Overnight Regulation: Florida decision puts Trump drilling plan on shaky ground | Trump floats staying in Paris climate deal | Dems rush into net neutrality fight

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Wednesday night in Washington, and we’re watching to see if the House and Senate can find some sort of agreement on immigration and border security and avoid a government shutdown.

 

THE BIG STORY

Interior Secretary Ryan Zinke may have put the Trump administration on shaky legal ground by agreeing to remove Florida’s waters from consideration for offshore drilling.

Zinke announced his decision Tuesday, minutes after meeting with Florida Gov. Rick Scott (R) at Tallahassee’s airport. Florida would be removed from consideration for drilling, Zinke said, due to the importance of tourism to the state.

{mosads}

“I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver,” Zinke said in a statement late Tuesday.

But after Zinke’s announcement, the leaders from numerous other coastal states quickly chimed in, saying they’re entitled to the same treatment.

The trouble for Zinke: Other states and legal experts say Zinke created a new standard that should apply to any state that wants it. Any other action could give opponents legal ammunition in suing the Trump administration over its drilling plan. Drilling plans, like other major policy decisions by agencies, can be challenged in court once they’re made final. The department’s moves would be judged by their adherence to the Administrative Procedure Act, including a standard that government actions cannot be “arbitrary and capricious.”

Who’s angry? Both Democrats and the oil industry, but for different reasons. For industry, the eastern third of the Gulf of Mexico has long been off-limits for drilling, and they see it as the best expansion prospect offshore. If the oil industry or a company wants to sue Zinke for excluding a certain area, like the eastern Gulf, they might do that.

Get the full picture from Timothy Cama here.

And keep reading for more reaction to Zinke’s decision…

 

REGULATORY ROUNDUP

Environment: A South Carolina Republican on Wednesday slammed a decision by the Trump administration to exempt Florida from proposed offshore drilling as “self-serving” because President Trump’s Mar-a-Lago resort is in the state.

“I would also say this, it smacks of what we never want to see in politics, which is, is it only self-serving?” Rep. Mark Sanford (R-S.C.) told “CNN Newsroom with Brooke Baldwin.”

“I mean, you can’t say ‘I don’t want to see an oil rig from Mar-a-Lago as I look out from the waters of Palm Beach, but it’s okay to look at an oil rig out from Hilton Head of Charleston, S.C.'”

Mallory Shelbourne has the rundown here.

 

Environment: President Trump said Wednesday that he might reverse his decision to pull the United States out of the Paris agreement on climate change.

In a joint press conference with Norwegian Prime Minister Erna Solberg, Trump reiterated his objections to the pact that former President Barack Obama helped negotiate but said there are circumstances in which he’d stop the exit process he announced last June.

“I will say that the Paris agreement, as drawn and as we signed, was very unfair to the United States. It put great penalties on us. It made it very difficult for us to deal in terms of business. It took away a lot of our asset values,” he said of the pact that includes every other member of the United Nations.

Trump also said he has “no problem” with the agreement, “but I had a problem with the agreement that they signed, because as usual, they made a bad deal.”

“So we could conceivably go back in,” Trump said, without expanding on what would have to happen or change.

Timothy Cama has more here.

 

Tech: Democrats are promising a showdown on the Senate floor over net neutrality, betting that the issue will give Republicans headaches ahead of the midterm elections.   

Using an obscure procedural tactic, the Democrats are moving to force a floor vote on a resolution that would block the Federal Communications Commission (FCC) from repealing net neutrality rules. Those rules, passed under former President Obama, required internet service providers to treat all web traffic equally.

The FCC’s decision last month to roll back the rules sparked a massive uproar, creating an issue that Democrats believe could prove politically potent in November.

By forcing a roll call vote on protecting the rules, Democrats are hoping to redirect public outrage — especially among young voters — toward congressional Republicans.

Harper Neidig has more here.

 

Finance: Sens. Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) have introduced a bill aimed at penalizing credit reporting agencies for breaches in the wake of the Equifax data hack.

The Data Breach Prevention and Compensation Act would provide the Federal Trade Commission (FTC) with more direct supervisory authority over data security at the agencies, as well as impose penalties on the agencies and provide consumers with compensation to prevent future breaches.

“We are introducing a bill today to say that when a credit reporting agency lets your data be stolen, that there are substantial automatic penalties that go into place, and there’s money that automatically goes back to the people whose data has been stolen,” Warren told CNN’s Alisyn Camerota on “New Day.”

Julia Manchester has more here.

 

Health care: South Dakota is set to join a growing list of states looking to impose work requirements on Medicaid recipients.

The state’s Republican Gov. Dennis Daugaard said Tuesday the state will ask the Trump administration for permission to require that work be a condition for eligibility.

“Work is an important part of personal fulfillment,” Daugaard said during his State of the State address.

“By making this adjustment to our Medicaid program, we can continue to help those who need it the most and start to connect those who can work with jobs that give them that sense of self-worth and accomplishment.”

Jessie Hellmann has the rest of the story here.

 

Finance: The IRS needs more funding as it implements Republicans’ new tax law, according to the agency’s in-house watchdog.

“The IRS will have a lot of issues to work through, and taxpayers will have a lot of questions,” National Taxpayer Advocate Nina Olson said in a news release Wednesday. “But with more funding, strong leadership, and a closer working relationship with Congress, I am convinced the IRS can do the job well.”

Olson submitted her annual report to Congress on Wednesday, which highlights the most serious problems facing taxpayers. She also made legislative recommendations for how to strengthen taxpayer rights and improve tax administration, which come as key House Republicans say they want to tackle IRS reform this year.

Naomi Jagoda has more here.

 

Finance: The Justice Department didn’t coordinate with the government agency responsible for advising banks in states where marijuana is legal when Attorney General Jeff Sessions rescinded an Obama-era policy that paved the way for the legal marijuana industry, according to a new report.

According to Reuters, congressional queries regarding the policy shift weren’t answered by the Treasury Department’s Financial Crimes Enforcement Network, which was reportedly caught off guard by the decision.

Sessions moved last week to rescind the 2013 Cole memo, which discouraged federal prosecutors from bringing marijuana-related charges in states where the substance had been legalized. 

The Justice Department declined to comment to Reuters about whether it coordinated the policy shift with the Financial Crimes Enforcement Network.

But Sessions’s memo rescinding the Obama-era policy did not address how financial institutions who do business with marijuana growers, processors and distributors should handle the new policy.

Max Greenwood has more here.

 

Elsewhere in the news:

Trump gets a reality check on deregulation (The Wall Street Journal)

Banks seek government help to track money laundering (The Wall Street Journal)

Minneapolis Fed proposes massive regulation change for big banks (CNBC)

Ford sued by truck owners, adding it to diesel defendants (Bloomberg)

EU: Internet giants not doing enough to take down illegal content (Reuters)