Regulation

For Trump And Icahn, Experts Say Regulatory Reform Should Be More Than a Numbers Game

And Congress needs to help

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RICHARD B. LEVINE/Newscom

President-elect Donald Trump has promised to tackle the federal regulatory state and on Thursday appointed billionaire investor Carl Icahn as a sort of anti-regulation czar who will lead the incoming administration's efforts.

On the campaign trail, Trump promised to repeal two federal regulations for every new one added to the books. Icahn, who was previously in the running to be Trump's Treasury Secretary but will instead serve as special adviser, has been a vocal critic of federal regulations—particularly those imposed by the Environmental Protection Agency.

"Cut a lot of this regulation, just cut it out. Its run amuck," Icahn told Bloomberg in an interview last month, as he was advising Trump on cabinet picks. "Let a businessman know that when he builds a factory, builds machinery, when he's going to invest the money, that he's got the government behind him."

In announcing the appointment on Thursday, Trump said Icahn's assistance would be invaluable. Perhaps so, since Icahn will not be paid for the special advisory role within the Trump administration. However, that also means the investor will not have to give up his position as chairman of Icahn Enterprises, which owns stakes in industries including railroads, casinos, hotels, rental car companies, and health care providers. The insider role in the administration was quickly criticized by Democrats who worry that Icahn could use it to benefit his businesses, Politico reported.

If Trump and Icahn want to make meaningful reforms to federal regulatory policy, though, they will need targets that are more specific than repeal-two-for-every-one-added and will have to get Congress to reassert its authority over the federal bureaucracies, policy experts tell Reason.

Chris Koopman, a senior research fellow at the Mercatus Center, applauded Trump's instinct to target regulatory overreach, but said focusing on the number of regulations could miss another dangerous piece of federal regulations: informal regulation that agencies rely on before they go to regulations in the traditional sense.

These informal regulations include things like guidance documents published by federal agencies that offer suggestions—with a wink attached—for how companies should act, and how the Federal Communications Commission mandates certain behavior through so-called "transaction reviews" before approving license transfers. The FCC has used that process to mandate parts of the Obama administration's net neutrality regulations.

Those informal regulations could become even more common if the Trump administration starts hacking away at written rules without focusing on the underlying processes.

"There is a huge problem with the amount of federal regulations that are put out. The intuition here—get rid of the thicket—should be applauded, but that's just the surface of the quagmire here," Koopman said.

To get below the surface, Trump's team could look to the Competitive Enterprise Institute—including regulatory policy guru Clyde Wayne Crews, who coined the apt descriptor "regulatory dark matter" for all those off-the-books regulations—which last week published a new report with five steps the next administration and Congress can take to reform the federal regulatory state.

The first thing the new administration should do is implement a better review process within the White House Office of Management and Budget. In theory, the OMB is supposed to make sure that proposed regulations' benefits outweigh the potential costs, but in reality this process is fraught with problems. Of the approximately 3,500 rules issued by dozens of federal agencies each year, only a few handfuls are subject to cost-benefit analysis.

Beyond that, Congress probably has to get involved.

The CEI report calls for Congress to assert itself by threatening to defund agencies that overstep their statutory authority and to use the Congressional Review Act to bring more accountability to executive branch agencies and commissions. The CRA was passed in 1996 and gives Congress the option of pausing any new regulation for up to 60 days of public scrutiny.

The law has been used sparingly and has only once, in 2001, resulted in the repeal of a federal regulation.

Congress also should reverse a decades-long trend of abdicating responsibilities to the executive branch agencies and over-delegating decision-making processes.

"Congress is poised to make great strides in returning a balance of power to the federal government through reining in the regulatory state," said Kent Lassman, president of CEI, in a statement.

Icahn and Trump have talked a good game about trimming back the federal government's control over individuals and businesses. It's clear that many Americans are in favor of reform—"draining the swamp," as some Trump supporters might put it—and limiting the power of the federal government's alphabet soup of various agencies and commissions.

The first thing Trump should do, Icahn told Bloomberg on Thursday, is "get rid of a number of these, what I consider to be, crazy regulations."

The "crazy" regulations are one thing. Fixing the roots of the problem will take more work.

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  1. Well, at least all the progtards can now legitimately say that billionaires run our government.

