Executive Order 13771: Regulatory agenda

What the Executive Order Says

Executive Order (EO) 13771 is entitled "Reducing Regulation and Controlling Regulatory Costs" and was issued on January 30th, 2017.  It has 5 sections.  This Executive Order also gets referenced in several subsequent EO's such as EO 13777, EO 13783 and EO 13790.

Section 1

This section defines the purpose of the EO which essentially is a statement that endorses a "small government" approach to policy making within the executive branch.  The center piece of this EO is the rule that for any new regulation, two regulations have to be rescinded or eliminated.

Section 2

This section discusses the concept that new regulations also have to be cost-neutral.  Subsection (d) states that the Director of the Office of Management and Budget (OMB) is to provide guidance on how to make these determinations.  One exception to this rule is where it is justified that laws do not allow for such cost-neutrality to be achieved.

Section 3

This section discusses that the costs of regulation need to be considered during the annual executive branch budgeting process.  The process is intended to be driven by targets set by OMB for each agency.  This EO is modifying the process defined in EO 12866.  Again, the Director of the OMB is to provide additional guidance on the details of how this is going to work.

Section 4

This section provides a definition for the terms "Regulation" and "Rule".

Section 5

This section includes the necessary legal fine print to assure the constitutionality of the EO.

My Commentary

At the time this was released, it was noted that other countries have had similar regulatory reduction measures in place and one notable example was the United Kingdom.
It should be noted that EO 12866 has been amended several times by different administrations.  There were 21 hits in my search on the Federal Register website and due to the age (it was issued in 1993), there may be additional documents that need to be pulled from the national archives.
It is acknowledged that over-regulation can occur.  Regulations can be written in such a way that they include circumstances to which they apply that were never intended and can simply not make any sense.  As a part of my job, I sometimes have to look into the Code of Federal Regulations.  It is often written by lawyers for lawyers.  And since the amount of regulations is so large and even though they try to keep things together, there are cross-references that one needs to know about for which a lay person casually reading the regulation is completely unaware.  For me this raises the philosophical question as to how can one create a society of 300 million in a way that maintains all the member's rights and freedoms justly?  In a village of 1000 people or a small town of 10,000, there can easily be a sense of inclusion such that people generally understand how to behave, a shared agreement on what one's moral compass should tell them to do in undefined cases.  But scaling that up to the size of 300 million seems difficult.  As brilliant as the constitution is, and there have been a few existential questions that have been overcome, one does have to wonder if it will be victorious once again.
Limitations placed on individuals through regulation are usually to prevent issues that have the character of the tragedy of the commons.  Burning trash or leaves in one's back yard is an example here.  If everyone were to do so, it would significantly raise air pollution and that would be bad for everyone even though any one person's contribution would be small.  I think that most people can understand such arguments and do not mind that regulation and enforcement mechanism exist.
Other kinds of regulations, along the lines which provide for fiduciary responsibility, are ones where there is a significant asymmetry in power between participants to a transaction.  Many regulations are limitations placed on government itself.  Other regulations are directed at businesses which are monopolies or oligopolies and as a result can force terms of contract which are very one-sided and the less powerful participant does not realistically have the option to walk away.
In conclusion, I've never really seen anything more than anecdotal stories that there is over-regulation.  I can understand that starting a small business can be a daunting endeavor, especially for someone who did not grasp that the business has a much larger set of regulations to which they have to comply than an individual who might be pursuing a hobby that incidentally earns beer money.  There is merit in reviewing obstacles to starting small businesses, but using such a situation to slash requirements on large businesses or government such that they could potentially harm citizens is wrong.