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Regulation and Compliance > State Regulation

Trump’s Safe and Sane ‘Regulatory Reform’ Idea

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In one of his few statements since joining government, presidential adviser Stephen Bannon announced that one of the Trump administration’s principal goals was “the deconstruction of the administrative state.” Given the critical role of federal agencies in protecting public health and safety, that’s pretty provocative. But President Donald Trump’s latest action suggests that reform is the aim, rather than deconstruction — and the reform might even turn out to be reasonable.

The action took the form of an executive order, issued in late February, “on enforcing the regulatory reform agenda.” Its text is quite bureaucratic, but it’s likely to prove profoundly important.

The order calls for the official designation of “Regulatory Reform Officers” and “Regulatory Reform Task Forces” within each department and agency of the federal government.

The reform officers are charged with carrying out three earlier executive orders. The first is Trump’s own requirement that agencies eliminate two regulations for every one that they issue. More surprisingly, the second and third come from Presidents Bill Clinton and Barack Obama. The Clinton order, issued in 1993, requires cost-benefit analysis of new regulations, along with approval by the Office of Information and Regulatory Affairs.

The 2011 Obama order calls for “retrospective review” of existing regulations, with the goal of getting rid of those that don’t make sense. By requiring adherence to the Clinton and Obama orders, the Trump administration has signaled a degree of continuity with what came before. That’s a good idea (and it’s hardly deconstruction).

The reform task forces have a much more specific job. Within 90 days, they must provide a report to agency heads, identifying specific regulations that are ripe for repeal, replacement or modification. They are charged with calling out those rules that eliminate jobs or inhibit job creation; that are outdated, unnecessary or ineffective; or that impose costs in excess of benefits. The task forces are specifically directed to seek input from those affected by regulations, including small businesses; consumers; nongovernmental organizations; trade associations; and state, local and tribal governments.

In the abstract, all of this is eminently reasonable — and, in practice, it could produce big dividends. Few people noticed, but the Obama administration’s own efforts at regulatory reform generated more than $28 billion in savings over five years. There is undoubtedly more where that came from. 

Because the White House itself lacks the capacity to scrutinize the stock of existing regulations, the Trump administration was smart to call for task forces within each agency to do that — and to require them to engage with the public to see which regulations are really causing trouble.

In addition, Trump’s emphasis on cost-benefit analysis is both welcome and hugely important. Some regulations impose significant costs, and the private sector really doesn’t like them. But they also create significant benefits, by helping consumers save money, preventing illness and saving lives. It would be a mistake, and it could be a tragedy, to repeal them.

True, the Trump administration isn’t likely to be issuing a ton of new regulations. As of this writing, exactly zero regulations are under review at the Office of Information and Regulatory Affairs. By contrast, the Obama administration cleared 58 regulations in its first two months, and the George W. Bush administration cleared 164.

But there’s a big difference between a slowdown in the flow of new regulations and “deconstruction” of what’s now on the books. Almost no one likes regulation in the abstract, but if we are speaking of food safetyhighway safetyair pollution standards or protection of disabled people against discrimination, it makes no sense to take a meat ax to the administrative state.

What’s needed is a scalpel, in the form of an evidence-based effort to see what really deserves to go, after close engagement with the American public. It’s too soon to know what will ultimately emerge, but the good news is that Trump’s reform officers and task forces have been charged with undertaking exactly that effort.


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