USDA Reorganization

You can comment on the proposed reorganization here.

Apparently USDA had problems with some of the comments received, because OFR shows 9 received, but only displays the text for 3.  The process is described here:

This count refers to the total comment/submissions received on this docket, as of 11:59 PM yesterday. Note: Agencies review all submissions, however some agencies may choose to redact, or withhold, certain submissions (or portions thereof) such as those containing private or proprietary information, inappropriate language, or duplicate/near duplicate examples of a mass-mail campaign. This can result in discrepancies between this count and those displayed when conducting searches on the Public Submission document type. For specific information about an agency’s public submission policy, refer to its website or the Federal Register document.

FSA Reg Writers Breathe Sign of Relief

From an OMB document on procedure for the 2 for 1 regulation:

" In general, Federal spending regulatory actions that cause only income transfers between taxpayers and program beneficiaries (e.g., regulations associated with Pell grants and Medicare spending) are considered "transfer rules" and are not covered by EO 13771. Additionally, an action that establishes a new fee or changes the existing fee for a service, without imposing any new costs, does not need to be offset; nor does an action that establishes new penalties or fines or changes those already in existence."

 The way I read this most if not all FSA regulations are excluded.

Prediction for a Democratic Congress: Reverse Congressional Review Acts

This article on the President's accomplishments notes that several of the bills he's signed into law are revocations of regulations as provided by the Congressional Review Act. The CRA provides if the Congress revokes a regulation, the agency cannot later issue a new regulation on the same subject.  There is an exception, however: Congress can specifically authorize the agency to regulate the subject.

My prediction is this means that CRA revocations will become like the Mexico City rule (no federal money for population control info):  each new administration (change of control of Congress) will result in legislation switching the revocations.  That is, when the Democrats regain control of Congress they'll pass a law(s) authorizing agencies to reissue the regulations killed this spring by the Republican Congress.  An interesting question: under the Administrative Procedure Act would the agencies be able to bypass the proposed rulemaking process if the regulation is reinstated verbatim?

Two for One Regulation EO

I blogged earlier about Trump's Executive Order on regulations.  Politico has a piece  raising some other questions about the order.  One is whether the President has power to govern the number of regulations--a neat question but one I'm sure lawyers can get around.

Two for One Order

The President has issued his order on regulations--do away with two regulations each time you do a new one.  I discussed it previously here and argued against a similar proposal of Senator Warner's back in 2010.  Cass Sunstein back in November argued it might work in limited cases.  He ends:

"In theory, “one in, two out” is silly, and in practice it’s likely to be a bit of a mess. It’s hardly the most sensible approach to regulatory reform. But with a little flexibility, and a lot of determination, executive branch officials might be able to make it work."

The two for one is the headline grabber, but the order also mandates "zero incremental costs" for regulations.  OMB is given this authority:

  The Director shall provide the heads of agencies with guidance on the implementation of this section.  Such guidance shall address, among other things, processes for standardizing the measurement and estimation of regulatory costs; standards for determining what qualifies as new and offsetting regulations; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section.  The Director shall consider phasing in and updating these requirements.

The zero incremental costs creates another dimension to evaluate regulations by, possibly a conflicting one.

My own two cents: by the time OMB gets through writing and rewriting its guidance to the agencies and the agencies get through with their meetings to understand the guidance and train their people, this executive order will have cost the government millions of dollars.

The Agency of Subjects of Regulation

"Agency" is a big buzz-word, has been for a number of years.  Typically in liberal and academic circles it means that people have minds and wills of their own, particularly the enslaved, the poor, the marginalized.  But it's also true when bureaucrats try to regulate behavior.  Often the picture in the bureaucrat's mind does not match the reality, or at least the picture in the mind of the person being regulated.  That's a truth often ignored in discussions.

It's particularly nice for a liberal to find this mistake occurring when conservatives/libertarians are the ones designing the regulations.  That's the case in Kansas, where governor Brownback has pushed tax reforms and cuts, intended to prove the old supply-side theory that less regulation and lower taxes will encourage growth and fill the government's coffers.  Jared Bernstein has this quote from a Wall Street Journal article (behind pay wall):

The WSJ piece points out that the number of entities taking advantage of this new loophole [not taxing small business income "passed through" to an individual] turned out to be 70 percent above the state’s projections.
Steve Moore, a key trickler that pushed the plan in Kansas, didn’t see that coming:
“Sometimes it was legitimate, and sometimes it was a gaming of the tax system to pay the zero rate, so that loophole has to be closed,” he said.  “Unless you have some rules about this, people really will shift income and they’ll find ways to legally avoid paying tax, and that was never the intention.”

