The stock market has rallied since Donald Trump’s victory, despite predictions to the contrary, and it’s small company stocks that have seen the largest gains by a wide margin. It’s predominantly fueled by expectations about Trump’s economic policies yet to be implemented, ranging from the repeal of Obamacare, tax cuts, gutting government spending, immigration, international trade, and many, many others.
Earlier today, Trump further followed through on his campaign promises to be critical of government regulation. He ordered a freeze on new and pending regulations shortly after taking office, and today, signed an executive order to regulate the regulations.
According to Reuters:
President Donald Trump signed an order on Monday that will seek to dramatically pare back federal regulations by requiring agencies to cut two existing regulations for every new rule introduced.
“This will be the biggest such act that our country has ever seen. There will be regulation, there will be control, but it will be normalized control,” Trump said as he signed the order in the Oval Office, surrounded by a group of small business owners. Trump’s latest executive action will prepare a process for the White House to set an annual cap on the cost of new regulations, a senior official told reporters ahead of the signing.
For the rest of fiscal 2017, the cap will require that the cost of any additional regulations be completely offset by undoing existing rules, the official said on customary condition of anonymity. Trump, a businessman turned politician, campaigned on a promise to reduce federal regulations that he said burdened American businesses.
Major regulations are typically reviewed by the White House’s Office of Management and Budget (OMB) before they are issued. That review will continue under this new measure, but agencies will also have to identify what two regulations will be repealed to offset the costs of any new rule. The new order does not require that the repeal of the two regulations be done simultaneously with the release of additional rules, the official said.
Barack Obama’s presidency set records for how many new regulations were added.
According to one study, published by the American Action Forum in August of last year, the 600 major regulations Obama added total a $743 billion cost to the economy. Each have an economic impact of at least $100 million, on a yearly basis, according to the study. To put the cost in other terms, it’s a $2,294 regulatory imposition on every person in the United States.
Such regulations disproportionately and adversely impact small businesses, who have fewer financial resources to comply with them. The worst part is the aforementioned costs of Obama’s added regulations are in addition to the costs of the already existing regulations that predate his presidency. There are undoubtedly necessary regulations — and when we do need to pass them, it won’t be hard to find two to eliminate to make room for it.
[Note: This post was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]