Trump Set to Combat 'Regulatory Dark Matter' Like Obama Transgender Bathroom 'Guidance'

On Thursday, the Trump administration's Office of Information and Regulatory Affairs (OIRA) will release its semi-annual "Unified Agenda," a master plan for all significant federal regulation that agencies intend to issue in the coming months. According to one conservative leader, this agenda will provide a blueprint for how the administration will cut down on all kinds of regulation — not just official rules, but also "regulatory dark matter."

"If you go outside and look at the stars tonight, you're not seeing much of the universe. The bulk of it is dark matter," explained Clyde Wayne Crews, vice president for policy at the Competitive Enterprise Institute (CEI), on a call with reporters. Similarly, while Congress passes a few laws and administrative agencies issue a few official regulations, "there are thousands and thousands of other notices," bulletins, letters, and so on issued by agencies every year.

This "regulatory dark matter" is hard to track, because it isn't even collected or examined. Rather, an agency will set forth specific dictates and companies, organizations, or individuals will follow them, without the intermediate step of an official law or regulation.

The best example of this came last May, when the Obama Department of Justice (DOJ) sent a letter to North Carolina Governor Pat McCrory insisting that House Bill 2, the state's law restricting public, multiple-stall restrooms on the basis of biological sex, violated the Civil Rights Act of 1964 by institutionalizing sex discrimination.

In one sweeping move, the DOJ had redefined the Civil Rights Act of 1964, extending its protection against discrimination on the basis of sex to transgender people, something foreign to the law itself and with which the law's authors clearly would have disagreed.

This letter was not an official law passed by Congress and signed by the president. Nor was it an official regulation, submitted in the Federal Register. No, it was an administrative fiat that threatened hefty penalties — the revocation of North Carolina's $4.5 billion in federal funding for the 2016-2017 school year.

But this infamous transgender mandate — reversed by a Trump administration directive this past February — is just the tip of the iceberg, Crews said.

"It's long been the case that there are more regulations than laws, and if we're missing regulations, we're missing government's biggest effect on the economy," the CEI vice president argued. He expanded the astral metaphor by adding, "Lately, Washington has gone supernova."

Crews runs a project called "Ten Thousand Commandments," which estimates the hidden cost of federal regulation. In the report from May 2017, he estimated that if the costs of federal regulation flowed down to U.S. households, the average American family would pay $14,809 every year — in addition to all the taxes they already pay. In total, regulatory compliance cost the American economy at least $1.9 trillion.

But these numbers are debatable, because even though more than 3,600 new regulations were passed last year, less than 24 received a full cost-benefit analysis. (Compare that with 211 laws passed by Congress in the same time frame.) "In a lot of ways, we're flying blind when we're regulating," Crews quipped.

Last April, a study from the Mercatus Center at George Mason University estimated that if regulation had remained at 1980 levels — if it just hadn't increased in the past 30 years — the economy would have been $4 trillion larger than it was in 2012.

"More important is what we don't know," Crews argued. He mentioned that "there's been very little cost-benefit analysis actually done" of President Obama's "pen and phone era."

The CEI vice president mentioned many areas where Obama unleashed "regulatory dark matter." There was his immigration order for "deferred action" on immigrants. There was his Treasury Department's memorandum in July 2013 that the Obamacare employer mandate was going to be delayed. The infamous "Waters of the U.S. rule" began as a pice of guidance. The Labor Department had administrative interpretations on joint employment and contracting.

Crews reported that when he examined all the bulletins, administrative interpretations, memoranda, and guidance, he found at least 617 that cost $100 million or more, but "there are thousands and thousands of other notices."

"The transgender restrooms," the CEI vice president added. "That wasn't a law, it wasn't regulation from agencies, but it was guidance from the Justice Department."

He also referenced a 600-page rule issued by the Federal Aviation Administration (FAA) that was not even complete in itself. The rule promised the FAA would issue further guidance on issues like air worthiness, pilot certification, how high drones have to fly, et cetera. Yes, the 600-page document was preliminary reading.

Crews argued this overregulation creates a culture that stymies technological progress. "You can't have this 'Mother, May I?' type of culture as our society and technologies get more and more complex," he insisted.

Nevertheless, he presented hope that President Trump would curtail a great deal of this "regulatory dark matter." Crews referred to an executive order Trump signed in January mandating that for every new regulation an agency passes, it must cut two regulations already on the books, and that the net economic impact of regulation must be no greater than zero.

"If the pen and the phone can curtail liberty, they can also expand liberty, too," the CEI vice president declared.

Crews predicted that the Unified Agenda would be a boon for fiscal conservatives. The agenda is meant to come out twice a year, in April and in October. In the report, each agency will publish its regulatory priorities. The first Trump Unified Agenda will be more rigorous than Obama's versions.

"Agencies have to have combed their archives and figure out which regulations they're going to get rid of," the CEI vice president said. "Given the Trump executive order eliminating two regulations for every new one and net new regulatory costs must be zero, and given that Mick Mulvaney has taken that very seriously," the agenda will likely significantly cut the size and scope of regulation, he added.

Last Month, Politico's Danny Vinik reported that Trump's presidency has experienced a drastic slowdown in regulations. From Inauguration Day to the end of May, a mere 15 regulations were approved by Trump's OIRA — the smallest number since the record-keeping began. In the comparable beginning period of Obama's administration, 93 rules were approved. Under George W. Bush, the number was 114.

Minor regulations also dropped to 1,005 in the Federal Register — a drop from Obama and Bush but less pronounced. Most of those, however, were small tweaks to requirements and procedures. The administration has adjusted the drawbridge schedule of the Atlantic Beach Bridge and designed an airspace in Montana — and not much else.

This trend gave Crews hope, but on the transgender front the Trump Department of Education's Office of Civil Rights (OCR) issued a directive last month warning that teachers who refuse to refer to transgender students by their preferred pronouns would face discipline.

This is different from Obama's letter, and the Trump administration has issued fewer regulations in general, but this directive should give conservatives pause nonetheless.

The Unified Agenda will go public on Thursday, and Americans will find out exactly how effectively the Trump administration will cut federal rules and regulation. Crews pointed out many signs for hope, and he deserves to have his faith rewarded.