As I have made clear over the last year and a half, Donald Trump is not my favorite president. However, he is doing some really good things when it comes to the economy and deregulating, and he deserves credit for it – but most in the mainstream media criticize him no matter what he does.
Let’s set the record straight: This fiscal year, with just over a month to go until September 30, something remarkable is happening: Federal regulations are being slashed at a record rate. On an individual basis, 12 of 22 federal agencies have already met or surpassed President Trump’s savings target for this fiscal year.
A new report by the American Action Forum (AAF) says that not only is President Trump meeting his deregulation goals, he’s exceeding them – in some cases, by a large amount. The AAF’s Dan Bosch earlier this month reported:
“Collectively, executive agencies subject to regulatory budget remain on pace to double the administration’s overall saving goal. The Department of Labor enjoys the largest total savings of covered agencies with $417.2 million. The Department of Health and Human Services comes in second in savings at $285.6 million. The Department of Transportation ranks third in annualized savings, followed by the Department of Justice.”
All told, the government aimed for savings of about $686.6 million from deregulation so far this year. Right now, the government has saved almost twice that amount at $1.308 billion from 47 separate deregulation actions.
This might not sound like much, given the government’s immense size. But it is. That’s because the economic impact is much larger than the mere dollar amount of regulations cut. And it’s also important because President Trump has put in place a rule that limits the number of new regulations. Basically, this rule states that whenever a new regulation goes into effect, two existing regulations must be eliminated.
As the Competitive Enterprise Institute noted earlier this year in its “Ten Thousand Commandments” annual report, federal regulations cost a lot more than their stated dollar amount. Last year alone, regulation and federal intervention in the economy cost Americans an estimated $1.9 trillion, and that estimate is probably low.
How much is that on a household basis? It’s the equivalent of a $15,000-per-household tax levied each year in perpetuity. That’s more than the average family spends on food, clothing or transportation. Only housing takes more of the family budget.
If the US regulatory burden was a nation, and let’s be thankful it’s not, it would be the 8th-largest economy in the world. Regulation even exceeds the IRS’ total take in corporate and individual income tax receipts. That’s how big it is.
Last year, Trump began cutting rules in earnest as soon as he entered office. He slashed the total number of pages in the Federal Register, the government’s regulatory bible, from 95,894 pages in 2016 to 61,308 pages in 2017. That’s a decline of 36% and the lowest since 1993. This year it will go even lower.
This is a really big deal for businesses, which find themselves increasingly burdened by mandates, orders, rules and commands issued by Washington bureaucrats, most of whom know nothing about their companies.
The burden on small businesses is especially acute. A National Small Business Association (NSBA) survey found that small business owners spend more than 80 hours a year just dealing with regulations. In the first year alone, a small business will spend on average roughly $83,000 to comply with government rules.
And it continues every year thereafter. That can be the margin between staying open or going bankrupt. The NSBA emphasized:
“The impact of regulatory burden cannot be overstated. More than one-third have held off on business investment due to uncertainty on a pending regulation, and more than half have held off on hiring a new employee due to regulatory burdens.”
The record regulatory siege under President Obama goes a long way toward explaining his poor economic performance. With growth averaging below 2% during his two terms, his was the worst administration for growth in postwar history. Let that sink in.
The Trump economy, by contrast, is today growing at just a tick below 3% a year. Median annual household income stands at $62,175 currently, the highest level since 2000. Unemployment in June matched its lowest level in half a century. In short, the economy is now operating on an entirely different level than during the Obama years.
It’s made a huge difference in Americans’ confidence, as shown in recent strong gains in the IBD/TIPP Economic Optimism Index, which rose to 58.0 in August, its highest level since January of 2004. The economy is again growing robustly and creating jobs, thanks in large part to Trump’s deregulation, which acts like a giant tax cut – even if it’s one you didn’t you got. This is great news!
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