Pulling the Administrative State off Autopilot
Reducing burdensome regulations could unleash the full potential of America
This past weekend marked President Trump’s 100th day in office. While tax cuts and health care reform have been discussed, neither has moved forward. With a potential fight over the debt limit looming, there is surely a lot that could be said about what Mr. Trump has and has not accomplished over the last few months. But there is at least one bright spot: reducing burdensome federal regulations.
When it comes to confronting excessive federal regulation, from signing a Congressional Review Act resolution to roll back the Federal Communications Commissions’ broadband privacy rules to his executive order asking the Environmental Protection Agency to review its Clean Power Plan, the Trump administration has, so far, delivered on promises.
During the campaign, candidate Trump promised a regulatory freeze and to use the two rules out for every rule in regulatory framework. Right after inauguration, both were done, plus he added a directive that new regulatory costs imposed by agencies should not exceed “zero,” so the costs have to be fully offset. To date, Mr. Trump has also signed 13 resolutions disapproving and rescinding last-minute Obama regulations. This means federal regulation has largely stopped in 2017, by greater than the 70 percent Mr. Trump originally promised, at least for the time being.
This is exceptionally good news for consumers, businesses and the economy since, in recent years, I’ve estimated the baseline for the U.S. federal regulatory burden has amounted to nearly $2 trillion annually. This amounts to a hidden tax of nearly $15,000 per household in a given year.
If you compare Mr. Trump to President Obama in 2016 for the same 100-day period, Jan. 20 to April 24, Mr. Obama issued 891 rules while the Trump administration has issued 696 rules since Inauguration Day. That’s a 28 percent decrease from Mr. Obama in 2016 to Mr. Trump today, not even taking into account that many of Mr. Trump’s “rules” aren’t rules at all, but deferrals or freezes like several EPA rules. Dozens of Mr. Trump’s rules were federal aviation airworthiness directives — nearly 100 — and numerous related to U.S. Coast Guard operations, such as drawbridges.
It is particularly heartening the Trump administration has incorporated “regulatory dark matter,” the tens of thousands of documents federal agencies use to circumvent Congress and overstep their authority, into his reforms for the enormous and costly administrative state, including his regulatory freeze and the one-in, two-out requirement. Agency dark matter consists of all the memoranda, guidance, notices, bulletins and other proclamations — including threats and bad publicity — that bureaucrats use to create or influence policy. This runs contrary to the law, specifically the 1946 Administrative Procedure Act.
Mr. Trump’s efforts so far have been focused on regulating bureaucrats rather than the private sector, issuing rules to limit their rules. It was President Reagan who first set up via executive order the procedure for central oversight of rules through the Office of Management and Budget, a process later presidents continued and still governs today. Reagan reduced federal regulation by more than one-third. Mr. Trump appears to be operating in a similar fashion.
Even with all these actions from the executive branch, there is still one large barrier to regulatory reform that remains: the U.S. Senate. Mr. Trump’s economic liberalization agenda ultimately will require congressional action to codify the reforms he has requested. The House of Representatives passed the REINS Act, which requires congressional approval of the largest agency rules, and the Regulatory Accountability Act, an assortment of reforms to increase governance, oversight and accountability for rule making. But the Senate has yet to act on anything apart from using the Congressional Review Act to disapprove certain Obama rules, and doesn’t appear to have the 60 votes to move more comprehensive regulatory reforms to the floor.
The Senate needs to recognize that regulatory reform has bipartisan pedigree. And regardless of the knock-down, drag-out fights Congress is sure to have over health care and tax reform, regulatory reform shouldn’t be a heavy lift. In fact, small compromises to pass some truly beneficial regulatory reform measures would both give members something to tout and hopefully give voters a little confidence back showing that Congress can still, in fact, accomplish something that’s good and beneficial for the American people. Surprisingly enough, the precursor to Mr. Trump’s rule-in, rule-out effort was first promoted by Sen. Mark Warner, Virginia Democrat, and his regulatory pay-go, or one-in, one out idea. Mr. Trump’s regulatory reviews, reductions and task forces also have similarities to Maine’s Sen. Angus King and his “regulatory improvement commission” idea.
Deflating the bloat of a federal government that otherwise seeks only to expand will require continued vigilance, including questioning the very roles and legitimacy of agencies and how they regulate the economy and competition in some cases. It will require challenging the very premise that the administrative state consists solely of impartial experts, who always advance the interests of a nation and its citizens. The growth of the administrative state has been on autopilot for too long, crushing innovation and entrepreneurship. It’s time to review, reform and potentially completely reorganize the regulatory state and unleash America’s wealth-creating and job-creating potential.
Originally posted to The Washington Times.