NTF ISSUE PAPER: PRESIDENT TRUMP CUTS REGULATIONS

NTF Issue Paper: president38.doc. 2-17.
NEBRASKA TAXPAYERS FOR FREEDOM ISSUE PAPER:
PRESIDENT TRUMP CUTS REGULATIONS.

BACKGROUND. Strangling regulations imposed by the Obama Regime have crippled large and small businesses. Agency rules and regulations surged during 2016, helping to create a Federal Register 20% larger than the prior record. 8 years of Obama bureaucrat rulemaking added almost 18,000 pages to the Federal Register. Burdensome rules and regulations have imposed mountains of paperwork on commerce, companies forced to hire additional employees only to comply with these federal dictates. Simultaneously, companies have delayed hiring new employees, as regulations have stifled their business growth. It is almost impossible now to start a small business or expand one because of draconian regulations. Federal Aviation Regulations, a typical example, are rotten with duplication and rules no longer necessary. The FAA through its history has preferred to handle regulatory issues by heaping new rules on top of old ones, many times without regard for previous regulations. President Trump has taken immediate action to lift these burdens from American businesses and government agencies.

SMALLER HURT. Regulation promulgators failed to fully analyze and understand their direct and indirect costs on American small businesses. Such businesses shoulder a massively high percentage of the regulatory burden in America, 36% higher per employee than large companies. The cost of Obama regulations hurt worst the small financial community because of fixed costs to comply with the regs. Since the 2008 financial crisis, the Credit Union National Assoc. found 235 regulation alterations by 23 federal agencies, 7,643 new pages of regs ordering local financial institutions how to treat customers. These regs placed a yoke on community banks and credit unions, restricting home and car loans and other services. The National Small Business Association presented a survey showing that beginning businesses spend $83,000 to first comply with regulations. Another of its surveys found that the average small business spends about $12,000 annually to comply with regulations. Almost 33% of small business owners spend over 80 hours annually to handle federal regulations. 75% state that they read through regulations, but 63% say they must comply with only 1/2 the regs they read, a waste of time. This burden has crushed many start-up businesses. Over 50% of small businesses have delayed hiring a new employee because of regulatory burdens.

TRUMP TAKES ACTION. Regulations eliminated include the Department of Labor overtime rule that would have doubled the current income threshold under which employees must receive overtime pay. The Waters of the U.S. rule would have greatly expanded the jurisdiction of the EPA water protection statutes to include puddles and farm ditches. The U.S. Equal Employment Opportunity Commission requirement meant to force specific employers to submit pay data that would place massive and unnecessary burdens on smaller employers and waste federal resources on meaningless enforcement based on incomplete and misleading information. President Trump issued an executive directive mandating that for every new federal regulation issued by an executive department or agency at least 2 previous regulations end and that the cost of planned regulations face control through a strict budgeting process. The order directs that the total new cost of all new regulations finalized in 2017 set at zero. New incremental costs associated with new regs must see an offset by eliminating existing costs associated with at least 2 prior regulations. Agencies must identify 2 regulations to repeal, if they choose to issue a new one. Starting in FY 2018, each agency must provide the Office of Management and Budget (OMB) with its best approximation of the total costs or savings expected from new regulations. Also in 2018, the order directs the OMB to give each agency a budget target for how much it can increase or cut regulatory costs. To the extent such estimates predict an increase in incremental regulatory costs, such increase must win authorization from the OMB. Agencies also must “provide the agency’s best approximation of the total costs or savings associated with each repealed regulation.” During the budget process, the OMB director will tell agencies the total amount of incremental costs allowed for every agency in issuing new regulations and repealing regs for the following fiscal year. Administration guidance will demonstrate processes for standardizing the measurement and estimation of regulatory costs, standards to determine what qualifies as new and offsetting regs, standards to determine the costs of existing regs considered for elimination, methods to oversee the issuance of rules with costs offset by savings at different times or in different agencies, and emergencies and other circumstances that might justify requirement waivers. Another memorandum instructed the Labor Dept. to delay implementing an Obama rule that forces financial advisers who charge commissions in selling stocks, bonds, annuities, etc. to steer retirees towards only low risk options when giving advice, limiting investment options. Industry groups objected to Obama rules, because many financial advisers would see their profits drop, leading to higher fees. They also argued the rule was unnecessary, as most advisers already act in client best interests. This Act would have caused brokers to dump retirement savers with smaller retirement accounts less than $50,000. Trump called the Dodd-Frank Act a horrid Obama policy that crippled markets, reduced credit availability, and hindered economic and job growth. It is a piece of massive government overreach Trump seeks to terminate. It imposed hundreds of new regulations on financial institutions and established an enormous amount of work and effort for financial firms. Some of its rules possibly are unconstitutional, creating new agencies that would not actually protect consumers. Canada, Australia, and the United Kingdom instituted similar reforms; for every British rule issued, 3 must end. This rule saved businesses there L885 million in 1 year. Proposed Obama rules, of which there were 2,391 as of 12-31-16, are on hold, as are finalized rules yet to hit their effective date, like 30 EPA rules. A new legal interpretation holds that rules going back many years actually subject to resolutions of disapproval because of a sweeping failure by agencies to follow technical reporting requirements. Trump also can refuse to enforce rules.

