Trump campaigned on a promise to cut through government red tape in Washington and unleash the power of American businesses. In an effort to quantify the benefits of deregulation, the Council of Economic Advisers (CEA) embarked on a study in 2017, using a range of data and tools.
The president ordered federal agencies to slash two regulations for each new regulation created; as a result, the government executed hundreds of deregulatory actions. The CEA limited its research to 20 of the deregulatory moves, basing its selection on actions that attracted the most public interest. In total, the 20 actions reviewed would save U.S. taxpayers an estimated $220 billion per year, CEA found.
“Since January 2017, the Trump administration has made a historic effort to reduce costly regulation while protecting workers, and public health, safety, and the environment,” said Casey Mulligan, the chief economist at CEA. “Deregulation has been a massive effort. There’s been hundreds of deregulatory actions already in this administration.”
According to Mulligan, prior to Trump taking office, new regulatory actions were subtracting an average of 0.2 percent in income per household every year.
The Trump administration’s deregulation of the pharmaceutical industry has resulted in a 10 percent reduction of prescription drug prices, the report found. The savings will result in $32 billion in additional purchasing power per year for Americans.
The administration’s deregulation of the telecommunications industry resulted in $40 in savings per subscriber, and added up to $40 billion in total savings over the course of the year. The administration also slashed mandates on small businesses and eliminated requirements that could have led to the closing of many small banks.
“These deregulatory actions are raising real incomes by increasing competition, productivity, and wages,” Mulligan said.
The combined impact of Trump’s deregulation exceeds the historic deregulation of the trucking and airline industries during the Carter era.
“Combined, the Carter-era deregulation of these two industries are estimated to have provided net aggregate benefits of about 0.5 percent of national income,” Mulligan said. “Although no two of the 20 recent actions we looked at have such a large benefit, at least according to our estimates, their combined net benefits expressed to be comparable to those earlier deregulations exceed 0.6 percent of national income.”
The deregulation taking place is being achieved not only through action by executive branch agencies. According to the CEA, the Trump administration’s work with Congress has resulted in 16 pieces of deregulatory legislation in education, mining, retirement accounts, and other fields. The combined effect of the congressional actions is expected to result in $40 billion in additional income for U.S. households.
U.S. taxpayers also will save money through a deregulatory provision in the Tax Cuts and Jobs Act, which eliminated Obamacare’s individual mandate. That deregulation is expected to save an estimated $28 billion per year.
“As you probably are well aware, deregulation is the cornerstone of the President’s pro-growth economic policies that have been implemented since he took office,” said Tomas Philipson, a member of the CEA. “I view today’s report as an extremely important report in that vein, in showing the economic impact of those deregulatory actions.”