How To Evade Trump's Two for One Regulation Cut

One of Trump's promises is "so important" in his words--the idea of eliminating two regulations for every new one.  In my words, so stupid.

First, there's a lot of definitions to be written:

• what's "new"? Is it a brand new subject area--would all the regulations issued to implement ACA be considered "new"?  Trump's not proposing many new programs, so that would cut the impact.  But he does have to implement his infrastructure bank and his replacement of ACA and..  Or when FSA issues new regulations or revises old regulations to implement the new farm bill, will those be considered "new"?  That definition would greatly expand the impact. What is the distinction between substantive newness and editorial newness?
• who's the actor, at what level will the balancing have to be done?  In the case of USDA, is it at the agency level, FSA? How are cross-agency regs handled (like sodbuster/swampbuster applying both to ASCS and SCS)? Or will it be USDA as a whole?  Or maybe the government as a whole?
• who's the enforcer?  Obviously if it's the government as a whole, then only OMB's regulatory shop can enforce, but if it's at a lower level you could also delegate the enforcement responsibility.  But with delegation comes discretion to interpret the rules.
• when does a document become a regulation?  Is it when the final rule is published, or do you have to be identifying the regs to be eliminated back in the proposed rulemaking document? Or can you publish a final rule Z with the promise that reg X and Y are being eliminated?  
• finally, what is a "regulation"?  Are we focused on the paperwork or the legal substance?  The two are not the same--one document may cover several parts (a "part" is a subdivision of the Code of Federal Regulations, representing some legal substance) or only a subpart or subsection of a part.  Or will the definition limit the applicability to "significant" regulations, the ones exceeding $100 million in impact (a threshold which has never been adjusted for inflation)?

Once you tell me how these definitions are written, then it's child's play to lay out a plan to game the system to do what needs to be done. 

I Was Wrong, Again

Sometime recently I believe I blogged about the difficulty in undoing regulations which had been finalized after the rule-making process.  The idea was, and is, that an agency needs to go back through the rule-making process in order to revoke a reg, a process which takes a while and can, in controversial cases, result in lots of comments to respond to.

That's still the case, but I'd forgotten Newt's baby, which is briefly referenced in this post.
It's the Congressional Review Act, part of Gingrich's Contract with America, which allows simple majorities in both Houses to nullify major regulations within 60 legislative days of promulgation. With divided government it hasn't been used, hence my forgetting about it.  Twill be interesting to see how many of the candidates the Republican Congress actually nullifies.  My bet is a minority, perhaps a small minority, unless some wiseass packages a number into one legislative act.

The Half-True Headline

Timothy Noah writes on the rush of the Obama administration to get final rules published before the 6 month cutoff: anything published after May 23 can be revoked by the next President; anything before then a formal rulemaking procedure is required which takes months, maybe years.

The headline is: "Obama rushes out rules to guarantee legacy."  That's true, and fine.  The administration is issuing rules faster in 2016 than in 2013-15.   Noah doesn't explicitly feed the idea that Obama is a big-government, regulation heavy Dem, though I'm sure some readers will jump to that conclusion.

Buried in the middle of the story, Noah notes that Bush used the authority to revoke a Clinton regulation on workplace safety.  And then: "Bush was careful not to get caught in the same trap himself seven years later. His administration pushed through 214 rules in the first five months of his final year in office — 19 more than the Obama administration for the same period."

So the bottom line is Bush did more regs than Obama, so the headline could have read: "Obama dawdles, lags behind Bush pace" 

How To Comply With All Laws

Finally two professors have published the answer to the problem.

Who Says the Old Days Were Better?

Not Consumer Reports, and they've a crash test between a 1959 and 2009 car to back it up.  (Link to Kottke)

Defining "Engaged": Farming Versus Selling Guns

For several days we've known that Obama was going to announce actions on gun regulation which he could take on his authority, without relying on Congress to pass new laws.  I've been curious to see what they would be.  Remember that his actions on immigration are currently tied up in court because, it is claimed, he needed to follow the rule-making process in the Administrative Procedure Act (APA) and didn't   So my question was: would he try the same sort of thing on guns, or could he find some other ways to affect the sale and possession of guns.

