This Week in Ridiculous Regulations

President Trump’s COVID-19 diagnosis marked the first of what will likely be many October surprises. Congress agreed on one spending bill to avoid another shutdown, but remains deadlocked on a separate COVID-related spending bill. Meanwhile, regulatory agencies issued new regulations ranging from TikTok to boat engines.

On to the data:

  • Last week, 73 new final regulations were published in the Federal Register, after 69 the previous week.
  • That’s the equivalent of a new regulation every two hours and 18 minutes.
  • Federal agencies have issued 2,470 final regulations in 2020. At that pace, there will be 3,216 new final regulations. Last year’s total was 2,964 regulations.
  • There were 45 proposed regulations in the Federal Register last week, for a total of 1,663 on the year. At that pace, there will be 2,165 new proposed regulations in 2020. Last year’s total was 2,146 proposed regulations.
  • Last week, agencies published 473 notices, for a total of 16,978 in 2020. At that pace, there will be 22,107 new notices this year. Last year’s total was 21,804.
  • Last week, 1,855 new pages were added to the Federal Register, after 1,509 pages the previous week.
  • The 2020 Federal Register totals 62,537 pages. It is on pace for 81,429 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.19 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 56 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 487 new rules affect small businesses; 20 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them deemed significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

September Brought Uptick in Jobs – Will Next Government Steps Help or Hurt?

This is a press release originally posted at cei.org.

Employers added 661,000 jobs in September, and the unemployment rate declined to 7.9 percent from 8.4 percent, the U.S. Bureau of Labor Statistics said today in its monthly report. CEI experts expressed encouragement that deregulatory policies and re-openings are helping people recover financially from pandemic lockdowns and shutdowns this year but warned that more government action is needed – to deregulate and to reject a return to lockdowns.

Statement by Sean Higgins, CEI research fellow:

“Friday’s Labor Department report that the economy added 661,000 jobs, dropping the official unemployment rate to 7.9 percent, is welcome news but also a reminder the economy has a long way to go to fully recover. The good news is the data suggest people are eager to go back work and shop, eat in restaurants, and go to theaters. But they cannot and that’s holding the recovery back.

“If we want the economy to recover, we cannot revert to locking everything down in reaction to a recent surge in coronavirus cases. We must find better ways to allow people to safely interact, instead. Doling out more stimulus funds to businesses or extending unemployment relief is placing duct tape over the problems, while piling on more debt that taxpayers will eventually have to pay off.

“The department’s report found the sector with the largest growth was leisure and hospitality, which added 318,000 jobs in September. That accounted for about half of the overall employment gains in the last month. Bars and restaurants accounted for the largest part of that, adding 200,000 jobs, with the rest in gambling, amusements, and hotels. These gains are dramatic because hospitality was the sector hardest by the outbreak. Since February, that sector of the economy has recovered 3.8 million jobs but remains down more than 2.3 million from where it was at the beginning of the year. That’s about a third of the total 6.8 million jobs lost since February.

“Retail trade grew by 142,000 jobs over the last month, the largest part of it (40,000 jobs) coming from clothing outlets, indicating more people are out shopping. Retail is still down 483,000 jobs overall from February.

“The good news is these sectors can rebound quickly when given the chance. Doing that means allowing people to get out of their homes to re-engage safely with the outside world. That has to be the focus if we want the economy to recover.

Statement by Ryan Young, CEI senior fellow:

“The economy continues to create jobs, but the pace is slowing. It will be some time before the economy is back to normal, let alone everyday life. Unfortunately, there are still thousands of government-created barriers that keep people out of work. These include licenses, permits, entry barriers, excessive paperwork, and tariffs—not to mention looming antitrust threats against the very tech companies that help make remote work possible. Over-regulation is hindering virus response and economic recovery.

“President Trump and Congress should continue to eliminate never-needed regulations. Depending on how the election goes, further regulatory reform will a positive addition to the Trump legacy or the springboard for a second-term agenda. Either way, regulatory reform is the right thing to do to get people back to work.”

This Week in Ridiculous Regulations

COVID-19 deaths passed 200,000 in the United States, and are roughly 1 million worldwide. Supreme Court Justice Ruth Bader Ginsburg’s passing sparked a fresh Supreme Court battle. A grand jury declined to press murder charges against the Louisville police officers who killed Breonna Taylor, sparking unrest and reopening conversations about police reform. The 2020 Federal Register topped 60,000 pages. Meanwhile, regulatory agencies issued new regulations ranging from Cuban assets to shrimp trawlers.

