White House Limits the Use of Guidance Documents for Regulatory Restrictions

Published December 19, 2019

President Donald Trump issued two executive orders (EOs) to limit the use of guidance documents to impose regulatory restrictions in the future.

Guidance documents are agency statements specifying how regulations should be understood and applied, setting policy on statutory, regulatory, and technical issues and interpretations.

Guidance documents, though treated by regulatory agencies as having the force of law, are not subject to the 1946 Administrative Procedures Act and typically do not go through the normal public notice and review process for new rules or regulations. Often guidance documents are not even posted on agency websites, yet individuals and small businesses can be cited for violating an agency guidance they didn’t even know existed.

‘Out-of-Control Bureaucracy’

The “Bringing Guidance out of Darkness” and “Transparency and Fairness” EOs are intended to defend average citizens against harms from secret regulations, said Trump at an October 9 White House event announcing the new orders.

“Today, we take bold new action to protect Americans from out-of-control bureaucracy and stop regulators from imposing secret rules and hidden penalties on the American people,” Trump said at the White House event. “A permanent federal bureaucracy cannot become the fourth branch of government, unanswerable to American voters. In America, the people must always reign.”

No Longer Binding

The Bringing Guidance Out of Darkness EO states, “[I]t is the policy of the executive branch, to the extent consistent with applicable law, to require agencies to treat guidance documents as non-binding both in law and in practice, except as incorporated into a contract, take public input into account when appropriate when formulating guidance documents, and make guidance documents readily available to the public.”

The EO requires federal departments and agencies to make all guidance documents publicly available by posting them on a website in a “single, searchable, indexed database” within 120 days after an implementing memorandum from the Office of Management and Budget (OMB) is published.

The order also requires federal agencies to review all their guidance documents, rescind those judged to be unnecessary or improper, and report to the OMB director within 240 days the reasons for maintaining any guidance documents flagged by the director as unjustified or problematic.

Any new guidance document issued must “clearly state that it does not bind the public, except as authorized by law or incorporated into a contract,” procedures for the public to petition for withdrawal or modification of the guidance, and public notice and comment for guidance documents identified as having “significant” economic costs, the order states.

Improving Transparency, Fairness

The second EO is intended to improve transparency and fairness by establishing conditions for and limits on guidance documents used in administrative enforcement and adjudication actions.

The EO stipulates, “Guidance documents may not be used to impose new standards of conduct on persons outside the executive branch except as expressly authorized by law and expressly incorporated into a contract. When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequences for a person, it must establish a violation of law by applying statutes or regulations. The agency may not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of applicable statutes or regulations.”

Curtailing Abuses

Trump’s guidance document EOs are an effort to rein in an out-of-control federal bureaucracy bent on expanding its authority and power, says Craig Rucker, president of the Committee for a Constructive Tomorrow (CFACT).

“For decades, the federal government has allowed bureaucrats to impose their own political agendas on the rest of the country without any oversight by Congress,” said Rucker. “Caught up in all this have been ordinary citizens who’ve received intimidating notices from regulatory agencies threatening fines and other legal actions for ‘violations’ of policies that are hidden from the public.

“These executive orders will curtail abuses by the administrative regulatory state,” said Rucker.

Members of the federal “deep state” will do what they can to thwart Trump’s EOs, says Clyde Wayne Crews, vice president for policy at the Competitive Enterprise Institute.

“Guidance documents are part of executive agencies’ ‘regulatory dark matter,’ the thousands of executive branch and independent agency actions subject to little scrutiny or democratic accountability but that carry practical, binding regulatory effects, and resisters will try to game the process to keep their power,” said Crews. “One big problem is even after OMB issues its memos, agencies have a long time to comply, which could put us at election time.

“Trump will need to hasten the process, just in case, and issue an ‘affirmation’ EO later to back OMB up,” said Crews.

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with CFACT.

Internet Info

“Executive Order on Promoting the Rule of Law Through Improved Agency Guidance Documents,” Office of the President of the United States, October 9, 2019: https://www.whitehouse.gov/presidential-actions/executive-order-promoting-rule-law-improved-agency-guidance-documents/

“Executive Order on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication,” Office of the President of the United States, October 9, 2019: https://www.whitehouse.gov/presidential-actions/executive-order-promoting-rule-law-transparency-fairness-civil-administrative-enforcement-adjudication/