The hidden growth of government in an age of less red tape

Recent editions of Ten Thousand Commandments detail how regulatory red tape mushroomed under Biden.

For vulnerable small business, the Small Business & Entrepreneurship Council noted overreach in the form of credit-card late-fee rules, antitrust activism, and new Labor Department mandates for independent contractors and franchises.

Trump 2.0 is the opposite, but with a big caveat, as I described in a new article at Forbes yesterday. In the one-in, ten-out era, conventional rulemaking has nearly dried up, with just over 2,000 final rules in the Federal Register so far, on track for the lowest count since the 1970s.

Earlier articles have detailed how many new rules are deregulatory “unrules”—rescissions, pauses, delays, or narrowed enforcement rather than new mandates. Not only that, but on the legislative side, nearly half of the 36 public laws signed by Trump through September are Congressional Review Act disapprovals wiping out late Biden-era regulations.

Of the 2,029 finalized rules so far, 510 affect small business, and only 21 are “significant,” implying major economic effects. Projecting small business rules for year-end looks like this:

Photo Credit: Getty

As for the projected 27 significant rules among an anticipated total of around 652 affecting small businesses, levels have never been this low. And even some of these few are deregulatory, such as:

  • Delaying costly trichloroethylene rules, preserving prior chemical-use standards.
  • Allowing telemedicine for buprenorphine treatment, ending in-person visit mandates.
  • Suspending certain Federal Aviation Administration drug-testing rules for foreign repair stations, easing compliance.
  • Extending certain beneficial-ownership deadlines, exempting many small firms.

This regulatory drought is fragile, though. Apart from the CRA resolutions of disapproval, many Trump changes are temporary. Congress would need to act to make streamlining permanent but other than moves such as Sen. Joni Ernst’s (R-IA) “Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act,” it has shown little enthusiasm for regulatory reform. Attempts to incorporate general regulatory streamlining into budget bills have also failed.

Of even greater risk to the overall regulatory streamlining project—and to the broader liberty movement itself, for that matter—is that Washington’s influence continues through a plethora of other expanding channels. Trump’s antitrust intervention, tariffs, federal equity stakes in private firms, and more, show that Washington’s reach extends far beyond shiny formal rulemakings that can easily be counted for one-in, ten-out updates.

Also under Trump, grants, subsidies, loan guarantees, contracting, and the procurement behemoth continue despite some admirable Department of Government Efficiency (DOGE) cuts, blurring the line between the public and private. If I were to somehow translate all this off-the-books federal intervention—stuff that doesn’t necessarily show up in the Federal Register—the 2025 bars in my chart above would be, unfortunately, rather tall. Maybe higher than the earlier years.  

Alongside Trump’s streamlining of conventional notice and comment regulation, which we still must regard as unprecedented despite the swampy caveats above, the Small Business Administration’s Office of Advocacy has pushed deregulation across agencies, offering advice to the likes of the Federal Communications Commission and the Interior Department on their purging campaigns.

It’s been a powerful pushback: yet even the Small Business Association is expanding its financial footprint. In the Trump administration, it has boasted of a 74 percent spike in manufacturing loans and has launched its first-ever manufacturing line-of-credit program. That’s not deregulation, it’s deeper entanglement.

The worsening problem is that too many firms now chase government favor instead of rising to meet actual market demand. Where unfunded mandates in the past led to demands for regulatory reform, today’s mandates are deliberately funded by a $7 trillion federal budget, pacifying what should be furious opposition to the federal interventionist state.  

Policymakers beware and pay attention: traditional rulemaking may have cratered under Trump, but the broader regulatory state definitely has not. True small-business freedom will require Congress to tackle the entire federal footprint by making Trump’s streamlining permanent, as well as ending the funding for the agencies that fuel it all.  

Politicians love to call small business the engine of the economy. To keep that motor running, they have to get us out of the spending/regulation trap they have created. To do so, they need to recognize that in government as big as this one—one so tightly fused to what should be a private sector—fewer rules don’t necessarily mean less red tape.

For more, see:

“Small Business Regulation Is Cratering – Here’s The Hidden Catch,” Forbes