Donald Trump: Deregulator-in-Chief
Keith B. Belton and John D. Graham
Donald Trump campaigned on a promise to cut regulations. When he became president, he moved quickly—issuing executive orders to eliminate two regulations for every new one through a novel policy, a “regulatory budget,” and to establish a deregulation task force within every federal agency. He also promised to identify and remove onerous regulations on the manufacturing sector—arguably the most regulated sector of the U.S. economy.
In this issue, we highlight our findings from our recent research report, Trump’s Deregulatory Record: An Assessment at the Two-Year Mark. Our conclusion: the Trump administration is keeping its word when it comes to a major campaign promise to deregulate more quickly and effectively than any of his predecessors. And while evidence is beginning to show that this is happening, some major roadblocks remain.
In undertaking this research, we did not examine the economic, public health, social or environmental impacts of President Trump’s deregulation agenda. Thus, we take no stance as to whether the agenda as a whole (or any specific deregulatory action) is good for the welfare of the United States or the world. Our interest is in presidential effectiveness—has President Trump been effective as a deregulator? If not, why? And what steps might he take to bolster his deregulation record?
To answer these questions, we conducted an extensive literature review, interviewed dozens of experts, utilized multiple regulatory and legislative databases, and examined dozens of judicial decisions.
Implementation has not gone smoothly. Three issues caught our attention. First, President Trump has been slow to nominate—and the U.S. Senate slow to confirm— regulatory agency leaders. The end result: agencies that produced the most red tape lack the political leadership needed to advance the president’s agenda. Although the absence of agency leadership may help to slow down the issuance of new rules or regulations, it also slows down the repeal of existing rules.
Second, the Trump administration has imposed accounting conventions that make it difficult to assess progress on deregulation. For example, the Trump definition of a regulatory action is narrower than that of a deregulatory action. This makes it easier for agencies to comply with the regulatory budget while confusing those who desire an apples-to-apples comparison.
A more fundamental issue is the lack of clear metrics for deregulation. Regulation is seen by the Trump administration as an intrusion on the freedoms of private citizens and enterprises, an intrusion that can be justified philosophically only via explicit authorizations by the U.S. Congress, subject to judicial review for constitutional validity. But how does one measure freedom? Instead of taking on the challenge, the administration uses an imperfect metric of cost savings.
Third, critics contend that the regulatory budget might cause agencies to eliminate good regulations that have large benefits relative to costs in order to make room for new regulations. Such a concern is unwarranted as long as agencies follow a long-standing federal policy that the benefits of a rule must justify its cost. The Trump administration has retained that policy, though it has struggled to meet it. A related concern, not so easily dismissed, is that the regulatory budget discourages agencies from even considering a promising new regulation because of the burden to eliminate two existing regulations.
Progress and Setbacks
Looking closely at the Trump record, we find clear evidence of progress but also indication of setbacks.
With respect to progress, the flow of new regulations has been reduced. Table 1 shows the numbers: Under President Trump, regulatory agencies are issuing fewer new regulations overall, fewer significant regulations (those subject to White House review), and fewer major regulations (those having an impact of $100 million or more on the economy). The total number of final regulations completed under the Trump administration is approximately 40 percent smaller than the number issued by the Bush administration and the Obama administration. The number of significant regulations under President Trump is almost 50 percent smaller than the number issued under Presidents Bush and Obama. For major rules, the counts under both Trump (-53 percent) and Bush (- 41 percent) are substantially smaller than the count under Obama.
Table 1. New Rulemakings during a President’s First 23 Months.1