The chains are coming off. Bound tightly by the regulatory state, U.S. industry has been hobbled for what seems like forever. President Trump has wasted no time demonstrating his desire to unleash the economy and enable it to roar to life again. It’s the way to make America great again.
The president signed an executive order Tuesday directing the Environmental Protection Agency to reconsider its Obama-era Clean Water Rule, which claimed federal authority over navigable U.S. waterways to control pollution, and this was interpreted to include rainwater on private land where a duck could hardly wet its bottom. The EPA decided that navigable waters can mean nearly every puddle or every ditch on a farmer’s land, or any place the bureaucrats decide to regulate.
The order followed an earlier one directing every federal agency to create a regulatory reform task force to survey its rules and recommend the most harmful ones for elimination. Agencies must appoint reform officers within 60 days and report on their progress within 90 days. Excessive regulation is killing jobs, driving companies out of the country like never before, and the economy needs all the friends it can find. Mr. Trump earlier told agencies to eliminate two regulations for every new one adopted.
The president’s work is a real step toward what White House adviser Steve Bannon calls “the deconstruction of the administrative state.” With 400,000 rules that carry criminal penalties, targets for the blue pencil shouldn’t be difficult to find. Protecting Americans from fraud is a federal responsibility, and when a fisherman can be arrested for throwing an undersized catch overboard under the Sarbanes-Oxley Act — a law meant to combat financial fraud — it’s a clear sign of regulation run amok.
The American Action Forum, headed by Douglas Holtz-Eakin, the onetime director of the Congressional Budget Office, reckons the cost of regulations signed by President Obama during his eight years in office, to be absorbed by business, reached $890 billion. That’s an annual bite out the U.S. economy larger than the entire gross domestic product of 131 nations. Add to that the burden of government spending, which a new Heritage Foundation study pegs at 38 percent of the nation’s gross domestic product, and the result is a sluggish economy.
If Mr. Trump can follow his regulatory rollback by redeeming his pledge to repeal and replace Obamacare, and reduce tax rates, he could achieve his target of GDP growth in the 3 to 4 percent range. President Obama employed an economic prescription for solving the Great Recession that included government stimulus spending, tax increases and thousands of new regulations. He is the first president since Herbert Hoover to leave office without reaching at least one year of 3 percent economic growth.
The president’s early assaults on red tape represent the most sweeping attempt to reform the regulatory state since Ronald Reagan organized the Grace Commission in 1982 to root out government waste. The commission’s 1984 final report made recommendations for saving $424 billion over three years. Congress ignored it, but the Gipper still managed to turbocharge the economy with tax cuts, and the economy averaged 3.5 percent growth during his eight years as president.
Mr. Trump’s promised tax cuts are likely months away, but anticipation and the steps the president is taking to eliminate job-killing rules have already ignited the stock market. With the Dow up more than 10 percent since Election Day, a renewed optimism is spreading that American prosperity is on the horizon, and closing fast.