In Donald Trump’s first act as president, he signed a high-profile executive order intended to dismantle Obamacare, instructing federal agencies to take any measures they could to roll back the Affordable Care Act. In retrospect, the vaguely worded directive was only symbolic. The Trump administration did eventually make moves to obstruct the law, but they took months and another executive order to implement. For all the theater, it’s hard to say whether that order had any effect at all.
Less noticed on Inauguration Day was a surprise move by the Federal Housing Administration to scratch a planned reduction in mortgage insurance premiums. That change helped shore up the financial health of the FHA’s mortgage insurance fund—but came at a real cost to homeowners, who would have saved an average of $500 a year if the Obama-era plan had stayed in place.
If you didn’t hear about the $500 you may have lost that day—well, that’s how the year went. The attention gap between the empty executive order and the real-life mortgage insurance rollback turned out to be representative of the whole first year of the Trump administration.
Again and again, Trump has taken the stage to an adoring crowd and declared victory on some issue, or announced lavish new promises, without any real results or plans to back them up. Meanwhile, very steadily, and almost totally separately from Trump’s speeches and tweetstorms, his administration has been ushering in a new conservative era of government—taking specific aim at Obama-era rules, and broader aim at the big regulatory mission of government.
At The Agenda, we’ve been tracking these policy changes weekly since June, ignoring the noise and explaining what the Trump administration actually accomplished each week. This week, we’re pulling them all into one mega-list—a portrait of a quiet but very serious Republican push against the scope and ambition of government.
What does it look like? There are a few consistent themes: Rolling back President Barack Obama’s legacy on everything from labor regulations to environmental protections, and more broadly tearing down rules across the government. Some topics have been largely missing: his infrastructure push has gone nowhere. Many of the rules are still in progress, or being delayed so long that it’s anyone’s guess what will really happen. (As you’ll see, some of our items are recurring episodes in long-running dramas, like what will finally happen to Obama’s fiduciary standard, which required stockbrokers to act in the best interest of their clients.) And finally, there are some perplexing surprises. After all the rhetoric against China and Mexico, the year’s big trade-war enemy has been … Canada?
Welcome to the annual wrap-up of our weekly guide to what Trump did while you weren’t looking.
June 3-9
1. A boost for Uber and McDonald’s
It’s the most controversial question in the labor world these days: When is a worker an employee, and when is he or she an independent contractor? That question has been especially controversial for “gig economy” companies like Uber and Postmates. But increasingly, regular businesses are also opting to classify their workers as independent contractors, which can cut their labor costs sharply by not obliging them to offer benefits like health insurance or pay employer payroll taxes. According to one recent study, the percentage of workers employed as contractors grew almost 30 percent from 2005 to 2015.
In 2015, the Obama administration gave workers a win on this one: It issued a guidance document explaining how the Department of Labor would interpret the law, outlining the economic tests it employed in determining whether an employer was misclassifying its workers. The agency had been using that policy in enforcing the law, but putting it in writing sent a clear message to employers across the country that the Obama administration was serious about cracking down on worker misclassification.
On Wednesday, the Trump administration withdrew the guidance document. This was a win for business owners in any number of sectors—not just Uber, but industries such as farming and construction, which increasingly use independent contractors. The withdrawal of the document doesn’t change the underlying law, the Fair Labor Standards Act, or the DOL’s current interpretation of it but sends a strong signal to employers that Labor Secretary Alexander Acosta plans to interpret it differently than his predecessor. “The big story is not that, for whatever reason, they pulled down guidance,” said David Weil, who issued the document under Obama. “The real question is what else comes with this.”
Acosta also withdrew another Obama-era guidance document on how the department will determine whether a parent company, like McDonald’s or Subway, is jointly responsible for its franchises’ labor violations. As with worker misclassification, the Obama-era DOL interpreted the joint employment standard favorably for workers; its withdrawal is a victory for businesses.
2. A trade war with Mexico averted—for now
Trump has stormed on about the North American Free Trade Agreement, calling it a “trading disaster” and vowing to rip it up, suggesting that a trade war with Mexico may be on the horizon. But on Tuesday, the United States and Mexico went the other direction and actually came to a deal, averting a potential trade crisis when they ended a dispute on Mexican sugar exports. The showdown was seen as a first test for the two countries as they, along with Canada, seek to preserve and update NAFTA later this year.
