When President Trump first took office he issued a handful of executive orders to cut red tape and reduce the ways that Washington micromanages Americans’ lives. As the news cycle has shifted to Russia, Syria and tax reform, among other things, the administration has quietly used tools like Trump’s one-in-two-out process to slow the growth of federal regulations that dictate what Americans can buy, sell and even do on a day-to-day basis.
Trump’s regulatory reform efforts saved the economy about $570 million in 2017. When compared to the cost of federal regulations, that barely makes a dent, but it’s a start. The U.S. budget is approximately $4 trillion. Though they provide benefits, federal regulations cost Americans and the economy nearly half of that ever year, according to an estimate by the Competitive Enterprise Institute. With an annual tab of almost $1.9 trillion, federal regulations cost nearly $15,000 per household.
Shining some light on this hidden tax and reducing the burden of federal rules on U.S. innovators and entrepreneurs is a rare bright spot for the Trump administration. In fact, his predecessors set the bar so low that Trump could already be considered one of the the most successful deregulatory presidents in 40 years. In 2017, federal regulators issued the lowest number of final rules — 3,281 — since the National Archives began publishing these numbers in 1976. But the important question for Americans is: Will it last?
The answer is: only if Congress helps out. Despite a number of executive orders, if you look at the long-term outlook, federal agencies already have a slew of regulations planned that could reverse Trump’s early progress. To prevent erasing gains made thus far, Congress needs to give Trump’s reforms legislative teeth before his affinities for protectionism and antitrust get in the way, and before the next administration reverses course with the stroke of a pen.
One promising proposal in Congress is a regulatory budget. This would build on Trump’s executive order that only allows agencies to issue a new rule if the net costs are zero. Just as the federal government releases an annual spending budget, an annual regulatory budget would allow each federal agency a certain amount of costs that they could impose on American businesses and consumers. This would force agencies to prioritize rules that are efficient and effective, and ditch rules that are outdated, burdensome or fail to accomplish their goals.
As it is now, agencies largely police themselves, allowing them to get away with number-fudging and skewed assumptions without adequate oversight or accountability. To date, Congress has been unwilling to step in, preferring to blame unelected agencies when a regulation is unpopular or controversial. A regulatory budget would restore some accountability to agency behavior, while allowing Congress to set the rules of the road.
Although a regulatory budget would be a good start, it alone will not solve our problems. Without clear, uniform standards for calculating regulatory costs, it is difficult, if not impossible, to gauge with precision how well agencies are keeping to their allotted budgets.
An even more important reform that Congress could pass would require lawmakers to vote on costly, complex and controversial rules before agency rules become effective on the public. This would prevent members of Congress from shirking responsibility and the blame-game between Congress and agencies for undesirable regulations.
Increasing transparency, accountability and disclosure should appeal to both sides of the political aisle. At a minimum, policymakers and the public need to be able to gauge what is happening in Washington and how agencies are doing their jobs.
As both parties have reminded us for decades, a government that tries to do everything does nothing well. Rather than spread itself thin, government should concentrate on its core responsibilities and take steps to ensure open, competitive markets — itself an important form of regulation on behalf of the consumer.
Eventually, politicians will be forced to get spending and deficits under control, but regulatory reforms are just as important to keep the economy growing and moving forward. Cutting red tape and freeing entrepreneurs to innovate will enrich society and give consumers more choice and likely more money in their pockets. And by making the overall economy healthier, Congress could in turn improve the unhealthy federal budget in the process, making a politically difficult job a little easier and more attainable.