  2. Let a businessman know that when he builds a factory, builds machinery, when he’s going to invest the money, that he’s got the government behind him.

    How about the government just gets out of the way instead.

    1. Big business has proved time and time again that they are perfectly happy to have big government when it benefits their bottom line.

      1. Pretty much my point

        1. Sorry, my comment was a “yes, and” not a “yea, but still”.

  3. Enjoy some salty Linda Greenhouse tears on Trump’s appointments:

    A smart piece by Michael D. Shear in The Times earlier this week referred to most of the Trump nominees as “disrupters” who “aim to unnerve Washington.” Disrupters, destroyers ? the scale of the degradation that will occur is so astonishing that no one word is adequate to encompass it.

    1. “…the scale of the degradation that will occur is so astonishing that no one word is adequate to encompass it….”

      I got one:
      Hooray!

    2. Holy fuck, that’s some writing! That’s like…beyond Dalmia by several parsecs.
      I couldn’t copy any content. Damn, everyone owes it to themselves to read this shit.

      If this is the NYT standard, and NYT is a prime example of quality US journalism, how did your country not catch fire and fall into the sea 50 years ago at least?

      1. I think there’s some kind of informal competition at the NYT right now for who can deliver the most hyperbolic deranged butthurt. This is a late entry but a strong one.

        1. I think it’s more a competition (with WaPo, CNN, etc) on how gullible their readers and the general public are to their own Fake News?. The polls showing the number of people who buy into the Russian Hacker conspiracy theory might make you lose faith in humanity.

          Just read that piece and realize they’re asking a loaded question. It’s not “do you believe Russians hacked the election”, but, literally, “How Much Does Russia’s Interference Bother You?”

          The Big Lie only works with repetition.

          1. The headline is something else too. “Russian election hacking” makes you think that the Russians fucked with the actual election/votes. .

            1. That’s the thing about this. People think they actually hacked the election results. They didn’t even hack the government. They hacked an organization’s e-mails with an incredibly basic phishing scam. All they did was release information. They didn’t falsify anything. The Dems never denied any of it was true. They didn’t manipulate people’s thoughts. They probably didn’t even change peoples’ minds, since they just confirmed everything people thought about Hillary all along. I’m still waiting to see the actual evidence suggesting a direct Russian government tie. The method of hacking was just so basic and easy.

            2. That’s the thing about this. People think they actually hacked the election results. They didn’t even hack the government. They hacked an organization’s e-mails with an incredibly basic phishing scam. All they did was release information. They didn’t falsify anything. The Dems never denied any of it was true. They didn’t manipulate people’s thoughts. They probably didn’t even change peoples’ minds, since they just confirmed everything people thought about Hillary all along. I’m still waiting to see the actual evidence suggesting a direct Russian government tie. The method of hacking was just so basic and easy.

      2. Read for content and not for following the alt-write cultists. I’m surprised your country hasn’t caught fire and fallen into the ocean with such high levels of pedantry.

    3. Just think how these people would react to a libertarian, or even a true fiscal conservative, coming to power in DC.

      1. Before reading the article, I’d have said “Ha, it’d be so funny, seeing them splutter because they used up all their hyperbole”

        After reading that thing, I really, really want to see. Because I know they can be even more hyperbolic and panicking. I can’t imagine how, but I know it.

    4. Disrupters, destroyers

      wreckers?

    5. And wouldn’t leftists be the chief agency snatchers?

    6. The white (almost all) men (almost all) sitting around the table will look like their predecessors, generations of them.

      So they look like every other cabinet in history, but we need to make sure to point out their race and sex for scorn.

      Then there is Andrew F. Puzder, the fast-food executive and opponent of raising the minimum wage, chosen as secretary of labor. He is a longtime anti-abortion activist who, as a lawyer defending people charged with blocking access to abortion clinics, has offered a “defense of necessity,” namely that abortion itself is a greater offense than a clinic blockage.

      That’s, uh, that’s not the kind of labor under his purview…

      I know “beyond parody” is frequently used here, but this freakout qualifies.

    7. Damn … if Trump’s appointees were just half as good as Linda Greenhouse says they are, I could really get hopeful about his Administration.

      I kind of doubt they are as good as she says, though, so I’ll keep my expectations low.

      But, yeah, the salty tears are no less delicious.

