Bureaucratic restraint improves economic opportunity

Ever-expanding bureaucracy has become the accepted norm of the United States government. The administrative state’s expansive entrenchment into the traditional operations of government has led to an unofficial anointing as the fourth branch, with erroneous beliefs such as ‘they make our lives better’ justifying continued growth. But the Constitution’s guidance only recognizes three branches of governance: legislative, judicial, and executive. Life-changing policies should only come from these three institutions.

In failing to respect this constitutional framework, the administrative state must be reminded of its subjugated status to the executive branch and end the regime of governance-by-regulator. Recent executive orders from the Trump Administration are addressing this lapse in civic education, bridling excessive regulations on the energy sector, and advancing bureaucratic restraint.

This bureaucratic minimalism focuses on the essential processes of government, aligns strongly with legislative intent, and minimizes unnecessary complexity in order to grow economic opportunities. On April 9, President Trump signed two executive orders and one memorandum curtailing gluttonous bureaucratic growth. These three efforts mandate zero-based regulatory reform, overturn unlawful regulations to align with recent Supreme Court decisions, and eliminate anti-competitive regulations. 

The executive branch’s adoption of zero-based regulation will require 10 agencies and subagencies to cyclically justify regulations from scratch by inserting sunset provisions into energy codes. Modeled after Idaho’s zero-based regulatory practices, the federal government will benefit from a continual review and update of regulations to keep up with changing needs and technology. As the executive order reads, “Zero-based regulation uses the bureaucracy against itself. If bureaucrats move slowly, the default is deregulation and free markets—not the sclerotic status quo.”

Agency resistance and slow response times lead to heavy costs on individuals and businesses. This executive order will force agencies to re-evaluate every regulation, justify its existence, and allow citizens a say in holding agencies accountable to the people.

Competitive Enterprise Institute (CEI) Senior Fellow James Broughel said, “The executive order echoes successful reforms implemented at the state level, most notably in Idaho, where a zero-based regulation system with a sunset review process enabled the state to eliminate tens of thousands of unnecessary regulatory restrictions and earn recognition as the least regulated state in the nation.”

The second declaration was a memorandum rescinding unlawful regulations under 10 recent landmark Supreme Court decisions. The recent flood of Supreme Court decisions siding with the American people over the administrative state is a result of decades of regulatory overreach. As agencies stretched the enforceable interpretations of the law and moved away from legislative intent, legality came into question. Recent Supreme Court decisions, like Loper Bright, determined the unlawfulness of many agency practices and mandated that agency enforcement align strictly and clearly with legislative intent.

The memorandum directs agencies to revoke any unlawful regulations expeditiously under the Administrative Procedure Act’s “good cause” exception. CEI’s Fred L. Smith said, “This new initiative goes beyond previous orders invoking typical platitudes about efficiency, cost-benefit and ‘outdated, unnecessary, or ineffective’ by specifically invoking ‘deconstruction’ of an administrative state now largely regarded as unconstitutional and irredeemable."

The final component of the April 9 efforts addresses the need for maintaining American competitiveness by eliminating anti-competitive regulations. The EO states, “Federal regulations should not predetermine economic winners and losers. Yet some regulations operate to exclude new market entrants. Regulations that reduce competition, entrepreneurship, and innovation — as well as the benefits they create for American consumers — should be eliminated.” 

Recognizing that the American people are more adept than bureaucrats at identifying regulations stifling entrepreneurship and opportunity, public input will be solicited.

Congress is also getting involved in this important regulatory reset. U.S. Senator Jim Risch (R-Idaho) introduced the "Zero-Based Regulations Act" to cut red tape and improve the opportunity for hardworking Americans. Risch said, “Idahoans are fed up with heavy-handed federal regulations stifling our freedoms.”

Detractors of bureaucratic restraint are already fear-mongering, claiming public health and other essential protections are under attack, but British Columbia’s experience justifies the need for regulatory minimalism. From 1994 to 2001, British Columbia’s lackluster economic growth of 2.6 percent per year (lagging behind Canada at 3.9 percent) motivated the new provincial government to launch the Red Tape Reduction Action Program. Within 3 years of enactment, the province reduced regulatory requirements by 36 percent, resulting in economic growth surpassing national rates by an average of 1.1% per year.  

If the poorly corralled fourth branch of government continues unhindered, the result will be economic minimalism, an undesirable alternative. The efforts of the Trump Administration to enact zero-based regulation, remove unlawful rules, and end anti-competitive regulation will work at reining in the overgrown fourth branch of government. As Idaho has already demonstrated at the state level, bureaucratic restraint is the best path forward to decreasing regulatory creep and increasing entrepreneurship and opportunity.