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Deregulation reform ramps up, could include SEC

The Trump administration is considering subjecting independent federal agencies like the Securities and Exchange Commission to more scrutiny of their rulemaking processes and outcomes, said Neomi Rao, administrator of the Office of Information and Regulatory Affairs, on Friday.

"It's something we're thinking about and considering," Ms. Rao said at a Brookings Institution event.

Officials at OIRA, part of the Office of Management and Budget, are revisiting all federal regulations following a 2017 presidential executive order requiring federal agencies to eliminate at least two regulations for every new regulation issued. "The president appointed people to the cabinet because they were reform-minded about getting rid of regulation," Ms. Rao said.

Ideas for regulatory reform come up through the individual agencies, which have been asked by the White House to submit ideas for reducing regulatory costs. While that effort is still gearing up due to a slow pace of agency head confirmations, "there are areas where we can give them maybe a bigger push," she said.

Part of the reform effort involves revisiting how cost and benefit analyses are conducted. "It's often easy to overestimate benefits, or to overestimate costs, so we are trying to be more rigorous about that," Ms. Rao said. Another potential change is limiting agencies' ability to implement changes through guidance documents or other orders. "Agencies we think should not be able to change obligations to the public without proper processes," she said.

Noting that "significant" guidance documents are part of the White House review mandate, Ms. Rao said that as the Treasury Department and IRS implement the new tax law, "we might push back if we think there is a better" approach.

Addressing recent reports of some fake public comments to rulemaking proposals, including revisions to the Department of Labor's fiduciary rule, Ms. Rao said: "We were not aware of the extent of the problem previously. We take it very seriously. We are already working very hard to try to implement procedures that can cut back and eliminate these problems."

Companies and their trade associations can now submit deregulation petitions to OIRA as the agency seeks input on its deregulation agenda. "We'd like to engage with companies and the public," said Ms. Rao.

A Brookings analysis of the Congressional Review Act, which allows Congress to undo federal regulations, found 348 significant rules passed during the last two decades that could be vulnerable to reversal through the CRA process. In the first 20 years since the law was passed in 1996, only one rule was reversed. In the current Congress, 10 resolutions of disapproval have been passed and are expected to be signed by the president. The CRA process allowed the White House in April 2017 to reverse DOL rules granting safe harbors to states, cities and other large political subdivisions setting up private-sector retirement savings programs.