Four months into the new Trump administration, Idaho’s two U.S. senators say they’re happy with what they’re seeing from the president, particularly when it comes to regulatory reform.
In recent telephone interviews, Republican Sens. Mike Crapo and Jim Risch both expressed support for Trump’s early efforts at deregulation, saying it will help shrink government and spur the economy.
“The last (Obama) administration wasn’t inclined to view the world as I do, but this one gets it,” Risch said. “They get that the regulatory burden is killing our competitiveness.”
Risch became chairman this year of the Senate Small Business and Entrepreneurship Committee. The committee has oversight responsibility for the Small Business Administration; it also conducts investigations into the challenges facing smaller firms.
As chairman, Risch said his primary focus will be on “keeping the federal government away from small business as much as possible.”
“That’s the biggest complaint I hear,” he said. Business owners “don’t like taxes, but their biggest difficulty is dealing with all the regulations the federal government puts out.”
During a congressional hearing last July, witnesses noted that federal regulations now cost the U.S. economy an estimated $1.89 trillion annually – an amount larger than the gross domestic product of Brazil, Canada or South Korea.
Much of that burden falls disproportionately on smaller firms. A 2010 report for the Small Business Administration estimated regulatory compliance costs averaged nearly $11,000 per employee for companies with fewer than 20 employees, compared to $7,755 for firms with more than 500 people.
“America’s small businesses are truly the engine that keeps our economy running,” Risch noted in recent comments on the Senate floor. “Congress has a responsibility to help this engine roar by getting government out of the way.”
Federal regulations have been the target of at least four of the 36 executive orders Trump has issued since taking office. Among other initiatives, he directed agencies to eliminate two regulations for each new one they propose, cap the incremental cost of new regulation at zero, appoint regulatory reform officers and establish regulatory review panels to recommend rules for elimination or modification.
Crapo, who became chairman of the Senate Banking, Housing and Urban Affairs Committee this year, said those recommendations will provide a basis for legislative reform efforts going forward.
“We want to protect the safety and soundness (of financial markets), while freeing businesses to be as strong and competitive as they can,” he said.
The two top priorities for his committee this year, Crapo said, will be to reform the housing finance industry and ease Dodd-Frank Wall Street regulations and other rules that inhibit economic growth.
Both of those issues stem from the 2007-08 financial crisis, which was prompted by massive defaults in the subprime mortgage market.
Fannie Mae and Freddie Mac, the two government-sponsored entities that dominate the $5 trillion secondary home mortgage industry, were placed under federal conservatorship in 2008, after it became apparent they lacked the resources to cover all their losses.
Taxpayers are now on the hook should there be a repeat of the housing collapse. Crapo said the goal is to transition to a system that reduces and limits taxpayer risk while maintaining some of the guarantees that allow for lower mortgage rates and greater liquidity – or to get the government out of the housing finance market entirely.
Given what he describes as devastating impacts Dodd-Frank rules are having on local community banks, Crapo also wants to replace their one-size-fits-all approach with something more appropriate.
Overall, Risch and Crapo gave Trump high marks for his first four months in office. Both cited the nomination of Neal Gorsuch to the U.S. Supreme Court as the top accomplishment to date. In addition to Trump’s regulatory reform efforts, Risch also applauded the president’s willingness to use military force.
“In the first 100 days, he’s pulled the trigger twice in using military force, and done it without starting a war,” Risch said. “He did it in a way that was appropriate and proportional. Our allies breathed a sigh of relief when that happened. He responded decisively, and gave them the confidence that America has their backs.”
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