the financial regulatory laws last year. And then some of them are recommendations that are still pending with Congress. And some of them are recommendations to the regulators, some of which are getting uptake at the regulators, but we’re keeping track of where we are having successes there.

And we think a number of them have been well received by the regulators, but we don’t have the power to force those on the regulators. We do have sort of convening authority through the Financial Stability Oversight Council. We think that’s a role that the Financial Stability Oversight Council really actually can beneficially play is to get the regulators together and talk about where regulation can be more effective.

The third unorthodox challenge I think we’re facing is, with regard to the administrative actions, vis-à-vis taxes and the Internal Revenue Code because the Internal Revenue Code presents a set of, I think, unique challenges because it is much more than most areas of statutory law. It is highly proscriptive, and it is mandatory on all Americans. All Americans have to engage in mandatory compliance every year. And that’s really not a thing that is true of most areas of law.

And so we find that with the Internal Revenue Code, when it comes to putting out guidance there, it’s not the case that people are trying to avoid regulation in this space. They are often clamoring for guidance as to how the tax code works. And so we routinely put out — the IRS routinely puts out guidance that is demanded by private industry, private individuals, saying, “How do I comply with this highly proscriptive, mandatory, arcane tax code?” And so when you look at the set of things that we put out there, they are routinely put out as a — we find ourselves getting demands in and demands that we do it now, and so we’re pushing things out regularly.

That is even more difficult in a situation where we have the most thorough overhaul of the tax code since 1986, and the set of regulations we’ve had to put out over the years and change since the passage of the Tax Cut and Growth [Jobs] Act has been probably the largest regulatory effort in the history of Internal Revenue Service. And people want it done fast, and they want answers to all their questions because there are really hard questions, especially with regard to pass-through entities and the international tax scheme.

At the same time, we’re trying to look back at the old set of regs that are on the books and say, “Where can this be modernized? What can we withdraw because it’s no longer in effect? What is unduly burdensome?” So early on in the administration, we proposed to actually pull 300 regulations off the books that actually, although they sat in the Code of Federal Regulations, had literally no effect. They did not have the force of law anymore because they were implementing statutes that were no longer effective. So they were nothing but a dead weight loss for tax law firm associates trying to figure out what is law and what is not.

And then last in that space, we did put out, in addition, a sort of statement of good regulatory hygiene for the Internal Revenue Service’s administration, much along the lines of what Steve and his agency did to ensure that people understand what set of pronouncements by the IRS are binding on taxpayers because they’ve been promulgated by notice-and-comment and what set are binding only on the Internal Revenue Service because we’ve committed to take a certain action. But because we haven’t done it by notice-and-comment, you’re welcome to challenge that in litigation. You’re welcome to take a different position, but we will commit that that is our position, and we will not deviate from it. You can hold it against us. So we’re trying to get to a place of good regulatory hygiene, and with that I’ll cease.

Prof. Adam White:  Thanks, Brent. And finally, from EPA, Matt Leopold.

Hon. Matthew Leopold:  Thank you. Can you hear me? Yep. All right. Good morning, everyone. And I echo the thanks to The Federalist Society for inviting me here. It’s always a pleasure.

We are a small agency, relatively in size, to some other federal agencies. We have about 14,000 employees. But we are an incredibly potent agency in terms of our effect on the American economy. And I just wanted to start with a few statistics today and assure you that the deregulatory initiative is alive and well, and we at EPA consider ourselves to be the tip of the spear for the President’s dereg initiative.

So as of yesterday—I just got these stats—we have finalized 39 major deregulatory actions in this administration that will save Americans $3.9 billion in regulatory costs. That’s a tremendous accomplishment coming out of EPA. We are working on another 40 deregulatory actions that, when implemented, will save another $100 billion. And it’s incredible to think that that much has been done and in the pipeline in a couple short years. And we expect to conclude many of those even by the end of this year. We are rebalancing how the agency considers costs and benefits, and we’re planning to issue a rule that would tell the agency how it needs to consider the cost-benefit analysis when weighing environmental protections and costs to the economy.

