How Will a 2-for-1 Regulatory Scheme Really Work?

Posted on 2/14/2017 by Roger Marks

According to the President’s Executive Order titled “Reducing Regulation and Controlling Regulatory Costs,” agencies will now be required to nominate two regulations for repeal for every new regulation promulgated. 

While the initial Executive Order raised many questions, it deferred authority to the Office of Management and Budget (OMB) to lay out the specifics of how the new regulatory initiative would work. Now, the OMB issued a guidance document that answers some of those questions about how exactly a regulatory 2-out, 1-in process will work.    

What Regulations Will Be Affected?

Code of Federal RegulationsFirst and foremost, according to OMB’s guidance, the EO’s requirements will apply to significant regulatory actions, as defined in Section 3(f) of Executive Order 12866 (signed in 1993). EO 12866 defines a significant regulator action as an action that may: 
Have an annual effect on the economy of $100 million or more;
Create a serious inconsistency or otherwise interfere with an action taken by another agency;
Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 
Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. 

How to Calculate Regulatory Costs and Savings 

When calculating the costs of new rules or the cost savings for rules proposed for elimination, regulators will measure cost as “opportunity cost to society.” This concept is defined in OMB Circular A-4, issued in September 2003.
The cost savings may be transferred within an Agency—meaning US EPA may eliminate two hazardous waste requirements to offset the cost of a new Clean Air Act rule, for example. If an individual agency cannot generate the savings needed to offset a new rulemaking, it can request in writing that savings from another agency be transferred to meet the requirement for offset.  

The OMB guidance document, offered in a helpful Q&A format, goes on to answer many other questions about how exactly the 2-out, 1-in scheme will play out. 
While the idea of eliminating regulations has raised concerns from some in the EHS community, it is worth noting that the United Kingdom, Australia, and Canada have all enacted similar offset requirements for new regulations in the past.
OMB has made it clear that the execution of this Executive Order will draw from existing principles for controlling regulatory costs found in documents like the above-mentioned 1993 EO and 2003 OMB Circular. In addition, limiting the EO to significant rulemakings, meaning those with an impact of $100 million or more, will limit the scope and should allow agencies some flexibility to advance less impactful rulemakings without a need for offset.  

We want to hear from you!

How do you feel about the idea of a 2-out, 1-in regulatory process? Do you have ideas for regulations that would provide great cost savings without affecting safety at your site?
Let us know on social media! We’re listening on Facebook, Twitter, and LinkedIn

Tags: DOT, EPA, new rules, osha

Find a Post

Compliance Archives

Lion - Quotes

These are the best classes I attend each year. I always take something away and implement improvements at my sites.

Kim Racine

EH&S Manager

This is the best RCRA training I've experienced! I will be visiting Lion training again.

Cynthia L. Logsdon

Principal Environmental Engineer

I can take what I learned in this workshop and apply it to everyday work and relate it to my activities.

Shane Hersh

Materials Handler

The instructor kept the class engaged and made learning fun. There was a lot of information to cover but time flew by. I will definitely use Lion in the future!

Chelsea Minguela

Hazmat Shipping Professional

This training broke down the regulations in an easy-to-understand manner and made them less overwhelming. I now feel I have the knowledge to make more informed decisions.

Amanda Oswald

Shipping Professional

The instructor took a rather drab set of topics and brought them to life with realistic real-life examples.

Tom Berndt

HSE Coordinator

Lion is easily and consistently the best option for compliance training. I've learned new information from every instructor I've had.

Rachel Mathis

EHS Specialist

I was recently offered an opportunity to take my training through another company, but I politely declined. I only attend Lion Technology workshops.

Stephanie Gilliam

Material Production/Logistics Manager

Much better than my previous class with another company. The Lion instructor made sense, kept me awake and made me laugh!

Marti Severs

Enterprise Safety Manager

I really enjoyed this training. Even after years on both sides of the comprehension coin, I find myself still learning! The quality of the delivery exceeded much of the training I have received in the past.

Neil Ozonur

Safety Officer

Download Our Latest Whitepaper

In-flight hazmat incidents can be disastrous. This guide gives 5 tips for first-time air shippers to consider before offering dangerous goods for transportation on passenger or cargo aircraft.

Latest Whitepaper

By submitting your phone number, you agree to receive recurring marketing and training text messages. Consent to receive text messages is not required for any purchases. Text STOP at any time to cancel. Message and data rates may apply. View our Terms & Conditions and Privacy Policy.