The sugar deal is a quintessentially in-the-weeds trade agreement: It raises the minimum prices for raw and refined sugar and cuts the percentage of Mexico’s sugar exports that are refined from 53 percent to 30 percent, while redefining the purity level for refined sugar. The U.S. sugar industry objected to the deal, arguing that it did not address loopholes that give Mexican producers an unfair advantage in the U.S. market. It wasn’t the win that industry wanted, but many experts were encouraged that the administration’s first big dispute with a major trading partner had an amicable ending.
3. The end of a DOJ “slush fund”
Three years ago, when the Department of Justice settled a $17 billion settlement with Bank of America over its mortgage lending practices, it came with a requirement: The bank had to pay $100 million to various legal and community groups, a sum intended to help homeowners hurt by Bank of America’s wrongdoing. Many other DOJ settlements with financial institutions during the Obama administration required similar payouts to outside groups.
Conservatives have long objected to this practice, which was used by Obama and, before him, George W. Bush: They see it as a way for a president to direct money to his favored organizations, illegally sidestepping the congressional appropriations process. The Obama administration argued that so-called third-party settlements were simply another tool for reparations: The money, they said, didn’t go to random organizations but to groups that could help repair the damage caused by financial misdeeds. Opponents called it a “slush fund.”
That ended Wednesday, when Attorney General Jeff Sessions issued a memo prohibiting U.S. attorneys from including such third-party payouts in any settlements. When the Department of Justice settles a case from now on, third-party groups won’t get a dime.
4. A win for nursing homes
Last October, the Obama administration banned any nursing home that receives federal funding—which is most of them—from requiring that prospective tenants sign an arbitration agreement as a condition to be admitted, a common practice in the industry. Such agreements prevent residents from taking the facility to court, requiring them to appeal to an arbitration tribunal. Nursing homes prefer arbitration because it’s usually cheaper than getting sued; critics say it’s unfair to residents, who often have no idea they signed away their right to sue in court until they actually try to file charges, at which point the nursing home shows them the fine print.
The nursing home industry fought the rule, suing the Department of Health and Human Services. In November, it won a temporary injunction against the regulation, so it never actually took effect. And now it may be dead. On Tuesday, the Trump administration signaled its view on arbitration agreements: the DHS issued a new proposed regulation that rolled back the Obama rule. Because it’s not final, the new rule doesn’t immediately overturn the ban on arbitration agreements; it has to go through the same process as any other rule. But it sends a strong signal for where the administration will ultimately land.
5. Get THAAD out of here
Not every major policy change affecting America originates in Washington. On Wednesday, South Korean President Moon Jae-in blocked the deployment of an American missile defense system intended to block missile attacks from North Korea.
The Pentagon’s Terminal High Altitude Area Defense system became a hot-button issue in Asia: China sees the North Korea angle as a cover story for a system that’s really intended to block Chinese missiles, an incursion on its sovereignty. (The Pentagon disputes that argument.) It already was a delicate issue in South Korea; Beijing had been successfully using state media to persuade Chinese consumers to boycott South Korean stores and cancel vacation plans, which has hurt many Korean businesses. Then Trump rattled relations with its ally by insisting in April that South Korea foot the $1 billion bill for the system, an idea later walked back by his national security team.
Moon—a left-leaning leader who supports a more open dialogue with North Korea than his scandal-plagued predecessor—was already reluctant to host THAAD at all, but allowed its continued deployment until he discovered last week, to his surprise, that the Pentagon had sent four more launchers into the country. On Wednesday, he stopped any further deployment of the system—just a day before North Korea conducted its 10th missile test of the year.
June 10–16
1. U.S. and China make nice on beef, dairy and poultry
Throughout his campaign, Trump railed against Chinese trade policies, vowing to label the country a currency manipulator and scaring the business community that a trade war was on the horizon. But Trump backed off his promise to officially label Beijing a “currency manipulator.” And in May, Commerce Secretary Wilbur Ross announced the U.S.-China 100-Day trade agreement, calling it a “herculean accomplishment.”
Still, trade experts who looked at the details of the agreement, were less convinced. Many of the ten policy changes were already underway; on the new changes, China made few firm commitments.
This week, a trio of trade announcements revealed there was more substance to the deal than originally thought, if not quite “herculean.” On Tuesday, the Department of Agriculture announced it had finalized an agreement with its Chinese counterparts to allow U.S. beef imports into China, breaking a 14-year ban that Beijing has more-than-once promised to end. On Thursday, the U.S. and China signed a memorandum to promote U.S dairy products in China, and, on Friday, the USDA published a proposed rule to allow Chinese poultry products into the U.S.
