Don’t let the next crisis grow the government—again

“Now, I’m going to sign this, and it’s a great honor — $6.2 trillion.  I’ve never signed anything with a “T” on it.  (Laughter.)  I don’t know if I can handle this one, Mitch.  (Laughter.)  We can’t chicken out at this point, can we?  (Laughter.)  I don’t think so, huh?”

—Remarks by President Trump at Signing of H.R.748, The CARES Act

Apart from highly discordant tones like antitrust activism and tariffs, the Trump administration’s second term has reignited the deregulatory engine on a scale not seen since the mid-1990s—with executive actions targeting red tape, bureaucratic overreach, the taxpayer-funding of partisan agendas, and more. This is encouraging—but we’ve been here enough times before to know not to get complacent.

First, Congress will need to act to make the best of these changes permanent. We know that with certainty because Joe Biden’s executive orders four years ago overturned nearly the entire streamlining agenda of Trump’s first term.

But more than that—as Trump’s remark above to Mitch McConnell upon the signing of the Coronavirus Aid, Relief, and Economic Security Act reminds us—Congress should also act to prevent the next crisis from fueling yet another explosion in government size, scope, and spending. Otherwise, any gains of Trump 2.0 are likely to get wiped out.

As laid out in a new Forbes article, history serves as a warning that even the best fiscal and deregulatory progress can vanish overnight when a crisis hits. After 9/11, the 2008 financial collapse, and COVID-19, Washington responded with massive new spending, bailouts, and expanded regulatory regimes. Both parties played a role.

That’s why we need an “Abuse-of-Crisis (AOC) Prevention Act”—a legislative framework that, among other steps, would:

• Lock in constraints on spending and regulation during emergencies;
• Prohibit federal bailouts and subsidies; and
• Make crisis-era expansions reversible, not permanent

Recent moves from the Trump administration—like an executive directive promoting state-level crisis preparedness and new scrutiny of federal grants and contracts—are strong starts. But executive actions alone can’t defeat the deeper machinery of crisis opportunism. Congress must step in.

What should an AOC Prevention Act do?

Comprehensive downsizing: Eliminate entire agencies by repealing enabling statutes. Replace sprawling programs with privatization and devolve power to states and communities. A codified version of the Department of Government Efficiency could become the institutional driver of this shift, and safeguard gains.

Business resilience: One step here could be reforming Internal Revenue Service rules that limit how much firms can save for a rainy day. Current “reasonable business needs” restrictions can undermine preparedness. Long-term, we may need a constitutional amendment to ban bailouts outright.

Intergenerational wealth: Shift from dependency to self-reliance. That means rejecting proposals like universal basic income, previewed during the COVID-era Economic Impact Payments. Instead, promote savings and give young Americans the choice to opt out of federal entitlement programs that do not repay what gets put in.

Restored federalism: End the federal grants-in-aid regime—now soaring into the hundreds of billions of dollars—and let states control their own funds. Genuine state sovereignty means less federal leverage.

Emergency powers restraint: Require Congress to reauthorize emergency declarations and decentralize casualty insurance markets to reduce federal moral hazard.

That’s a sketch, but the bottom line? Economic shocks are inevitable, but runaway government expansion doesn’t have to be. A serious AOC Prevention Act can help the country weather the next crisis without losing more liberty in the process.

For more, see:

“Trump Reforms Die Without An Abuse-Of-Crisis Prevention Act,” Forbes

The Case for Letting Crises Go to Waste How an “Abuse-of-Crisis Prevention Act” Can Help Rein in Runaway Government Growth, Competitive Enterprise Institute

“A Constitutional Amendment Banning Subsidies, Grants And Loan Guarantees,” Forbes