A Day at the White House to Cut Government Red Tape

Earlier this week, I was invited by the White House along with 100 other leading trade association executives to attend an event highlighting the efforts made by the Trump administration to reduce the regulatory burdens businesses continue to face. This “Cut the Red Tape Summit,” which featured most of President Trump’s Cabinet and senior staff, was led by Vice President Mike Pence and highlighted efforts by the administration to halt the extraordinary growth of the Code of Federal Regulations from the 1960s to today (the small pile of paper in the picture is from 1960 and the mountain of paper next to it is the CFR for 2016!).  

Some of the startling facts about this country’s ever-expanding regulatory framework according to the White House include:

• Approximately 45,000 more pages in the Federal Register, which reflects the flow of new regulations, than 40 years prior -- an increase of about 90 percent.
   
• An increase in the Code of Federal Regulations, which measures the existing stock of regulations on the books over time, rising 160 percent from 1975 to 2016. 
   
• A rise in business costs on compliances officer salaries of 171 percent since 2000 accounting for inflation -- an annual growth of 6.9 percent each year on average – or more than twice the rate of growth of the economy.
   
• Paperwork completion cost estimation of $236 billion in 2000 (up from $143 billion in 1980). Assuming the same proportion of compliance officer salaries out of total paperwork cost, paperwork expense increased to $881 billion in 2015. 
   
• Higher cost per employee of complying with regulations: $11,724 for small firms versus $9,083 for companies with over 100 employees.

The real-world impact of these startling statistics are certainly well known to NACD’s member companies that on average generate $26-million in sales and employee 26 staff members. And while President Trump has issued a couple of executive orders to reduce the regulatory burden on businesses, including his action last January requiring federal agencies to eliminate two regulations before any new one can be issued, Congress still needs to act on regulatory reform.

Thankfully, this administration’s policies on reducing burdensome regulations are starting to work. According to the Office of Information and Regulatory Affairs at the federal Office of Management and Budget, the administration has either eliminated or delayed more than 800 proposed rules saving $300-million. That is good news for businesses across the board including America’s chemical distributors.