And so for those who are pro-deregulation, you might be applauding that. But our critics say, “Well, great, EPA. I’m glad you’re saving the economy money and you’re cutting the regulatory burden, but you’re doing this at the expense of human health and the environment. And that’s the external cost that we’re all paying as Americans.” So I wanted to throw out a couple stats as well on how we’re doing as a country on environmental protection.

And I routinely, when I speak publicly, talk about this — we are actually doing incredibly well in environmental protection. And I think if you read the articles written about our agency every day, you would never know some of these statistics. So since 1970, since President Nixon created the EPA, criteria air pollution, which are the six major air pollutants that are common from burning fossil fuels, they have declined 73 percent since 1970. The Clean Air Act has been a raging success in terms of human health protection. You don’t hear that statistic, but EPA has routinely put that out in Democratic and Republican administrations. Those stats haven’t changed.

For those who are interested in carbon dioxide and controlling carbon dioxide emissions, we have reduced, as a country, total carbon dioxide emissions by 14 percent since 2005. According to the U.N., we have reduced our relative carbon dioxide emissions by percentage more than any other developed country, so very contrary to what you might hear in the press. Let me talk about water for a minute. Our administrators said water’s the biggest crisis that the planet is facing. The World Health Organization says we have the best access to safe drinking water of anywhere in the world.

And so I want to level set because in the context of the deregulatory discussion, we always have to emphasize that our main mission is to protect human health. And we have returned back to basics: safe drinking water, clean air, and cleaning up contaminated lands are three of the key elements that the EPA has to undertake. And we are doing that, and the President has given us direction to do it in a way that doesn’t unnecessarily burden the economy. And so I wanted to talk about just a couple of our biggest deregulatory initiatives, and they’re ones that you may have heard about. And I want to frame it in the context of rebalancing the relationship with the states.

For those in this room, you’ll be glad to know federalism is alive and well at the EPA, in large part thanks to Congress. Our statutes are unique in that Congress really envisioned a co-regulator role between the federal government and the states in protecting the environment. But unfortunately, sometimes the federal government has overstepped its role. And a lot of our deregulatory approach is to return the power to the states as Congress envisioned. So let me just talk about a couple of contexts where that’s happening.

First, what we call our Affordable Clean Energy rule. This is the replacement for the previous administration’s Clean Power Plan that regulated coal-fired power plants. That regulation had three building blocks. It said to make power plants more efficient. It also told the states to substitute natural gas generation for coal-fired generation because natural gas is 50 percent cleaner than coal in terms of carbon dioxide emissions. And then it said to substitute all fossil with renewable. Those are their three building blocks.

Well, they hung all this on a paragraph in the Clean Air Act that was little interpreted and poorly understood. And they basically said that EPA could regulate the entire energy economy and determine the fuel mix for the country in what we call generation shifting. And we didn’t see that, and the litigants in that case didn’t see that in the statute. And so many of you know, for the first time in U.S. history, the Supreme Court issued a stay of a regulation, of any federal regulation, before any lower court actually heard argument and decided on the legality of the regulation. And that was ongoing at the D.C. Circuit.

That’s historic, and it set us on a path which we’ve now proposed to determine that, indeed, EPA does not have the statutory authority to become the nation’s energy regulator. Our friends at the Department of Energy have a role in that. The states have a clear role in their public service commissions and rate payers determining their energy mix that’s right for that state that brings energy security as well as environmental protection. So we are rebalancing that with our rule. And we’re making sure that, yes, EPA has a role in setting a standard, which we call the best system of emissions reduction, but states are the primary implementers of that and what’s called in the statute standards of performance. That’s one.

The other major rule you probably heard about is the Waters of the United States definition, another thorny, difficult statutory interpretation problem. Justices of the Supreme Court have called, I believe, the Clean Water Act’s definition vague. And indeed, it is tough. And we’ve engaged in a 40-year battle in this country to determine what is the limit of federal jurisdiction. But there’s a key word in that statute which is navigability. And we believe navigable has to mean something. We propose to say it doesn’t mean just the traditional navigable waters like the Mississippi River, but it also doesn’t mean a pond in your back yard that’s not connected — there’s no significant connection or surface water connection to a traditional navigable water.

