Cutting Red Tape: Trump’s War on Regulation

Deregulating the U.S. economy has become a focus of the second Trump Administration, with the president ordering 10 government rules or regulations cut for every new one adopted.

Clearly, regulatory policy has profound impacts on economic growth, innovation and competitiveness. If the United States hopes to control its deficit spending and national debt, and continue its dynamic economic growth, policymakers need to carefully examine the costs and benefits of existing and proposed regulations.

Numerous studies demonstrate how deregulation can unleash economic efficiencies and reduce prices for consumers. For instance, earlier efforts to rollback rules on the airline, trucking, railroad and telecommunications industries resulted in cost reductions of around 30%.

But there will be challenges. Policymakers need to prioritize reforms that maintain important protections while minimizing compliance burdens. For instance, digitalizing all compliance paperwork for federal, state and local government agencies to share and access would go a long way toward creating a “one-stop-shop” for government permits. That alone would dramatically accelerate how fast proposed projects are reviewed without compromising public welfare, and at the same time spur investment, according to the Organization for Economic Cooperation and Development. Coordination between regulatory agencies is another key area for improvement. Inconsistent or conflicting rules from different agencies impose unnecessary costs on regulated entities.

So far, the Trump Administration claims to have saved “Americans over $180 billion, or $2,100 per family of four, by halting proposed Biden-era regulations.” Notable efforts include significant rollbacks of environmental rules by the Environmental Protection Agency and redefining the scope of the Consumer Financial Protection Bureau. Those actions, however, are facing several legal challenges.

Bottom Line: If America wants to remain a global leader in innovation, the government can’t ignore the impact of its regulatory system. It’s not about blindly slashing red tape, but about being smarter and more strategic in how we regulate with strong cost-benefit analysis. We need to cut the fat, not the muscle, and get rid of outdated rules that serve no purpose and streamline processes to reduce headaches for businesses.