These aren’t huge changes to the U.S.-China trade relationship, and some were in the works long before Trump took office. In fact, China promised last September to lift the ban on U.S. beef exports; the dairy agreement wasn’t actually part of the “100-Day” trade deal. But the trio of agreements show that even as Trump rails against Beijing’s trade policies, the two sides are still capable of compromising. For all the eye rolls that Trump’s initial “100-Day” deal invited, it’s looking a lot more real two months later, especially once beef shipments actually arrive in China, which Ross estimated could be as soon as 10 days. “Everyone has been justified in taking a wait and see attitude,” said Bruce Hirsh, a former assistant U.S. trade representative. “Even now, until actual shipments are accepted, it's best to wait and see.”
2. Education Department targets Obama-era student protections
With student-loan debt a trillion-dollar issue, the Obama administration announced a new policy last October that would allow defrauded borrowers to have their federal student loans canceled—an expensive proposition for the government, which would cover the cost. Student advocates, who had long pushed Obama to adopt such a rule, cheered the news, arguing it was simply a matter of fairness.
One problem: The rule wasn’t scheduled to take effect until July 1—and now it looks like it will never take effect. Education Secretary Betsy DeVos announced this week that the agency was delaying the implementation of the so-called “defense to repayment” rule indefinitely, on the grounds that it is the subject of an ongoing lawsuit. In effect, this means the idea is almost certainly dead: DeVos also announced that the department intends to rewrite the rule altogether, along with another major Obama-era education rule, known as “gainful employment,” that required colleges to meet certain standards or risk losing access to federal student loan dollars.
Unlike “defense to repayment,” the “gainful employment” rule was finalized in 2014 and had already taken effect, so the Trump administration will have to undertake a full rulemaking process to rewrite it, a time-consuming process.
The changes are a defeat for defrauded students and a big victory for for-profit colleges, which are disproportionately represented among both loan-fraud cases and colleges that leave students with high debt levels. For-profits loudly argued that the Obama administration was effectively trying to choke out the industry altogether. This week, DeVos gave it new life.
3. The Pentagon flexes its muscles
During the Obama administration, the military often complained that the White House was micromanaging its affairs, requiring high-level, interagency approval for decisions on troop levels or drone strikes outside of active war zones. Trump has dramatically reversed those policies, giving the Department of Defense wide autonomy to conduct overseas military operations.
That autonomy was on display in two countries this week: Somalia and Afghanistan. On Sunday, the U.S. struck al-Shabab, a terrorist group, in southern Somalia, the DOD’s first known use of additional war-making powers in Somalia. In March, the Trump administration had declared parts of Somalia as an “area of active hostilities,” which gives military commanders the same authority to conduct raids and strikes as they now have in active war zones like Iraq; it also reduces protections for civilians. Human rights advocates criticized the move, saying it effectively allows the Pentagon to conduct unauthorized wars with little oversight. U.S. officials responded that it was necessary to confront emerging threats quickly. The U.S. Africa Command was slower than the White House expected in launching operations after the March change; Sunday’s strike appears to be the first under the new authority.
This week, Trump also gave the Department of Defense the autonomy to decide whether more troops are needed in Afghanistan. Washington had been anticipating a decision from the White House on the proposed Afghan troop surge for weeks, with Defense Secretary James Mattis arguing in favor and White House officials like chief strategist Steve Bannon arguing against it. Trump’s decision to outsource the decision to the Pentagon is a big win for the agency and for Mattis—and an outcome that would have been unthinkable under Obama.
4. VA civil service reforms heads to Trump’s desk
For years, Congress has tried to reform the rules for firing workers at the Department of Veterans Affairs, having grown frustrated at the difficulty of removing employees responsible for the scandal at VA hospitals in 2014, which eventually led to the resignation of Secretary Eric Shinseki.
This week lawmakers sent a substantive set of reforms to the president’s desk; he is expected to sign them in the days ahead. The legislation, called the VA Accountability and Whistleblower Protection Act, creates a new office to provide greater protection for whistleblowers and significantly shrinks the time needed to fire VA employees. Previously, it could take months, if not years, to broom out problem employees; agencies often deemed it not worth the effort to try. Under the bill, the review structure largely remains in place for rank-and-file employees—it changed more for senior executives—but it sharply cuts the time for filing appeals and for the oversight board to reach a decision. It also lowers the burden of proof necessary for agencies to take action against employees. Groups representing federal employees, including the American Federation for Government Employees and the Senior Executives Association, said the legislation would undermine worker protections like due process. Veterans’ groups cheered the changes.
