Red Tape Rollback: Trump Least-Regulatory President Since Reagan

Trump’s presidency is quietly lurching the country rightward.

The big ticket items may be stalling, but there are lots and lots and lots of left-wing regulations being undone.

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The Trump mode has been to regulate bureaucrats rather than the public. New, large-scale regulation has largely stopped in 2017, and where it hasn’t, new costs are required to be offset.

President Donald Trump is capping the end of the fiscal year and beginning the new one with high-profile events on tax reform and cutting red tape, respectively. He highlighted these issues in a speech to the National Association of Manufacturers on Friday, the last working day of the federal government’s 2017 fiscal year. Then on Monday, the 2018 fiscal year starts, and the White House will host a “Cut the Red Tape” event to discuss the administration’s regulatory reform plans.

Trump’s focus on tax reform and cutting red tape is exceptionally good news for consumers, businesses and the economy. 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. 

Getting rid of complicated and unnecessary rules would create a fairer and simpler system that will help get America working for everyone. The combination of regulatory reform and tax reform would jumpstart the economy, finally resulting in the economic relief Americans have been waiting for: more jobs and higher wages. It would also help small business owners, driving more growth, investment, and productivity.  

As we continue to watch the president’s progress on his economic priorities, it’s interesting to compare Trump with previous presidents, namely Ronald Reagan. Under Reagan, both regulations and Federal Register pages (where agency rules and regulations are published) dropped more than one-third. So far, Trump has reduced the flow of regulation even more.

Even though Congress has yet to send regulatory reform legislation to the president’s desk, this week’s “cut red tape” push follows three important efforts already initiated by the White House:

1. Trump’s January executive order requiring agencies to eliminate at least two rules for every new regulation adopted, and that they ensure net new regulatory costs of zero;
2. A sweeping  Reorganization Executive Order that requires the Office of Management and Budget to submit a plan aimed at streamlining and reducing the size of the administrative state generally. This plan will set the tone for Trump’s budget proposal next year.
3. A memorandum from the new Office of Information and Regulatory Affairs (OIRA) administrator Neomi Rao directing agencies, for the first time as far as I can tell, to propose an overall incremental regulatory cost allowance for the agency in the new edition of their “Unified Agenda” on regulations. This report will appear in the fall. Prior editions, since the 1980s, would label rules as “economically significant,” but never has there been such a “regulatory budget.” Rao says, “OMB expects that each agency will propose a net reduction in total incremental regulatory costs for FY 2018.”

Although there is much regulation that cannot be counted, if we’re going to keep the executive branch in check, we must try to get a handle on what federal agencies are actually doing. For example, in the same way that President Obama invoked the “pen and phone” to go around Congress, agencies did so too. As a result, we call the multitude of guidances, notices, memoranda and the like, “regulatory dark matter,” and have started to catalog it. Trump’s agencies have eliminated some of the higher-profile, “dark matter” actions of Obama administration.

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ht/ C. Steven Tucker