On to the data:

  • Last week, 69 new final regulations were published in the Federal Register, after 99 the previous week.
  • That’s the equivalent of a new regulation every two hours and 26 minutes.
  • Federal agencies have issued 2,397 final regulations in 2020. At that pace, there will be 3,121 new final regulations. Last year’s total was 2,964 regulations.
  • There were 55 proposed regulations in the Federal Register last week, for a total of 1,617 on the year. At that pace, there will be 2,105 new proposed regulations in 2020. Last year’s total was 2,146 proposed regulations.
  • Last week, agencies published 416 notices, for a total of 16,505 in 2020. At that pace, there will be 21,491 new notices this year. Last year’s total was 21,804.
  • Last week, 1,509 new pages were added to the Federal Register, after 3,012 pages the previous week.
  • The 2020 Federal Register totals 60,682 pages. It is on pace for 79,013 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.19 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 54 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 478 new rules affect small businesses; 20 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Senators Introduce Regulatory Commission Bill

CEI’s approach to regulatory reform has an overarching theme: It is not enough to get rid of this or that harmful regulation. For the benefits to last, there must be system-level reform to the rulemaking process that keeps generating those rules. Institutions matter. One of the best of those institution-level reform ideas now has COVID-19-focused legislation at the ready: the independent regulatory reduction commission.

Senators James Lankford (R-OK), Ron Johnson (R-WI), and Rob Portman (R-OH) have introduced the Pandemic Preparedness, Response, and Recovery Act (PPRRA). The House version was previously introduced by Rep. Virginia Foxx (R-NC). The bill would establish an independent commission to identify regulations harming the COVID-19 response, and compile a package for Congress to vote on.

Wayne Crews and I have a statement supporting the idea here.

The idea is not new. Former Sen. Phil Gramm introduced a version of the idea back in the 1980s. The Base Realignment and Closure (BRAC) commissions that closed unneeded military bases had four rounds in the 1990s, and saved billions of dollars. CEI has been promoting the idea for more than a decade, most recently in a Washington Examiner op-ed and  #NeverNeeded paper. Several other legislative versions of the regulatory BRAC commission have been introduced by lawmakers from both parties.

The time to act is now. If House and Senate leadership, not wanting to make any waves before the election, do not act, then the PPRRA should be reintroduced in the next Congress, and on and on until it passes. Regulatory reform is a long game, but with people hurting from COVID-19 and a tough recovery ahead, this is an idea that Congress should act on now.

CEI Experts Applaud Sens. Lankford, Johnson, and Portman for Independent Regulatory Commission Legislation

This is a press statement originally posted at cei.org.

On Thursday, Senators James Lankford (R-OK), Ron Johnson (R-WI), and Rob Portman (R-OH) introduced the Pandemic Preparedness, Response, and Recovery Act. The House version was previously introduced by Rep. Virginia Foxx (R-NC). The bill would establish an independent commission to identify regulations harming the COVID-19 response, and compile a package for Congress to vote on.

Competitive Enterprise Institute senior fellow Ryan Young thinks the commission is a good idea:

“If a regulation isn’t helping now during a pandemic, it was probably never needed in the first place. Agencies have already loosened rules for telemedicine, fast-tracked COVID treatment approval, and remote education. But the Code of Federal Regulations is still 185,000 pages long. How many of those rules are still harming the COVID-19 response? How many might make the country less resilient against the next crisis? A dedicated commission like the one in the Pandemic Preparedness, Response, and Recovery Act is a good way to find out.

“If leadership doesn’t see fit to hold a vote on the PPRRA this session, COVID-19 will still be around when the next Congress convenes in January. If necessary, the bill should be reintroduced and voted on then.”

CEI Vice President for Policy Wayne Crews said:

“The Congress has passed several Covid-19 relief packages and is contemplating more spending stimulus at this very moment. Missing from that body’s concrete actions in the coronavirus crisis has been powerful deregulatory stimulus, that is, easing or removing unnecessary rules and regulations that can both impede response to the pandemic and restrict smooth and energetic economic recovery from it.

“Federal agencies and the administration have implemented numerous waivers and suspensions with respect to the crisis as well as some explicit moves to streamline regulation and treat those subject to rules more fairly, an example of that being Trump’s executive order on Regulatory Relief to Support Economic Recover. But the executive branch is not America’s lawmaking body, and many of the steps taken need to be permanent rather than transitory. That is just the beginning; there remains a great deal more relief-oriented foundational streamlining of the Code of Federal Regulations’ content possible that utterly depends upon the intense attention of Congress to come to fruition.

“It is up to Congress has to reassert its primary legislative role and act to reduce regulation, as this juncture ideally can do that via a bipartisan ‘regulatory improvement commission,’ an idea is rooted in bipartisan discussions stretching back over several Congresses.

