How much deregulation did Donald Trump actually achieve?
John Kane-Berman |
22 February 2021
John Kane-Berman analyses the record of the former US President
Donald Trump famously declared that “for every new regulation issued, at least two prior regulations [must] be identified for elimination”.
This was music to the ears of all those believing that governments around the world have become too bloated and too expensive and that they interfere too much. The necessary executive order – number 13771 – was signed on 30th January 2017, ten days after Mr Trump took office. His first general counsel said that “the ever-growing, unaccountable administrative state is a direct threat to individual liberty”. Neil Gorsuch and Brett Kavanaugh, both of whom Mr Trump appointed to the Supreme Court, had expressed concerns about the immense powers of the modern administrative state.
In the summer 2020 edition of Regulation, a review published by the Cato Institute, an article by Keith Belton and John Graham argued that no other post World War II president, except perhaps Ronald Reagan, had exhibited such public commitment to the cause of deregulation as had Mr Trump. The two writers reported on a study they had conducted of the Trump administration’s deregulatory efforts at the end of his second year in office.
One finding was that the flow of all new regulations in the first two years under Mr Trump was “much smaller” than under the first two years of the two previous administrations. George W Bush had issued 6 999 regulations and Barrack Obama 6 793, but Mr Trump only 4 310. This is a significant decrease.
Looking only at “major regulations” issued during the first two years of the three presidents, Mr Bush’s count was 103, that of Mr Obama 176, and that of Mr Trump only 90 – again a significant decrease.
However, reducing the flow of new regulations was much easier than cutting away the huge stock of regulations already in force. Mr Trump had undertaken 243 “deregulatory actions” under his executive order, with 514 still in progress. These deregulatory actions were, however, “very small” when measured against the total of almost 69 000 regulations adopted in the last 24 years.
Although Mr Trump had instructed cabinet officers to find as many regulations as possible to eliminate, he had also left key administrative posts vacant. Another problem was that there were early signs that his deregulatory agenda was being blocked or delayed by the judiciary, which was still dominated by judges appointed by Democratic administrations. Moreover, an “unintended consequence” of federal deregulation was that some state and local governments were becoming more “aggressive” in their own regulatory policies.
The two authors further noted that the Trump administration’s deregulatory policies on “climate change” were vulnerable to the “increasingly bipartisan” nature of congressional politics on this issue, which could lead to their reversal.
The same issue of Regulation also reported on an analysis in an annual report entitled Ten Thousand Commandments. This showed that the two-to-one goal had been achieved during the first three years of the Trump administration, but that there had then been a loss of momentum, with more regulatory than deregulatory actions in the pipeline at the end of 2019.
Another analysis was based on the Federal Register, the daily repository of new regulations proposed or enacted by the federal government. This showed that in 2019, Mr Trump’s third year, 2 954 final rules were added, the lowest count since records began in the 1970s.
The author of this second Regulation article, Pierre Lemieux, also studied the Code of Federal Regulations, which codifies all federal regulations. This showed that such regulations had grown from around 163 000 pages in 2009 to 185 000 when Mr Trump took over, and that he capped them at a level slightly above that. The Trump administration had thus “stopped the growth of regulation”.
A further measure featured in the article was the number of “restrictions” in the code – as determined by the use of words such as “shall”, “must”, and “prohibited”. The number of such restrictions has risen from around 400 000 in 1970, to slightly more than 1 000 000 in 2016. Growth then stalled for the first two years under Mr Trump. In 2019, his third year, the number of restrictions decreased by 0.6%.
Commented Mr Lemieux: “Such decreases are rare.” They had occurred only under Ronald Reagan and Bill Clinton, “and then only briefly before resuming an upward trend.”
However, despite his commitment to stopping and reversing the flow of regulations, Mr Trump introduced more regulation in foreign trade, inter alia by imposing tariffs. All tariffs on several thousand specific goods are listed in the Harmonized Tariff Schedule. When Mr Trump took office, there were 3 707 pages in the schedule. By the end of 2019, he had added 248 pages, bringing the total to 3 955.
So although the United States was not a bastion of unfettered trade, Mr Trump’s protectionism – including his “Buy American” orders - had made things worse.
Mr Lemieux noted that new tariffs on Chinese imports had prompted more than 4 500 US companies to “use spare time and scarce resources and legal help to file 52 700 requests for exemptions, most of which were rejected”.
According to Mr Lemieux, both imports and exports increased faster under Mr Obama than under his successor. One econometric study suggested that Mr Trump’s “trade wars” had reduced US GDP by 0.4% a year.
Wrote Mr Lemieux: “Trump’s trade wars increased prices for many American companies and American consumers. Just like any other restriction of economic freedom, these interventions constrained free exchanges in which Americans voluntarily participate. They thus reduced economic efficiency and income in the United States.”
Totting regulations by number, or by the pages they take up in registers, is an inevitably crude way to measure them. Given the vast number of regulations already in existence when he assumed office, Mr Trump faced an enormous challenge in carrying out his avowed commitments to cut red tape – commitments which he himself undermined by his undoubtedly harmful protectionist policies.
* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.