      1. Jim O’Neil for the FDA could be the real deal. If he gets in there, I think he will stay true to his rhetoric on relaxing drug approval regs. That alone would be a big plus in Trump’s column.

        Puzder may be able to do good things at Labor. Or maybe he’ll be a corporatist crony.

  4. However, that also means the investor will not have to give up his position as chairman of Icahn Enterprises, which owns stakes in industries including railroads, casinos, hotels, rental car companies, and health care providers. The insider role in the administration was quickly criticized by Democrats who worry that Icahn could use it to benefit his businesses, Politico reported.

    Oh, noes. Trojan horse!

    1. will have to get Congress to reassert its authority over the federal bureaucracies

      Or they could wave a magic wand. Both options are equally plausible, since Congress specifically delegated their law-making powers to the alphabet agencies just so they wouldn’t have to take responsibility for their actions.

    1. That is actually on the WaPo site? You didn’t have to directly type in the URL to find the page?

  5. Trump didn’t make deregulation a big focus of his campaign, but it sure looks like that’s what he’s basing appointments on. About damn time.

    1. There’s been a position paper on it on his website.

      1. You didn’t hear much about it on Reason, but a quick look at his twatter shows that he (his handlers) brought it up regularly with cute infographics.

  6. they will need targets that are more specific than repeal-two-for-every-one-added

    Repeal *everything*?

  7. Thank you, Eric Boehm! See, this is what I’ve been saying Reason should do: find the parts of Trump’s agenda that are compatible with libertarianism, and write about those. Don’t just sit around whining about the bad parts. The left and the MSM and academia will do more than enough whining about the rest.

    Next, start making some specific suggestions. How about a nice listicle: “The 25 Most Harmful Regulations Trump Should Repeal.” Something like that. Start generating some public outrage over the worst examples. There’s some momentum to reducing parts of government now, so add to it!

    1. Trump is yucky, and he’s an old white heteronormative male, so if you say anything good about him, you won’t get invited to cocktail parties.

      And, you know, don’t you, how much cosmotarians like their cocktail parties?

    2. Ah, the dreaded PapayaSF stamp of approval.

      1. Your insightful contribution is noted.

    3. See, this is what I’ve been saying Reason should do: find the parts of Trump’s agenda that are compatible with libertarianism, and write about those.

      We’re not Trump shills… we need to cheer Trump when he does something good and jeer him when he does something bad.

      Start generating some public outrage over the worst examples.

      I have a suggestion for example #1: The laws that made it possible for URL Pharma, Turing Pharmaceuticals, and Mylan to corner the market on their drugs and jack up the price.

      1. My pick: Loosening the rules that stop companies like this one from operating.

        Loosening safety rules for big airlines would be incredibly politically costly, but allowing some level of non/less-regulated small-scale flying services to happen can achieve a big fraction of the experimentation/benefits.

        1. That’s good, too.

      2. I’ve never asked anyone to be “Trump shills.” My point has always been Fabian incrementalism applied to libertarianism, making lemonade from lemons, accentuating the positive. Also, that the jeering is redundant: everybody is doing that. Not many are looking for libertarian opportunities, so that should be Reason’s main focus.

        Your suggestion is excellent, though.

      3. If they’d just go back to the original, intuitive understanding of “new drug”, that wouldn’t happen. They’re interpreting the 1962 amendments in a pro-regulatory way.

    4. You know who else wanted to get rid of regulations? Oh wait, never mind, the person I’m thinking of loved the state regulating industry….

  8. Note to libertarians here. An incoming Hillary Clinton administration would not be doing one. godamned. thing. to scale back the role of government. Progressives are the opposite of libertarians. Note, Trump may not be the best, but he’s far from the nightmare Clinton would have been regarding regulations.

    The only things Progressives will promise is full social freedom as long as you completely agree with them on every social issues in exchange for complete economic domination but the government.

    1. Pretty sure most people on this board would agree with you. Trump may be an obnoxious blowhard, and he may deliver more bad than good in the next 4 years, but I feel nothing but relief that he’s taking office rather than Hillary. The country almost certainly dodged a huge bullet.

      1. But is there an anvil coming down onto the spot where the country wound up?

    2. Trump won’t be scaling anything back other than real estate regulations and energy company regulations. That’s where his money is. The only reason he’s there is up his personal wealth and make sure his family is even more set for life.

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