Vice President Mike Pence says that when it comes to deregulation, President Donald Trump’s record is historic.
Trump "has signed more laws cutting through federal red tape than any president in American history and has already saved businesses and families up to $18 billion in red tape costs every year," Pence said in a speech at the National Retail Federation's Annual Retail Advocates Summit on July 18, 2017.
Looking at the first half of the statement, we wondered, has Trump surpassed his predecessors in deregulation? And, is the savings $18 billion?
It’s not so easy to quantify laws that cut red tape. Experts we spoke with said that other presidents have cut through more red tape than Trump so far, citing the Paperwork Reduction Act of 1995, Regulatory Flexibility Act of 1980, and the Unfunded Mandates Reform Act of 1995, as well as President Jimmy Carter and Ronald Reagan’s deregulation of such previously heavily regulated industries as air travel, trucking, banking and telecommunications.
However, many of these measures were taken through federal agencies, or constituted a single law, whereas Pence cited a record number of laws passed.
" ‘Laws cutting red tape’ is a sufficiently ambiguous phrase that it is nearly impossible to say who has cut the most," said Jon Schaff, a professor of political science at Northern University. "If you were going to judge Pence’s claim, you’d have to go through all laws for all presidents and then decide whether each law was deregulatory in some manner and then how much did it deregulate. How does one judge such a thing? How much ‘red tape’ was saved through welfare reform in the 1990s? Or simply getting rid of federal controls on speed limits on highways? Or tax reform in 1986?"
When we asked Pence’s office for clarification, spokesperson Marc Lotter said that Trump had signed 14 Congressional Review Act measures compared with one previously. He’s right.
President Bill Clinton signed the Congressional Review Act in 1994, and it allows lawmakers to overturn regulations by federal agencies within 60 legislative days of their issue dates. It mainly applies when a new administration is aligned with the new Congress, and both oppose a certain set of last-minute regulations from the previous president.
Unlike executive authority -- which requires notice to the public and hearings, and produces outcomes that are often challenged in court -- Congressional Review Act measures only require an up-or-down majority vote in Congress.
"Pence’s office is clearly, unambiguously correct when it comes to Trump signing 14 Congressional Review Act resolutions to just one for all previous presidents — though do note that it is called the Congressional Review Act, and really it would be more fair to say that Congress initiated those actions, and Trump was in a position to ratify their choices," said Philip Wallach, a senior fellow in Governance Studies at the Brookings Institution.
Has Trump already saved Americans $18 billion with his deregulatory measures?
Lotter directed us to research by the right-leaning policy group American Action Forum to back up the talking point.
The AAF calculated $1.1 billion in savings, using the Federal Register’s estimated costs of regulations issued by the Obama administration that were repealed by Congressional Review Act measures.
"In addition, President Trump has formally delayed and signaled an intention to amend several other major rules. Combined, these actions could generate more than $18 billion in annual regulatory savings for businesses, investors, and consumers," the AAF said in the cited report. An updated AAF post places this estimate closer to $21.8 billion.
We first parsed through the $1.1 billion saved by the historic CRA measures, which checks out with the Federal Register data. What doesn’t check out is Pence’s statement that these dollars have already been saved.
The reason it was possible for Trump to roll back these rules was that they had been put in place at the end of the previous administration, which also means that many of them hadn’t yet taken effect.
Take the Disclosure of Payments by Resource Extraction Issuers, a rule that would require energy companies to report to the Federal Exchange Committee payments made to foreign governments. The AAF calculated its rollback would save $590.7 million annually, but those savings would only begin on Sept. 30, 2018, the rule’s required compliance date. The rollback of the Stream Protection Rule, calculated to save $81 million annually, would only start in 2020.
With compliance dates months or years in the future, businesses were unlikely to have sunk costs to comply with these rules according to Amit Narang, a regulatory policy advocate at Public Citizen, a left-leaning government watchdog group.
The calculation of costs also ignores the benefits of these rules and industry innovation that may reduce the cost of compliance.
In the Office of Management and Budget’s last annual report computing the costs and benefits of the federal regulations that were produced between 2005 and 2015, they found that benefits outweighed costs.
"In 2014 dollars, aggregate annual benefits are estimated to be between $269 and $872 billion and costs between $74 and $110 billion," the report said. "These ranges reflect uncertainty in the benefits and costs of each rule at the time that it was evaluated."
We then went on to look at the larger chunk of costs the AAF analyzed to come up with total annual savings from executive actions (not just Congressional Act Review measures). These potential savings were calculated using the costs estimated by the Federal Register at the time the legislation was put in place.
Taking these cost estimates as full savings assumes that the Trump administration will be able to fully annul rules that experts expect would take years to achieve.
For example, the executive action to dismantle the Clean Power Act would theoretically save $8.4 billion annually, but it will take a years-long rulemaking process to complete. The executive order to roll back the Gainful Employment Rule, estimated to save $433 million annually, will be delayed due to a court challenge.
The last chunk of the $21.8 billion estimate came from rule delays, which brings us back to our concern with saying the administration has saved the costs from future regulations cut by CRA measures. These costs weren’t straining families and businesses to begin with, because they were not yet in effect, and have simply been pushed further back.
The Office of Management and Budget’s latest calculation of the Trump administration’s annualized cost savings estimated these at $22 million, which is significantly lower than Pence’s $18 billion figure. We repeatedly reached out to the OMB for more details on their projections but did not hear back.
Pence said Trump "has signed more laws cutting through federal red tape than any President in American history and has already saved businesses and families up to $18 billion in red tape costs every year."
Whether Trump has signed more laws cutting red tape depends upon how you count legislation. Trump did sign a record number of laws rolling back regulations under the Congressional Review Act, but that’s not the only way to count deregulatory action.
Also, Pence is counting eggs before they hatch in using an $18 billion estimate of total savings. The deadlines for compliance for most of the measures he annulled had yet to go into effect, and the fate of many of the executive actions that would back past regulation remains unclear.
We rate this statement Half True.