Civil-service reforms don’t often get much attention, but these are significant changes with bipartisan support, and government reformers are watching them closely. If they prove successful at the VA, lawmakers could soon look to implement them across government.
5. New food labels? Not so fast.
Not every Trump rollback targets a Barack Obama policy—some of them target Michelle Obama policies. The former first lady made healthy living her top priority during her husband’s presidency, promoting exercise with her “Let’s Move” program and working to improve the nutrition of school lunches. One of her big policy wins was the redesign of the nutrition facts panel, the one that appears on all the packaged foods you buy. Unveiled by Obama in May 2016, the first redesign in more than two decades makes the calorie number more visible and includes information on “added sugars” for the first time, provoking a sharp response from the sugar industry.
Food makers were supposed to start using the new labels by July 26, 2018—but on Tuesday, the Food and Drug Administration put them on indefinite hold. There’s no timetable for when it could be implemented; industry groups had also been pushing to align the timing with another FDA rule on the disclosure of genetically modified organisms, which isn’t expected until 2018. In a note explaining the delay, the FDA said the extra time was needed for manufacturers to print the new label. It said nothing about actually rethinking the redesign altogether, although it’s possible that could happen too.
June 17–23
1. The Labor Department loosens a rule on beryllium exposure
You haven’t heard of it since chemistry class, but beryllium is a chemical toxic to lung tissue. The Department of Labor took years to finalize a rule protecting workers from exposure, and didn’t issue the final version until the tail end of Obama’s presidency—January 9, to be exact. It was always at risk of removal by the Republican Congress, which could have repealed it with just a majority vote, but it survived until now.
On Friday, the Department of Labor proposed a new rule on beryllium exposure; it doesn’t change the original exposure limits imposed by Obama but instead eliminates additional safety requirements for the construction and shipyard industries, such as conducting medical surveillance or providing training for those workers who are near, but not above, the exposure limits. Labor groups slammed the change, saying that it would lead to more lung disease and cancer among workers. Industry groups applauded the changes; the original rule, they argued, was too restrictive.
The DOL must still go through a full rule-making process, so the new beryllium rule won’t be finalized for months. In the meantime, the department said it wouldn’t be enforcing the Obama-era rule.
2. A new emergency alert for cops
We’ve all noticed the emergency warnings on television or radio, which alert audiences about a child abduction (the “Amber Alert”) or severe weather. Soon, there may be a new alert: a “Blue Alert” for when a police officer is missing, seriously injured or killed in the line of duty.
On Thursday, the Federal Communications Commission unanimously approved the first stage of rulemaking to add such a “Blue Alert” to the FCC’s Emergency Alert System, which was created in 1997 to enable the president to communicate quickly and directly with the American people in the case of an emergency. Stations are required to carry such presidential alerts, but alerts for a child abduction or severe weather are voluntary.
A “Blue Alert” has already been implemented in 27 states; the FCC proposal would make it a national standard. The change has bipartisan support—it’s hard to see politicians taking a stance against showing concern for officer safety—but it also fits with the Trump administration’s focus on attacks on cops, and the Department of Justice’s pivot from Obama-era policies on police accountability toward a more protective stance on police.
3. The Yucca nuclear controversy reopens
So … where is America supposed to put its spent nuclear fuel over the long term? A decades-old debate was reawakened this week when Rick Perry, the energy secretary, announced at a congressional hearing on Tuesday that he was reconstituting the Office of Civilian Radioactive Management, which ran a proposed Nevada site for long-term waste storage.
Throughout the Obama administration, with Nevada Sen. Harry Reid leading the Senate Democrats, plans to store nuclear waste in Nevada’s Yucca Mountain had no chance of actually happening. Now it’s back. This wasn’t exactly a surprise, since Trump’s budget included $120 million to restart the licensing process for the Yucca site; in fact, in May, the Nuclear Regulatory Commission took the first steps toward restarting that process. But Perry’s words nevertheless created a sharp backlash from Nevada politicians who have long fought any plan to store nuclear waste in their state.
Perry somewhat walked back his comments at a separate congressional hearing on Wednesday, saying that “no decision has been made at this time with respect to the timing or the location, for that matter, of waste storage." But the Office of Civilian Radioactive Management is still set to reopen during fiscal 2018. The next Yucca fight is just beginning.
