Billed by the White House as the most ambitious attack on red tape since the Reagan era, President Trump signed an executive order Monday aimed at cutting business regulations and capping the total cost of new rules that each government agency can impose annually.
Mr. Trump signed an order that the White House is calling “one in, two out” — for each new regulation proposed by an agency such as EPA or the Labor Department, the same department will need to identify two existing regulations to be eliminated. The president called it “the biggest such act that our country has ever seen,” and promised to set his sights next on rolling back the massive Dodd-Frank financial regulatory law.
“Dodd-Frank is a disaster,” the president told reporters in the Oval Office after a meeting with small business owners. “We’re going to be doing a big number on Dodd-Frank. The American dream is back.”
Dodd-Frank was a response to the financial crisis, and restricts banks from making certain risky investments. The measure also created the Consumer Financial Protection Bureau, an agency with sweeping powers to regulate banks and credit-card companies. Some Republican lawmakers are eager to reform the agency or fire Director Richard Cordray, although the White House hasn’t disclosed its intentions for the agency.
Employers and conservatives praised the president’s move as a needed effort to promote job growth, while opponents said it was a thinly disguised attempt to gut environmental protections. Even some supporters of cutting regulations said it would take years for the Trump administration to make a dent in the overall regulatory burden heaped on businesses by Washington.
“The president’s order is a good first step on the long road toward eliminating ball-and-chain regulations so small businesses can create jobs and expand the economy,” said Juanita Duggan, president and CEO of the National Federation of Independent Business.
Some regulatory watchdogs also said the number of regulations to be cut doesn’t matter as much as the type of rules to be eliminated.
“It is important to focus on eliminating the equivalent regulatory burden rather than a specific number of regulations,” said Clyde Wayne Crews, policy director at the libertarian Competitive Enterprise Institute. “It is important for the executive branch to also work with Congress to ensure this effort is long-lasting and that it works in conjunction with other regulatory reforms.”
The Obama administration issued 3,853 final rules in 2016, the most in 11 years. Another 2,391 proposed rules were in the regulatory pipeline when Mr. Trump was inaugurated on Jan. 20.
Federal agencies last year issued 18 rules and regulations for every law approved by Congress.
The conservative American Action Forum said the Obama administration issued $157 billion worth of so-called “midnight” regulations near the end of Mr. Obama’s presidency, such as rules on stream protection, greenhouse gas standards for trucks, firearms data and offshore drilling, that could be rescinded by Congress quickly by using a measure called the Congressional Review Act.
“Congress wants to cut regulations ‘24/7’ and we know President Trump wants to repeal two rules for every new regulation, so the CRA offers a quick approach to remove past rules and take credit as he moves forward with his regulatory vision,” said AAF’s Sam Batkins.
The president’s order directs the White House director of the Office of Management and Budget to issue guidelines on the “one in, two out” requirement, and essentially freeze the cost of all new regulations finalized in fiscal 2017, which ends Oct. 1. Beginning in fiscal 2018, each government agency will have an incremental “cost cap” set by OMB; an agency will be barred from issuing new regulations after reaching its cap. White House press secretary Sean Spicer said the order was “perhaps the most significant administrative action in the world of regulatory reform since President Reagan” signed a directive in 1981 to formalize the cost-benefit analysis of proposed regulations.
“Every year, overregulation costs our economy billions of dollars and reduces the wealth of every American household,” Mr. Spicer said. “This executive order will help get the economy back on track and is part of the president’s bold plan to create 25 million new American jobs in the next decade.”
Michael Brune, executive director of the Sierra Club, blasted the order as “a dangerous, deadly plan to undermine the laws that protect our environment, our workplaces, and our families.”
“Trump should expect fierce resistance,” Mr. Brune said. “The safeguards that Trump wants to throw out are those that ensure we can fulfill and implement laws deeply valued by Americans, like the Clean Air and Clean Water Acts, meaning this shameless pandering is willfully ignorant of congressional mandates.”