On Regulatory and Management Reform, Chao’s Transportation Department Leads Way

Even as the fortunes of their legislative agendas wax and wane, all presidential administrations can have a dramatic impact – some for better, others for worse – on the course of federal regulation.

Sitting largely in the “better” category has been the Trump administration, which ordered agencies and departments to examine their own regulations, make recommendations for improvement and better understand how their rules may affect businesses and taxpayers. The overall results have been impressive: According to the American Action Forum, federal rulemakings in 2018 yielded a net savings to the economy of $7.8 billion – the first time agencies reduced this measurement of annual regulatory burden in 13 years of available data.

Deregulatory and managerial performance has not been uniform across the entire government, but one agency showing some impressive results has been the Department of Transportation. There, Secretary Elaine Chao and her team have made significant progress over the past two years on regulatory reform and more financially sound infrastructure investments.  

Alongside vigorous development of policies to make regulations more transparent and shaped by stakeholder input, which other parts of the executive branch were slower to embrace, Chao led a policy initiative to transform the nation’s air traffic control system into a user-funded, user-accountable model. The air traffic controllers themselves were for this move, and proponents of the plan collaborated with their union to find policy solutions. Taxpaying travelers, who currently suffer under government tax and fee loads on airline tickets of more than 20 percent, could have benefited dramatically from this transformation. Although the effort led by Chao and former House Transportation Committee Chairman Bill Shuster (R-Pa.) ultimately fell short with the legislative branch, DOT has met with success elsewhere. A few examples:

In late 2017, the Department moved to harmonize the Federal Railroad Administration’s environmental review process for “multi-modal” transportation projects, so that they would not be crushed by duplicative investigations from other entities such as the Federal Transit or Highway administrations.

Under DOT, the Federal Aviation Administration is implementing performance-based rules, along with strict private-sector standards, that evaluate advanced manufacturing processes for general aviation aircraft more quickly without compromising safety.

In concert with the Environmental Protection Agency, DOT is developing more sensible fuel economy standards for vehicles that not only protect clean air but also promote consumer savings and welfare.

Last month, DOT moved quickly to cancel $929 million in unpaid federal taxpayer grants for an over-budget, behind-schedule California high-speed rail project that Gov. Gavin Newsom (D-Calif.) decided to slow down and scale back. Here’s hoping Washington officials, who also seek to recover some $2.5 billion in federal resources already sunk into the California scheme, will work to ensure the money goes toward reducing the federal deficit.

All told, 52 percent of DOT’s rulemakings in 2017 were designed to relieve rather than add to the regulatory load, compared with 14 percent in the last year of the Obama administration. More is on the way, including a more methodical approach to regulation of truck lengths and weights, additional revisions to rules for commercial space launches and a balanced framework for the development of automated cars and trucks, which could save tens of billions for business customers as well as taxpayers who fund government vehicle fleets. Policies such as these can and should inspire others in the infrastructure sphere (e.g., the Surface Transportation Board) to pursue regulatory actions that are friendly to taxpayers, consumers and the economy.

This forward thinking can also translate into managerial leadership. During the most recent government shutdown, Chao continued to make sure tax dollars were well spent and Americans got the services they needed. Even though only 216 aviation-safety experts were initially working at the start of the shutdown, Chao made sure the FAA brought more than 3,100 employees in this area back to their jobs while negotiations to reopen the rest of the government continued to falter. According to a Wall Street Journal data analysis, these and other actions helped to maintain a high standard of passenger safety during a fiscally challenging time.

With leadership like this, market forces can be brought to improve government programs and prioritize tax dollars for safety instead of bureaucracy. Taxpayers will be among the first to cheer.


Sepp is president of the National Taxpayers Union, a conservative group founded in 1969 to work for less burdensome taxes and more efficient, effective government.

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