This added transparency will help the EPA do its important work in the light of day—and make the agency more accountable to the taxpayers for whom it works.
Republicans in the House of Representatives have been working on a bill that would bring similar transparency measures to every federal agency. The Sunshine for Regulations and Regulatory Decrees and Settlements Act of 2017 closely mirrors Pruitt’s directive and could help tear down barriers between the people and the onerous regulatory process. As of this writing, the bill has passed the House and has been sent to the Senate for consideration.
ECONOMY AND BUSINESS
President Trump and Republicans have made considerable progress in getting rid of economically harmful regulations governing the financial and labor sectors.
For example: Congress used the CRA to nullify what was known as the arbitration rule, a costly regulation created by the totally unaccountable Consumer Financial Protection Bureau, which benefited trial lawyers rather than ordinary Americans and cost taxpayers $76 million annually.
After Trump appointed, and the Senate confirmed, two new members of the National Labor Relations Board (NLRB) in 2017, the board moved to revoke a destructive Obama-era standard that drastically expanded the definition of “joint employer” under federal rules.15
Obama’s labor board in 2015 set a new standard that said any company that had even the vaguest control over working conditions or terms for employees at another company was a “joint employer.” This rule greatly complicated business for franchise companies—of which there are 780,000 locations in the country—as well as contractors.
The Obama standard meant that any company that had even “indirect control” over an employee could potentially be held liable for violations at the employee’s workplace—even if the company had no way of directly overseeing or preventing the bad behavior. So, as an example, the Subway corporation could be held liable for virtually any violation that occurred at any of its 26,291 franchise16 stores across the country—along with the person who owned the franchise.
This huge expansion of risk and liability made it more beneficial for large restaurant chains or other franchise businesses to own all of their stores outright rather than provide opportunities for franchisee-owned small businesses.
Under Trump and Republican leadership, the labor board returned the joint employer standard to include only employers with direct control over employees’ workplaces and employment. This was the standard that had been constant from 1984 until Obama’s labor board changed it. However, in March, the labor board’s inspector general decided one of the NLRB’s Trump-appointed members should have recused himself from the case that overturned Obama’s horrible rule because a law firm he previously worked for represented a company involved in the NLRB case that set Obama’s standard. In response, the board vacated that ruling, effectively readopting Obama’s broad joint employer definition. This decision by the labor board’s inspector general showed a blatant double standard at the NLRB. The same inspector general found no issues when one of Obama’s former board members, who was previously a lawyer for the Service Employees International Union, oversaw cases for that body. As I am writing this, Obama’s horrible rule is in place, however, the House has already passed a bill to fix this regulatory overreach and define joint employers as direct employers in law.
The bureaucracy also fought Trump’s first effort to get rid of the fiduciary rule—a controversial regulation passed by the Department of Labor under Obama that would make sound investment advice harder to get for many in America’s middle class.
The fiduciary rule drastically redefines the role of financial advisors who manage retirement investments. Instead of being advisors who give people “suitable” advice on their investments, the fiduciary rule would force financial planners to have the same legal and ethical accountability to their clients as doctors and lawyers. The rule is estimated to cost the industry more than $4.7 billion per year to cover compliance of the rule. Any sane person who understands business recognizes this cost will be shifted to consumers. Do we really want to make retirement planning services comparable in cost to legal and medical services? I think not.
Shortly after taking office, President Trump ordered the Labor Department to review the fiduciary rule in order to delay its implementation. While Senate Democrats slow-walked Trump’s appointment for secretary of labor, the bureaucrats at the department ignored the president’s order and actually sped up implementation of the fiduciary rule. They claimed it was “uncontroversial” despite it being called a “terrible, horrible, no good, very bad rule” by then acting Securities and Exchange Commission Chairman Michael Piwowar. Ultimately, two pieces of the regulation went into effect, however, once the Senate confirmed Alex Acosta as secretary of labor in April, he was able to delay the remainder of the rule.
The administration is aggressively working to strip away other burdensome, backward regulations that are keeping small community banks from being able to lend money and giving labor unions outsized power.
However, the most important effort the administration is taking to spur our economy through deregulation is its effort to reign in the Consumer Financial Protection Bureau (CFPB).
The CFPB is an entirely partisan, unaccountable, anti-capitalist institution created by the 2010 Dodd-Frank Act and shaped by hyper-liberal Senator Elizabeth Warren. Its original mandate was to provide transparency to consumers who were borrowing money from banks, credit unions, and other financial institutions to prevent shady lenders from taking advantage of people. Since its creation, however, the bureau has abused its power and become a liberal weapon to carry out an anti-capitalist agenda by placing burdensome regulations on banks, which have made it harder for them to lend money. Specifically, the bureau has used its bureaucratic power to prevent banks from lending money to industries that the Left opposes. For years, I have warned that the CFPB is a dangerous, unconstitutional, economically damaging, out-of-control federal bureaucracy. Time and time again, the bureau has validated my concerns.
