During his last State of the Union Address in 2016, President Barack Obama conceded: “I think there are outdated regulations that need to be changed, and there’s red tape that needs to be cut.”
President Donald Trump is about to take a machete to that red tape.
On Monday, Trump issued an executive order promising that for every new regulation, two old regulations will be eliminated. According to Cass Sunstein, who served as administrator of President Obama’s White House Office of Information and Regulatory Affairs, it’s a regulatory gimmick that just might work.
It is also a fundamental reason that many conservatives held their noses and voted for Donald Trump.
In September of 2016, when someone employing the nom de plume Publius Decius Mus wrote an essay for the revered Claremont Institute in support of Donald Trump, conservative intellectual circles were stunned. Titled “The Flight 93 Election,” the piece went viral, and it spawned some obvious questions on the right. Who wrote it? And why would such a venerable conservative institution be supporting a vulgarian who isn’t even really that conservative?
Writing in The Weekly Standard last Oct. 31 (the story had legs!), Steven F. Hayward, a senior fellow at Claremont, sought to provide an explanation. “Trump’s disruptive potential explains… his attraction for Claremonsters,” he said (citing the endearing nickname given to the “West Coast Straussians” who reside there). “More than just a rebuke to political correctness and identity politics, a Trump victory would be, in their eyes, a vehicle for reasserting the sovereignty of the people and withdrawal of consent for the administrative state and the suffocating boundaries of acceptable opinion backing it up.”
In other words, President Trump will pick fights that other politicians—even other Republicans—will only talk about.
Ronald Reagan might have rolled back the Soviets, but he never rolled back the administrative state. Maybe it takes someone like Donald Trump—a builder, who knows something about onerous regulations—to get this done. In fairness to Reagan, Trump also has a Republican Congress, an attorney general nominee named Jeff Sessions, and more state Republican attorneys general than any time in history.
The problem has been around forever. Alexis de Tocqueville warned of this “soft despotism.” But the power of unelected bureaucrats and supposedly apolitical “experts” to make and impose rules and regulations really took root and blossomed from the time of Woodrow Wilson’s administration. Although conservatives often complain about this fourth branch of government, nobody has taken the initiative to change it. Until now.
To be sure, there are regulations that deserve unanimous support. Nobody wants to drink dirty water or eat poisoned food. However, rules can become unwieldy. They can create a situation that discourages innovation and job creation. There must be a balance, and many Americans have the sense that the balance has tipped in favor of regulation over jobs.
A study conducted a couple of years ago by the National Association of Manufacturers (NAM) found that “the average U.S. company pays $9,991 per employee per year to comply with federal regulations,” and that “the average manufacturer in the United States pays nearly double that amount—$19,564 per employee per year” (PDF). It is even harder on small manufacturers, who pay $34,671.
If President Trump’s goal is to bring back manufacturing jobs (and let’s be honest—he has a lot of Rust Belt Americans to thank for his election), reducing onerous regulations would go a long way. What is more, unlike some of his rhetoric and proposals to curb globalism and immigration, cutting the cost of hiring an American worker would help solve a very real challenge: The rise of automation and robotics. Of all the things that Republicans might embrace to help spur the economy, the decidedly “un-sexy” topic of regulatory reform is probably one of the most underrated.
“As a Republican, we focus so much on taxes,” said Ken Cuccinelli, head of the Senate Conservatives Fund and a former attorney general of Virginia. “But there is nowhere in governance today where there is more opportunity to have a longer-term impact on liberty and our economy faster. Even if you pass tax reform, you wouldn’t see an impact for a year and a half. They could get nearly immediate economic impacts by shelving the Clean Power Plan.”
And like the Supreme Court, regulatory reform is a galvanizing issue on the right. Consider the case of David McIntosh, a former congressman and co-founder of the Federalist Society who now heads the fiscally conservative Club for Growth (a group I have spoken to). McIntosh has been very critical of Trump, but when I asked him about the potential for regulatory reform, McIntosh told me: “I think the Trump agenda on scaling back regulation is hugely pro-growth and a really great development.”
“What we’re seeing in the regulatory area is his business experience of how to manage a big enterprise is to set an audacious goal and say ‘get the job done now,’” McIntosh added.
In the 1990s, as part of the Contract with America, McIntosh authored the Congressional Review Act (CRA), which empowered Congress to “disapprove” of new regulations. But Congress hasn’t really used it to rescind regulations. It was an idea reminiscent of Robert Heinlein’s science fiction novel, The Moon is A Harsh Mistress, where one legislative chamber is solely devoted to repealing bad or outdated laws on the books. Yet, having passed the law (signed by President Clinton in 1996), Congress didn’t forcefully utilize it. Why would Congress be so hesitant to use this power? Cuccinelli has a colorful explanation: “They don’t have two balls between them in the leadership of Congress, and I would add, especially the Senate.” According to McIntosh, The Club for Growth is strongly pushing for Congress to “use the CRA multiple times to remove costly Obama rules.”
Competing against this idea of restoring power to the legislative branch is something called Chevron Deference. Invented by the Supreme Court in the 1980s, this principle says that the courts defer to agencies in terms of their interpretations of statutes. ”The agencies get to be both judge and jury of the breadth of their own power,” lamented Cuccinelli. “That’s outrageous in a constitutional republic, and it’s gone on for more than thirty years. As Dr. Phil would say, ‘How’s that working out for you?’”
(It is worth noting that Neil Gorsuch—one of President Trump’s potential finalists for the Supreme Court—has criticized the Chevron deference.)
So which regulations and agencies might be scrutinized? It would be impossible to provide a comprehensive list, but here is a sampling: the aforementioned Clean Power Plan (where—depending on your perspective—Obama’s United States Environmental Protection Agency either saved the environment or unilaterally destroyed coal-dependent states); the “Waters of the United States Rule“ in the Clean Water Rule (according to critics, this gives the EPA the authority to essentially say that a ditch on your property constitutes a body of water and necessitates the property owner to obtain a wetlands permit); Dodd-Frank Wall Street Reform and Consumer Protection Act (a series of regulations that critics say hurts small community banks); the Consumer Financial Protection Bureau (a new agency that lacks congressional oversight); and possibly Food and Drug Administration rules (speeding up approval times and driving down the cost of drugs).
His presidency is still in its infancy, but Donald Trump might end up being the most consequential conservative in American history—and he is not even a conservative. Republicans have been talking for decades about decreasing the size of government and tackling the quagmire of the administrative state. But most normal politicians move slowly and make compromises, as the government continues to grow.
By electing Donald Trump, the voters were betting that he might actually do what he said he would. There may very well be a steep downside to this gamble, but there has never been better potential for a president to actually cut regulations and spur the economy in the process.
Note: The author’s wife previously served as a consultant for Ken Cuccinelli’s race for attorney general.