So the way that we propose to rebalance the relationship with the states is there is a provision in the Clean Water Act that makes sure that states — their local land development authority remains with the state. And that really, when you look at the Waters of the United States definition and the permitting process around that, it’s a form of land use regulation. If your land is wet and the federal government says you can’t use it, it really can extend over into telling the states how to use their land. And we are appropriately balancing the twin goals of the statute, which is cleaning up the water and protecting the physical, chemical, and biological integrity of the water with the states’ historic role in land use.

And I’ll just mention one, quickly. The other thing that we’ve done recently is we’ve issued some guidance on a long-standing question that’s now before the U.S. Supreme Court in the County of Maui v. Hawaii Wildlife Fund. The Court has granted cert on that case, an in anticipation of that, we issued an interpretation which we’re planning to codify, depending on the Supreme Court guidance, that makes sure that the line — the question is whether pollution that’s discharged on the land that may go into groundwater and ultimately end up in one of those traditional navigable waters, does that need a federal permit or is that a state issue?

For many years—we went back to 1973—the General Counsel of EPA issued an opinion that groundwater is the regulatory jurisdiction of the states. There’s other indications. The Clinton administration in ’94 issued a statement that it was unclear that the federal government had authority to regulate groundwater in this way. We looked at the legislative history where members of Congress indeed said even though the water is hydrologically connected to ground and surface, they tried to amend the proposed law, and they failed.

And Congress drew a jurisdictional line, whether it made sense or not, between groundwater and surface water as the line between state and federal jurisdiction. We issued a guidance making that clear, drawing a clear line, and we’re hopeful that the Supreme Court will look at the logic of what we’ve proposed and, ultimately, adopt that logic in the County of Maui case. So those are some of the big actions at EPA.

Prof. Adam White:  Great. Thanks, Matt. And thanks, everybody. We have time for audience questions. You’ll see there are microphones in a few of the aisles, so if you have a question you’d like to ask, please line up.

While folks are lining up, let me just ask a very general question. This administration from the very beginning was very forward-leaning in issuing executive orders, not just across the board, executive order on controlling regulatory costs, but also subject specific EOs like the core principles on regulating the financial system, the executive order on promoting energy independence and economic growth. I’m just curious — what has it been like inside of the agency taking those sort of new and, in many ways, sort of unprecedented or groundbreaking executive orders and implementing them for the first time? What’s the experience been? What have the challenges been? Anybody? Steven?

Hon. Steven Bradbury:  Can I go first? I’ll use this also as an opportunity to brag a little bit the way Matt did, I think. Yeah. So two of the President’s executive orders in the early days of the administration required that for every — one of them, 13771, required that for every significant new regulatory rule imposing major costs on the economy that an agency adopts, it has to identify at least two deregulatory actions it’s going to take, relaxing other rules to compensate. And also, agencies have to achieve a zero net increase in costs as a regulatory budget in their planning for regulations.

And these have been challenged in court, arguments that this interferes with the statutory obligations of an agency to do it’s rulemaking. We have not found that to be the case at all at DOT. This has not been difficult to meet these requirements. It has not interfered or interposed any non-statutory considerations in our rulemaking agenda. It’s been quite easy to identify rules that are outdated, that no longer serve the purpose they were intended to serve, that are overly restrictive given developments in the marketplace. And so in fiscal year 2018, when the President announced his fall agenda last October, Department of Transportation announced that we were at that time 23 to 1, not 2 to 1, but 23 to 1 in terms of deregulatory actions for significant new rulemakings. As of today, we’re at 46 to 3.