4. The White House gets tough with Russia
Amid multiple congressional inquiries and the investigation by special prosecutor Robert Mueller, the Trump administration hasn’t done much to distance itself from Moscow. So it may have come as a surprise on Tuesday when the Treasury Department imposed sanctions on more than three dozen individuals and organizations involved in Russia’s annexation of Crimea.
The announcement coincided with Ukraine President Petro Poroshenko’s visit to the White House, but many observers wondered if the administration had a different motive: discouraging the House from taking up the Senate’s Russian sanctions bill. That legislation, which passed the Senate last week by a 98-2 vote, would limit Trump’s ability to ease sanctions on the Russian government. The White House has been working to water down or kill the Senate bill. The new sanctions can’t hurt those efforts.
5. Trump quietly releases another immigration executive order
It went almost entirely unnoticed: At 9:20 p.m. on Wednesday, the White House released a new executive order on immigration. Compared to Trump’s past orders on immigration, which have set off national protests and ongoing court cases, this one was minor. It makes a very small change to an Obama-era executive order, removing one section that directed the secretaries of state and homeland security to create a plan so that “80 percent of nonimmigrant visa applicants are interviewed within 3 weeks of receipt of application.”
So now, DHS and State can take more time to review nonimmigrant visa applicants. What’s the reasoning for this? Michael Short, a White House spokesperson, said in an email that the change was “a very straightforward step that removes an arbitrary requirement and ensures the State Department has the needed discretion to make real world security determinations.” He explained that the White House didn’t want to set an “arbitrary deadline” for reviewing and vetting visa applicants.
For people seeking nonimmigrant visas, which include everything from business travelers to foreign athletes to diplomats, this could mean longer waits as their applications are processed. But to the White House, any additional waits are simply a necessary step to keep the country safe.
June 24–30
1. The Labor Department was busy, Part 1
The Department of Labor issued some big regulations under Obama, and Labor Secretary Alexander Acosta isn’t wasting any time targeting those. Just this week, he took aim at three big ones: the overtime rule, the fiduciary standard and an electronic recordkeeping rule.
Under Obama, the department said it would require certain large employers to electronically submit data on injuries and illnesses, starting July 1. But on Tuesday, the Department of Labor officially proposed delaying the record-keeping rule to December 1. The rule isn’t final yet, so it will technically take effect Saturday, but the Department previously said it won’t yet accept electronic submissions. Supporters of the rule hope that sunshine will act as a disinfectant, shaming companies into better labor practices; companies say it is onerous and unnecessary.
Then on Thursday, the Department asked for comments about delaying the January 1, 2018, compliance date of another major Obama rule—the “fiduciary standard,” which requires financial advisers selling investment products to act in the best interest of their clients. In May, Acosta announced in a Wall Street Journal op-ed that he was going to allow the fiduciary rule to take effect as planned on June 9, prompting cheers from Democrats who thought the rule was doomed. Those cheers may have been premature: The department had previously announced that it wouldn’t actually enforce the rule until January 1—and Thursday’s news is a sign that Acosta is considering more substantive reforms.
Finally, this week the agency sent some signals against Obama’s overtime rule, which doubled the salary threshold under which almost all employees are entitled to time-and-a-half pay for working overtime. What actually happened was technical: The department defended its authority to set a salary threshold in determining whether an employee qualifies for overtime, filing a brief in federal court in a case challenging the rule. However, what didn’t happen was crucial: The agency didn’t defend the overtime rule itself. In fact, it gave a very strong indication this week that it doesn’t support the rule. On Tuesday, the Department sent a request for comments about the overtime rule to the White House for review, the first step toward significantly reforming the rule.
2. The Labor Department was busy, Part 2
The Department of Labor has two big policy tools at its disposal: rule-making and enforcement. Rules get most of the attention, but enforcement can have a larger impact on worker’s daily lives—and under Obama, the DOL used its enforcement powers broadly, earning praise from labor groups and criticism from businesses.
On Tuesday, the Labor Department gave a big hint that a new enforcement regime is beginning. The DOL’s Wage and Hour division announced that it would resume issuing opinion letters, which are documents requested by an employer or employee that provide case-by-case legal guidance over potential federal labor law violations.
Businesses like opinion letters: They give individual companies a clear idea if their labor practices are likely to violate the law. Many labor groups don’t: Critics say they suck up department resources that could be spent on investigations, and unfairly favor big employers, who have the resources and know-how to submit formal queries to the government, over employees, who don’t.
