By Clyde Wayne Crews, Competitive Enterprise Institute
The White House Office of Management and Budget’s (OMB) new “Streamlining the Review of Regulatory Actions” memorandum signals a potentially transformative shift in Washington’s regulatory posture.
Last week we noted the directive’s primary emphasis on speeding up regulatory review timetables, and on employing the Administrative Procedure Act’s “good cause” exemption to roll back existing “facially unlawful” rules without full comment periods. The latter is a bold approach to say the least; one likely headed toward judicial scrutiny but representing a long-overdue reckoning with respect to what will be tolerated from the regulatory state.
The third and final section of the memo received less attention but could be the more important in the long-term if it’s built upon. The “Developing Better Deregulatory Records” subsection urges agencies to identify, quantify, and document deregulatory benefits with the same rigor applied to new rule costs.
I’m a skeptic of even regulatory cost measurements—which are rarely tabulated at all—let alone ephemeral benefits often claimed by regulators with an itch to govern. The disregard for can only be solved by requiring Congress to vote on agency rules, forcing lawmakers to internalize costs.
Still, recognizing deregulatory benefits as distinct from the alleged regulatory ones marks a rare nod toward freedom as a “measurable” public good worth actively pursuing.
As I note in a new Forbes column, this innovative project in “Developing Better Deregulatory Records” hints at something potentially game-changing: a framework for making deregulation the government’s normal operating mode rather than an occasional political project.
The memo’s recognition of the “Private-Conduct Liberty Benefits” of deregulation—such as freedom of choice and lower consumer costs, for starters—is an acknowledgement that decades of accumulated rules have compounded into a drag on innovation, prosperity, and self-government. Unwinding those constraints, the directive notes, can create a virtuous cycle across sectors, from energy to transportation to finance.
That skeletal “deregulatory dashboard” elements of the “Streamlining” memo need codification—first in a new Trump executive order rewriting the Clinton-era EO 12866 on “Regulatory Planning and Review,” and ultimately in law.
Agencies have long treated regulation as the default and freedom as a special exception and last resort, permissible only if so-called experts choose to leave things alone. Bureaucratic expansion, disregard for cost measurement, and overreliance on qualitative and performative “net-benefit” assertions (that I bemoan repeatedly) all sustain an interventionist bias. This has been somewhat true even under the Trump administration. In fact, the memo itself states that agencies “do not appear to be fully maximizing their energy” in implementing the president’s several deregulatory initiatives launched earlier this year.
To make deregulation permanent, a new executive order should take further steps I’ve outlined in Forbes and elsewhere: replacing cost-benefit “balancing” with cost budgeting alone in a limited regulatory budget; halting most sub-regulatory “dark matter” and creating a portal for the rest; and most importantly, ending corporate subsidies and abolishing agencies and their enabling statutes. Overall, a new executive order should affirm that the real risk lies in political and administrative failure, not “market failure.” As CEI’s founder Fred Smith repeatedly explained, what’s most often at play is not market failure but the “the failure to have markets.” The “Streamlining” memo provides a base to operationalize that recognition and change policymaking for good.
The OMB memo gives the wheel of reform a new spin. The next step is for Trump to seize it—issuing an executive order that institutionalizes deregulation as a governing principle, not just a temporary policy. Congress needs to take the next step and codify deregulation, “forcing” freedom upon us for a change. C’mon; jam no-government down our throats for once!
For more, see: “Regulation Renovation: The Executive Order To Make Deregulation Permanent,” Forbes
“The deregulation machine hits bureaucratic resistance,” Competitive Enterprise Institute
“A Banger Trump Executive Order Abolishing ‘Regulatory Dark Matter,’” RealClearMarkets
“If Regulators Aren’t Experts, the Entire Administrative State is Suspect,” Forbes
Wayne Crews is the Fred L. Smith Fellow in Regulatory Studies at the Competitive Enterprise Institute.