In July 2013, the Washington Times17 reported that some CFPB officials were being paid more than U.S. Supreme Court justices, congressmen, state governors, and White House officials. At the time, the newspaper reported that 741 of the bureau’s 1,204 employees were bringing home six-figure salaries, with 56 being paid more than $199,700 a year. Also, 111 CFPB employees were being paid the same salary as Federal Reserve governors, who make $179,700 annually. The highest-paid worker was getting $251,288. Overall, the average pay for a CFPB bureaucrat was $118,000, and the median salary was $113,000, according to the paper. On its face, this is absurd. CFPB employees regulate banks and other financial institutions. Supreme Court justices, members of Congress, governors, and executive appointees are essential members of our government and shape the future of America.
Prior to the 2016 elections, Republicans have repeatedly introduced legislation that would bring CFPB salaries in line with other federal employees. All attempts were blocked by Democrats.
Pay is far from the only problem at this agency.
In April 2014, CFPB senior attorney Angela Martin testified before a congressional committee that there was a “pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing” at the bureau’s office of enforcement, according to the Cleveland.com18 news website.
An outside investigator looking into Martin’s claim found the agency rife with “exclusion, retaliation, discrimination, nepotism, demoralization, devaluation and other offensive working conditions.”
These instances illustrate the complete disregard the CFPB has for any other federal authority.
The CFPB has been able to get away with this defiant activity because it isn’t accountable to the American people or any branch of government. The bureau gets its funding from part of the Federal Reserve’s operating budget, so it doesn’t need Congress for anything. Its director is also one of the only federal b
ureaucratic leaders that the president of the United States cannot fire at will. According to the Dodd-Frank Act, the CFPB director can only be fired with cause.
This point leads to one of President Trump’s first victories over the CFPB—which the media first distorted and then promptly ignored.
On November 24, 2017, former CFPB Director Richard Cordray, who was appointed by President Obama, abruptly announced he was resigning. He had eight months left in his term. Before Cordray left, however, he tried to prevent President Trump from steering the future of the rogue consumer bureau by appointing his chief of staff, Leandra English, to be deputy director, which effectively made her acting director in his stead. According to a provision in the Dodd-Frank Act, the deputy director assumes the role of acting director if the director leaves.
President Trump quickly appointed OMB Director Mick Mulvaney as acting director, in accordance with existing law that gives the president authority to fill executive vacancies. An extremely brief legal battle ensued.
Citing Dodd-Frank, English and her attorney asked a federal judge to bar Mulvaney from becoming acting director. They failed.
Cordray and English apparently thought their absurd scheme would allow the entrenched bureaucracy to continue hindering President Trump’s agenda until he could get a permanent director confirmed by the Senate. It was a ludicrous plot, especially since the CFPB’s own general counsel acknowledged Mulvaney was the rightful acting director.
Through it all, the media treated English’s claim that she somehow had more authority over the agency than the president of the United States as legitimate. After English’s restraining order was denied, the mainstream media simply stopped following the story.
Another big win for the Trump deregulation effort came in December, when Trump’s Federal Communications Commission (FCC) voted to repeal the 2015 Obama overreach known as “net neutrality.”
The rule put a number of new restrictions on Internet service providers such as Comcast and Verizon. The aspect of the law that the Obama administration touted was a restriction that disallowed these Internet service providers from speeding up or slowing down upload and download speeds on certain apps or websites. So, for instance, it prohibited Comcast from slowing down Internet speeds when its customers went to Verizon’s website.
The bureaucrats’ pitch was that this would make the Internet a free, unspoiled, information landscape that was unhindered by corporate motives. This seemed like an OK idea. However, it was a perfect example of a federal bureaucracy overreaching to solve a problem that never existed. The Internet has been widely accessible to Americans since the mid-1990s.
The net neutrality rule has roots in similar “open Internet” rules passed by the FCC in 2010, which have been continuously challenged in court by communications companies. In earlier cases, federal courts ruled the FCC lacked authority to regulate the Internet. By 2015, when the current net neutrality rule was enacted, there had never been any significant evidence that the large telecommunications companies had been engaging in the behavior the FCC was trying to halt.
Despite this, the U.S. Court of Appeals for the District of Columbia Circuit ruled in a 2–1 decision in 2016 that broadband Internet was a utility that could be regulated, therefore allowing the FCC’s rules to stand. This is ridiculous. Water is a utility. People could die if they don’t have access to clean water. The Internet is important but does not fall into the same life-and-death category. Now that the net neutrality rule is vacated, communications companies can focus on their customers instead of their lawyers.
The truth is, as the nation has moved away from wide reliance on the electromagnetic spectrum (in which radio and broadcast TV operate) the FCC as an agency has become more and more obsolete. It was originally founded to essentially be a federal real estate manager for the electromagnetic spectrum by renting specific parts of the spectrum to various broadcasters. This is how radio and broadcast TV stations secured their claim to their call frequencies (or channels).
