The Surprising Deregulation Legacy Of Jimmy Carter—And Why It Still Matters

In the Wall Street Journal, former Texas Sen. Phil Gramm shared a compelling account of how President Jimmy Carter—who turns 100 October 1—has not received the credit he deserves for the economic deregulation of the 1970s and early 1980s. Outlining the transformative legislative efforts of that era, Gramm wrote:

Without Mr. Carter’s deregulation of airlines, trucking, railroads, energy and communications, America might not have had the ability to diversify its economy and lead the world in high-tech development when our postwar domination of manufacturing ended in the late 1970s. The Carter deregulation helped fuel the Reagan economic renaissance and continues to make possible the powerful innovations that remake our world.

Carter also deserves recognition for promoting the concept of a regulatory budget—a notion now commonly associated with Republicans, but which Carter pioneered during his presidency.

A New Era of Expanding Regulation

While Carter’s era saw a significant rollback in economic regulation, today’s policymakers seem incapable of creating a similar sustained program for downsizing government spending, subsidies and the sprawling regulatory state. In fact, we’ve seen a return to, and even an expansion of, the regulatory frameworks that Carter helped dismantle with surges in economic, technology and social policy regulation.

Budget battles have been put on temporary hold with winks and secret handshakes ahead of the 2024 election, but trillion-dollar interest payments and a looming debt ceiling crisis await in early 2025. The successor to the Congress that just scooted out of town after approving yet another signature stopgap spending extension must acknowledge the urgent need for sweeping eliminations of federal departments and agencies as a prerequisite for meaningful spending and regulatory reductions.

As Gramm noted, Carter’s elimination of the Civil Aeronautics Board was a significant triumph; however, new proposals for airline regulation have gained traction in the Biden administration. This underscores the reality that departments, agencies, commissions, and offices responsible for allocating spending and administering regulations are created far more frequently than they are eliminated.

As Congress confronts the reality that the federal government cannot—and should not—do it all, the question arises: What happens to the rules and regulations administered by a shuttered agency?

This is a key question for the 119th and future Congresses. The answer will depend on the specifics of “Terminator” legislation aimed at abolishing agencies. Such legislation should also explicitly repeal or sunset the rules and regulations once enforced by these agencies, ensuring that their regulatory influence and legal effect vanishes alongside. The aim would be for administrators to pursue other interests in the private economy or spend more time with their families. But it has not quite worked out that way.

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