It seems that he mostly has, and partially by definition of "engaged", which I find to be a parallel with the "actively engaged in farming" issue in payment limitation regulations. (Search for "actively engaged" to see prior posts on this.)

From this Post piece (currently with 1430+ comments):

That distinction centers on the phrase "engaged in the business." Those who are engaged in the business of selling firearms, such as firearm dealers, need to conduct background checks. Those who aren't, such as individuals selling guns, don't.

 The Post piece includes an interview with a law professor, whose discussion could equally apply to the "actively engaged" issue.  To recall: as Sen. Grassley can testify, some in Congress want the USDA to interpret "actively engaged" very strictly,  others want a very loose interpretation.  Typically because the farm state legislators are more continuously involved, USDA tends to follow the loose interpretation.  This favors the farm interest: everyone actively engaged can receive payments up to the limit.  For gun control, the politics reverse themselves: everyone actively engaged in gun dealing faces the regulations on sales.

The open question at the moment is a comparison of how Obama is promulgating his interpretation of "engaged" (i.e., proposed rule under APA or simply instructions to the bureaucrats) versus FSA's use of the regulatory procedure.  More to follow.

Actively Engaged Regulations Finalized--Is the 30-Year Struggle Over?

FSA published the final rule on "actively engaged" in farming determinations here.

"No major changes are being made in response to comments, because FSA has determined that the comments support the definitions and requirements for ‘‘actively engaged in farming’’ specified in the proposed rule and support limiting eligibility for farm payments. Also, there was no consensus amongst the comments for any alternative payment eligibility provisions that would address the 2014 Farm Bill requirements. FSA has made minor changes from the proposed rule in this final rule to respond to commenters’requests for clarifications of certain provisions"

 With age I've diminished interest and ability in parsing FSA regulations, so I'll leave that to others.

My reference in the title of this post is to the 1985 farm bill, which I believe IIRC added the actively engaged provision to the payment limitation regulations There's been a long political fight over how to define the term.  Perhaps the fight is now ended, given the declining importance of FSA programs, and the focus will shift more to the rules on the crop insurance side?  We'll see. 

Apparel from Wood

Proof that American innovation is unceasing--the Foreign Agricultural Service is seeking OMB approval to collect information on this subject.

Foreign Agricultural Service

Title: Agriculture Wood Apparel Manufacturers Trust Fund.
OMB Control Number: 0551-0045.
Summary of Collection: Section 12315 of the Agricultural Act of 2014 (P.L. 113-79) authorizes distribution out of the Agriculture Wood Apparel Manufacturers Trust Fund (“Agriculture Wool Trust Fund”) in each of calendar years 2014 through 2019, payable to qualifying claimants. Eligible claimants are directed to submit a notarized affidavit, following the statutory procedures specified Section 12314 (c) or (d) of the Act.
Need and Use of the Information: The Foreign Agricultural Service will use the information provided in the affidavits to certify the claimants' eligibility and to authorize payment from the Agriculture Wood Trust Fund [Underlining added]

I can understand one typo, I could even understand consistent typos, but why one word correct and 3 incorrect?

I need to vent in a future post about the absurdity of these approvals.

The Accuracy of Cost Estimates on Regulation

Cass Sunstein at Bloomberg writes on the estimates which are required for new regulations.  A study shows there's no systemic error (bureaucrats underestimating costs or overestimating benefits), although the estimates probably aren't very accurate. 

What would be more interesting to know is how often the analysis results in changes to the regulations or dropping the effort altogether.  I'm still waiting for a thorough redo of the regs on paperwork and regulations to make them fit the 21st century.  Not holding my breath though.

More Administrative Procedure Act Weeds

I mentioned an amendment to the farm bill from House Judiciary, requiring compliance with the Administrative Procedure Act.

Today I followed up an a USDA notice in the Federal Register, not something I usually do, and found they're withdrawing a 1971 statement on APA compliance.

