In an effort to make good on a campaign pledge to cut out the red tape in Washington, President Trump Monday signed an executive order that requires agencies to revoke 2 regulations for every 1 they want to enact.
Trump’s “1 in - 2 out” guideline met with enthusiasm from small-business owners and skepticism from consumer advocates.
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There was some confusion about the Trump order since the only way 2 regulations could be revoked would be when 1 new one was being proposed. The problem is that shortly after the inauguration the White House imposed a freeze on new regulations.
In order for the plan to work the Trump administration either has to drop its “no new regulations” order or make exceptions on an as needed basis.
Worry About Consumers & Environment
Critics have already raised concerns that the new order would reduce or eliminate protection for consumers and the environment. Many of the regulations Trump has criticized relate to environmental protection.
In response Trump said, "There will be regulation, there will be control, but it will be a normalized control." In addition, the administration said independent agencies such as the Securities and Exchange Commission (SEC) would not be affected by the new order.
House Chomping At The Bit
Meanwhile the Republican majority in the House of Representatives indicated it was anxious to get to work dismantling several regulations passed during the Obama administration. These rules have to do with climate change, federal contracts and background checks for gun ownership as well as other issues.
This move is separate from the new Trump executive order and utilizes a seldom used tool that requires a simple majority in the House and in the Senate on a resolution of disapproval. Assuming President Trump signs the measure, the regulation would go away.
Among the regulations targeted by the House are a rule designed to reduce methane emissions on public and tribal lands; a rule to lessen the environmental impact of coal mining on streams; and a rule to increase disclosure requirements for federal contractors.
Other targeted regulations involve disclosure of payments made to U.S. and foreign governments related to mining and drilling, requiring the Social Security Administration to forward names of certain disabled persons to the National Instant Criminal Background Check System and several additional Obama era rules.
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While reducing regulations is widely seen as a pro-business move, it remains to be seen how fierce the fight between corporate interests and consumer advocates will become. Given the uncertainty, companies that appeal to the part of the population with the most wealth and highest spending, aka baby boomers, are being touted as desirable investments moving forward.
These include The Coca-Cola Co. (NYSE:KOD), Toyota Motor Corp. (NYSE:TMD) and Amazon.com Inc. (NASDAQ:AMZNC). Moreover, these companies represent a departure from those involved in infrastructure, something that could also represent a good investment assuming Trump gets his $1.6 trillion spending bill through Congress.