In the fall agenda last fall, Department of Transportation accounted for one-fifth of all of the deregulatory actions that were identified in the President’s agenda. Accumulatively, since the beginning of the administration, as of now, we’re approaching, at DOT, net cost savings for the U.S. economy in our rulemaking of $3 billion dollars. And I hasten to point out that that number has not yet been audited by OIRA at OMB, so they may have some adjustments in it.

Let me just tick off quickly some of the major actions we’ve taken. Let me start with the major, the significant regulatory actions because we are a safety enforcing agency. Safety is our top priority, and we’re not going to do anything in the regulatory space that compromises safety. We don’t balance safety in these calculations. So we have issued three significant rules. The Federal Transit Administration has required that transit agencies put in place safety plans for their transit systems. For railroads that transport crude oil, we’ve required that they have oil spill response plans in place. And also, we’ve put restrictions on how and when lithium batteries can be transported by airplane, a key safety issue. Those were statutory mandates, but we issued them in compliance with statute, doing an appropriate analysis of the costs and the benefits and following our procedures for rulemaking.

But in terms of major deregulatory rules, our Pipeline and Hazardous Materials Safety Administration has issued a rule allowing greater use of plastic piping in gas transmission. There’s new, innovative technologies available that make plastic pipes safer than they used to be for transmission and much more cost-effective. We’ve issued a rule that resets the testing standards for higher speed passenger train sets to allow a greater use of different technologies and testing parameters from around the world. We’ve also issued a rule that revoked a previous rule that required electronically controlled pneumatic brakes in trains. Congress was very skeptical of the benefits of this previous mandate and required that we undertake a new cost-benefit analysis, and that analysis clearly showed that the costs of this rule far outweighed the benefits and that industry knew best when and how to use this new ECP brake technology, so we revoked that old rule.

Let me just mention a few of the rules that are currently in our agenda that we’re working on that are not yet final, but very, very exciting regulatory new ways to approach regulation. In commercial space, we’re issuing a major rule at the direction of the President to streamline commercial space launch and reentry licensing. And this is a major, major reform of rules for FAA that go back to the 1970s and that are pretty obsolete. We’re going to have a new scheme in place for a more streamlined and efficient approval of those launches. Drones over people — FAA has issued a proposed a rule on unmanned aircraft systems and when then can fly over people and at night, loosening up and regularizing broader use, particularly of commercial drones.

Along with Matt’s agency, EPA, our National Highway Traffic Safety Administration, NHTSA, is undertaking a joint rule that will be a comprehensive reset of the fuel economy standards for new motor vehicles. We call it the SAFE Vehicles Rule; safer, affordable, fuel-efficient vehicles. This is a huge reset and change of the really unrealistic fuel economy standards that were previously put in place in 2012. This rule alone, if finalized as proposed, will achieve hundreds of billions of dollars of cost savings for U.S. consumers and the U.S. economy. And finally, we’re working on an exciting rule for energy distribution which will allow for liquified natural gas, LNG, transport by rail in new technology available for tank cars.

So these are some of the things we’re doing, and extremely exciting and having a real impact, I think, on the U.S. economy.

Prof. Adam White:  Since folks are lined up, why don’t we go straight to audience questions. We’ll start here and we’ll alternate side to side. Since this is being recorded and broadcast, please identify yourself and please be as efficient as possible in your question so we can get to as many folks as possible. Karen?

Karen Harned:  Hi. Karen Harned with NFIB Small Business Legal Center. And just on behalf of the Small Business Center, we really appreciate the regulatory efforts of this administration. A question I have, though, is on how this is working for you guys. Any obstacles you’re encountering, particularly since we’ve seen such a slow walk of so many political nominees? Is that having an impact on how quickly you can get these deregulatory efforts out? And on that front, too, as you’re going through the deregulatory process and finalizing that, are you needing to do aggressive oversight, or are you finding that the career attorneys are complying with trying to put new priorities of deregulation in place?