Under Bush, the Labor Department issued lots of opinion letters. but Obama discontinued the practice, instead issuing general guidance documents that explain broadly how the DOL interprets the law. Acosta rescinded those guidance documents three weeks ago. The resumption of opinion letters doesn’t signal a policy change in itself. But the shift is telling: Under the Acosta regime, business is finding the door open again.
3. Trump expands his trade fight with Canada
During his presidential campaign, Trump slammed China for its currency practices and sharply criticized Mexico over its cheap labor. But Canada largely avoided the crossfire—until Trump took office.
Since then, our northern neighbor has become the chief target of Trump’s trade ire as the Commerce Department imposed preliminary tariffs of 7.7 percent on certain Canadian lumber companies. This is the second time Trump has imposed penalties on the Canadian lumber industry; in April, Commerce announced tariffs of 24 percent on certain Canadian lumber companies. It’s the latest moves in the long-simmering dispute that has turned hot in the past few months.
The lumber fight is the background battle as the two sides, along with Mexico, are preparing to renegotiate the North American Free Trade Agreement. This week, the U.S. trade representative hosted a three-day public hearing on NAFTA with 140 witnesses giving five-minute statements and then answering questions from government officials. All involved appear to agree that the renegotiation will be long and hard—and the escalating fight over Canadian lumber won’t engender any goodwill.
4. EPA targets a top Obama-era rule
In May 2015, the Obama administration issued the Waters of the United States rule—colloquially known as WOTUS—a far-reaching and long-awaited plan to limit pollution in America’s wetlands. The culmination of years of work, WOTUS was hailed by environmentalists as a marquee moment in America’s commitment to cleaning up its polluted waters.
But two years later, WOTUS is on the verge of defeat. Twenty-seven states sued the Obama administration over the rule, arguing that the EPA exceeded its authority to regulate small streams and tributaries. A judge blocked the rule last year, so it hasn’t taken effect, and on Tuesday, the EPA, along with the Army Corps of Engineers, took the first step towards killing it, issuing a 52-page proposed rule to repeal WOTUS. The agencies are accepting comments for 30 days. Soon after, they will issue a final rule.
5. Trump tightens the grip on China—and North Korea
When Trump took office, he quickly realized the threat posed by North Korea, even saying he was willing to go easier on trade if China helped Washington with Pyongyang. Those days appear to be waning.
On Thursday, the Treasury Department imposed sanctions on a small Chinese bank, saying that it “acts as a conduit for illicit North Korean financial activity,” along with two individuals and another Chinese company. The moves are the clearest sign that the Trump administration has decided that Beijing is unlikely to pressure North Korea into giving up its nuclear program and that unilateral action is necessary. Apparently, Trump meant what he tweeted last week: “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!”
July 1–7
1. A new era for the renewable fuel standard
The Renewable Fuel Standard is one of the biggest annual fights in energy policy, a bruising battle between oil and agriculture interests. Under Obama, the agriculture industry frequently came out ahead as the Environmental Protection Agency upped the volume of biofuels—mostly corn-based ethanol—that oil refiners are required to mix into their gasoline supply.
Those days may be over. On Wednesday, the EPA, under new Administrator Scott Pruitt, released its proposed Renewable Fuel Standard for 2018, which would leave the requirement for conventional biofuels unchanged at its 2017 level. But the EPA would reduce the requirement for advanced biofuels, the first reduction in volumes under the Renewable Fuel Standard. It’s a victory for oil and gas interests who praised the move but said it still did not go far enough. Biofuel producers slammed it.
Pruitt also signaled that he could undertake broader reforms to the Renewable Fuel Standard, saying the EPA will conduct a technical analysis to “inform a future rule” about the program and will be “assessing higher levels of ethanol-free gasoline.” A new regulatory regime is well underway.
2. More oil and gas drilling on federal lands
Under Obama, oil and gas companies frequently criticized the administration for limiting drilling on federal lands, an effort that was praised by environmentalists as a way to keep oil and gas in the ground and reduce greenhouse gas emissions.
On Thursday, Interior Secretary Ryan Zinke took a step in the exact opposite direction when he issued a secretarial order directing the Bureau of Land Management to speed up the permitting process for oil and gas leases. Zinke wants the BLM to hold quarterly lease sales and to issue permits within 30 days. The bureaucratic move is a first step toward opening up more federal land to oil and gas drilling but, as Zinke said, nothing will change overnight. With oil prices depressed, many producers aren’t interested in drilling on federal land. The order won’t change those market forces.
