National Opinions

Will President Trump’s house-cleaning agenda at major rules-making agencies spur economic growth?

No: Trump’s ‘house cleaning' will hurt most Americans

By Daylin Leach

During presidential campaigns, candidates make lots of promises regarding what they will do if elected.

Donald Trump was no exception, even if his promises were odder and more indecipherable than most.

For example, whereas the other candidates put forth specific plans for boosting the economy, Trump mostly just promised he would do things that were “tremendous,” “classy” and “huge.” He assured us that “everybody will love” his plans and that they would miraculously end ideological disagreements in this country.

But given the lack of Trump’s specificity, or even coherence, it is difficult to speculate what a promise from him actually means.

In terms of government reform, he has promised to “drain the swamp,” which, based on the appointments he’s made since entering the White House, apparently means he intends to drain the swamp directly into his Cabinet room.

Similarly, Trump has also promised to “clean house” at some of the major federal agencies, including the Environmental Protection Agency, the National Highway Traffic Safety Administration, and the Department of Housing and Urban Development.

Again, it is difficult to know what this will mean until we see how it fully unfolds. But if Trump’s transition and first weeks in office are any indication, this house cleaning will be very bad for America.

It’s important to note that federal agencies weren’t established for kicks and giggles. They were created to protect us from predatory private interests and to address very real problems.

The EPA, for example, was created to protect us from corporate pollution and ensure that our air and water are clean. More recently, it inherited the critical mission of leading the fight against climate change.

The Department of Health and Human Services is responsible for our social safety net. The National Transportation Safety Board — another Trump target — ensures that our highways, rails and skies are safe for travelers.

So far, Trump has seemingly picked Cabinet members based on how aggressively they have opposed the very missions they are being hired to carry out.

EPA secretary-designate Scott Pruitt is a conspiracy theorist and climate-change denier who has spent his professional career suing the very agency he has been nominated to head. Tom Price, now the head of HHS, is a fierce critic of Obamacare and is openly hostile to the social safety net. And Ben Carson, the HUD nominee, has in his lifetime paid as much attention to housing issues as Mick Jagger has to magnesium extraction.

We’ve already heard talk from administration officials about slashed budgets and massive layoffs. Further, we’ve heard the Cabinet picks and relevant transition officials disparage federal agencies that were created to protect the American people.

Given all of this, it is difficult to see how Trump’s efforts to clean house will do anything but result in a dirtier, more unfair, more inequitable, less safe and less free America. This push is among the most disturbing of Trump’s early actions. And that is truly saying something.

Yes: Regulatory red tape is strangling economic growth

By William F. Shughart II

As President Trump has noted, a surefire way to restore the competitive edge America once enjoyed would involve cleaning out the executive branch’s Augean stables, from which heavy-handed regulations have been issued at an increasing pace for decades.

Complying with regulations now costs individuals and businesses both large and small about $4 trillion each year, according to economists at George Mason University’s Mercatus Center. That’s about $13,000 per person.

Money spent keeping records, hiring regulatory compliance officers, and dealing with the bureaucrats who promulgate and enforce these regulations — which affect nearly every aspect of daily life — is money not available for families to spend on their own needs. Indeed, it’s money businesses don’t have to invest in buildings, equipment and jobs.

Regulations are like a tax on economic activity. And they’re a regressive one, at that, meaning they fall most heavily on low-income households and small businesses.

Suppose a new safety regulation for cars and trucks — requiring all new vehicles to be equipped with backup cameras, for example — adds $500 to the cost of each vehicle sold. Most of the added cost will be passed onto consumers in the form of higher prices.

Who is more hurt by the price increase: the government bureaucrat making $131,000 a year, or an apprentice electrician earning $30,000 annually?

Most regulations are one-size-fits all. The anti-money laundering provisions of the Patriot Act, passed shortly after 9/11, required all financial institutions to adopt procedures and internal controls to prevent money from ending up in the hands of terrorist groups.

Because the costs of complying with that law essentially were the same for a hometown bank as for a big Wall Street bank, some 3,000 small financial institutions were forced to shut their doors or merge with larger competitors over the following few years.

So-called midnight regulations are another growing problem. That term refers to rules issued by an outgoing administration between Election Day and Inauguration Day.

Every president since Ronald Reagan has signed executive orders requiring government agencies issuing major regulations to conduct cost-benefit analyses prior to finalizing them. Midnight regulations, however, are rushed through the review process and published without full consideration of their economic impacts.

One shouldn’t put much faith in regulations issued less hastily, as federal agencies routinely overstate the benefits and understate the costs of the rules they issue.

A district court judge recently reprimanded the Environmental Protection Agency for failing to comply with a requirement that it estimate the number of jobs that would be lost as the result of new regulations.

EPA Administrator Gina McCarthy responded by saying producing such estimates is of “limited utility.”

To whom, one wonders?

The EPA’s proposed Mercury and Air Toxics Standards, or MATS, was sold as a public health measure that would cut mercury and acid gas emissions from coal mines and power plants.

The rule, while promising annual benefits of $4 million to $6 million, will cost electric utilities almost $10 billion per year — a cost that will be passed on to customers.

Unless canceled, MATS will help fulfill President Obama’s goal of shutting down America’s coal industry and will inflict deep economic pain on states like Wyoming, West Virginia, Kentucky, Illinois and Pennsylvania.

Trump has called for a two-for-one policy requiring the elimination of two existing regulations for every new rule issued. Because not all rules impact the economy equally, the policy will require careful and thoughtful implementation. It’s a good starting point.

But there’s much more to be done. Pruning back the regulatory state will go a long way toward energizing the economy.

Pennsylvania State Senator Daylin Leach is the national president of Americans for Democratic Action, the nation’s oldest liberal advocacy organization. Readers may write him at ADA, 1629 K St. NW, Suite 300, Washington, DC 20006. William F. Shughart II is the research director of the Independent Institute and the J. Fish Smith Professor in Public Choice at the Huntsman School of Business at Utah State University. Readers may write to him at the Independent Institute, 100 Swan Way, Oakland, CA 94621.

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