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Trump Plays Up Deregulatory Moves, Touts $50 Billion in Savings (1)

Dec. 6, 2019, 7:37 PMUpdated: Dec. 6, 2019, 9:22 PM

President Donald Trump called fiscal 2019 another wildly successful year for his administration’s deregulatory mission and touted more than $50 billion in total savings, a claim law professors and regulatory analysts deem true in some ways and exaggerated or false in others.

Federal agencies took 150 deregulatory actions during fiscal 2019, which ended Sept. 30. They also issued 35 new, economically significant regulations, the White House regulatory office said in a report released Dec. 6.

“Our regulatory reform efforts are delivering prosperity to forgotten men, women and children of America,” Trump said at a White House meeting with Cabinet officials and small business owners. “We are seeing a middle-class boom.”

Since Trump took office, his administration has taken 392 total deregulatory actions and issued 53 economically significant regulations. That amounts to a ratio of 7.4 cuts for every big-ticket rule that has been added, and overall savings of $50.9 billion, according to the report. The emphasis on slashing bureaucratic red tape stems from Executive Order 13771, Trump’s directive requiring agencies to cut two rules for each new, economically significant one they issue, and to impose no new regulatory costs overall.

The president’s regulatory track record allows him to claim he has added far fewer new regulations than any recent administration, law professors and regulatory analysts told Bloomberg Law. But even if the numbers are taken at face value—something the analysts from across the political spectrum were hesitant to do—Trump still could not prove his repeated assertion that he’s cut the most regulations of any president.

“Just on the idea that he’s cut more regulations than anyone else in history, that is not true,” said James Broughel, senior research fellow at the conservative Mercatus Center at George Mason University. “There have definitely been previous presidents who have seen bigger reductions in the overall size of the code of federal regulations than we’ve seen under President Trump.”

President Jimmy Carter in the 1970s deregulated massive segments of the economy, including the airline, trucking, railroad, and telecommunications industries. During the Clinton administration, Vice President Al Gore’s “Reinventing Government” initiative substantially reduced the volume of federal regulations.

Yet, it appears that by the end of Trump’s first term, the federal regulatory code is going to be smaller than it was when he entered office, which would be a first for any president, Broughel said.

Focus on 2020

The report highlighting Trump’s regulatory trimming in fiscal 2019 follows the release late last month of the administration’s regulatory playbook for the coming year, when it will face pressure to finalize a series of important regulations so that Democrats won’t be able to cast them aside if they take the White House and Senate in the 2020 elections.

The administration’s regulatory plan for 2020 includes nearly twice as many new, expensive regulations as expected deregulatory moves, according to a recent analysis by the George Washington University Regulatory Studies Center.

“Next year we will continue our bold deregulatory campaign,” Trump said, mentioning a proposal intended to make cars safer and more affordable. His administration is currently battling California over authority to set emissions standards for cars.

Also, the Department of Transportation is working to provide greater financial freedom and flexibility for truckers, Trump said, adding that the trucking industry has gotten “out of control.”

“And we’re doing other things—the light bulb,” Trump said. Now bulbs can be manufactured under the old and new standard, the president said.

The Environmental Protection Agency will be looking at low-pressure water flow in sinks, showers, and toilets, Trump said. “EPA is looking at that very strongly, at my suggestion,” he said.

Cut Doesn’t Mean Gone

One misleading statistic is the ratio of rules cut to rules issued because of White House Office of Information and Regulatory Affairs guidance that classifies few rules as “regulatory” and many categories of actions—such as eliminating guidance documents and reducing paperwork burdens—as “deregulatory.” It also contains nearly a dozen exemptions that exclude the vast majority of routine rules from its calculations.

Most people assume that “cutting” a regulation means it completely goes away, said Dan Bosch, director of regulatory policy at the conservative American Action Forum.

But when the administration says it has cut 7.4 rules for every one issued, what that means is they’ve taken an average of seven deregulatory actions—potentially small modifications—for every significant regulatory action, he said.

The real impact, Bosch said, is in the far smaller number of new regulations Trump has proposed compared to other recent administrations.

Total estimated cost of new regulations in the eight years of the Obama administration was $890 billion, for an average of more than $100 billion in total costs added each year, Bosch said. Since Trump’s inauguration, there’s been $22.9 billion in total costs added, he said.

“And that’s probably the biggest takeaway, I think, for most folks to get from what the Trump administration is doing, is that they’re slowing the growth of regulatory costs substantially,” Bosch said.

Cost Savings for Whom?

Trump’s claim of more than $50 billion in regulatory cost savings also is problematic. It’s unclear how much of that amount was actually being incurred by companies, and how much was estimated costs that would have been incurred had certain rules taken effect.

The Obama administration’s Clean Power Plan regulation, for example, never had any economic impact because it never went into effect, said Cary Coglianese, law and political science professor at the University of Pennsylvania Law School.

“So it’s not as if you’re necessarily getting an immediate or a $50 billion boost to the economy,” Coglianese said.

Another problem is that Trump’s deregulatory agenda doesn’t make sense from an economic perspective because it’s focused exclusively on reducing regulatory costs while ignoring or downplaying the benefits of regulation, said Michael Livermore, law professor at the University of Virginia School of Law.

“There’s nothing accurate about it because it doesn’t look at the benefits that are foregone,” he said.

The Trump administration has issued fewer new regulations, which is different from deregulating, Livermore said. “And to the extent that their goal is to not do anything, they’ve been very successful.”

(Updated with additional reporting.)

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bgov.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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