“The new Pandemic Preparedness, Response, and Recovery Act is a logical, sensible, fair and humane approach to dealing with crisis. Under the Act, a bipartisan commission would prepare recommendations for regulatory streamlining, and those would be improved upon by public notice and comment. The resultant report would be issued to Congress, which would have the ability to say yes or no to this new vehicle uniquely expressing an aspect of the will of the people that too often gets neglected. While the regulatory code grows with little relief, the Pandemic Preparedness, Response, and Recovery Act provides a way of disciplining it for the public good, and health.”

Read more:

New Paper: Antitrust Regulation is #NeverNeeded

My colleague Jessica Melugin and I, along with our former colleague Patrick Hedger, have a new paper out today, “Repeal #NeverNeeded Antitrust Laws that Hinder COVID-19 Response: Smokestack-Era Laws Favor Established Interests and Do Not Encourage Competition.” The tech companies that regulators are targeting have made a difficult pandemic easier to endure. Antitrust lawsuits would not help the COVID-19 response. Since the real cost of antitrust policy is its chilling effect on new innovations, ramping up antitrust enforcement would leave the country less resilient against the next crisis.

Amazon has made it easy for people to get no-contact deliveries of household supplies and groceries—and spurred competitive responses from Walmart, Target, and other retailers. Facebook makes it easy for people to stay in touch while staying socially distant. Google makes it easy to find information about the virus and stay up to date. As the paper concludes:

Antitrust investigations at the federal and state level should be suspended during the COVID-19 crisis and, ideally, abandoned permanently. The unintended consequences of market distortion and chilled innovation are the last thing consumers and businesses need right now—or ever. This is no time for politicians and government lawyers to promote their own careers through the posturing of antitrust enforcement. Consumer benefit and business resiliency must be preserved and antitrust enforcement must not be prioritized or expanded.

Read the whole thing here. For more on antitrust, see Wayne Crews’s and my paper “The Case against Antitrust Law” and CEI’s dedicated antitrust site, antitrust.cei.org.

This Week in Ridiculous Regulations

Scientists may have found potential chemical evidence of life on Venus—phosphine gas, which in Venusian conditions may well have been produced by anaerobic (non-oxygen-using) microbes. No life forms have been directly observed, and phosphine is also present in the atmospheres of lifeless Jupiter and Saturn, but that is still a pretty big deal. In more earthly realms, regulatory agencies issued new regulations ranging from watermelon promotion to natural gas emissions.

On to the data:

  • Last week, 99 new final regulations were published in the Federal Register, after 31 the previous week.
  • That’s the equivalent of a new regulation every one hour and 42 minutes.
  • Federal agencies have issued 2,328 final regulations in 2020. At that pace, there will be 3,198 new final regulations. Last year’s total was 2,964 regulations.
  • There were 55 proposed regulations in the Federal Register last week, for a total of 1,568 on the year. At that pace, there will be 2,154 new proposed regulations in 2020. Last year’s total was 2,146 proposed regulations.
  • Last week, agencies published 449 notices, for a total of 16,089 in 2020. At that pace, there will be 22,100 new notices this year. Last year’s total was 21,804.
  • Last week, 3,012 new pages were added to the Federal Register, after 1,112 pages the previous week.
  • The 2020 Federal Register totals 59,172 pages. It is on pace for 81,280 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.19 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 54 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 462 new rules affect small businesses; 20 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Trade News: China Tariffs Violate WTO Rules, Aluminum Tariffs Dropped, No Trade Deal with EU

Usually policy-related news slows down near elections; nobody wants to rock the boat. This has not been the case with trade policy. Three important stories have emerged in the last day or so.

First, the World Trade Organization (WTO) ruled that President Trump’s China tariffs violate the WTO’s Most-Favored Nation (MFN) rules. Those rules state that all countries with MFN status cannot be charged different tariff rates for the same goods. They must all be charged the same rate—and that rate has to be the lowest a country charges any country for a given good.

China has MFN status. So, under WTO rules, the U.S. cannot charge China higher tariffs than it does other countries for MFN-eligible goods. This is exactly what Trump has done with hundreds of billions of dollars’ worth of Chinese goods.

While this is a big headline, it likely means little in terms of policy changes. China retaliated in kind, and roughly in proportion to Trump’s increase, so the WTO will likely consider the matter settled, and thus will not endorse further action against the United States. And as my colleague Iain Murray has pointed out, Trump, ironically, is unable to appeal the decision because he has essentially dismantled the WTO’s dispute resolution system.

It is ultimately up to Congress to right President Trump’s wrongs on trade policy. And the administration needs to get through its head that tariffs are not going to convince Beijing to enact needed reforms on economic policy, human rights, and political repression. The data are in, and the tariff approach does not work. A better approach will use consistent, long-term multilateral diplomatic pressure.

