Weekly Billion Dollar Trend Continues Apace: October 16 – 20

Although last week was relatively busy in the pages of the Federal Register, there was no significant action to add spending. There were 10 rulemakings with some measurable economic impact, but in each case no additional burdens.

REGULATORY TOP LINES

  • Proposed rules: 34
  • Final Rules: 49
  • 2023 Total pages: 72,562
  • Costs for the 2023 final rule: $118.2 billion
  • Proposed cost of 2023 rule: $494.4 billion

NOTABLE REGULATORY ACTIONS

The most significant rule of the week was the Environmental Protection Agency (EPA) rule “A finding that emissions of lead from aircraft engines that operate on leaded fuel cause or contribute to air pollution that may reasonably be expected to endanger the public health and welfare.” As the title suggests, the rule is a finding that may reasonably lead air pollution from certain aircraft is expected to endanger the public health and welfare within the meaning of the Clean Air Act.

Specifically, EPA identifies general aviation as a source of lead contamination: “Covered aircraft in this context means all aircraft and ultralight vehicles equipped with covered engines. Aircraft covered would include, for example, smaller piston-engine aircraft such as the Cessna 172 (single-engine aircraft) and the Beechcraft Baron G58 (twin-engine aircraft), as well as the largest piston-engine aircraft such as the Curtiss C -46 and Douglas DC- 6. Other examples of covered aircraft include rotorcraft such as the Robinson R44 helicopter, light sport aircraft, and ultralight vehicles equipped with piston engines.

These final findings do not constitute a general aviation regulation. Instead, if EPA finalizes the findings, it will be required to propose and promulgate emission standards for this class of aircraft. Those rules would then impose costs on those entities outside the federal government.

Another notable action this week was the Centers for Medicare and Medicaid Services (CMS), which issued three rules covering calendar year 2024. hospital deductible and coinsurance sums, Part A premiums for uninsured adultsand Part B premiums and deductibles, respectively. Again, these important decisions do not impose new burdens or hours of paperwork.

TRACKING ADMINISTRATIONS

The Biden administration reliably opposes the Trump administration and has so far outpaced the Obama administration in the pace of spending on the private sector. Because AAF RegRodeo data extends back to 2005, it is possible to provide weekly updates on how the top-level trends of President Biden’s regulatory record compare to those of his two most recent predecessors. The following table provides the cumulative amounts of the final rules containing any quantified economic impact from each administration through this point in their respective terms.

Because of the final rules discussed above, there are no real changes to the current Biden administration regulatory amounts. Over the comparable period, however, the Trump administration cut regulatory spending by $23 billion, while the Obama administration added $10 billion to the total.

REGULATION PICTURE OF THIS WEEK

A notable feature of the Fiscal Responsibility Act (FRA) – the legislation that ended the debt ceiling impasse earlier in 2023 – was the inclusion of the Administrative Appropriations Act of 2023 (“the Act”). The idea was that if an executive action resulted in mandatory spending — an example was President Biden’s proposed student loan forgiveness, which the Supreme Court declared invalid — there would have to be another action that would offset the budget. There was never much hope that the law would meaningfully control spending. It expires at the end of 2024, and even when it is in effect, the director of the Office of Management and Budget (OMB) can waive the requirement if it is “necessary to provide essential services” or “necessary to effectively carry out the program.”

However, in September, OMB issued the implementation guidelines for the Law. A notable feature of the application is that not all increases in direct costs are treated equally. First, there are exceptions for de minimis increases. More interestingly, “if the agency determines that it is required by law to issue a rule, but that the law leaves the agency discretionary in determining how to satisfy that statutory requirement, the agency must, to the extent possible, establish at least expensive implementation option that is “reasonably identifiable” and measuring the increase in direct costs of the rule relative to that least expensive implementation option.”

In other words, if the agency chooses the lowest-cost option—no matter how much it costs—no compensation is necessary. If he chooses an expensive implementation, only the additional costs should be compensated. But it gets even better: “Whether a rule is ‘required by law’ for the purposes of section 262(7) – and if so, whether there are reasonably identifiable, less expensive options for implementation – are case-by-case decisions, which are made by the agency, in consultation with agency counsel.” In other words, the agency must be judge and jury as to whether to use this exception.

The bottom row? It does not appear that the law will deter many direct costs from enforcement actions.

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