There is still a role for the FCC in managing cellular phone communications, satellite signals, and other uses of the spectrum. However, over the last decades, the radio and television industries have been gradually moving to Internet-based, cable, or fiber-optic formats that don’t need to use the electromagnetic spectrum. Instead of shrinking the bureaucracies within the FCC that managed those industries’ use of the spectrum, the agency has simply determined they have the authority to regulate these other formats—which aren’t scarce, are created by private companies, and don’t really need regulating.
Net neutrality was the bureaucratic establishment’s effort to declare the Internet a utility that government has purview to micromanage. It was a naked attempt by government bureaucrats to justify their increasingly unnecessary jobs.
As FCC Chairman Ajit Pai said when the rule was repealed:
Following today’s vote, Americans will still be able to access the websites they want to visit. They will still be able to enjoy the services they want to enjoy.… There will still be cops on the beat guarding a free and open internet. This is the way things were prior to 2015, and this is the way they will be once again.
President Trump’s effort to free American businesses from arduous federal regulations has been a key driver in restoring and energizing our economy. As more red tape gets cut, America will become more prosperous.
EDUCATION
President Trump also took action to make sure students continue to have access to the type of certificate and associate degree training programs which are a key requirement for many well-paying jobs.
Under the guise of protecting students, the Obama administration created a rule which measured the success of a program not by whether the student learned the material, but by whether they earned an arbitrary amount of money relative to their student loans after they graduated. Programs whose graduates did not earn enough money two out of three consecutive years were barred from receiving student loans.
The so-called Gainful Employment Rule was devastating to trade schools. Many of these schools are small businesses and the reporting requirements alone are daunting. Furthermore, measuring the earnings of a graduate immediately upon entering the workforce is absurd. Most first jobs out of college are not high paying. The rule didn’t consider expected wage increases in the industry students enter.
For instance, many electricians attend trade schools to learn the basics. They then move on to apprenticeships to hone their crafts and many remain apprentices for several years. These apprenticeships do not pay much, but they prepare electricians for very high-paying jobs down the road. The Gainful Employment Rule doesn’t take this into account when measuring the success of the programs.
In truth, the Gainful Employment Rule was a thinly veiled attack on the for-profit school sector. For one, the rule applied to all programs offered by proprietary schools while only applying to nondegree programs (certificates) at public and nonprofit ones. So left-wing schools that offer basket weaving and unemployable humanities degrees, whose graduates end up working in coffee shops, unable to repay their student loans, are left untouched.
This attack was a continuation of the failed national education policy that has spent years funneling all students into college—whether it made sense for their futures or not. This effort has only contributed to a massive skills gap in the American workforce.
More fundamentally, since these private schools are not subsidized by state and local taxes, as community and state colleges are, they have higher tuitions—making it harder for their students to meet the rule’s arbitrary debt-to-earnings ratio. However, students choose for-profit schools despite the higher tuitions for a variety of reasons—including class flexibility and condensed schedules. It should be up to the student to decide. All the Gainful Employment Rule did was reduce student choice.
The Trump administration recognized all the problems this rule presented, halted enforcement of the rule, and went back to the drawing board in an att
empt to create a fairer set of rules. The new rules are still being revised, but the proposed framework suggests that it will apply to all schools and all programs, instead of just targeting one sector, and promote transparency across all forms of higher education so students can make the best choice that fits their needs.
ONLY THE BEGINNING
Remember, the Trump presidency has only existed for a little more than one year. President Trump and Republicans are going to continue to aggressively reduce the U.S. regulatory state.
The Office of Management and Budget is collecting destructive federal regulations via a public website it set up.19 Republican governors across the nation should follow suit and identify regulations at the state level that can be modified or revoked to make living and working in America easier and more prosperous.
President Trump and Republicans nationwide have a tremendous amount of work cut out for them, and eliminating the decades of red tape which have accumulated in our country is vital to freeing up America to be great again. Many Americans elected President Trump because he pledged to get America back to work. His deregulation effort is central to that mandate.
CHAPTER SEVEN
THE COMEBACK OF THE AMERICAN ECONOMY, PART 2—THE TAX CUTS AND JOBS ACT OF 2017
The most memorable, immediately impactful accomplishment President Trump and Republicans made in the first year of his term, without question, was passage of the Tax Cuts and Jobs Act of 2017. It is a key part of America’s great comeback, and along with the repeal of regulations is the major reason the economy has boomed under President Trump.
The left-wing of the anti-Trump coalition hates tax cuts because their working assumption is that all money should belong to the government so that more enlightened people (non-deplorables) can decide how to spend it. Every time taxes are raised, the power of the Left is increased. Every time taxes are lowered, the power of the Left is reduced.
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