RUTHFULLY YOURS

Every new president, dating back to Jimmy Carter, has promised to cut regulations. Even President Obama’s executive orders on improving the regulatory process and cutting red tape sounded impressive when they were issued. That was before six of the seven all-time-high years for pages of federal regulations occurred during his tenure.

Four decades of nonstop growth in federal regulation show that tackling Washington’s bureaucracy is tougher than it sounds. The U.S. Code of Federal Regulations is more than 175,000 pages long, having grown steadily since the 1970s. Federal regulations aren’t just words on a page; these pages contain more than one million commandments from Washington in the form of restrictive words such as “must,” “cannot,” or “shall.”

But based on President Trump’s first 100 days, there is reason for optimism that this trend is about to change.

President Trump has already issued two executive orders on regulatory reform. They sent a message to executive agencies: Regulatory restrictions on businesses will not be able to keep growing on autopilot.

Trump’s hiring freeze will also help lower the rate of new regulations. As research from the Mercatus Center has shown, there is a high correlation between the number of employees at an agency and the number of regulations issued by that agency. President Trump has also taken advantage of the Congressional Review Act, which gives Congress the power to overturn recently finalized regulations through a simple majority vote. So far, he has signed at least 13 such repeals. Previously, this tool had been successfully used only once in its 20-year history.

Though President Trump’s lofty promise to cut regulation by “by 75 percent, maybe more” is likely unattainable, simply halting the growth in federal regulations would be a massive achievement. And the president has many methods available to him to accomplish this.

Moving into the next phase of his first term, there are three main legislative solutions that President Trump can use to follow through on his promises to cut regulation. These solutions address the accumulation of old regulations, the creation of costly new regulations, and the lack of public participation in the regulatory process.

First, the Trump Administration needs to get rid of outdated, ineffective regulations.

If President Trump decides to capitalize on his reputation as a deal maker, an innovative idea from the center-left Progressive Policy Institute would address regulatory accumulation. Both the Regulatory Improvement Act and the SCRUB Act create a “Regulatory Improvement Commission” to come up with a package of older regulations to eliminate that would then go through Congress for an up-or-down vote. Focusing on older regulations would take some of the politics out of regulatory reform, and voting on a large package in this way would limit the ability of established interests to interfere with the process.

Congress is making good progress on rolling back Obama Administration regulations, but a case of political nerves is protecting two obvious targets for repeal that are still standing: a Labor Department exemption from the Employee Retirement Income Security Act (Erisa) for state-run retirement plans and the Education Department’s borrower defense rule.

Such left-leaning states as California, Illinois, Maryland, New Jersey and Oregon have passed laws to set up state-administered retirement accounts for workers in the private economy who aren’t covered by employer plans. Employers would be required to automatically enroll workers in the state plans and deduct payroll contributions—up to 10% of wages in California—though employees could opt out.

The putative goal is to reduce administrative fees through economies of scale. But workers can easily sign up for a low-cost Roth IRA over the internet and choose how much to contribute. Liberals don’t trust workers to make their own financial decisions, so Democrats want to “nudge”—the behavioral economist’s euphemism for compel—them to sock away more money while giving politicians control of their investments.

Many workers would unknowingly contribute a share of their wages to retirement plans they don’t know exist and may not be able to exit. They also wouldn’t be protected by Erisa since former Labor Secretary Tom Perez last year exempted state plans with automatic enrollment. Thus, an employer in Wisconsin who enrolls workers in a 401(k) would be deemed a fiduciary. But in California an employer’s fiduciary obligations would be waived if he enrolls his employees in the state plan. Employers would have a new incentive to drop workers on the public plans that would be guaranteed by taxpayers.

The House has passed a resolution overturning the Erisa exemption, but the Senate isn’t moving. Tennessee Sen. Bob Corker appears to be the main obstacle, arguing that states should be able to experiment. But they don’t need an Erisa waiver for that. The issue is that the Labor rule unfairly favors government plans in a way that could hurt workers.

Meanwhile, Republicans should also move to rescind a midnight rule by the Obama Administration that lets borrowers who claim they’ve been duped by their colleges to discharge their student loans. The Education Department estimated the rule would cost taxpayers between $9.5 billion and $21.2 billion over the next decade, though Obama officials repeatedly underestimated the cost of loan forgiveness.