EXAMPLES. Terminated is the Consumer Financial Protection Bureau rule on payday and vehicle title loans, a bureau “Bulletin” on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act that limited the ability of automobile dealers to offer discounts, the Federal Railroad Administration’s “Train Crew Staffing” rule seeking a 2 engineers on a train mandate, the Dept. of Transportation Rear Seat Belt Reminder System, and the Department of Labor “administrator’s interpretation” on independent contractors (Obama re-classification as “employees.”)

THE BENEFITS. This order will cut regulations massively for both small and large businesses and ease the creation, opening, and expansion of small businesses, previously crippled by Obama Regime rules. The President specifically mentioned particular regs that hinder job growth, including the EPA waters rule and regs on power plants, the latter currently before a federal court. He pledged to visiting business execs to cut regs by 75% and freeze all new and pending regs at the federal level. Bureaucrats seeking new regulations sometimes do not realize that the same or similar ones already are in force, causing duplication. House Majority Leader Kevin McCarthy said agencies continually increase the regulatory burden on the country without considering the tens of thousands of pages of rules that already exist. An end to the way these rules appear to undermine our Constitution, the rules obstructing innovation and economic growth while harming individual American citizens. Regulators will find budgetary constraints on costs that they impose annually.

EXCLUSIONS. The Trump order specifically excludes military and national security regulations, also emergencies regarding health and safety until a department chief can review them. This directive unfortunately does not and cannot delete regulations from independent agencies, like the SEC and Commodity Futures Trading Commission, agencies that pass rules required by the onerous Dodd-Frank Act. It would not apply to rules mandated by congressional statute law.

SUPPORTERS. The U.S. Chamber of Commerce praised the executive directive that fulfilled the Trump campaign promise to eradicate regulations that restrict growth and cause employees to lose jobs. The Chamber actively will help the Administration identify regs harming the most people and recommend solutions. The National Federation of Independent Businesses also champions this order.
OPPONENTS. Liberal consumer groups and radical environmentalists oppose the Trump actions, accusing the Administration of harassing government agencies to stifle regulation.

CONGRESS HELPS. This Trump directive supports the conservative House GOP Better Way agenda, as the House begins to repeal several Obama regulations. Though the President has made regulatory reform a priority, significant relief still requires congressional action. In addition to supporting the Office of Advocacy, Congress must revise its entire approach to regulatory policy. It can pass laws that are straight-forward, specific, and transparent, giving regulators a clearer path toward implementing the law envisioned. Trump will cooperate with Congress to defang Dodd-Frank, which has crippled the financial industry with burdensome and redundant red tape regarding compliance and reporting standards for mortgages that make it difficult to extend loans. The House already passed the REINS Act, to require Congress to approve the costliest bureaucratic rules and the Regulatory Accountability Act. It also can defund agency programs.

TAKE ACTION NOW. Contact your representative and 2 senators today to endorse and support the Trump executive orders to reform federal regulations. Nebraska large and small businesses and families count on conservatives to lobby our Capitol Hill delegation. Congressional liberals mean to stall and smother these reforms. Email netaxpayers@gmail.com for congressional contact information.

Research, documentation, and analysis for this issue paper done by Nebraska Taxpayers for Freedom. This material copyrighted by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by other groups in the NE Conservative Coalition Network. 2-17 C

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