President Donald Trump is capping the end of the fiscal year and beginning the new one with high-profile events on tax reform and cutting red tape, respectively. He highlighted these issues in a speech to the National Association of Manufacturers on Friday, the last working day of the federal government’s 2017 fiscal year. Then on Monday, the 2018 fiscal year starts, and the White House will host a "Cut the Red Tape" event to discuss the administration’s regulatory reform plans.
Trump’s focus on tax reform and cutting red tape is exceptionally good news for consumers, businesses and the economy. In recent years, I’ve estimated the baseline for the U.S. federal regulatory burden has amounted to nearly $2 trillion annually. This amounts to a hidden tax of nearly $15,000 per household in a given year.
Getting rid of complicated and unnecessary rules would create a fairer and simpler system that will help get America working for everyone. The combination of regulatory reform and tax reform would jumpstart the economy, finally resulting in the economic relief Americans have been waiting for: more jobs and higher wages. It would also help small business owners, driving more growth, investment, and productivity.
As we continue to watch the president’s progress on his economic priorities, it’s interesting to compare Trump with previous presidents, namely Ronald Reagan. Under Reagan, both regulations and Federal Register pages (where agency rules and regulations are published) dropped more than one-third. So far, Trump has reduced the flow of regulation even more.
Even though Congress has yet to send regulatory reform legislation to the president’s desk, this week’s “cut red tape” push follows three important efforts already initiated by the White House:
- Trump’s January executive order requiring agencies to eliminate at least two rules for every new regulation adopted, and that they ensure net new regulatory costs of zero;
- A sweeping Reorganization Executive Order that requires the Office of Management and Budget to submit a plan aimed at streamlining and reducing the size of the administrative state generally. This plan will set the tone for Trump’s budget proposal next year.
- A memorandum from the new Office of Information and Regulatory Affairs (OIRA) administrator Neomi Rao directing agencies, for the first time as far as I can tell, to propose an overall incremental regulatory cost allowance for the agency in the new edition of their “Unified Agenda” on regulations. This report will appear in the fall. Prior editions, since the 1980s, would label rules as “economically significant,” but never has there been such a “regulatory budget.” Rao says, “OMB expects that each agency will propose a net reduction in total incremental regulatory costs for FY 2018.”
Although there is much regulation that cannot be counted, if we’re going to keep the executive branch in check, we must try to get a handle on what federal agencies are actually doing. For example, in the same way that President Obama invoked the “pen and phone” to go around Congress, agencies did so too. As a result, we call the multitude of guidances, notices, memoranda and the like, “regulatory dark matter,” and have started to catalog it. Trump’s agencies have eliminated some of the higher-profile, “dark matter” actions of Obama administration.
- The transgender bathroom “guidelines” – neither a law, nor a regulation that went through – are gone.
- The Department of Labor’s controversial “Administrator’s Interpretations” on franchising and on independent contracting is also gone.
As for ordinary rules, Trump had prominently declared that 70 percent of regulations "can go," and issued a regulatory freeze early in his term. The Interior Department followed suit and talked of reducing its regulations by 50 percent.
According to the data below, President Trump compared to his predecessors is—so far—the least regulatory president of all. Let’s look at the end of his first fiscal year.
Trump’s Federal Register Reduced Sets a Record
- The Federal Register stands at 45,678 pages. Last year at this time, Barack Obama’s Federal Register stood at 67,900 pages. (Obama’s 2016 Federal Register set an all-time-record: 97,110 pages).
- Compared to Obama at this time last year, Trump’s page count is down 32 percent so far in his first year.
- It took a few years for Ronald Reagan to achieve his ultimate, one-third reduction in Federal Register pages following Jimmy Carter’s then-record Federal Register. So by this metric, Trump is moving much faster.
Trump Final Rules at Fiscal Year-End Compared to Obama
Let’s also review executive branch and independent agency rules the Trump administration has issued so far compared to the same period under President Obama in 2016 (Jan. 20-Sept. 30).
Nine Months of Trump Regulations vs. Obama (Jan 20-September 30)
Rules “Significant” Rules
Trump 2017 2,183 116
Obama 2016 2,686 274
In nine months, the Trump administration has issued 2,183 rules. Obama issued 2,686 rules in the corresponding time period in 2016. Trump’s tally represents an 18 percent decrease.
Keep in mind, even getting rid of a rule requires issuing a “rule” in order to comply with the Administrative Procedure Act’s notice-and-comment requirements. So these tallies may obscure that some of Trump’s rules have been eliminations or delays of earlier rules that hadn’t reached their effective date. For example, here are several delayed Environmental Protection Agency rules. Moreover, new costs agencies impose must be zero. (CEI has urged that Congress, or Trump via executive order, needs to change the nomenclature for a rollback so we can compare apples and oranges).
Significant rules issued, generally those with an impact of $100 million or more, are down an astonishing 58 percent compared to Obama. Trump’s agencies issued 116 significant final rules during his first nine months, while Obama’s issued 274 over the corresponding nine-month period in 2016. This also ignores any portion of Trump’s rules that are deferrals or freezes.
Rules Cooking in the Oven Are Way Down
The tally above is for rules finalized. Proposed rules are those being created, those in the process of being written, and those being commented upon. Their bulk implies either a higher or lower level of final rules (what we just covered) one would expect to see later.
In addition to final rules being down under Trump, overall proposed rules are down even more. The vibe in the Trump administration is to lessen what goes into the pipeline in the first place. Below, I also compare Trump to George W. Bush and Bill Clinton.
Trump’s First Fiscal Year: Proposed Rules Compared to Predecessors
(January 20 - September 30)
Proposed Rules “Significant” Proposed Rules
Trump (2017) 1241 65
Obama (2016) 1737 290
Obama (2009) 1413 216
Bush (2008) 1707 276
Bush (2001) 1757 129
Clinton (2000) 1976 198
Clinton (1997) 2134 169
Trump’s overall proposed rules in the pipeline are far below any of his predecessors (calendar-year comparisons may be found at www.tenthousandcommandments.com).
They are down a down 28 percent compared to the corresponding time frame from Obama’s final year. Trump: 1241, Obama: 1737.
Note that Trump’s “significant” proposed rules are drastically below any predecessor. They are down 77 percent compared to Obama. Trump: 65, Obama: 290.