Trump’s Executive Order on Regulations: All Show, No Substance

By / 1.30.2017

Today President Donald Trump signed an executive order requiring agencies to cut two existing regulations for every new rule introduced, “to the extent permitted by law.”  Trump, of course, already has control of new regulations from the executive branch, so the executive order was not needed.  At the same time, his attempt to pare back existing regulations by executive order is not new. In fact,  every president since Jimmy Carter, Democrat or Republican has issued executive orders calling on agencies to review and cut down existing regulations.  Unfortunately, these executive orders have never worked, for three reasons:

  • First, most regulations are issued in response to Congressional mandates or legislation, which agencies can’t override without Congressional action.
  • Second,  no matter their political stripe, presidents tend to impose new regulations when they think they are necessary, ignoring the economic cost. For example, George W. Bush created an entirely new agency and regulatory apparatus, the Transportation Security Administration, in response to 9/11.  Similarly, Trump’s executive order exempts “military, national security, or foreign affairs” regulations.  Notably, his immigration executive order has the potential to impose large regulatory costs on American businesses. 
  • Third, it’s a difficult process for agencies estimate the impact of repealing an existing regulation, requiring intrusive data gathering from businesses.

Moreover, even if agencies manage to identify regulations to repeal, these changes are more likely to benefit large businesses which have the clout to lobby agencies, rather than small businesses.

That’s why the Progressive Policy Institute supports legislation such as the Regulatory Improvement Act of 2015 (HR 1407  and  S 708), which had sponsors from both parties.  This legislation would set up an independent Regulatory Improvement Commission to collect testimony from businesses and individuals to help identify which regulations needed to be repealed or improved. Then the Commission would make recommendations to Congress, which would vote the Commission’s proposal up or down.

Trump and the Republicans have the chance to move forward, if they want, on important regulatory improvement.  This executive order does nothing to help small businesses.