Eakinomics: Assessing
Trump’s Regulatory Budgeting
Guest authored by Dan Bosch,
AAF's Director of Regulatory Policy
Last week the Trump Administration wrapped up its fourth regulatory budget
cycle. For the uninitiated, a regulatory budget is similar to a fiscal
budget; each executive agency is given a budget cap on the total amount of
estimated economic impacts from their rules. This cap can be either
positive (net costs) or negative (net savings).
The Trump Administration has used regulatory budgeting to drive its
deregulatory agenda, and in terms of net economic impact, it has delivered
impressive results. From fiscal year (FY) 2017-2019 the administration
achieved $50.9
billion in total savings, according to the Office of Management
and Budget. The recent projection
of year four that my colleague Dan Goldbeck and I did shows the
administration more than tripling that total in a single year, with $171.7
billion in net savings.
So, is the Trump version of regulatory budgeting a success? Yes and no.
The regulatory budget has been successful in getting agencies to look over
their stock of existing regulatory requirements to see what might be cut
back, rather than solely focusing on where they can extend their authority.
This is an important change in direction after decades of steady regulatory
increases. It has also focused agencies on adding new regulations only when
necessary.
But as AAF’s recent projection shows, focusing entirely on the net economic
impact can mask significant costly regulations. For example, more than the
entire sum of the $171 billion in net savings comes from one massive rule.
That rule helps cover up some big regulatory costs, including more than $27
billion from two rules tightening immigration.
There are also a number of significant rules exempt from the regulatory
budget due to national security reasons and the COVID-19 health emergency.
The five largest of these added up to more than $140 billion in net costs
in FY 2020.
Perhaps the biggest weakness of Trump’s regulatory budget is that it has
limited applicability and enforcement because it was implemented through an
executive order. The regulatory budget does not cover independent agencies,
and the enforcement mechanism is weak. It can also be gone with a stroke of
a pen – maybe as soon as the early afternoon on January 20, 2021.
A legislative solution is needed. Congress needs to give serious
consideration to legislating a regulatory budget that is durable, applies
to all agencies, provides limited exemptions only in the most dire
situations, has clear rules for how the accounting of costs (and perhaps
benefits) should be conducted, and requires detailed public accounting. The
Trump Administration has shown that the idea of regulatory budgeting has
merit. It is up to Congress to decide whether a forward-looking regulatory
budget should continue to be a priority in years to come.
|
No comments:
Post a Comment