(Bloomberg Opinion) -- Deregulation has been a central theme of Donald Trump’s presidency. By freeing companies of burdensome bureaucratic requirements, the president says, he has helped the country prosper — a success that makes him a better shepherd of the economy than his opponent in the upcoming election.
Like many of the president’s claims, this one doesn’t stand up to scrutiny.
No doubt, the Trump administration has taken or participated in some notable actions, rolling back rules designed to protect the environment, promote fair lending, provide Americans with affordable health care and much else. Perhaps this is why media have labeled this president “deregulator in chief,” largely accepting the administration’s assertions that it has, on net, sharply reduced the number of regulations, and that the effort has delivered savings of more than $200 billion to U.S. businesses and more than $3,000 to each U.S. household.
In a new report, my co-authors — regulation experts Cary Coglianese of the University of Pennsylvania Law School and Stuart Shapiro of Rutgers University’s Bloustein School of Planning and Public Policy — and I take a closer look at Trump’s deregulatory achievements. We find the administration’s claims to be a mix of overstated, cherry-picked and indefensible.
Let’s start with the magnitude of deregulation. The Trump administration says it has eliminated between seven and 22 rules for each rule it has promulgated. (Press secretary Kayleigh McEnany announced that “seven deregulatory actions have been taken for every one new regulation,” while the Trump campaign website claims this number is 22.) A comparison of agencies’ agendas with the administration’s reports of its regulatory actions between 2017 and 2020 tells a different story.
For one, the administration’s tally excludes 71% of its completed regulatory actions by categorizing them as “exempt” or “other.” This is like golfers counting only the strokes that suit them. Even using this skewed data set, the ratio of deregulation to regulation is 5 to 1. And if one focuses solely on “economically significant” actions, the ratio drops to about 1 to 1. In other words, when it comes to regulations most likely to affect the economy, the Trump administration has created about as many as it has eliminated.
The lack of net deregulation can also be seen in the number of pages in the Code of Federal Regulations, which has held more or less steady under Trump, not decreased as it did during some previous administrations. Despite this, the president has falsely asserted the exact opposite: that his administration “removed nearly 25,000 pages of job-destroying regulations, more than any other President by far in the history of our country.”
Now let’s consider the purported savings. Trump’s claims appear to stem from a 2019 Council of Economic Advisers report, which projected that the administration’s efforts would eventually save the typical household more than $3,000 annually. Those benefits are supposed to arrive after five to 10 years, so it’s wrong to say that they’ve already been delivered, as this administration has repeatedly. In any case, the estimates contain some serious econometric flaws.
For example, the administration assumes that its move to eliminate broadband consumer protections — which had prevented internet providers such as AT&T and Verizon from using customers’ personal data without their express permission — will generate $22 billion in annual savings. This estimate is based on a decrease in the price of wired and wireless services that occurred at about the same time, even though there’s no justification offered for attributing the decline to the deregulatory action, as opposed to contemporaneous changes in market competition.
The savings estimates also completely ignore the other side of the ledger — the costs that American families will accrue as a result of deregulatory efforts. For example, eliminating the Obamacare requirement that everyone procure health insurance, projected to save $28 billion annually, will entail immense costs by reducing the number of insured Americans. Rolling back fuel economy standards will also impose costs, in the form of greater gasoline consumption, pollution and accelerated climate change. Reversing worker protections will expose more people to wage theft and dangerous conditions.
All told, there’s no evidence that Trump’s deregulatory efforts have helped the economy — which, before the global pandemic hit, had grown at a slightly slower rate under Trump than it had in the final years of the Barack Obama administration. But that’s not to say that there won’t be consequences from this administration’s deregulatory push. Indeed, we fear the long-lasting effects across the economy are likely to be dire. These costs will be counted not only in dollars, but also in the lives of the most vulnerable Americans.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Natasha Sarin is an assistant professor at the University of Pennsylvania Law School and an assistant professor of finance at the Wharton School.
©2020 Bloomberg L.P.