Good regulation is important to ensure proper functioning of economies and public services, and governments generally, regardless of ideological alignment, have resorted to regulations. However, Presidents occasionally favor limiting government by arguing inter alia that regulations may have negative and unintended consequences and become less effective or burdensome over time.
Both the Brazilian and American Presidents, Donald Trump and Jair Bolsonaro, have promised to reduce government intervention on businesses by drastically limiting regulations. Bolsonaro and Trump’s policies are relatively similar, and Bolsonaro is dubbed “The Trump of the Tropics,” not only because of his agenda, but also because of his [contentious] opinions about minorities, immigration, guns, etc.
This similarity has reached the regulatory agency’s management policy. Presidents Trump and Bolsonaro have apparently made deregulation a priority, getting out of the way of entrepreneurs, but such policy has also undermined agencies by reducing their autonomy and power.
Trump has adopted a series of measures against agencies autonomy and its regulations, as shown below:
- A recent New York Times analysis counted more than 80 environmental rules and regulations on the way out under Trump’s administration;
- Trump issued an Executive Order (E.O. 13771) directing all agencies to repeal at least two existing regulations for each new regulation issued in Fiscal Year 2017 and thereafter. The E.O. states, in Section 2, that it is important that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.
- By October, 2018, agencies had taken 243 deregulatory actions;
- In 2017, the Office of Information and Regulatory Affairs (OIRA)’s administrator sent regulatory officers at all agencies instructions to submit a budget for fiscal 2018 that produces a net reduction in total incremental regulatory costs.The Administrator also proclaimed that “it is the policy of the United States to alleviate unnecessary regulatory burdens placed on the American people.”
- In April, 2019, the Office of Management and Budget (OMB) published a memorandum imposing additional scrutiny over agencies new major policies and rules; if a regulation or guidance is deemed “major” by OIRA, according to some standards, it will now be submitted to Congress for review.
- An Executive Order (E.O. 13875) issued by Trump in June 2019 ordered agencies to terminate, by September 30, 2019, at least one-third of its current committees.
- An analysis of the Center for Economic and Policy Research (CEPR) shows that, of 179 positions of independent agencies voting members, 83 seats that are either expired or vacant, almost half of the total; such absences may affect powers of some agencies.
- The Trump Administration has also revealed last year its plan of reorganizing government, by inter alia merging and reshaping agencies.
Bolsonaro has similarly adopted a series of reorganization and de-bureaucratization measures, e.g., revocation of Executive Orders, reduction of Departments and personnel, redesign of agencies (e.g. Brazilian IRS), restructuring of workforce and shrinking expenses.
But many of his measures identically compromise agencies’ power:
- In April 2019, Bolsonaro issue an Executive Order eliminating dozens of agencies panels integrated by society representatives.
- Bolsonaro recently declared his desire of reducing by 90% labor safety and health regulations (NRs).
- Heundermined environmental protection agencies by reducing powers and representation of such agencies.
- Bolsonaro has vetoed a Section of the General Law on Regulatory Agencies requiring Senate confirmation hearings of agencies’ directors nominees. He reasoned that such requirement unconstitutionally limited his constitutionals powers to nominate heads of agencies.
- According to the President, Federal Government won’t hire new officers in the coming years.
- A recent Executive Order suppressed thousands of non-permanent leadership positions within the Federal administration.
- Although it is stated that the governmental intention is to reduce complexity and burdens to citizens and corporations, some policies are being refurbished in order to serve the market For example, Bolsonaro has declared his desire to eliminateE-social, an online tool of the federal government that digitally collects labor and social security information of employers and employees; it is an important tool against tax evasion.
The Brazilian and American contexts are indeed distinct, but the political agendas dictated by Trump and Bolsonaro largely determine the direction to which the United States and Brazil are headed regarding regulation and agencies’ influence. However, radical policy changes by new presidents are limited by many institutional constraints: presidents can do many things, but not everything. Presidents, according to Gene Healy, do “not have a Magic Scepter of Inherent Authority, placing [them] beyond the reach of the law.” Both the Brazilian and the American case law have substantive doctrines according deference to agencies; agencies’ expertise and institutional capacities are not simply disposable by the President; and the system effects of a deregulation policy may include a reaction of other institutions, which may see their workload increase or feel unable to cover the regulatory vacuum.
Trump and Bolsonaro have also suffered major defeats with the legislature and the judiciary, blocking part of their measures on many issues. The Washington Post recently published that federal courts have ruled against Trump administration policies at least 70 times, and numerous courts have invalidated rollbacks or delays by the Environmental Protection Agency and other Trump Administration agencies of rules promulgated during the administration of President Barack Obama. The Brazilian Supreme Court (STF) have also granted injunctions suspending Bolsonaros’s Executive Order regarding society panels mentioned above.
Not to mention the negative reaction of public opinion and private institutions that led to presidential setbacks in both countries. Most of their aforementioned measures have already impacted agencies’ policies and powers. The consequences of these deregulatory actions and the real interests Trump and Bolsonaro are supporting are still uncertain, but running over a whole regulatory policy is not an isolated and irrevocable decision of the President.
Antonio Sepulveda is Professor of Law at the Fundação Getulio Vargas (FGV) and at the Universidade Federal Fluminense. He was Clerk at the Regional Labor Court of Rio de Janeiro. He is a researcher at the Institutional Studies Laboratory (LETACI) and a Brazilian Internal Revenue Service officer.
Igor De Lazari holds a Master Degree from the Universidade Federal do Rio de Janeiro, where he was a researcher at the Institutional Studies Laboratory (LETACI) and a Law Clerk at the Regional Federal Court in Rio de Janeiro. He is a summa cum laude undergraduate of the Universidade Federal do Rio de Janeiro Law School.