In the short term, the China tariffs should be rescinded anyway, regardless of what the WTO says. Taxing needed goods is terrible policy during a pandemic and a recession.

Second, President Trump had announced in August that he would reinstate national security tariffs against Canadian aluminum—about a month after the United States-Mexico-Canada Agreement (USMCA) came into effect. Canada announced it would retaliate, as countries nearly always do when tariffs are raised against them. On Tuesday, Canadian officials were set to announce what the retaliations would be. Hours before the press conference was to begin, the U.S. announced it would drop the tariffs.

This is more damage control than an actual positive policy change—tariffs are not going down, they are merely not going up. But backing off represents at least a tacit admission that more tariffs will not help the economy during a pandemic and a recession. Even if tariffs would help the aluminum industry itself, which is a questionable assumption, higher prices would hurt aluminum-using industries ranging from autos to beer to construction, as well as consumers.

Third, the European Union apparently will not negotiate a trade deal with the U.S. anytime soon—even if Biden wins the 2020 election. At a conference, EU trade official Sabine Weyand said Europe would rather work with the U.S. on shared problems, such as China policy, in the WTO, where they can also build coalitions with other allies. Europe would also rather settle other issues in piecemeal fashion, such as the ongoing dispute over Airbus and Boeing subsidies, and various Trump tariffs.

An EU trade agreement is one of the “big three” that were expected to completed in the next few years, along with China and the Brexited UK. President Trump has been mulling further tariffs against European goods for some time. Hopefully this news does not spur him to raise tariffs in hopes of forcing the EU to the negotiating table. If the USMCA is any precedent, such an agreement would be filled with trade-unrelated provisions for labor, environment, regulation, intellectual property, and whatever else rent-seekers can cook up. It would also, as with the USMCA, likely do more to manage trade than to free it.

Since Democratic candidate Joe Biden’s trade protectionism is uncomfortably similar to Trump’s, it is just as well that there will likely be no U.S.-EU trade agreement anytime soon. This will give both sides time to fully digest the lessons of the Trump administration’s failed protectionist experiment, and to pursue smaller policies such as regulatory mutual recognition, and at least some lowering of tariffs and other trade barriers.

Trump Administration Backs Down on Tariffs on Canada Aluminum, But Long-Term Problems Unfixed

This is a press release originally posted at cei.org.

In another high stakes trade matter today, the Trump administration decided to back down from plans to impose tariffs on Canadian aluminum. Just before Canadian Prime Minister Justin Trudeau was set to announce retaliatory tariffs against the United States, U.S. Trade Representative Robert Lighthizer announced the U.S. would drop the tariffs. CEI Senior Fellow Ryan Young praised Lighthizer’s decision:

“United States Trade Representative Robert Lighthizer did the right thing by dropping the planned reinstatement of aluminum tariffs against Canada. The tariffs violated the spirit, if not the letter, of the just-enacted USMCA trade agreement. The agreement and its predecessor exist in large part to avoid the sort of brinksmanship between allies we just witnessed.

“The administration may finally be learning that other countries retaliate against tariffs. Just in case the lesson has not yet sunk in, Congress should pass legislation taking back the tariff-making powers it granted to the President under Section 232 of the Trade Expansion Act of 1962. Taxing power properly belongs with Congress, and this administration has proven it will not use its power responsibly.​”

WTO Rules Against Trump’s China Tariffs, but the Problem Remains the Tariffs Themselves

This is a press release orginally posted at cei.org.

The World Trade Organization ruled today that President Trump violated global trade rules by unilaterally imposing tariffs on over $350 billion worth of Chinese goods. CEI Senior Fellow Ryan Young says, while the WTO decision is not a surprise, the bigger problem remains the economic and personal toll of the tariffs themselves.

“It is no surprise the WTO found that President Trump’s China tariffs violate its rules. Ironically, the President cannot appeal this decision because he continued the Obama-era policy of crippling the WTO’s Appellate Board. 

“The China tariffs are still bad policy. The purpose of the tariffs was to force the Chinese government to reform its illiberal policies ranging from trade barriers to technology theft to its human rights record. Not a single reform has been credibly made.

“In the short term, the Trump tariffs are raising prices and limiting access to important goods during a pandemic and a recession. There are even tariffs on needed personal protective equipment such as face masks. There is no justification for such measures.

“In the long term, President Trump’s blatant disregard of a rules-based trading system means countries like China will be less likely to follow the rules themselves. His policies are contrary to the national interest and harm the pandemic response. President Trump should rescind the tariffs regardless of what the WTO says.”