Hon. Brent McIntosh:  I’ll take that. Obviously, we would like people to be confirmed more quickly. There’s no question about that. We think that Leader McConnell’s doing a nice job recently. But let me say, with regard — from my perspective, when I look at the career attorneys and the career experts we have, I think they’re actually remarkably expert and remarkably responsive, even in places where we are doing 180-degree reversals on former policies. The federal workforce really is a dedicated and expert workforce. Our workforce in particular, I think, is terrific.

Now, there is a natural human instinct when you tell someone, “I know you just spent the last several years dismantling our Iran sanctions program. I need you to re-mantle it, as it were.” And people look at that and they think, “I spent years of my life doing this, and now you want me to reverse that.” And so there’s a natural human instinct there, but people will salute and work hard on that, even where they feel, like, “Gosh, I spent time doing this one mission, and now you’re giving me another mission.” So I’ve been very impressed with the federal employees, and how they work on these things, and their willingness to take direction in the way that is democratically accountable.

Prof. Adam White:  Anyone else?

Hon. Steven Bradbury:  Totally agree.

Prof. Adam White:  Okay. Let’s go next here.

Dr. Will McCauley:  Dr. Will McCauley with the Animal Health Institute. My question is for Mr. Vaden. And let me start by saying it’s a real privilege and a pleasure to work alongside USDA on some really important topics. And I appreciate you mentioning transparency in your opening comments as being important to the regulatory reform process. I would posit that it may not be as transparent as it may seem from the inside looking out. I know my members, we’ve made submissions to the process, and it’s kind of a black box. We kind of put something in the front, and we wait 12 months, and maybe something comes out the other end, or not. But it’s very — it hasn’t been clear as far as how our submissions are being evaluated, if they are being evaluated, what the timeline is. And so I would ask that the USDA redouble its efforts to maintain that transparency. And if there’s more we can do, more we can submit, we’re very open to that.

Hon. Steven Vaden:  Well, we always welcome public submissions, and we cannot do our job adequately if we don’t have the maximum level of participation from those who are affected and, indeed, those who have an interest. One thing that may be a difference from prior administrations and how they ran their regulatory processes which may, to those who are used to the prior procedures, be frustrating but are necessary in order to keep it fair is we tend to abide very closely by the ex parte rule when it comes to a rulemaking proceeding.

So before anything is put in the Federal Register, we’re willing to meet with anyone and everyone who may have an interest in an issue that they think the Department of Agriculture should take interest. But once we put something in the Federal Register and say, “This is our proposal,” we really do try to keep meetings to basically zero with stakeholders who have an interest in that. And we require all interested parties to submit their thoughts in the record that every citizen has access to on

And while we understand that that may be frustrating for certain groups that have the means and the ability to hire lobbyists and others who could have a one-on-one interaction with an agency official to more directly state their concerns and their hopes and wishes for the regulatory proceeding, it is necessary to keep it fair because there are millions of citizens who have interests in those proceedings who do not have the financial means to hire lobbyists and others to come meet with us in Washington D.C. personally. And they should, according to the Administrative Procedure Act, have their comments and thoughts considered in exactly the same form or fashion and in exactly the same level of seriousness that someone who does have such means does. And so that may be one of the reasons why there is some frustration because I will say—I’ll plead guilty to being the bad cop—I am the person who goes around and tells the agency, “No, you may not take this meeting.”

But I can give you my personal assurance, if you submit a comment, and your comment is dealing with one of our rulemaking proceedings, it gets read. We respond to it, and if your comment is what I’ll term original for lack of a better term; in other words, it’s not a form comment, it’s not one of these 25,000 postcards that we get in the mail that all say the same thing. And we respond to those too, but only once, not 25,000 times. If you do that, you will get a response from us. And the attorneys in my office who are wonderful, they spend their time looking through your comments and making certain that the agency does give you some type of response. I can’t guarantee you’re going to like the response, but I can guarantee you, you will get a response. And under the Administrative Procedure Act, that is what we owe you.

