What does $33 billion in regulatory cost savings really mean?
The Trump administration recently issued a report and supporting materials summarizing its regulatory cost cutting efforts. The report, authored by the Office of Information and Regulatory Affairs (OIRA), claimed total regulatory cost savings of $23 billion in Fiscal Year 2018. This is a notable increase from the $8.1 billion in savings claimed in the prior year. Moreover, the 2018 deregulatory items were on the whole more substantive than the 2017 list, which was bolstered deregulatory actions already taken by Congress, initiatives largely formulated in the Obama administration, routine periodic update rules, and rules required by statute (a more complete accounting is available from a prior piece in this Brookings series).
OIRA has described its total claimed regulatory cost savings of $33 billion as “historic and meaningful regulatory reform.” Is this a fair claim or an overstatement? Answering that question requires context. Is a cost savings of $33 billion a big number? In the context of a $20 trillion annual economy, the answer appears to be “no.” ($33 billion amounts to one-tenth of one percent of the total U.S. economy). For present purposes, perhaps the fairer context is OIRA’s own estimates. OIRA claimed that in its first 21 months, the Obama administration imposed $245 billion in regulatory costs (the basis for this number is unclear but from OIRA’s report it appears to exclude benefits from Obama administration rules). Relative to Obama-era regulatory activity as measured by the Trump administration, reducing regulatory costs by $33 billion over 21 months appears relatively modest.
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