How The Next President Can Use Executive Power To Jumpstart Economic Growth On Day One (Part 1)
After what will have been eight years of debate over executive overreach and Barack Obama’s “pen and phone,” and it will be time for “liberty’s meataxe” when it comes to government programs.
Regulatory liberalization, when it ever happened, has been bipartisan and popular. There was transportation and financial liberalization in the late 70s and 80s, and unfunded mandate relief in the 1990s.
In the current presidential race, both Hillary Clinton and Donald Trump proposed regulatory relief in their August national economic addresses.
Clinton promised “new national initiatives to cut red tape at every level” and acknowledged complex tax filing as problematic for small business and entrepreneurship. Trump promised to ”issue a temporary moratorium on new agency regulations” and to “cut regulations massively.”
Much fretting has accompanied Obama’s executive actions that have encouraged over-regulation. But interestingly enough, the first thing for a new president to do, whichever of these individuals gets the job, is to reaffirm one executive order that did actually cut regulation in America, at least in terms of Federal Register pages, and numbers of rules and regulations.
Let’s back up a moment, first.
Obama gained a reputation or executive actions that color outside the lines of the separation of powers, and it’s not just Republicans who said so.
So not surprisingly, during the primaries, some presidential candidates promised to roll his executive actions back, within the rule of law. Sen. Ted Cruz, for example, told the Washington Post that:
"Everything put in place by executive order can be undone by executive order…So it would be my intention in the weeks leading up to being sworn into office to engage in a careful, systematic review of each executive action and to rescind every one of them that exceeds the Constitutional and legal authority of the president."
Similarly, Donald Trump remarked, “the one thing good about executive orders: The new president, if he comes in—boom, first day, first hour, first minute, you can rescind that,” such as any Obama actions on firearms that Trump vowed to “unsign.”
Actually, it is the Obama administration’s “memoranda” that have propelled the pen and phone even more than formal executive orders, and federal agencies are on autopilot besides. All this cements the case for reevaluation of the regulatory status quo by a new president. Alongside the purging of existing invalid decrees, the next president should limit the scope of future government with a technique Ronald Reagan used in the 1980s.
As the nearby chart shows, Federal Register pages skyrocketed during the 1970s after the creation of several bureaucracies, peaking at 73,258 in 1980 (These bodies included the Occupational Safety and Health Administration, the Consumer Product Safety Commission the Environmental Protection Agency and the National Highway Traffic Safety Administration under Richard Nixon, and the Department of Energy under Jimmy Carter.)
Reagan took office in 1981; note that pages declined to a low of 44,812 in 1986. That was a 28,446-page drop (leave aside for now that pages now top 80,000 annually).
Within those pages, thousands of rules issue each year. Mirroring Federal Register pages, rules peaked at 7,745 in 1980. They declined during the Reagan decade to as low as 4,589; a second chart shows that.
What happened? Arguably President Reagan’s February 17, 1981 Executive Order 12291 made a difference in volume. Reagan’s order required that new major executive agency regulations’ benefits “outweigh” costs where not prohibited by statute. It also provided for the Office of Information and Regulatory Affairs within the White House Office of Management and Budget to more formally review agencies rules and analyses.
Agencies eventually found a way to compensate and resume regulatory output—things begin to tick back upward especially with post-Reagan legislation such as the Americans with Disabilities Act and the Clean Air Act Amendments in 1990. And glaringly, the rules of independent agencies (like the Federal Communications Commission, and the Consumer Financial Protection Bureau) were exempt from E.O. 12291 review procedures and remain so under subsequent orders.
Next time we’ll talk about how Reagan’s executive order and accompanying oversight became diluted, and name the lessons for a new president who takes seriously the concerns of red tape.
(This writeup is based on my recent report, “Channeling Reagan by Executive Order.”)
Originally posted to Forbes.