3. Another big victory for for-profit colleges
A few weeks ago, the Department of Education targeted an Obama-era protection for students known as the “gainful employment” rule, which required colleges to meet certain standards or risk losing access to federal student loans. It was a big victory for for-profit colleges, which are disproportionately affected by the rule. But since the “gainful employment” rule was finalized in 2014, the department would have to undertake a full rule-making process to rewrite it.
As of July 1, the rule required schools to disclose a range of information to prospective students, including completion rates and post-graduate earnings. But on Wednesday, the Department of Education issued a notice that it was extending the compliance date for those disclosures by a year, to July 1, 2018. In the meantime, schools must still disclose that information on their websites. The move is another victory for for-profit schools, which have found a much more welcome regulatory regime under new Education Secretary Betsy DeVos.
4. Trump takes another shot at Obama’s climate policy
Just a couple weeks after Trump won the presidential election, Obama took a major step to secure his climate legacy when he blocked any oil or gas drilling in most of the Arctic waters. The plan, released by the Interior Department’s Bureau of Ocean Energy Management, guides offshore energy development from 2017 to 2022, and was a major victory for environmentalists, obstructing Trump’s pledge to expand offshore drilling.
On Monday, the Interior Department took the first step toward revising that five-year road map and opening the Arctic’s Chukchi Sea, Beaufort Sea and Cook Inlet areas to oil and gas drilling. The BOEM issued a notice in the Federal Register seeking comments from the public on a replacement plan that would cover 2019 to 2024. Oil and gas groups praised the move as a necessary step to secure America’s energy future, but critics said it would undermine U.S. efforts to fight climate change and put the Arctic waters at risk. Either way, changes won’t happen overnight: Zinke expects the rewrite to take two to three years.
In the meantime, offshore drilling in most of the Arctic will remain off limits. Trump cannot overturn Obama’s climate legacy that easily.
5. The Pentagon delays lifting the ban on transgender troops
In June 2016, the Obama administration announced that it would allow transgender troops to serve openly in the military, a move lauded by gay-rights groups and criticized by many Republicans who worried it could undermine the strength and stability of U.S. armed forces.
The move was set to take effect on July 1—but late last Friday, the Department of Defense announced that it was delaying lifting the ban until January 1, 2018, to determine the impact on "the readiness and lethality of our forces." Some military experts are concerned that allowing transgender troops to serve openly would undermine unit cohesion and reduce the military's effectiveness. Gay-rights advocates vigorously dispute that argument and slammed the Pentagon's delay. But they are hopeful that it signals a broader reversal of the Obama-era policy.
July 8–14
1. Foreign entrepreneurs not welcome
Trump’s overhaul of U.S. immigration policy hit a new target this week: foreign-born entrepreneurs.
In 2016, President Barack Obama passed a rule to allow foreign-born entrepreneurs to remain in the U.S. while they build new companies. The so-called startup visa was a linchpin in Obama’s effort to encourage innovative foreigners to remain the U.S. as long as they were creating jobs for Americans; it was a top priority for many technology companies and venture capitalists. It was supposed to go into effect on July 17.
This week, the Department of Homeland Security pushed it back, delaying the effective date until March 2018. The agency also said it will propose another regulation to repeal the original rule, which relies on the government’s parole authority to allow foreigners to temporarily stay in the United States even if they don’t meet the requirements for a visa. This all has its roots in Trump’s executive order on immigration, signed in January, that directed the government to limit its use of parole to only a case-by-case basis. That provision didn’t make headlines, but many immigration experts saw it as a signal that Trump was planning to kill the startup visa—and this week’s move confirms that that is the case.
2. A Korean trade war brewing?
Trump’s favorite targets on trade are well-known: China, Mexico and Germany. But there’s another country—an important U.S. ally—that often is a frequent target of Trump’s ire: South Korea.
This week, U.S. Trade Representative Robert Lighthizer took the first formal step to combating Korea’s perceived trade infractions when he formally requested the two sides enter into discussions to consider changes to the five-year-old U.S.-South Korea trade agreement, which was signed under George W. Bush and approved by Congress in 2011. In a one-page letter to his Korean counterpart, Lighthizer specifically wrote that the Trump administration was determined to reverse the U.S.’ $28 billion bilateral trade deficit, a top goal for Trump, who brought up Korea’s trade policies as recently as Thursday in an interview with reporters on the plane ride to Paris.