Prof. Adam White:  I’ll just interject a related question. And maybe Brent, you have some thoughts on this too. But on the question of transparency and the interactions between the agencies and the public, a few of you have mentioned guidance documents. And Brent, as you mentioned, it’s a very challenging subject because on the one hand, the regulated community wants guidance on how the law will be enforced. At the same time, we don’t want guidance to become a substitute for what should be done through notice-and-comment rulemaking or other vehicles. A lot of the agencies have been very forward-leaning on this. The Justice Department itself has been forward-leaning on this. I’m just curious how your agencies have grappled with the issue.

Hon. Brent McIntosh:  One thing — I referenced the fact that in the tax base, we put out a statement of, for the lack of — I think I called it regulatory good hygiene, but it’s basically our administrative procedures. We don’t for example, ever ask for Auer deference or Chevron deference for anything that’s done in a subregulatory way. We want to be explicit when we put out subregulatory guidance that you can rely on it. You, the taxpayer, can rely on it, but it does not bind you. So the IRS cannot do its job without putting out guidance to taxpayers because they are routinely responding to every bespoke situation that a taxpayer comes in with. So we can’t do our job without subregulatory guidance. But we also need to be very clear and explicit that when we’re going to purport to bind a taxpayer, we’re going to do it through the APA process.

Prof. Adam White:  Anyone? Matt?

Hon. Matthew Leopold:  If I could just add kind of the way we think about it at EPA, and it generally comes up in the enforcement context. We like to think of guidance as a shield, not a sword. So people are looking for the safe harbor that, “Hey, if I conduct my business in this manner, you’re not going to take enforcement against me.” And it is important to give people those assurances. But when we’re going to affirmatively enforce, we require statute or regulation to bring those actions.

Prof. Adam White:  Next question?

Dominic Hofstetter:  Dominic Hofstetter, Legal Affairs at the Embassy of Switzerland. First off, thank you so much for taking the time to share these insights into regulatory reforms and what’s being spearheaded at the moment.

This question kind of ties into what Professor White also asked, and it concerns mostly Mr. McIntosh. Recently, OFAC released a framework concerning sanctions compliance, and my question would be in that framework, OFAC detailed a few elements which would constitute an effective sanctions compliance program. And my question would be whether the Treasury is looking into some type of assurance for U.S. companies as well as foreign companies subject to U.S. jurisdiction as to whether their sanctions compliance programs and their undertakings and transactions are indeed compliant. And this kind of ties into the theme of regulatory predictability as well as accountability, if you could perhaps venture a comment on that.

Hon. Brent McIntosh:  I think, really, to get a concrete answer to that, you’d have to address it to OFAC because they’re the experts on this. I think it’s difficult for us to make an evaluation of every company that might be touched by OFAC sanctions because there are a massive quantity.

Prof. Adam White:  Next question. Sir?

Nick Kleesis (sp):  Hi, my name is Nick Kleesis, and I’m directing the question to Mr. Bradbury. I’m kind of looking between the lectern over there. Infrastructure projects that — one previous President lamented that there’s no such thing as a shovel-ready project. And just as an example, the Port Authority of New York and New Jersey wanted to replace the Goethals Bridge. And I understand that it took ten years to get all the permits in line, and there were some really arcane rules. So part of the question is how much do you think the approval process has been shortened by the new regulatory regime in effect?

And the second point is that there are so many certain points in the regulatory approval process where activist groups that want to oppose something like, for example, in Montgomery County, there was the Purple Line light rail line, and some people were complaining about some trees that would be cut down. And I just can’t believe that environmentally activist groups would actually oppose a mass transit line. How much can the regulatory regime changes reduce the points at which projects might be blocked? And I say that because the points of this litigation sometimes just add on cause to an already approved project, meaning that they’re funded — the cost increase may be by 50 percent or 100 percent.

Hon. Steven Bradbury:  Yeah. Well, I don’t think we yet have statistics in this administration to quantify how close we are to achieving the goal of dramatically shortening, permitting an approval processes for major projects like infrastructure projects, but we’re certainly trying very, very hard. It’s a high priority for the President, as you know.

