Weekly Column: Economic Growth From Regulatory Relief
Guest column submitted by U.S. Senator Mike Crapo
Over the last two years, Congress and the Administration have taken a number of actions to reduce burdensome and unnecessary regulations, as well as slow the massive growth of new regulations. Through a combination of issuing executive orders, utilizing the Congressional Review Act to overturn unnecessary regulations legislatively, enacting new laws focused on providing relief from onerous regulation and appointing pro-growth agency officials, deregulatory actions are creating more freedom for innovation and job growth.
This conservative approach to federal regulations is making tangible progress in improving productivity while maintaining needed protections. This approach questions whether regulations will inflict more harm than good and whether old regulations are achieving their intended purposes or creating bigger problems. It has resulted in the rollback of egregious federal overreaches that include actions to repeal and replace the 2015 “Waters of the United States (WOTUS) Rule,” which would have exerted federal control over nearly every stream, ditch, pond and puddle on state and local lands and private property. It also includes the overturn of the Bureau of Land Management’s “Planning 2.0” rule that would have limited necessary local involvement in natural resources planning. Since the beginning of 2017, Congress, with President Trump’s signature into law, has used the Congressional Review Act 16 times to overturn past rules and regulations.
The White House Council of Economic Advisers (CEA) reported, “Between 2001 and 2016, the Federal government added an average of 53 economically significant regulations each year. During the Trump Administration, the average has been only 4 (not counting deregulatory actions).” The CEA found, “This new approach to regulation not only reduces or eliminates costly regulations established by prior administrations but also sharply reduces the rate at which costly new Federal regulations are introduced.” The CEA estimates, “after 5 to 10 years, this new approach to Federal regulation will have raised real incomes by $3,100 per household per year.”
The CEA analyzed deregulatory actions and considered the costs that regulatory actions impose on consumers, small businesses and other economic actors. The CEA cited S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, which as Chairman of the Banking Committee I introduced and worked to enact, as a key driver of economic growth. The Council reported, “the Crapo Bill has annual net benefits of almost $5 billion and raises real annual incomes by about $6 billion by removing regulatory burdens from small bank lenders.”
This legislation I shepherded through Congress was signed into law in May 2018 and provides meaningful relief to the community banks and credit unions that have been crushed under undue regulation for the past decade. It also increases important consumer protections for veterans, senior citizens, victims of fraud, and those who fall on tough financial times. In its report, the CEA reiterated previous analysis finding that the law “recognizes the vital importance of small and midsized banks, as well as the high costs and negligible benefits of subjecting them to regulatory requirements better suited for the largest financial institutions.”
The U.S. is experiencing a reported record-level of consecutive months of economic expansion, and removing burdensome federal mandates is part of the ongoing effort to help create this better foundation for Americans to succeed. Bureau of Labor Statistics data shows that the national unemployment rate, at 3.7 percent in June, has been at less than 4 percent for more than a year and employment increased by 224,000 in June alone. In my home state of Idaho, the unemployment rate is only 2.8 percent. I look forward to finding agreement on additional commonsense reforms that will help continue our current economic growth trajectory.
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