President Donald Trump has taken an aggressive approach in his push to rollback regulations, begging the question of what the impact will be for everyday Americans.
Trump pledged in the latter weeks of last year that he would bring regulations down to their 1960s levels. He stood between two radically different size stacks of paper that compared the regulatory burden between the two eras. His administration has since worked to roll back regulations in the hopes of boosting economic growth.
“You can see another really vivid illustration of the monumental task we face,” President Trump said at the time. “In 1960, there were approximately 20,000 pages in the Code of Federal Regulations. Today, there are over 185,000 pages.”
Republicans and the business community have long argued that the current regulatory framework has become too burdensome. The administration is optimistic the new approach will help lift the burden many employers face – which would allow them to invest more time and money into their businesses and employees.
The Trump administration has looked to areas like labor policy, consumer rights, healthcare, and the environment in its deregulatory effort. But the push has also faced backlash from critics who argue the administration is eroding critical workplace and environmental protections.
“The Trump administration has clearly focused on deregulation and evidence indicates it has had some success,” George Washington University Prof. Susan Dudley told InsideSources. “Working with Congress, the president has rescinded several regulations issued at the end of the previous administration, and the pace of new regulations is dramatically less than during previous presidents’ first years.”
Former President Barack Obama has become a central target for much of the deregulatory effort. His administration implemented many new regulations intended to protect workers, consumers, and the environment. But critics argue the changes hurt people throughout the country by creating a drag on the economy.
The Environmental Protection Agency (EPA) has since eliminated Obama-era rules intended to combat climate change. The Federal Communications Commission is in the process of eliminating net neutrality. Health and Human Services reined in some of the requirements under the Affordable Care Act, better known as Obamacare. The Department of Labor has started to eliminate many regulations covering the workforce and financial industry.
Those efforts have resulted in some fairly notable cuts to regulations and other federal rules. The Competitive Enterprise Institute found in a report Oct. 1 that the administration had reduced the federal register by 32 percent. The American Action Forum noted Oct. 3 that the administration has saved $560 million annually by cutting regulations.
The Trump administration still has a lot of regulations it is in the process of dismantling. Federal regulations often require a lengthy process that involves a public comment period to either implement or undo. The process could take a year or more depending on the regulation.
The American Enterprise Institute (AEI) has long argued that regulations have become a drag on economic growth. AEI financial policy expert Peter Wallison notes that the new shift towards deregulation has been fairly dramatic – adding that nearly every federal agency has been rolling back or reforming existing regulations.
“The change has been quite dramatic,” Wallison told InsideSources. “The first, and probably most important as a symbol of Trump’s intentions, was the elimination of 14 Obama regulations under the Congressional Review Act, which allows Congress to repeal regulations made within 60 legislative days of the repeal vote.”
Federal regulations have become a hot-button political topic with the current deregulatory effort being no exception. It’s not just a matter of reducing regulations – it’s also a question of which regulations should be scrapped, which should be kept, and which just need to be reformed. Dudley believes the current approach will be beneficial.
“Regulations have been accumulating with little attention paid to their actual effects once they’re in place,” said Dudley, who also serves as the director of The George Washington University Regulatory Studies Center. “At some point, even well-intentioned regulations can slow economic growth. I think the focus on reviewing existing regulations, as well as carefully evaluating the need for new regulations, should be beneficial.”
Wallison also believes the new approach will be helpful – especially when it comes to the economy. He notes that some of the economic growth will eventually taper off as businesses begin to adjust to the reformed regulatory system. But the recently enacted tax reform law, he argues, should offset that drag.
“The benefits are obvious,” Wallison said. “The new growth in the economy, the rising wages, and the ebullience in the stock market. If you think that we don’t have enough regulation in the U.S. economy—that the government should become even more deeply embedded in making decisions for the private sector—then the cost is the loss of that opportunity.”
The Center for American Progress (CAP) has been much less optimistic with the new approach to regulations. Its research has found ordinary Americans will lose important protections. CAP senior policy adviser Sam Berger argues that the administration seems more focused on helping businesses than on what harm it might be causing to ordinary people.
