President Trump has signed a new executive order requiring federal agencies to form task forces which will identify regulations to repeal. According to the order:
- Each Regulatory Reform Task Force will evaluate existing regulations and identify candidates for repeal or modification.
- Each agency’s Task Force will focus on eliminating costly and unnecessary regulations.
- To hold the Task Forces accountable, agencies will measure and report progress in achieving the President’s directives.
Regulations Cost America
Study after study shows that regulations harm American competitiveness and shrink the economy. A Mercatus Center study released in April of 2016 showed that if regulatory growth had been halted in 1980, in 2012 the economy would have been $4 trillion larger than it ultimately was. The study concludes, “By altering investment decisions and disrupting the innovation that comes from investment in knowledge creation, regulations have a cumulative and detrimental effect on economic growth—and, over time, have a real impact on American families and workers.”
The Regulatory Explosion May Finally Be Contained
There have been an explosion of regulations that harm America’s economy in the last few decades. Researchers at George Washington University’s Regulatory Studies Center show the growth of economically significant rules published each year. In 2016 there were over 90 economically significant rules published by the government. To be classified as economically significant a rule must have an annual effect on the economy of $100 million or more or adversely affect the economy or a piece of it.
Manufacturers Join President Trump for the Signing
Not Trump’s First Order on Regulation
This isn’t the first time President Trump has targeted regulation. In January he signed an order requiring that for every regulation created by an agency, two must be eliminated. The text of the order states:
Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.
The January rule kills any possibility for growth in the overall number of regulations, while today’s rule will seek to force a reduction in the number of rules outstanding.
Deregulation Has Been Successful in the Past
According to Susan Dudley, writing for the Cato Institute, deregulatory efforts of the 70s and 80s were a success, benefiting consumers and business. She wrote in 2014:
Bipartisan efforts by policy entrepreneurs in the Ford, Carter, and Reagan Administrations, in Congress, the judiciary, and at think tanks eventually led to the abolition of whole agencies such as the Civil Aeronautics Board and the Interstate Commerce Commission, and the removal of economic regulation in several previously-regulated industries.14
This wave of deregulation is generally regarded as a success, having lowered consumer prices, increased choices, and aligned service quality with customer preferences. More competitive markets have generated real gains—and not just reallocated benefits—for consumers and society as a whole, and markets have evolved in beneficial ways that were not anticipated prior to deregulation.15
Hopefully efforts by the Trump administration to deregulate will produce similar success.
Timothy O. Jones
Latest posts by Timothy O. Jones (see all)
- WATCH: How Crony Capitalism Ruined Your Lighting, and More - June 22, 2017
- Is Trump About to Reward the Rust Belt? - June 15, 2017
- What is the Trump Administration Planning on North Korea? - April 25, 2017