- - Monday, February 13, 2017


Hours after taking the oath of office, President Trump issued his first executive order. Eleven more followed in his first three weeks.

His opponents are complaining about Mr. Trump’s brisk pace, but neither he nor any other modern president has come close to matching Franklin Delano Roosevelt in the scope of actions at the start of his term.

Just 48 hours after his inauguration, Roosevelt suspended all banking transactions. Two days later, he began drafting legislation to seize regulatory control of the financial system. He also launched a public works spending spree, introduced agricultural subsidies, and initiated government production of energy, all in his first 100 days.

There is unlikely another period in an executive’s term when the opportunity for reform is as great and the political capital as ample — particularly if the margin of election victory was significant.

Not that a new president enjoys free rein; the U.S. Constitution limits a president’s power to act unilaterally. But Mr. Trump will need all of the means available to him to countermand the injurious policies inflicted on the nation by the Obama administration (with help from Congress).

Among the worst is the unparalleled growth in the number and cost of regulations.

Federal regulators issued more than 23,000 regulations since the start of the Obama administration in 2009, which increased regulatory costs by more than $120 billion each year. The actual costs are far greater, both because the impacts have not been fully quantified for a significant number of rules, and because many of the worst effects — the loss of freedom and opportunity — are incalculable.

For purposes of steering regulatory policy, the president’s authority to appoint — and dismiss — the heads of executive branch agencies are among the most effective.

The president also wields budgetary influence over regulatory agencies. The Office of Management and Budget (OMB) formulates a proposed budget in accordance with the administration’s priorities. Ultimately, however, Congress determines appropriations.

Executive orders and memoranda represent a direct means by which the president establishes his policies, although the president cannot override statutory directives to agencies unless the law expressly grants that power. Like his predecessors, one of Mr. Trump’s first actions was to issue a memorandum placing a regulatory freeze on all executive departments and agencies.

Agencies with regulations in the pipeline that conflict with the new administration’s policies may propose either to further delay the effective date or to rewrite or repeal a rule. However, this requires following the rule making process and providing justification subject to public notice and comment.

Though time-consuming, the effort is justified to overturn particularly egregious regulations, such as the Agriculture Department’s unpalatable school lunch standards or the EPA’s Greenhouse Gas Endangerment Finding and its Renewable Fuel Standard.

The ultimate White House influence on rule making may well be the regulatory review process administered by the OMB’s Office of Information and Regulatory Affairs (OIRA), which is responsible for reviewing both proposed and final regulations.

Every president over the past four decades has customized regulatory review procedures. And no wonder. OIRA determines whether agencies have complied with rule making requirements, including the integrity of risk assessments and cost-benefit analyses, and controls if and when a regulation is finalized. That is real power in an era of regulatory overload.

In its current incarnation, OIRA’s regulatory review is overwhelmed by the volume of rule making. Its staff of about 50 is reviewing the work of agencies that have a combined 279,000 personnel, a ratio of more than 5,600 to 1.

The Trump administration should replace the existing regime with stricter standards for review, a broader scope of review, and greater transparency in the review process.

Regulation acts as a crushing tax on Americans and the U.S. economy. Certainly the Founders never conceived of the nation as the vast administrative state it has become. Absent substantial reform, economic growth and individual freedom in America will continue to suffer.

Diane Katz is the senior research fellow specializing in regulatory policy for The Heritage Foundation’s Roe Institute for Economic Policy Studies.

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