Regulators make new push to roll back Obama rules

Regulators make new push to roll back Obama rules
© Keren Carrion

The Trump administration is on the hunt for ways to repeal or roll back some of the most controversial Obama-era rules that are already on the books.

Federal agency heads have released a flurry of requests for comment in recent weeks, calling on the public to provide data and information that can be used to revise existing rules.

Labor Secretary Alexander Acosta told lawmakers last month that a request for public comments is the first step an agency must take under the Administrative Procedure Act (APA) if it's looking to make changes.

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“If there were to be a change, that change would have to be based on information obtained through a record process, the first step of which is a request for information,” he said at a House subcommittee hearing on the agency’s budget request.

President Trump in January directed regulators to find two rules to eliminate for every new rule they propose.

And in February, he ordered all federal agencies to create regulatory reform task forces to evaluate existing regulations and make recommendations to agency chiefs on repealing, replacing or modifying them consistent with applicable law.

Under those orders, Education Secretary Betsy DeVos said her department had completed an initial canvas of its rules and found 150 regulations for further review. 

Here's a look at five rules that are now in the administration's crosshairs.  

 

Overtime rule

The Obama-era rule expanding overtime pay is high on the administration's list. The rule set a new salary threshold for workers to be eligible for overtime and was intended to take effect in December 2016, but was quickly challenged by states and business groups in the courts.

Last week, though, the Labor Department (DOL) asked a federal appeals court not to rule on the validity of the salary threshold.

The administration is defending its right to set salary limits on who qualifies for overtime pay but it isn't defending the $47,476 annual salary limit created by the Obama administration.

The Trump Labor Department said it’s planning to revisit that threshold in a new rulemaking.

Nevada, Texas and 19 other states challenging the rule claim it raises the standard for overtime pay too quickly, jumping from $23,660 to $47,476 a year – roughly $913 per week.

Acosta has also suggested the current limits are too high.

“Any rule that has a dollar amount that hasn’t been updated is a problem because life gets a lot more expensive, but I also think the way that it was done created a shock to the system,” he said last month at a House budget hearing.

Business groups challenging the rule claim they will be forced to convert salaried workers back to hourly employees or cut benefits.  

DOL has put out a request for information on the rule that will be published in the Federal Register.

Proponents of the rule say the moves to rewrite it show Trump is siding with big businesses and corporate lobbyists over working people.

 

Financial adviser rule

The Labor Department last week also asked for public comments on the Obama-era rule that imposes tougher restrictions on investment advisers, requiring that they act in the clients' best interests.

Critics, particularly in the business world, have warned the rule will raise costs and make it harder for many Americans to afford financial advisers.

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The U.S. Chamber of Commerce praised the agency for putting out a call for comments, but asked for 60 days instead of 30 to recommended changes or exemptions to the rule.

“The current rule has now been in effect for only 20 days, and its full consequences – intended and unintended – are not immediately apparent,” the chamber said in a letter to the agency last week.

“The requested comment period extension will allow the concerned public necessary time to observe the impacts of the rule more fully.”

The agency is slowly implementing the rule by refusing to pursue claims against investment advisers who are working diligently and in good faith to comply with their duties until Jan. 18, 2018.

The agency has given the public 15 days to comment on whether to extend that Jan. 18, 2018 deadline.

 

For-profit college rules

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The Department of Education announced plans to rework its gainful employment rule.

The rule, which took effect in 2015, aims to ensure career training programs at for-profit- career and technical colleges are preparing students for good-paying jobs.

On average, a graduate's estimated annual loan payment has to be at or below 20 percent of his or her discretionary income or 8 percent of his or her total earnings on average. If an institution fails to meet those requirements, it risks losing its ability to participate in taxpayer-funded federal student aid programs.

Last week, the agency gave schools another year to comply with the rule's disclosure requirements and, following a court order, gave for-profit cosmetology programs more time to appeal their graduates’ earning data.

The American Association of Cosmetology Schools sued the agency, claiming it was unfairly using Social Security Administration income data when rating cosmetology programs. The group claimed graduates disproportionately underreport their income, most of which comes in the form of tips. 

A D.C. District Court judge last week said the agency “acted arbitrarily and capriciously in disregarding the widespread underreporting of income in the cosmetology industry.” The judge ordered the agency to give programs more time to challenge their graduates’ debt compared to earnings rate.

The agency has also scheduled public hearings next week to discuss the rule.

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Student borrower rule

The Education Department is also seeking public comment on its borrower defense to repayment rule at the public hearings scheduled for next week.

The Obama-era regulation aims to better protect student borrowers against misleading and predatory practices with rules to make filing claims more transparent.

The rule also establishes automatic triggers that require a school to put up a letter of credit — or large sum of money — every time they are sued to protect taxpayers if the institution fails.

The agency cited pending litigation as the reason for deciding to delay the rule from taking effect on July 1. A regulatory committee has also been created to rework the rule.

 

Beryllium rule

Another contentious rule in the administration's crosshairs is an Obama-era rule to protect workers from being exposed to beryllium, a toxic material that can cause a deadly lung disease.

Beryllium is a lightweight metal used in foundry, machinery and blasting, among other things, and is coveted for being lighter and stronger than steel. But it can pose serious health risks when it’s crushed to dust and enters the air.

The regulation, which was Obama's last major workplace rule, reduces the permissible exposure to beryllium from 2.0 micrograms per cubic meter of air to 0.2 micrograms of beryllium per cubic meter of air over an eight-hour period.

Last week, the Labor Department proposed removing the shipbuilding and construction industries from the rule.

Those changes follow public hearings that were held in March to discuss the rule and additional time for public comment.

The Occupational Safety and Health Administration (OSHA) is proposing to keep exposure limits at the previous level for the shipyard and construction industries and has asked the public to comment on whether existing standards covering abrasive blasting in construction, abrasive blasting in shipyards, and welding in shipyards provide adequate protection for workers engaged in these operations.