A Covid Silver Lining: Weeding Out Harmful Regulations
In order to combat the pandemic that has left tens of thousands of Americans dead and millions more out of work, many government agencies have suspended regulations and restrictions that harm our ability to respond effectively to the crisis. Now, the Trump administration is wisely moving to try to preserve deregulation efforts where they have proven successful.
As part of the Executive Order on Regulatory Relief to Support Economic Recovery, President Trump directs agency heads to review regulatory standards that have been temporarily set aside or modified in response to the coronavirus. They are then directed to report which changes would improve economic recovery if made permanent — so long as those changes would be consistent with protecting public health and safety.
That’s an important step towards cementing this administration’s legacy as the first in years to take meaningful steps towards arresting the steady growth of the administrative state. One 2016 study by the Mercatus Center found that the economy would have been 25 percent, or $4 trillion, larger had the size of the administrative state remained where it was in 1980. Through 2016, the steady growth of the bureaucracy and its continued encroachment on the workings of the economy appeared inevitable.
However, the Trump administration has made deregulation a cornerstone of economic growth. Through the end of 2019, the administration had eliminated $50.9 billion in regulatory costs, and was ending nearly twice as many significant regulations as it was implementing.
That’s excellent progress, but there’s a reason deregulation is politically difficult — deregulatory efforts are easy to pillory as dangerous, with supporters of a stronger regulatory state conjuring images of environmental devastation or rats in peoples’ food. These characterizations are deeply misleading — just 14 percent of significant regulations are environmental, and many existing regulations make their way into the Federal Register with a very limited justification process.
As government agencies have temporarily suspended regulations to respond to the crisis at hand, Americans have had an opportunity to see just how unnecessary and harmful many suspended regulations are. Many of these changes have drastically increased the speed at which medical supplies and treatments can be produced.
Take the example of telemedicine, the practice of consulting with medical professionals via video chat and other technologies. These services, previously subjected to onerous licensing requirements across a patchwork of state regimes among other regulatory burdens, has seen explosive growth as states and the federal government have relaxed requirements. Telemedicine has the potential to benefit rural patients, those without easy access to transportation, and doctors facing less in-person exposure to sick patients should these eased requirements remain in place.
Other, more mundane coronavirus deregulations have had a profound impact on peoples’ daily lives. The advent of to-go cocktails and cocktail delivery is hardly life-changing (outside of pandemic-imposed quarantines, at least) but it does beg the question of why these restrictions existed in the first place.
Directing the federal government to review suspended regulations that can stand to be eliminated permanently is an excellent way to salvage some minor structural economic improvements out of a thoroughly negative situation. States and local governments should consider doing the same.