Trump Takes Hatchet to Regulatory State
Business groups hail president's move to cut two regulations for every one added
President Donald Trump on Monday moved to dramatically roll back regulations, signing an executive order requiring the elimination of two existing rules for every new one.
Trump, who campaigned on taking a hatchet to regulations as a way to juice an economy that has limped along since emerging from the Great Recession, scrawled his signature on the document in a roomful of small business leaders at the White House.
“This will be the biggest such act that our country has ever seen.”
“This will be the biggest such act that our country has ever seen,” he said. “There will be regulation. There will be control, but it will be normalized control where you can open your business and expand your business very easily. And that’s what our country has been all about.”
Trump said the executive order would help unleash entrepreneurship.
“If you have a regulation you want, No. 1, we’re not going to implement it, because it’s already been approved probably in 17 different forums,” he said. “But if you do, the only way you have a chance is you gotta knock out two regulations for every new regulation. So if there’s a new regulation, you have to knock out two. But it goes way beyond that.”
The order instructs the director of the Office of Management and Budget to — unless otherwise prohibited by law — identify two regulations for elimination for every new proposed rule and that the cost of planned regulations be “prudently managed and controlled through a budgeting process.”
The order also mandates that the incremental cost of all new regulations in the current fiscal year be no greater than zero, unless otherwise required by law.
One of the White House guests, whose name was not immediately identified, praised the move.
“Thank you for doing this, because small business has just been buried in a tidal wave of red tape,” said the man, who was standing directly behind Trump. “To break that will really change the world for us.”
Other business leaders welcomed the order, as well. The National Small Business Association pointed to a survey indicating that the average small business owner spends at least $12,000 every year complying with regulations.
“Our federal regulations have real-world implications for economic growth: More than half of small businesses have held off on hiring a new employee due to regulatory burdens,” association President and CEO Todd McCracken said in a prepared statement. “This burden is becoming … insurmountable … to those who would consider starting their own business: When asked to estimate their businesses’ first year’s regulatory costs, the average was a whopping $83,019.”
James Gattuso, a senior fellow for regulatory policy at The Heritage Foundation, said Trump is sending an important message to federal agencies charged with filling in the details of legislation passed by Congress.
“It’s signaling to regulators that they’re supposed to be taking regulations off the books, as well adding them,” he said. “It’s really much more of a guideline.”
But Gattuso said achieving the literal text of the order will be difficult. He said presidents cannot unilaterally kill most regulations. Repealing a rule requires the same agency process as newly adopted regulations do.
What’s more, Gattuso said, the two-for-one rule might appear arbitrary — particularly if officials propose eliminating a rule that seems to protect health or safety.
“People don’t like regulations in the abstract, but they tend to like them in the specific,” he said. “This is something that can potentially be too easily demagogued by supporters of the regulations.”
Wayne Crews, policy director at the Competitive Enterprise Institute, noted in an email to LifeZette that the idea has bipartisan support. He wrote that a Democratic senator, Virginia’s Mark Warner, proposed requiring one regulatory repeals for every new rule.
Gattuso said the Trump presidency also offers the potential to make greater use of the Congressional Review Act, which allows Congress to kill any regulation within 60 legislative days. Importantly, such votes are not subject to a Senate filibuster.
But Congress only has used the law once, in 2001 to kill a Labor Department rule on ergonomics that the outgoing administration of Bill Clinton had imposed.
Gattuso said a near-certain veto from then-President Obama kept Congress from trying to kill regulations over the last eight years.
Regulations that Congress might kill include rules regulating internet privacy, methane emissions, and disclosure of payments to companies that extract oil, natural gas, or minerals. In addition to 11th-hour Obama regulations on the chopping block, Gattuso said older rules that never were formally presented to Congress might also be repealed.
White House press secretary Sean Spicer said at a news conference Monday that regulations cost the American economy billions of dollars a year. The executive order, he said, will help Trump fulfill a campaign promise to create 25 million new jobs over the next decade.
"This executive order is the first step in the president delivering on his promise to slash bureaucratic red tape that is choking our nation's small businesses," he said. "Under the president's leadership, the president will no longer punish Americans for working and doing business in the United States."