Report: Trump Deregulation Proceeds, But Threatened by Trump Regulation

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The Competitive Enterprise Institute issued a report today on the burden imposed by federal government regulations: Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State. 

The Trump administration’s efforts to deregulate have continued, ranging from his goal of two regulations eliminated for every new one imposed to the recent COVID-19-related Executive Order aimed at permanently eliminating regulations that hinder recovery.

That said, the federal government of late, particularly with spending, has grown by leaps and bounds. And Trump’s own regulatory impulses—implemented, pending, and potential actions on antitrust enforcement, trade restrictions, free speech, corporate welfare, and more — threaten those gains and undermine his deregulation goals, the report finds. 

“President Trump early on emphasized the need to help businesses succeed by cutting unneeded red tape, and during the COVID-19 pandemic he’s gone further with an Executive Order aimed at making temporary deregulations permanent,” said Clyde Wayne Crews Jr., author of the report and a CEI vice president. “There is a great deal more he can do unilaterally to streamline regulation and achieve a lasting legacy of deregulation. Ultimately, though, Congress must step in to make serious, permanent changes in the regulatory burdens that hold businesses back from economic recovery and success.”

Key facts and points in the report:

  • The aggregate cost of federal regulation remains more than $1.9 TRILLION annually – and that is a conservative estimate based on publicly available data from government, academia, and industry.

  • The cost of federal regulation to each U.S. household exceeds $14,000 annually, on average. For perspective, that equals about one-fifth (18 percent) of the average pre-tax household budget and is the second-biggest budget item after housing. 

  • The $1.9 trillion regulatory burden is almost equivalent to the $2.5 trillion COVID-19 Phase 3 stimulus bill Congress passed in April 2020. COVID stimulus cost taxpayers $2.5 trillion, but regulations impose a more hidden cost of $1.9 trillion – ouch!

  • The $1.9 trillion regulatory burden is equivalent to more than 40 percent of total federal spending, which was $4.447 trillion in 2019.

  • The $1.9 trillion “hidden tax” of regulation exceeds the corporate and personal income taxes combined. 

  • The cost of regulation ($1.9 trillion) + the cost of spending ($4.4 trillion) is equivalent to 30 percent of the economy (GDP $21.43 trillion). In other words, the cost of regulation combined with spending effectively negated 30 percent of what the US economy produced last year.

  • The number of new, final rules is way down under Trump: 9611 total over three years.

  • The number of pages in the Federal Register – one sort of measure of regulation – are fewer under President Trump compared to his predecessor. Trump has averaged 66,490 pages per year, compared to President Obama’s annual average of 80,420 pages per year.

  • For the first time, in fiscal year 2019, the administration did not meet the one-in, two-out goals as prescribed by Executive Order 13771. Instead of “one-in, two-out,” the ratio was 1.7 to one.

  • The “Unconstitutionality Index”—the ratio of rules issued by agencies relative to laws passed by Congress and signed by the president — underscores the rise of the administrative state over the Constitution. There were 28 rules for every law in 2019 (there had been 11 in 2018, see Figure 23). 

The report urges Congress to take responsibility by reviewing, debating, and voting on the most costly regulations. Specific reforms include: Executive Orders to permanently repeal recently waived regulations that were harming the coronavirus response, sunset dates for regulations, annual regulatory report cards with standardized, searchable information on existing and upcoming rules, and an independent regulatory reform commission to review existing regulations and recommend which ones to repeal.