“[Trump] doesn’t seem concerned at all about the effects on everyday citizens,” Berger told InsideSources. “When you talk about regulations you must talk about the costs and the benefits. But with the administration, it’s all about the costs. More specifically, it’s all about the costs to industry. His idea of deregulation is to allow large corporations to cut corners at the expense of everyone else. It’s something you see throughout all the regulatory actions that have been taken.”
Berger adds that the deregulatory push mirrors a larger agenda of putting the wealthy before the middle class. He points to the tax reform law which he argues also benefits large corporations at the expense of ordinary people. Berger believes that former President Barack Obama took a more sensible approach to regulations.
“When you look at the Obama administration, there was a focus on two things,” Berger said. “They put forward new regulations that were going to be net beneficial to society: they were going to help people, protect them from dangers, make sure kids weren’t playing with unsafe toys, making sure workers weren’t being cheated out of their wages. But there was also an effort to look at some of the old rules to see where things could be updated or eliminated entirely.”
Federal regulations aren’t the only thing the administration has been working to roll back. While regulations take time to unravel, there have been various other rules and executive actions that have been upended much more easily. President Obama used legislation, regulations, and executive orders to implement his agenda.
The process to upend a federal rule tends to be as easy or difficult as it is to implement. An executive order, for example, can just be rescinded with another executive order. President Trump was able to undo many rules from his predecessor already simply because of how they were implemented.
“There have been pretty significant changes where Obama did things unilaterally, by executive order or guidance document,” Brookings Institution senior fellow Philip Wallach told InsideSources. “In those cases, it’s been pretty easy for the Trump administration to reverse course and erase some of those changes. So there has been a number of important things done that way.”
A new administration also means a change in the culture throughout the government. While elements within the bureaucracy have appeared unwilling to change, the federal government is steadily moving towards Trump’s vision. American Action Forum regulatory policy director Dan Bosch argues the cultural shift can be seen throughout the government.
“Even agencies that aren’t reporting to the administrations are taking a look now that most of them are under Republican leadership,” Bosch told InsideSources. “So in that respect, the impact has been felt throughout government regardless of whether it’s the executive or an independent agency.”
Wallison adds that the business community has recognized the shift in direction as well. He notes that employers are becoming confident they can invest more back into their business without worrying about new regulations that could undermine that decision.
“The most profound change has been the attitude of the government, and the business community recognizes this,” Wallison said. “They have begun to believe that they can make investments without having the ground cut out from under them by a new and unanticipated regulation.”
The administration is also facing legal challenges over its push to deregulate. The EPA was sued by a group of state attorneys general for delaying implementation of a 2015 regulation. The Natural Resources Defense Council and the Communications Workers of America filed a lawsuit against the administration regarding an executive order which requires that two rules get scrapped for every new one added.
“It will be interesting to see how the courts deal with the legal challenges that will certainly come from these deregulatory actions,” Bosch said. “A lot of what we’re seeing is the Trump administration opening public comment periods, taking comments, and saying we disagree with the previous administration about this so we’re getting rid of the rule. It will be interesting to see whether that holds up.”
Bosch adds that the courts could create a lot of uncertainty if they allow new administrations to just toss regulations. He argues that congressional action could help to better clarify those laws. Berger argues that the administration has drawn some of the legal scrutiny by how they justified the reforms.
“Some of the steps that have been taken have relied on faulty math,” Berger said. “Suddenly a regulation that was providing billions of dollars in benefits is rewritten to provide no benefits, or where a rule is simply delayed without there being a reason for why that’s the case. We’ve already seen some of these actions to deregulate get challenged in the courts, and the courts have said, ‘you haven’t explained why you’re doing this.'”
Lawsuits also have the potential to make the process to implement or remove regulations significantly longer. A court could rule against the change, in which case it’s dead unless there is a higher court to appeal to. A judge could also delay a regulation to give time for a proper ruling.
