Regulatory reforms? Don’t expect speed, ag lobbyists say

WASHINGTON, June 14, 2017 - Despite President Trump’s spirited campaign shouts and executive orders to kill anti-business and other harmful regulations, plus the Republican Congress’ ubiquitous rhetoric decrying overregulation, two veterans of national regulations affecting agriculture told a dairy industry conference this week not to count on a quick end to unhelpful rules affecting the farm sector.

In a rundown of five “macro factors” affecting the writing and revising of U.S. regulations, Randy Green, a lobbyist and former deputy undersecretary at USDA, put all of those dynamics on the side of slowing the pace of new, costly rules. His summary for participants at the “Regulatory Roundup” held by the International Dairy Foods Association (IDFA), went like this.

• The 2016 election. “We made a move from an administration that was pretty friendly to new regulations to one that is pretty unfriendly to new regulations . . . the bar is a lot higher,” he said.
• The “home-alone” factor. Although the Senate has confirmed all Cabinet members, sub-cabinet and other high-level appointments that require Senate action are far behind the historical pace. The shortage at those ranks can make regulatory reform actions hard to initiate.
• No built-in agenda. Major legislation affecting agriculture, including the farm bill and the 2010 Food Safety Modernization Act (FSMA), have been passed and subsequent required regulations written, so federal agencies’ list of major regulations is short.
• Agriculture’s low profile. Few agricultural regulations are national “hot-button issues,” so pressure to advance or reform them aren’t priorities for the White House or Congress. He noted, though, that Agriculture Secretary Sonny Perdue has, for example, stepped up to order a start of the process of infusing wider choices in school lunch menus, including flavored 1 percent-fat milk (instead of skim only).
• Trump’s two-for-one executive order. It directs that “any new incremental costs associated with new regulations shall … be offset by the elimination of existing costs associated with at least two prior regulations.” Further, it mandates all agencies to ensure that “the total incremental cost of all new regulations, including repealed regulations … shall be no greater than zero, unless otherwise required by law” or approved by the White House Office of Management and Budget (OMB). Green says that while the order is sure to result in termination of unneeded rules, if implemented, it will also likely delay regulatory action that Congress has mandated. (For example, the Bioengineered Foods Labeling law, for which labeling rules are supposed to be implemented by July 2018. Delays in this regulation could make the compliance date for the Food and Drug Administration’s new nutrition facts label, also in July 2018, problematic, the speakers said. In fact, FDA on Tuesday said it was extending the compliance dates for those rules.)

Clay Hough, the IDFA general counsel, said IDFA indeed wants regulatory reform in many areas, but his dairy manufacturer members need progress on a few new rules as well. The nutrition facts label regulation “is a huge one for us,” he said, before learning of the FDA decision to delay the compliance date. “Manufacturers need lead time for label changes, and Hough pleaded, “if we are going to get a delay, give us a delay; otherwise, we have to move forward.” The FDA did not specify the new compliance date. 

Hough said his industry also wants FDA to complete regulations that readily accommodate ultra-filtered milk in making cheese. That is urgent, he said, especially because Canada, a big customer of U.S. ultra-filtered milk, effectively has closed off imports of that product, and the U.S. industry must find ways to use more of it domestically.

Hough and Green agreed that a lot of the direction on national regulation will be determined by funding levels allotted in yearly spending bills. Drafting and finalizing the FMSA’s broad set of regulations has captured most of the FDA’s food regulatory energy and resources for years, they noted, and funding for implementation in the field will determine much of those regulations’ impact from now on.

Meanwhile, however, another speaker at the conference viewed the two-for-one executive order as opening OMB to a more active, prominent role in both initiating innovative regulatory changes and in rescinding and reforming old ones.

Jonathan Gledhill, president of the Policy Navigation Group and a former OMB reviewer of proposed regulations, pointed out that while the delays in top-level appointments may stymie regulatory reform among the agencies, OMB is filled with presidential appointees who can step directly into regulatory reforms. Its staff is comprised mostly of economic and policy experts who make up more than a third of the White House personnel.

Further, he said, Trump’s order calls on OMB to gather proposals from the public, for example, on where regulations can best be trimmed, streamlined or dropped. The suggestions may prove very helpful, he said, to provide savings that can balance out the projected cost of regulations that agencies are mandated to write. The agencies, wishing to advance their regulations, will be glad to get the package deal, he expects.

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