Two things we’re doing: one is helping with other agencies to implement the “One Federal Decision” executive order of the President which says when multiple agencies of the federal government are involved in permitting approvals for a project, there’s going to be one lead agency. It’s going to be the one that drives that process, and so we’re trying to work out how to implement that. Number two: within our own department, we are doing major reform of our NIPA procedures to try to capture efficiencies so that all of the multiple sub-agencies within DOT that go through the NIPA process of environmental assessments and environmental impact statements will get the benefit of best practices from among all the agencies. So for example, categorical exclusions from one agency may be applicable to the practices of another agency.

And obviously, with NIPA, these projects can take a long, long time, and litigation is obviously a major factor. And a lot of that is keyed off of the CEQ, Council of Environmental Quality, regulations implementing NIPA. These go back to the ‘70s, to the Carter administration. I think one of the things the administration is doing under Mary Neumayr at CEQ is going to be taking a look at a very significant reset and reform of the CEQ regulations. And if that can be successfully done in a responsible way, that can have a material effect on unreasonable litigation and delay.

Prof. Adam White:  Next question?

Steve Gannon:  For Mr. McIntosh, Steve Gannon from Citizens Bank. In the March 5th policy statement, you quite clearly, I thought, made a pledge that in litigation, your agency would not attempt to claim judicial deference under Auer or Chevron for interpretations that were based on subregulatory guidance. So the question is will the other general counsels on the panel make the same pledge, number one, and number two, does FSOC have a role in driving consistency across financial services agencies for similar concepts regarding guidance?

Prof. Adam White:  Right. Can you start with the FSOC, and then we’ll double back to Chevron.

Hon. Brent McIntosh:  Yeah. Sorry, guys. The FSOC, I think, does have a role, but, look, the FSOC is — this is the Financial Stability Oversight Council created under Dodd-Frank which spent the Obama administration mostly designating financial institutions as systemically important. We think the FSOC has an important role to play in convening the financial regulators and the markets’ regulators, including some non-federal participants and getting them together to talk about issues in the financial space, whether it’s particular stability concerns or things like that. But one of the things that could be on that agenda would be these sorts of regulatory good hygiene matters. It hasn’t been yet, to my knowledge, but certainly the sort of thing we could talk about. I will say that a number of the financial regulators have taken, although not that particular point, they have taken steps toward ensuring that they are in compliance with best practices, administratively.

Prof.  Adam White:  On the deference question, you’ve all been on both sides of the table over the course of your careers. You see the impact of judicial deference doctrines on the regulated community, on the public at large, but also from the inside view, you see the statutes or regulations that you’re administrating are often written in very broad terms, and your agency does have expertise that you bring to bear in a special way. How have you gone about sort of striking the right balance on whether and how to invoke these deference doctrines in your litigation? Sure, Matt.

Hon. Matthew Leopold:  I’ll give it a shot. Chevron and Auer often come up at EPA, and I think the way that we think — certain deference is appropriate. And not to the statutory interpretation of the agency, per se. I mean, if I see Chevron being amended, you could see courts rebalancing how we look at — whether the agency is truly in a better position to interpret the statute. But at EPA, we do defend the deference of the agency to make technical judgements. And so when we say, for example, the administrator has discretion to determine whether conduct or a pollution standard is safe for human health, and we have scientific record and expert record, it is frustrating if courts substitute their judgement for that. And we see that all too often in the courts that hear our cases, and so I think the core of deference for us is on technical matters. And we are not claiming Auer deference in our pieces of litigation at EPA.

Prof. Adam White:  Anyone else? George?

George Fibbe:  Just very briefly, interestingly enough, I’ve looked into this question at the Department of Energy and was actually unable to find any instance in which the Department had claimed Auer deference.

Hon. Matthew Leopold:  Bless you.

George Fibbe:  However, we did have at least one opportunity to do so and declined.

Prof. Adam White:  I think we have time for one more question. I’m sorry for folks who have been so patient.

