Trump’s State of the Union Fiction Debunked: The Truth About Regulation and Deregulation

Jan. 29, 2018 | Download PDF

The administration’s deregulatory agenda endangers us all and is setting the stage for large-scale disasters that could devastate communities and disrupt the lives of millions of Americans. This agenda is premised on a series of fabrications, misstatements and inaccuracies that are likely to be repeated in President Donald Trump’s first State of the Union address. Reporters should not allow these claims to go unchallenged in press accounts.

 

Trump’s deregulatory measures have not supercharged our economy…

Nearly all of the rules and rulemakings Trump rolled back hadn’t taken effect yet, and their potential impacts were too small to affect our economy. All Trump’s deregulatory measures have done is let big banks rip off consumers, polluters poison our drinking water and bad employers endanger workers.

The Facts: The Trump administration has claimed $570 million in annual cost savings from regulatory repeals, a drop in the bucket compared to our nation’s $18 trillion economy. It’s true that the administration has withdrawn hundreds of rulemakings and repealed dozens of soon-to-be-implemented rules, 15 of them using the Congressional Review Act. There is no disagreement that this represents an unprecedented anti-regulatory push, but the White House and its industry allies have inflated the scale of this push and claimed benefits from it that don’t exist.

 

The truth about costs to industry…

The benefits of regulation to the public vastly outweigh the hyped-up costs to industry. The regulatory protections Trump has thwarted not only save lives, prevent injuries, stop consumer rip-offs and protect our planet, they ultimately make our economy stronger.

The Facts: The Washington Post and Politifact have debunked the outlandish claims made by Trump and Republican lawmakers about regulatory costs. Most industry-backed studies are not scientific or peer-reviewed, greatly exaggerate the costs and omit the benefits side of the ledger. The facts are that major regulations produced up to $800 billion in net benefits over the past decade – up to 12 times the costs – according to the U.S. Office of Management and Budget’s (OMB) latest figures. The Trump administration evidently considered OMB’s reports so damaging to its case that it took steps to hide these reports from the public upon taking office. Opponents of regulation have a history of predicting doom and gloom in the face of new rules and celebrating deregulation, but they’ve been wrong every time.

 

We don’t have to choose between regulations and jobs…

It’s deregulation that kills jobs by letting big corporations prey on the public and endanger our economy. Deregulating Wall Street, which led to the 2008 financial crisis and subsequent recession, is how we lost millions of jobs. Putting tough rules in place is how we stop this history from repeating.

The Facts: White House Legislative Affairs Director Marc Short admitted in an April 2017 press call that repealing regulations does nothing to create jobs or grow the economy. This truth then was echoed by coal industry executives (allies of the president) who acknowledged that repeal of the stream protection rule and other climate change measures like the Clean Power Plan would do nothing to bring back coal jobs. What’s more, Americans have seen firsthand that cutting regulations can lead to economic devastation and kill jobs. Sweeping Wall Street deregulation in the 1990s and 2000s led to the financial crisis of 2008 and the accompanying recession, which cost Americans $14 trillion, killed 8.7 million jobs and caused pension funds to lose nearly a third of their value. We do not have to choose between jobs and commonsense safeguards that protect our wallets, workplaces and economic well-being.

 

Complaints about “red tape” and the number of rules or pages of regulation are highly misleading…

The vast majority of federal regulations are not contested. The administration’s anti-regulatory rhetoric is just a stand-in for slashing public protections that save lives, protect our pocketbooks and bring corporate criminals to justice. Americans in both parties overwhelmingly support strong and effective safeguards to protect our air, water, health, safety, environment, financial system and more.

The Facts: Rhetoric about excessive regulation is aimed at hiding a basic truth: the vast majority of federal regulations are not contested by anyone. There are rules moving Tax Day to a Monday in years when it falls on a Sunday, rules setting the timetables for the raising and lowering of drawbridges, and rules ensuring that trees don’t block airport runways. It is rare for industry to contest regulations that have been on the books for more than about a decade; after being implemented, higher standards come to be seen by both businesses and consumers as the minimum standards. Consider seat belts. Before seat belts became a requirement and for years after, the auto industry fought these regulations, claiming they were too costly and bad for business. Today, everyone accepts seat belts as a basic safety requirement for all vehicles. Any claim that our system of safeguards is holding back business should be treated with enormous skepticism, especially when corporate profits are at their highest in more than a decade.

 

The real “hidden tax” on Americans is the cost of not regulating…

Deregulating industry has enormous costs for regular Americans. From the Wall Street crash to the BP oil spill to contaminated drinking water, deregulation endangers our lives, health, environment and economic security. When reckless and greedy corporations harm workers, consumers and families, tough regulations ensure that corporations pay the price rather than their victims.

The Facts: When lawmakers deregulate industry, regular Americans pay the price. The financial crisis of 2008, caused by deregulation, cost millions of jobs. Weak drilling safety standards led to the 2010 BP oil spill, killing 11 workers, costing more than $50 billion and disrupting small businesses, working families and ecosystems all along the Gulf Coast. Even now, more than 18 million Americans – including the residents of Flint, Mich. – are using water systems with lead levels that violate current standards. Deregulation’s victims have heart-wrenching stories. Veteran Paul Schwarz Jr. died from eating a piece of cantaloupe in a fruit cup due to a lack of food-safety protections. The absence of automobile backup cameras resulted in the accidental death of a young boy. And a young girl was strangled to death by a window blind cord deemed “child safe” by the company that made it. Each of these tragedies and thousands of similar stories could have been prevented by tougher rules and enforcement. Deregulation may boost industry profits in the short-term but it imposes tremendous and unrecoverable costs on Americans whose lives are destroyed in the process.

 

The Coalition for Sensible Safeguards (CSS) is a national alliance of more than 160 organizations, representing millions of Americans. We are joined in the belief that our nation’s system of regulatory safeguards should secure our quality of life, pave the way for a sound economy and benefit us all.