Whether you agree with Donald Trump’s policies, you have to say this for the new President; he’s delivering on his campaign promises. That’s refreshing, especially if you own a business.
Earlier this week, Trump signed a wide-ranging executive order designed to begin his promised review and rollback of federal regulations on business. Under the order, government agencies must eliminate two existing regulations for every new rule they want to impose. The order comes on the heels of Trump’s earlier move to freeze all pending new regulations put in place in the last days of the Obama administration.
Under the new system, the administration will set forth an annual budget for how much new regulations can cost the economy, employers and employees. For fiscal 2017 that budget is zero.
Business leaders have long argued that government regulation is costly, cumbersome and inhibits growth. The National Association of Manufactures says the cost of regulation in 2012 was $2 trillion, with manufacturers bearing a disproportionate part of that burden. Another recent study by the Competitive Enterprise Institute (CEI) put that burden at $ 1.88 trillion.
The CIA report says the federal government issued 3,554 regulations in 2014 and had another 3,415 in development in 2015. The biggest rule generators are the Departments of Treasury, Commerce, Interior, Health and Human Services, Transportation and the EPA.
Progressive think tanks and others who advocate for a more activist government question the business community’s estimate of regulatory costs, calling the numbers excessively high. There’s certainly room for disagreement on the price tag, as regulations don’t always come with exact price tags. And those costs are indirect; such as an employer’s decision not expand his operation because growing larger would subject his company to more federal rules.
Critics of the regulatory rollback worry that it will eliminate rules that provide important protections for workers and the environment. But I have to believe our system of checks and balances will eventually lead us to place where we have “right-sized” government’s oversight of business. And to get to that point, we no doubt need to thin the herd of federal rules and regulations.
Cover Image: ABC News