REGULATION

Steve Forbes: Mr. Trump, please keep de-regulating -- our prosperity depends upon it

Steve Forbes

With all the media focus on Russian investigations, tax reform, attempts to repeal and replace ObamaCare and President's Trump bold budget, it would be easy to overlook the impressive progress being made on the unglamorous but crucial area of liberating the U.S. economy from suffocating regulations – another form of taxation.

Experts believe these rules cost the American people up to $2 trillion a year. Now the ball of sensible deregulation is advancing, a stunning change from the Obama administration where hardly a day went by without some new anti-business mandate being promulgated.

The Federal Communications Commission (FCC), for instance, is in the process of throwing out Obama administration rules that shackled the Internet with 1934-like regulations designed for rotary dial telephones. The Environmental Protection Agency (EPA) and the Interior Department are liberating the energy industry from mandates designed to cripple the development of fossil fuels. The Food and Drug Administration is beginning to examine ways to bring the approval of new drugs and new uses of existing drugs into the 21st century, which would save lives and money.

A number of Obama anti-growth rules have been repealed through the Congressional Review Act.

To help this nascent but crucial process of unshackling the U.S. economy, reformers should dust off a concept that first emerged in, of all places, the Clinton administration but then promptly fell into the proverbial black hole. The basic idea is that regulators should embrace outcomes, not prescriptions, when writing rules. In other words, state the goals and let industries figure out the best ways to achieve them instead of bureaucrats dictating precisely how things are to be done. This would encourage innovation and avoid the constant problems of regulators always being behind the curve when it comes to newer and better practices.

Rep. Jeff Denham, R-Calif., recently asked the right question in a hearing on improving our infrastructure: “Can performance-based regulations be more effective than command-and-control regulations in achieving safety goals while imposing less of a burden on industry?”

The answer, of course, is yes and there is now a bill before Congress that would codify this common sense approach, The Revamping American Infrastructure Act of 2017. The proposed legislation would call on federal bureaucrats to “identify those regulations, guidance and policies that in current form establish prescriptive requirements for regulated entities; and are able to be replaced, consistent with Federal law, with outcome-based performance standards.”

What started as an empty directive from President Clinton can now finally become a reality. Take freight railroads, for instance.

Thanks to deregulation in 1980, the industry morphed from an inefficient, loss-ridden system into the finest, most efficient in the world. Nonetheless, the industry is still weighed down unnecessarily by countless, archaic operational mandates. It is ready to deploy new technologies for inspections such as drones, trackside detection systems and sophisticated X-ray machines that would provide crucial information in real time. Yet the industry must abide by a rigid set of procedures established by the Federal Railroad Administration (FRA) that seems to think the world is still dominated by those legendary steam engines of yore.

This nanny-ish, we-know-best mentality persists despite the fact that railroads have set all-time safety records in recent years, a result of private investments exceeding $100 billion since 2013. These impressive achievements did not result from the oversight of a government agency still mandating paper, not, digital, reporting.

This dinosaur mentality has begotten a rule mandating current crew sizes in perpetuity. The head of the Association of American Railroads points out that this is how government seeks to address a problem, in this case “accidents caused by human error by dictating to the railroads a specific approach: use of two-person crews. [Yet] it does so without any data or analysis to support the notion that the second person in the cab will actually result in a reduction in human-error accidents--which was, after all, the goal.”

The need for outcome-oriented solutions is felt everywhere.

We had mentioned the EPA's jihad against fossil fuels. One example is its so-called haze rule that it issued during the Obama administration, ostensibly to improve visibility. Trouble was, objective observers find it would do next to nothing to achieve that goal. What it would do, however, would be to force the closure of several coal-fired power plants and kill numerous jobs.

For too long, regulators have been obstinately rigid in their oversight. Agencies have conjured up mandates based on whim and fact-free ideology. These diktats are often written to give bureaucrats oppressive discretionary powers.

At long last, this regulatory tyranny is under attack. This is good news for our future prosperity.

Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. His latest book, "Reviving America: How Repealing Obamacare, Replacing the Tax Code, and Reforming the Fed will Restore Hope and Prosperity".