An important area for the new Congress and Trump administration to save money for families and lower inflation is reducing the cost of regulation. Regulatory red tape increases the costs annually by $22,962 per household, or 31% of the family expense budget, according to a report from the National Association of Manufacturers (NAM).
Congress should provide strong oversight to clean up the mess that the Biden-Harris White House made. Biden accelerated red-tape regulation, piled on top of existing rules.
For just the calendar year 2024, American Action Forum estimates the Biden-Harris rules cost $1.3 trillion (driven, as the Competitive Enterprise Institute notes, primarily by the Environmental Protection Agency’s Multi-Pollutant Emissions Standards, which alone account for $870 billion).
To stop the red tape strangulation, Congress can step in and invoke the use of the Congressional Review Act (CRA). The CRA was a bipartisan law, passed by a Republican Congress and signed by former President Bill Clinton, a Democrat. It is a tool created to strengthen congressional oversight of federal agencies’ rules.
The CRA requires federal agencies to submit a report on each new rule to both houses of Congress and the Government Accountability Offices’s Comptroller General for review before the rule can take effect. Congress is able to scrutinize existing/new Biden regulations and overturn faulty ones. In a Wall Street Journal oped, Suzanne Clark, president and CEO of the U.S. Chamber of Commerce, this week set the stage for what’s possible:
Before President Trump’s first term, the Congressional Review Act—which allows Congress to overturn recently issued agency regulations—had been used only once. While in office, Mr. Trump and the Republican Congress used it on 16 rules. This time, there will be more than 56 regulatory actions recent enough to be repealed.”
Rules issued earlier will take longer to unwind, and may require a new rulemaking process. The Trump team was successful at this during its first term, but it will be harder this time given the sheer quantity of rules. The new administration will need to prioritize those that are hindering growth.
For just the manufacturing industry alone, NAM estimates that the total cost of federal regulations in 2022 is approximately $3.079 trillion (in 2023 dollars). Federal regulations cost the manufacturing sector at large about $350 billion a year, an amount equal to 12% of U.S. GDP. A small manufacturing company with just 20 employees is required to pay about $1 million annually in compliance costs.
Think how much innovation can be unleashed and inflationary costs reduced across all sectors of the economy once Congress steps in and brings common sense to everyday life. No more woke, irrational Green New Deal mandates. No more telling us we can’t have a dishwasher that actually works. No more forced EV car sales of vehicles people don’t want because they’re unreliable.
The executive branch’s power has grown immensely in modern times. It’s time Congress steps up and cuts the regulatory red tape.