The U.S. Department of Agriculture (USDA) is proposing to rescind the Statement of Policy titled “Public Participation in Rule Making,” published in the Federal Register on July 24, 1971 (36 FR 13804) that requires agencies in USDA to follow the Administrative Procedure Act's (APA) notice-and-comment rulemaking procedures even in situations where the APA does not require it. The Statement of Policy implemented a 1969 recommendation by the Administrative Conference of the United States (ACUS), which urged Congress to amend the APA to remove the exemption from the notice-and-comment requirement for rulemakings relating to “public property, loans, grants, benefits, or contracts,” adding that agencies should follow the notice-and-comment procedures pending amendment of the APA.

They've several justifications for withdrawal: loan programs are governed by OMB rules, some notices of proposed rulemaking don't attract significant comments, Congress never adopted the 1969 recommendation of the ACUS, information on rules is much more readily available in today's environment than it was in 1971. 

I know the Dems revived the ACUS. I wonder what they've done, if anything, to bring the rulemaking/public participation process into the 21st century.

USDA Is Not an Agency

My title isn't quite true, but here's my point:  Megan McArdle writes about federal regulations here.  In doing so, she mentions the "Department of Agriculture" twice, both in contexts which are vaguely adverse.  The problem I have is that USDA is a bunch of different agencies, each with their own missions and regulations, each with their own attributes.  To write of it as if it were a unitary agency is simply to misunderstand and oversimplify.

Complexity of Regulations

The Reps often complain about complex regulations, complain, that is when they aren't complaining about any regulation at all.  Some bloggers have talked about why regulations are complex.  There's probably some truth in all positions, but there was an episode Sunday which illustrates one factor.

Scene: surfing NFL football. A contested call.  The quarterback is standing on his own 1-foot line, he draws his arm back, so the football is over the end zone. He throws the ball and is called for intentional grounding.  Now the rule is, if you're called for intentional grounding while in the end zone (note: I think this was the situation, but my memory is untrustworthy, but the issue is right) it's a safety. 

So the official called a safety.  Then the officials conferred and ended up reversing the call.  The announcers agreed they'd never seen that exact situation, and suggested that the rule book would be changed in the future to clarify that the issue is whether the quarterback is standing in the end zone, not where the ball is.

So that's an example of how regulations grow: you start with a simple rule, then you encounter a situation you've not thought of so you change and add to the rules to cover it.  And things keep on growing. How much of the growth in regulations is accounted for by this process I don't know.  But it's significant, and a factor no one addresses.

[updated with this]  Here's a somewhat related Politico post, on the issue of tomato paste in school lunches. Politico addresses it as an issue of industry influence on regulations, and it is.  But back in the day we didn't have pizza in school lunches.  I'm not sure there was pizza in the 1980's.  Back then the Reagan administration notoriously tried to change the rules to give credit for the nutrients in ketchup (another form of tomato paste) in school lunches.  They got shot down because it was framed as calling ketchup a "vegetable".  It's an example of the same process: if you count nutrients in school lunches, how do you count, and what do you count when you've got pizza or ketchup involved.  The simplest solution is to go back to the school lunches in my day: meat loaf and overcooked vegetables, and only salt and pepper.

CFTC and MF Global

Chris Clayton has an outstanding post on the House Agriculture Committee's oversight hearings--two paragraphs:

"By my own count, the House Agriculture Committee has held six hearings on the Commodity Futures Trading Commission's implementation of Dodd-Frank Wall Street Reform and Consumer Protection Act. More than 30 witnesses appeared before the committee, which has issued 13 news releases on its work from Jan. 27 to date.

But in the entirety of the House Agriculture Committee's work, no one, as far as I can tell from news releases and hearing transcripts, asked anything along the lines of "Are there any loopholes that need to be closed, or rules that need to be implemented to protect client accounts from being raided?" Or, "Is there a loophole big enough to drive a massive bankruptcy through?" "Is there anything we're missing?"

The Christmas Tree "Tax"

Ann Althouse is only one of the people highlighting the new "tax" on Christmas trees. Unfortunately USDA has a tin ear for political impact.  In the old days when the Directives Branch processed a Federal Register document for ASCS there'd sometimes be a press release included in the clearance package, particularly for CCC board decisions. These days they probably should do a blog post in anticipation of an FR document publication; just try to get their side of the story out.

I'm playing catchup today but this sounds like a new research and promotion program, voted on by the Christmas tree growers and with the fees to be used for promotion.  For some background on the research and promotion programs, here's the national ag law center's summary.