Our attention is focused on a single, terrible story like we’ve rarely seen before, a story that commands such a level of attention because it has altered nearly every person’s life. Tragedy, both personal and economic, has visited far too many people, and too many lives have been taken behind a curtain of secrecy unwittingly erected by the social distancing orders most have agreed to live under to help slow the spread of the COVID-19 pandemic.
Amid the tragedy and the singular focus of the moment, we witnessed a landmark moment in government that thrust a rarely discussed topic to the center of attention in power-obsessed Washington, D.C. Last week, President Trump signed an executive order, only a few pages in length, that will fundamentally alter the trajectory of the regulatory state, position the nation for economic recovery, and leave the executive branch with less power in the midst of a global crisis.
The central line is fewer than two dozen words: “Agencies should address this economic emergency by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery.”
The complexity and pervasiveness of federal rules and regulations make it impossible for anyone to understand genuinely even a fraction of federal law. And yet, the law governs every aspect of healthcare, and the organization of production facilities, transportation, and communications. There are more than 180 federal employment laws and a cabinet department that produces more than 140 million hours of annual compliance burden affecting both employers and employees. Altogether, we suffocate the economy with nearly $2 trillion of red tape.
Since February, hundreds of laws and regulations have been temporarily suspended by agency leaders, governors, and emergency orders. At first, these regulations were clustered in areas that required immediate responses to the coronavirus pandemic and stay-at-home orders. Regulatory relief was dramatic, if uneven, for the provision of healthcare services, education, and manufacturing or delivery of vital goods such as personal protective equipment.
As the effects of the pandemic expanded through the economy, common sense once again began to prevail in heavily regulated areas such as shipping and consumer finance. Rules were loosened, and enforcement of various compliance obligations was waived. It turns out all that red tape did not add as much value as the costs it imposed. It took a crisis to drive the point home, but it became visible to anyone paying attention.
During the past two months, we have seen the government blunder repeatedly. The volume of regulation and the myriad agencies involved in all aspects of economic activity produces confusion and friction in the system. After the February testing fiasco caused by bureaucratic delays and jockeying at the Centers for Disease Control and Prevention and Food and Drug Administration, the public vividly understands that risks must be balanced. No government agency will make us safe from all harm, but plenty of rules make it impossible to protect ourselves. As a result, the elimination of regulations that may never have been needed enjoys broad public support.
One of our organizations, the Club for Growth, recently conducted polling on the question of deregulation. The results demonstrated the potential power of culling regulations as an election issue. More than 65% of likely voters support Congress “giving President Trump the authority to waive costly regulatory requirements on American businesses.” An astounding 74% of likely voters support removing regulatory hurdles to infrastructure projects, including 64% of Democrats.
Trump intuits that support. He understands that the things that people need most in this emergency (medical services, vital supply chains that can deliver food and other essentials, and access to capital) are precisely what are necessary to begin a resurgence in an economy badly knocked on its heels.
Kent Lassman is president of the Competitive Enterprise Institute, a free market think tank. David McIntosh, a former Republican congressman from Indiana, is president of the Club for Growth.
