Revisiting Trump’s First Term Regulatory Record: The Hidden Story of Declining Regulatory Costs—and Why We Still Need the REINS Act

When we talk about President Trump’s economic record during his first term, most people point to tax cuts, a surging stock market, and low unemployment. But what’s often overlooked—buried under headlines about tariffs and trade wars—is what might be the most remarkable achievement of all: under Trump, the real cost of federal regulation actually declined.

This is a claim no other modern president can make. Once you adjust for inflation, it’s the first time since the modern regulatory state took shape in the early 1970s that the economic burden of federal regulations actually shrank.

The numbers tell a striking story

Between January 2017 and January 2021, the nominal cost of federal regulation rose by only about 0.33% per year. That’s already an unusually slow rate of growth for Washington’s regulatory machine.

But factor in inflation, which averaged around 2% to 2.5% per year over that period, and you get a very different picture:

• In real terms, the burden of federal regulations declined by roughly 1.7% to 2.2% per year on average.

• Over four years, that compounded to a cumulative real reduction in regulatory costs of 6.5% to 8.4%.

To put that in perspective: if federal regulations were costing the economy about $2.25 trillion in January 2017, by January 2021—adjusting for inflation—the real burden had fallen to somewhere between $2.06 trillion and $2.10 trillion.

That means President Trump accomplished something no president since Nixon has managed: reversing the relentless growth of regulatory costs, even after accounting for rising prices.

Why it matters: freeing up the economy

Patrick McLaughlin, a research fellow at the Hoover Institution, has testified before Congress on just how powerful regulatory accumulation is at dragging down economic growth. His research shows that the steady piling on of rules over decades has slowed U.S. economic growth by nearly one percentage point per year, leading to an economy that was $4 trillion smaller by 2012 than it would have been with a leaner regulatory code. That’s a staggering hidden tax—roughly $13,000 less in annual income for every American.

Trump’s aggressive efforts to cut back on new regulations—and to require agencies to systematically review and prune old ones—helped break this pattern. According to McLaughlin, when the stock of regulation stops growing, the private sector has more space to innovate, invest, and hire. That’s part of why the economy continued to expand robustly, even as Trump pursued protectionist trade measures that in theory could have slowed growth.

In short, despite the drag of new tariffs, the lightening of the regulatory load helped keep the economy humming. It also helps explain why we saw:

• Strong wage growth, especially at the lower end of the income scale.

• Low inflation, even with aggressive trade restrictions and supply chain shifts.

• A surging stock market that repeatedly hit new highs.

• Falling gas prices, despite Middle East tensions.

Why regulatory costs are the hidden tax

As McLaughlin put it recently: Regulation is a tax, even if it doesn’t show up on your pay stub. Every compliance burden, every bureaucratic requirement that slows a new product launch or forces a small business to hire a lawyer instead of another worker, pulls money and effort out of the productive economy.

Ike Brannon from the Jack Kemp Foundation echoed the same concern: regulations raise the cost of doing the wrong thing to try to steer behavior. That’s the point of them. But if we’re not clear-eyed about the cost side, we end up accepting regulations that don’t deliver enough benefit to justify the drag they impose.

The Trump administration’s insistence on rigorous cost-benefit analysis—often using a more realistic value of a statistical life or more skeptical assumptions about climate projections—kept a lid on major rules. The Biden administration reversed much of that, leading again to a surge in new costly mandates, often justified by selective metrics.

Why we still need the REINS Act

All of this underscores why structural reform is essential. The Trump administration showed what’s possible with an aggressive deregulatory posture in the executive branch. But unless Congress reasserts its authority, future presidents can simply dial regulation back up.

That’s where the REINS Act comes in. Both McLaughlin and Brannon have been vocal about this. The REINS Act would require Congress to approve any new major regulation—defined typically as a rule with an economic impact of over $100 million—before it could take effect.

McLaughlin described it this way: Congress has largely abdicated its lawmaking responsibility, creating agencies that churn out far more rules than Congress passes laws.

The ratio is something like 27 regulations for every new law. That means unaccountable bureaucrats, not elected representatives, often decide the rules that shape our daily lives and the costs businesses must bear.

Brannon added that executive agencies inevitably pursue their agendas, sometimes far from what Congress originally intended. Without a legislative check, it’s too easy for them to inflate benefits and downplay costs to justify sweeping new mandates.

The REINS Act would bring these decisions back to where they belong: with elected officials who have to answer to voters.

Avoiding future economic drag

As McLaughlin’s work documents, the cost of unchecked regulation is enormous:

• Lower GDP growth—about 0.8 to 1 percentage point less annually, or up to $4 trillion less economic output by some estimates.

• Higher consumer prices—regulatory accumulation acts like a stealth consumption tax.

• Slower wage growth—compliance jobs crowd out productive work.

• Greater poverty and inequality—because regulations often fall hardest on low-income households and small businesses.

  
  

The Trump years demonstrated that with the right regulatory discipline, we can reverse this tide. Even modest reductions in the regulatory burden can translate to faster growth, more job creation, and higher real wages. The lesson is clear: the economic gains from deregulation are not just theoretical—they’re measurable and impactful.

Looking ahead: Trump’s second term

President Trump is signaling he plans to be even more aggressive on regulatory reform if returned to office. That’s encouraging. With inflation now cooled, the stock market rebounding, and employment figures tightening, further deregulation could add more fuel to wage growth without reigniting price spikes.

But to make these gains stick—and to insulate them from future administrations determined to grow the regulatory state—we need structural changes like the REINS Act.

As McLaughlin argued, accountability matters. If Congress has to sign off on big new rules, voters can hold them responsible. That’s how the system was designed to work. And it’s why even in a period of strong executive-led deregulation, we shouldn’t stop pushing for broader reform.

The case for smarter—not just more—regulation

Regulations can protect health, safety, and the environment. But without disciplined oversight, they grow unchecked, imposing costs that kill investment, slow innovation, and squeeze families with higher prices and fewer job opportunities.

Trump’s first term showed that it’s possible to actually shrink the real cost of federal regulation, something no other president has achieved since the regulatory boom of the 1970s. That’s a powerful testament to the economic benefits of keeping Washington’s rule-making impulse in check.

If we want to lock in those gains—and keep the economy growing, wages rising, and opportunity expanding—we need Congress to step up. That means passing the REINS Act, so no administration, of either party, can bloat the regulatory code without direct accountability to the American people.

It’s time to finish what Trump started: make the regulatory state truly accountable, keep costs down, and let Americans thrive.