The stakes are high: Both the U.S. and South Korea are seeking a strategy to block North Korea’s nuclear weapons program, a difficult issue that has already created some tension between the longtime allies. Any trade disputes would only hurt the U.S.-Korea relationship.
3. A milestone for Obamacare
As the Republican health care reform stands on a knife’s edge on Capitol Hill, states can’t just wait and see how those efforts end up; they need to take immediate steps to stabilize their health insurance markets—and they have a powerful tool to do so.
A so-called Section 1332 innovation waiver, for its section of the Affordable Care Act, allows states to opt out of many Obamacare regulations within the basic parameters of the law. This week, the Centers for Medicare and Medicaid Services approved its first waiver, to Alaska, which wants to set up a reinsurance program to help insurers that end up with a disproportionate number of high-cost enrollees. The program is intended to moderate premium increases and prevent its individual insurance market from collapsing. CMS will provide $323 million from 2018 to 2022, and estimates that Alaska’s plan will reduce premiums by 20 percent in 2018. The agency had previously signaled support for the waiver, so Tuesday’s announcement wasn’t a surprise. But it still marked a milestone for the law.
The ACA puts strict rules around when and how states can waive Obamacare requirements but that could change if Senate Republicans reach a compromise on their health reform. Under their bill, states could receive approval for waivers much easily—with less oversight, and more freedom to spend money as they see fit.
4. The rollback of Obama’s environmental legacy continues
While the Clean Power Plan and the Paris deal garnered most of the headlines, Obama’s environmental legacy touched all corners of the government, from offshore drilling leases to energy efficiency policies. But under Trump, a new environmental regime is underway, quickly reversing those policies.
This week brought two such efforts. First, on Tuesday, the Environmental Protection Agency announced that it was accepting comments on its proposal to rescind a ban on mining in Alaska’s Pebble Mine. Under Obama, the EPA refused to issue permits for gold and copper mining in Pebble and instead officially restricted mining in the area. The decision was the subject of a fierce legal battle, with developers arguing that the EPA’s determination violated the law and environmentalists arguing that pollution from the mining would threaten a nearby wild salmon fishery, the world’s largest. In May, the EPA, under Administrator Scott Pruitt, announced a deal with the owner of the Pebble Mine to withdraw an ongoing lawsuit, repeal the mining restrictions and allow Pebble a fair process to apply for a permit. Tuesday’s move is the first step in implementing that agreement and allowing drilling in Pebble.
On Thursday, the Interior Department announced its first oil and gas lease sale since Trump took office, offering 75.9 million acres in the Gulf of Mexico—more than the agency offered in the Gulf of Mexico during all of 2016, in part due to a lack of demand. Secretary Ryan Zinke also announced that he was lowering royalty rates—the government’s share of the take—on shallow-water leases, an effort to encourage oil companies to drill despite the fact that oil prices remain depressed. The lease sale is scheduled for August 16.
5. A move to lower drug prices
As prescription drug prices have climbed higher and higher, Americans have become angrier and angrier at drug companies and the government’s inability to rein in the price hikes. Trump has said the issue is a top priority for his administration, but he has made few real policy changes on it so far.
That changed on Thursday when the Department of Health and Human Services released two major new rules setting 2018 payment rates and policies for hospital outpatient departments and ambulatory surgical centers. If it sounds complicated, that’s because it is: The proposed rules run almost 1,500 pages in total. But experts immediately focused on a reform to the prices that the government will pay certain doctors and hospitals for prescription drugs.
The change relates to the 340B discount drug program, which was created in 1992 and requires drug manufacturers to offer outpatient drugs at a heavy discount—around 22.5 percent on average—to hospitals and doctors that serve a large share of low-income patients. Under last year’s payment schedule, CMS reimbursed hospitals for 340B drugs by about 6 percent above their average sales price. The new proposal would reimburse hospitals for such drugs at 22.5 percent below their average sales price, effectively negating the discount. CMS says that this reform will lower out-of-pocket costs for patients, ensuring that the 340B program is actually benefiting Medicare patients and not just goosing the bottom line of 340B hospitals and doctors.
The Trump administration heavily promoted the changes, even sending out a statement from Trump touting the reforms. But hospitals warned that the changes would hurt patients’ access to care by threatening the financial health of 340B hospitals. The payment rates aren’t final, and the agency is accepting comments on it. Expect a major fight to come.
