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The Trump Deregulatory Juggernaut Is Rolling

The Wall Street Journal logo The Wall Street Journal 10/30/2017 Gerald F. Seib

Why, you might ask, are the financial markets and the business community so happy with the Trump administration?

After all, a Trump presidency carries the risk of a trade war, which alarms investors and big-business leaders; in fact, the business community is actively working against the administration’s threat to deep-six the North American Free Trade Agreement.

The GOP tax-cut plan the financial sector has been counting on is only being unveiled this week, and the administration has done nothing so far to launch the promised rebuilding of American infrastructure that business leaders crave.

To some extent, then, the explanation for the love affair lies elsewhere, in something many in Washington either find boring or overlook entirely: deregulation.

While the Republican machine that emerged from the 2016 election may be sputtering on other fronts, it is proving to be a juggernaut on deregulation. And as a priority for the business community, deregulation ranks right up there with tax cuts and tax reform.

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A new set of figures from the U.S. Chamber of Commerce tells the tale of how far and fast the president, his administration and the Republican-controlled Congress have moved.

The Chamber has been keeping a tally of deregulatory actions this year, and its scorecard lists 29 executive actions—executive orders by Mr. Trump or directives from his White House—to reduce regulatory requirements. In response, executive-branch agencies have issued 100 additional directives that either knock down regulations or begin a process to eliminate or shrink them.

The Chamber’s count also lists almost 50 pieces of legislation that have been introduced or begun moving through Congress. And that count doesn’t include perhaps the most aggressive step the Republican Congress has taken: It has pioneered the use of a little-known 1996 law, the Congressional Review Act, that allows lawmakers to repeal executive-branch regulations within 60 days after they are finalized.

Using that law, Congress has passed, and Mr. Trump has signed, legislation overturning 14 regulations promulgated by the Obama administration in its final days.

Then, just last week, Congress passed legislation repealing a rule put in place this year by the Consumer Financial Protection Bureau—created under Mr. Obama’s administration—that would have made it easier for consumers to sue banks in financial disputes. The legislation, one of the most significant wins for the financial industry in years, passed the Senate 51-50 when Vice President Mike Pence broke a tie.

None of this is as flashy or sexy as a controversy over a 6:30 a.m. tweet from the president attacking his enemies. But the deregulatory push may be the most consequential initiative the Trump administration has taken, perhaps rivaled only by the appointment of dozens of federal judges, who can serve for life.

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Certainly the business and financial worlds are noticing the deregulatory drive. The economy grew at a 3% rate in the third quarter, the government reported Friday, fueled in part by business spending on new equipment, which rose at an annual 8.6% rate. That spending is one sign business leaders like the new environment.

Meanwhile, the stock market is hitting record highs on a regular basis. The Dow Jones Industrial Average is up more than 18% so far this year.

Democrats, on the other hand, aren’t pleased. They have begun complaining that the deregulatory rush is both dangerous to the public and the result of work by Trump administration officials with deep conflicts of interest, arising from their careers in affected industries or their personal financial interest in those industries.

Earlier this month, a group of House Democrats introduced legislation that would require agencies to report any conflicts of interest that would arise for the president or senior members of his administration when regulatory rules are being changed. President Trump is “undermining regulations in order to benefit himself, his family, and his close friends,” said Rep. David Cicilline, a Rhode Island Democrat and one of the bill’s sponsors.

Such legislation isn’t going anywhere in a Republican-controlled Congress, of course.

Some of the administration’s steps are small-bore—setting up a team to review federal and state rules to ensure that efforts to protect the sage grouse are complimentary, for example. But others, particularly those launched by the Environmental Protection Agency, are big and broadly significant, including moves already taken to delay and potentially rescind Obama-era Clean Air Act and Clean Water Act rules.

Some of the deregulatory actions will unfold slowly: Just as legal requirements for public comment and review periods make issuing regulations a slow process, so too do they mean unwinding regulations can take time and, in some cases, invite court challenges.

Ultimately, though, there is little Democrats can do to stop the drive—a clear sign that elections do have consequences.

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