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Trump Must Collaborate and Persuade to Advance Regulatory Reform

Tonight a new President will step to the lectern in the historic House chamber to deliver an address to a joint session of Congress. At the same time, though, he’ll also be speaking over the heads of the assembled politicians to the American public. While his day-to-day job is managing the federal leviathan, the opportunity tonight is to use his office to persuade both policymakers and everyday Americans to support an agenda. His ability to collaborate and persuade will define what his administration is able to accomplish beyond the initial flurry of cabinet appointments and executive orders.

The President campaigned as a man of action, who can get the nation a good deal and fix what is broken. With that in mind, we should expect to hear a good deal about the early executive orders out of the White House. He has vindicated the rule of law by restarting private infrastructure projects like the Dakota Access and the Keystone XL Pipelines. Both are vital components of a national strategy to deliver plentiful, accessible, and affordable energy. Looking at the data, it is pretty clear that when America has energy, it has economic growth. Time and again, it is economic growth that delivers the technologies and the means to create healthier, cleaner, and more vital environmental spaces.

The President has also shown an early commitment to fundamental regulatory reform. Of the three issues that he consistently campaigned on for more than 18 months – the others including America’s relationship with China and establishing a border wall and new immigration policy – it is the one where I find the good news. Federal regulation imposes nearly $1.9 trillion in costs on American entrepreneurs and families every year.

The President’s recent executive orders established a regulatory moratorium and demonstrated commitment to a rudimentary regulatory budget by requiring each new regulation to see two old regulations fall by the wayside. Perhaps most importantly and little noticed, President Trump extended the work of President Obama on this front by covering agency guidance. Agency guidance documents, memoranda, bulletins, and notices are not subject to review or public comment like ordinary regulation and are frequently used as a way to circumvent Congress and the voice of the American people.

In the last year, there were 18 rules and regulations for every law passed by Congress. In order to achieve lasting success, the President will have to help Congress – using that power of his office to spotlight the issue and persuade lawmakers – to stop writing laws which cede overwhelming authority and discretion to the regulatory state.

Profligate government spending – on infrastructure or any other good – will neither create jobs nor boost the economy. However, we can count on seeing proposals for trillion-dollar works projects that will stimulate waste and unseemly political favoritism. Fundamentally, there are two ways to allocate resources in a diverse, pluralistic and advanced society. We can use market forces or the force of political systems. The former deliver efficient allocations through price signals and incentives toward efficiency.

Allocating infrastructure dollars through the meat grinder of politics promises an abundance of funds for new projects promoted by politically-favored constituencies, and dramatic under-allocation of resources for maintenance of and improvements to critical facilities.

The initial frenetic energy that drove an upstart campaign toward transition into a governing administration will certainly stabilize. What happens next, in a constitutional republic built on a system of shared powers and strong checks and balances, is certainly not known. For the President to advance his agenda for reforming the overreaching regulatory state, however, he will need a partnership with Congress—no matter how many times he speaks directly to the American public.