Given the recent onslaught of executive orders and legislation introduced to curtail financial regulations and overhaul the Consumer Financial Protection Bureau (CFPB), President Donald Trump’s first official joint address to both the House and the Senate was relatively sparse on mentions of the financial industry, and contained zero references to the CFPB.
Trump, however, briefly touted two of his executive orders aimed at deregulation: one implementing what is informally known as the “one-in, two-out” rule; and the other mandating the creation of task forces to identify regulations to be thrown on the chopping block.
“We have undertaken a historic effort to massively reduce job‑crushing regulations, creating a deregulation task force inside of every government agency; imposing a new rule which mandates that for every one new regulation, two old regulations must be eliminated,” Trump said.
The one-in, two-out rule is intended to reduce the volume of federal regulations in place and ensure that the cost of new regulations is offset by the repeal of two others.
Three non-profit organizations sued the Trump administration over the rule, stating in their complaint that it violates the Administrative Procedures Act (APA) and calling it “arbitrary, capricious, an abuse of discretion, and not in accordance with law.” The APA requires agencies to publish a notice of proposed rulemaking in the Federal Register and solicit public comment before adopting, modifying or repealing it, as well as the Constitution’s judicially enforceable “Take Care Clause.” The order ties the regulatory cycle to the fiscal year, meaning agencies would be required to repeal old regulations by Sept. 30 in order to adopt any new ones.
Trump also addressed tax rates, a hot-button issue for many in corporate America.
“Right now, American companies are taxed at one of the highest rates anywhere in the world,” he said. “My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. At the same time, we will provide massive tax relief for the middle class. We must create a level playing field for American companies and workers.”
In addition to divesting from his trademark boisterous, confrontational persona during the address, many observers also took notice of Trump’s proficiency with the use of facts to support his views and assertions.
His statement that, “We have the worst financial recovery in 65 years,” is correct. GDP growth since the financial crisis, compared with economic recoveries after World War II and during the Ronald Reagan administration, has been markedly slow. Industry professionals and economists have pointed to the stringent regulatory regime implemented by the Dodd-Frank Act, intended to stave off a future financial crisis, as a main reason for the sluggish recovery.
Although not inaccurate, one statement Trump made regarding the state of the economy could be characterized as misleading, a fact pointed out by the online news source Politico.
“Ninety-four million Americans are out of the labor force,” Trump said. “More than one in five people in their prime working years are not working.”
Politico wrote that the figure about 94 million Americans being out of work “includes high school students, retired senior citizens, the disabled, and people who choose to stay home as primary caregivers. Many of these people have no intention of actually being part of the job market, so the 94 million figure is not the best way to measure the number of people outside of the labor force.”