A Proposed 13-Point Trump Agenda For Economic Stimulus By Reforming Regulation
I remembered wondering in 2017 whether the federal government would be larger or smaller after four years of Trump.
We had our answer even before the recent string of economic recovery packages, but the debt just topped $25 trillion last week, according to Treasury. The Congressional Budget Office projects the annual deficit alone to top $3.7 trillion, a figure higher than all federal outlays as recently as 2015.
White House and congressional negotiation on still another economic stimulus package is now on hold, probably until June. But it’s coming, and entails yet more borrowing and spending: on state bailouts, aid to households, and infrastructure.
There are steps Congress can take to “deregulate to stimulate” the economy and decrease uncertainty, such as the bipartisan regulatory reduction commission some have been recommending for decades. But so far, no such bipartisan impulses are apparent.
While there has been some rollback of regulation in recent weeks it pales compared to the reality of lockdown, and one strains to believe this Congress will take aggressive steps to permanently eject the never needed regulations highlighted during the last two months. Regulatory liberalization compared to the spending explosion simply has has not gained any traction.
Here’s hoping I’m wrong. We could test it by asking Congress to pass a law codifying all four of former president Obama’s domestic regulatory oversight executive orders.
In the meantime, president Trump can and should use a meataxe on regulation unilaterally, going further than he has on earlier executive orders requiring regulatory review, oversight, streamlining and reduction, such as with the notorious one-in, two-out program.
Obama proclaimed “we can’t afford to wait” when stumping for $800 billion stimulus in the 2009 downturn. Now that we’re well over three times “affording” that dollar amount in the 2020 version of “spendulus,” we badly need alternatives. The administration is already pondering some unilateral steps like further extending the tax-filing deadline and providing some employer liability protections (which is risky and regulatory, and therefore another story).
Trump can’t zap major regulatory laws unilaterally, but there are certain modest-to-meataxe steps the administration could take in the forms of streamlining and sweeping regulatory reductions. What follows are examples of some of these from “One Nation, Ungovernable” that are applicable now; for a slightly deeper look on each follow the links.
One: Implement a regulatory moratorium. That is, freeze the issuance of new regulations altogether where their pouring forth isn’t mandated by Congress.
Two: Boost regulatory review resources and free market law and economics staff at agencies, and also at the Office of Information and Regulatory Affairs (OIRA). The latter is the entity charged with reviewing agencies’ rules for cost effectiveness.
Three: Professionalize and systematize review, revision, repeal and sun-setting of regulations. This could be an executive branch version of the congressional reduction commission noted earlier.
Four: Expand the number of rules receiving cost analysis such as by reducing dollar thresholds that trigger mandatory “Regulatory Impact Analyses” of agency rules.
Five: Scrutinize all agency decrees that affect the public, not just “rules.” Late last year the Trump administration issued executive orders to rein in the abuse of so-called guidance documents, but early indications were that agencies are not following through on compiling the required guidance inventory and assessments. Even apart from the current economic troubles, this necessitates a new Trump order to tie up these loose ends, as well as to address the agency personnel engaging in guidance abuse and ignoring the new process.
Six: Enhance and give teeth to rule disclosure in the Unified Agenda of Federal Regulations, the twice-yearly planning document in which agencies present their regulatory priorities.
Seven: Track and tally the federal regulations that accumulate as specific businesses sectors grow.
Eight: Provide detailed annual report cards on regulations. “Measure what is measurable, and make measurable what is not so,” is a quote sometimes attributed to Galileo that he probably never uttered; still, we need need numbers quantifying what agencies do and when the do and do not follow procedure.
Nine: Find creative ways to improve transparency and clarify regulatory impact, such as by designating multiple classes of “major” or “economically significant” rules.
Ten: Account for and report separately on economic, health and safety, environmental, labor and social engineering regulations. Relatedly, independent agencies like the Federal Communications Commission and the Consumer Financial Protection Bureau need more scrutiny as well as different approaches to reform. Trump can incorporate them into cost-analysis executive orders that apply to executive agencies.
Eleven: The administration should improve assessment and analysis of “transfer” costs and recognize deadweight costs of government in regulatory reporting. Retirement/Social Security and health care/Medicare were government takeovers that became untouchable after a few generations passed. The situation with Obamacare is similar. Big spending is also big regulation, and can be seen today in the progressive wish-list items being attached to spending stimulus.
Twelve: Regulatory analysis tends to emphasize compliance costs. That needs to be extended so that policymakers acknowledge and minimize the far greater indirect costs of regulations
Thirteen: Trump should formalize “do not regulate” reporting and offices in the government. Call it the “Office of No.” Here I’m not just talking about more resources for OIRA or establishing a Congressional Office of Regulatory Analysis, but an entity or entities actually formally chartered with an anti-regulatory “bias” to offset the pro-regulatory bias prevailing in the entire rest of the federal government, including its independent agencies.
The job would be to explain the reasons, in every instance, not to regulate. Regulation requires something other than a bureaucracy; the concerns that agencies purport to “regulate” (privacy, financial stability, Internet access, food safety, and so forth) are forms of wealth and require something apart from the man-made administrative behemoths created by long-dead ideologues and/or rent-seekers, that didn’t and do not work, and that are increasingly abusive yet accountable to no one.
The gist of unilateral regulatory reform “stimulus” is to not just to streamline, but to prevent agencies from creating new rules in areas where Congress hasn’t explicitly authorized it by distinctly voting to delegate legislative authority.
An economy as healthy as possible, one unencumbered by needless regulation, is one that will be more resilient in the face of the next crisis; and with luck, one more resistant to the flash policy of spendulus.