Business Ethos Blog

Deregulation

Dr. David Mielke, Retired Dean of the College of Business at EMU 

President Trump received a lot of criticism for what some call a disappointing first 100 days in office.  However, what many pundits seem to have overlooked is the steady stream of executive and other actions he put in place to deregulate the economy.  Were his moves to deregulate good for the economy?  Will these moves improve the business environment?  Should the deregulation continue? There are currently 6 bills passed by the House to further ease regulations.  Should they be passed by the Senate?  What is the “Right Thing to do?”  Let’s look at the issues:

  1. President Trump has signed over 13 bills repealing regulations through the powerful Congressional Review Act which allows Congress to reject rules in a majority vote within 60 legislative days of publication.  If the Congress disproves a rule the agency cannot issue the same regulation again.
  2. Although the CRA expires the end of this month, experts have explained how the law may continue to be applied to past rules that agencies failed to report to Congress as required.  This would open up more rules to review as well as guidance letters, such as the Education Department’s sexual assault “Dear Colleague” letter that imposed the force of law without a public comment period.
  3. The Congressional Review actions does not include the President’s executive orders which have directed agencies to reconsider such regulations as the trillion dollar Clean Power Plan, the Labor Department’s financial advice rule, known as the fiduciary rule, micromanaging ceiling fan efficiency and setting organic farming standards.  President Trump signed an executive order requiring that many agencies eliminate two regulations for every new one they propose and that the changes entail no increased cost.
  4. Just days after taking office, President Trump invited American Manufacturers to recommend ways the government could cut regulations and make it easier for companies to get their projects approved.  As Commerce Secretary Ross stated, this is the first time any administration has canvassed the private sector to identify the worst regulatory and permitting problems.
  5. House Republicans are moving forward with an aggressive package of bills on regulatory reforms.  But with only a 52-48 edge in the Senate, some of the bills will likely not make it because of the Democrats’ filibuster power.
  6. The Regulatory Accountability Act would require federal agencies to issue the least costly rules to address problems.  If a cost benefit analysis shows the regulation is too expensive, the agency would be required to choose a reasonable alternative.
  7. The Small Business Regulatory Flexibility Improvements Act would require federal agencies to consider the impact their rules have on small businesses.  Agencies would conduct a regulatory flexibility analysis to determine how many small businesses would be affected by rules.  Those that would have a big impact on small businesses would be subject to further periodic review.
  8. The Searching for and Cutting Regulations that are Unnecessarily Burdensome, or SCRUB Act, would establish a commission to review existing regulations.  Congress would then vote on whether to repeal outdated and duplicative rules.
  9. The Regulations from the Executive in Need of Scrutiny, or REINS Act, would require federal agencies to seek congressional approval before issuing major regulations.  This act would allow one party to kill regulations more easily, even if they control just one branch of Congress.  This act is likely the most controversial.
  10. The All Regulations are Transparent Act, or ALERT, aims to shed more light on the rule-making process.  Federal agencies would be prohibited from issuing new rules until they have been posted online for 6 months for public review.
  11. The Early Participation in Regulations Act would add additional steps to the rule making process.  Agencies would be required to provide advanced notice at least 90 days prior to the proposed rule, giving the public more time to comment.  This step is currently optional.

Currently, the Trump Administration has rolled back more regulations than any President in history.  Will he utilize the theory that the CRA allows more regulations to be rolled back if the agencies have not reported to Congress as required?  Will the 6 bills passed in the House be passed by the Senate?  Do the acts make sense and should they be passed?  Will the Democrats seriously consider any or all of the acts, or just say “No.”  What is the “Right Thing to do?”  Many presidents, including President Obama have called for regulatory reform.  However, as we have found relatively little or no action was taken.  In fact, regulations under President Obama ballooned.  It is time for real regulatory reform and President Trump has set a solid example of following through to get it done.  Congress should continue to use the CRA to kill regulations set by agencies that did not report to Congress.  The 6 acts passed in the House should be passed by the Senate.  It is time to restrict and eliminate regulations that provide minimal benefit at high costs to the economy.  In particular, the REINS Act should be passed to require Congressional approval before any new rules are imposed.  Without that approval, where is the accountability for the federal agencies?  It will be interesting to hear the same litany of objections by the Democrats to fight the bills.  Get it done—deregulate!