Questioner 6:  Hi. When President Trump got into office, he issued an executive order to consider what regulations might be better less restrained in some way of walking them back reasonably. And Treasury had issued a great report on that where they had recommended that the Volcker Rule be limited for those banks with less than $10 billion or small trading assets. Congress implemented what Treasury had asked for, but when it came time to put in those regulations, Treasury, at least in our opinion, seemed to ignore its own suggestions and the language of the statute, which really confused us as to why Treasury went this way.

Hon. Brent McIntosh:  I think you’re — I don’t think the premise of the question is correct. Actually, the Volcker regs are not our regs. They are a set of interagency regulations promulgated by the various regulators.

Prof. Adam White:  Maybe one more?

Mark Chenoweth:  I’d actually like to follow up on Adam’s question about guidance and subregulatory guidance. There’s been quite a bit of deregulatory activity in this administration, but so much of it has been done by guidance that it will be undone almost immediately in the event that a new administration takes over. What can be done to get more of these deregulatory efforts done not through guidance, but through rules? I forgot to identify. Mark Chenoweth, New Civil Liberties Alliance. We have sixteen petitions and counting pending with all of your agencies except Energy—and it’s on the way—asking for the deregulatory efforts that you are making to be made via rule rather that be a guidance. What prevents that from happening?

Prof. Adam White:  Steven?

Hon. Steven Bradbury:  Well, if you take a look at the order we did on guidance documents, one of the things to address this is guidance in the past has been just too easy to issue. It’s a quick and easy, almost cost-free exercise for agencies. And often, the excuse is, “Well, industry wants clarity, and so let’s tell them what they should do.” But if you look at one of the things that we’re doing with our process is we’re imposing new requirements for the review and clearance of guidance documents, so it’s not so easy and there’s some clear rules of the road.

So number one, it’s very clear that guidance documents do not have the force and effect of law, so we’re not going to rely on them to take enforcement action against anyone. Number two, it’s easy to say, “Well, the regulated entity should do something, and if you do that, then we’ll deem you in compliance.” So for example, if the rule says you’ve got to have reliable accounting for your actions, and the agency says, “If you hire two sets of independent accountants, we will deem you in compliance and we won’t question that.” Well then, regulated entities will start hiring two sets of accountants to get that safe harbor. Well, that’s a cost.

So the next reform is you have to take account of the fact that guidance documents, even though not legally binding, can impose costs. And you have to make a good faith effort to estimate those costs, and if you think they’re going to be significant, put it out for comment before it goes into effect. So these are simple procedures that achieve a degree of hygiene, as Brent says, and actually make it more likely that the agency will, in fact, take action through a formal regulation.

And let me say just one more quick thing about Chevron because that was brought up. One of the things we put in our policy statements is we are not going to use Chevron deference to define how far we’re going to go with our regulations or our enforcement actions. We’re not going to try to go to the outer bounds of what we think a judge might conclude is a reasonable interpretation and say that’s where we’re going to go with our full enforcement authority. We’re going to make a good faith effort to interpret the statutes we administer and the rules we’ve promulgated so that they’re reasonably interpreted, and achieve the purpose for which they were adopted, and not use a judicial deference doctrine to try to define the scope of our power. That’s a doctrine to limit what a judge might do to overturn an agency’s judgement. It doesn’t define how we are properly administering our authority. So I just wanted to add that on Chevron. Thanks.

Prof. Adam White:  Richard, I’d hoped we’d get to your question, but we’re up against a hard break. I’ve been asked to tell everybody please remain in your seats so we can reset very quickly and go on to our next speaker, the Acting Chief of Staff of the White House. But please join me in thanking our speakers.

Steven Bradbury

Former General Counsel

U.S. Department of Transportation

George Fibbe


Baker Botts

Matthew Leopold


Hunton Andrews Kurth

Brent McIntosh

General Counsel

U.S. Department of the Treasury

Stephen Vaden


United States Court of International Trade

Adam J. White

Assistant Professor and Executive Director, The C. Boyden Gray Center for the Study of the Administrative State

Antonin Scalia Law School

Regulatory Process

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].

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