CEOs are Seeing Progress on Deregulation

For many CEOs encouraged early on by promises of rapid regulatory rollbacks, the Trump administration’s deregulation push seems stalled, whether by a genuine lack of progress or by a heightened focus on the Russia probe, the healthcare bill and lesser distractions.

But a closer look shows that, headlines aside, the administration actually has been ticking off one deregulation initiative after another, not only in areas where Trump explicitly promised to act, but in many other areas, as well. This has included not only clawing back old regulations, but also refraining from issuing the spate of new rules that is customary at the beginning of an administration.

In fact, in comparing the first six months of the Trump administration with the first six months of the last year of Obama’s presidency, there was a 7% decrease in rules of all kinds put forward. And from Inauguration Day to the end of May, just 15 regulations were approved by the Office of Information and Regulatory Affairs, according to Politico. That’s by far the fewest among comparable periods since record-keeping began in the 1990s.

Trump also has gotten help from Republicans on Capitol Hill who, to an unprecedented extent, have used something called the Congressional Review Act to repeal rules from late in the previous administration.

Consider the following actions the administration has taken since Inauguration Day, all intended to throw the regulatory monkey off business’s back:

Two-for-one: The president kicked off his term with an executive order calling for the federal government to junk two regulations for every single new one it imposes.

Gas pipelines: Also immediately, Trump delivered on one of the highest-profile regulatory bottlenecks under President Obama: he approved construction of the Keystone XL and Dakota Access natural-gas pipelines in the Great Plains, over environmentalists’ objections.

Coal power: Trump quickly overturned President Obama’s Clean Power Plan to curb carbon-dioxide emissions by coal-burning utilities and rolled back the moratorium on leasing federal lands for coal production.

Net neutrality: In April, Trump’s appointment to head the Federal Communications Commission, Ajit Pai, vowed to reopen the Internet to competition that was thwarted under the Obama administration’s net-neutrality regulations. Opposing activists are taking him seriously.

Calorie counting: In May, the Food and Drug Administration delayed a rule, prized by former First Lady Michelle Obama, that would require restaurant chains to do extensive posting of the number of calories in their menu items.

Methane pollution: In May, the EPA halted an Obama administration rule to cut down on pollution by methane, which had been criticized by the oil and gas industry.

Alaskan reserve: In May, the Interior Department began reopening Alaska’s National Petroleum Reserve to oil and gas drilling, reversing the Obama administration’s 2013 shutdown.

Climate change: In June, Trump withdrew the United States from the Paris accord on climate change because he said it imposed wildly unfair environmental standards on American businesses and workers.

Joint employment: In June, the Labor Department withdrew its previous guidance on “joint employment” and independent contractors, moving away from an Obama administration standard that was much maligned in the franchising community.

For-profit colleges: In June, the Education Department pulled back the Obama administration’s rules for “gainful employment” and “borrower defense,” which many at for-profit colleges said were aimed at destroying their industry.

Protecting water: In June, the Environmental Protection Agency began moving ahead with plans to dismantle the Obama administration rule that sought to protect clean drinking water by expanding the federal government’s power to regulate small streams, wetlands and other tiny bodies of water in addition to major rivers and lakes. The “Waters of the United States Rule” was a major bane to businesses such as agriculture.

Speedier drugs: This month, the new leadership of the Food & Drug Administration “may be pursuing its goal of speeding drug development by easing up on its requirements,” the Wall Street Journal reported in the wake of the agency’s OK to permit Amicus Therapeutics to submit an experimental drug for approval without running an additional clinical study that the FDA previously demanded. Migalastat is meant to treat a rare genetic disorder.

“there were statements made during the campaign that deregulation was going to be one of the key agenda items, But it may just be too early to tell what’s happening in that regard.”

Tax inversion: Earlier this month, the Treasury Department announced plans to alter the Obama administration’s rule against corporate acquisitions made for the purpose of cross-border tax avoidance, or “tax inversions,” which many big companies have executed over the last several years to avoid high U.S. corporate-tax rates.

Consumer rules: And within the past two weeks, the Consumer Product Safety Commission asked the public to suggest ways the agency could reduce the burdens and costs of its existing rules, regulations and practices without harming consumers.

Many CEOs have watched this progress approvingly. For example, John Koudounis, CEO of Calamos Investments, an asset management company based in Naperville, Ill., told Chief Executive, “When President Trump assumed office, businesses were facing a rising tide of new regulations. There is no doubt that the president has helped to stem that tide. Reducing the shadow of impending regulation has been a huge positive for businesses.”

Avner Schneur, CEO of GRM Document Management, an enterprise-content management company based in Jersey City, N.J., agreed, adding that Trump’s “intentions seem to be in the right place when it comes to rolling back the regulatory burden on businesses.” But Schneur also noted that the Trump administration’s deregulation push is being held back to some extent by factors including the complex regulatory environment and the fact that “each regulatory decision has positive and negative effects.”

Other CEOs are less sanguine in terms of how the administration has met their expectations for action. “I haven’t seen any impact yet,” said Pete Selleck, CEO of Michelin North America, the Greer, S.C.-headquartered arm of the French tire-making giant. “We’re not seeing a reduction in regulatory impact on our company.”

But Kevin Greiner, CEO of Gas South, a natural gas services provider in Georgia and Florida, told Chief Executive that he’s willing to give the president the benefit of the doubt. “Certainly, there were statements made during the campaign that deregulation was going to be one of the key agenda items,” Greiner said. But “it may just be too early to tell what’s happening in that regard.”

With or without fanfare, the Trump administration has clearly moved to deregulate or loosen regulations in a number of crucial areas, and as it gains approval of White House appointees, the actions and momentum should be even clearer—and the pace is likely to pick up. Plus, the president’s people haven’t really begun to address huge areas that they still intend to deregulate, such as taking apart the Dodd-Frank law that was Obama’s signature effort to rein in the financial industry.

The battle over regulation in the Trump economy clearly has been joined. But it’s far from over.

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Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.

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