Why Executive Orders Can’t Save The U.S. Economy?
This nation will remain a neutral nation. I've got a pen and I've got a phone. I have today signed an executive order. Circumventing Congress and raising many, many, many, many questions. Presidents have two options when trying to advance their policy agenda. They can either submit a proposal to Congress and hope that the members turn bills into laws or they can do it on their own. Pretty much every president in history has relished having and extending unilateral powers. At times even going beyond their authority. It's a lot easier to make a decision yourself than to have 535 people in the legislative branch agree with you.
There are always risks that executive power can be misused. The ability to create a policy with the stroke of a pen is a powerful tool. But that strength has limitations, especially when it comes to affecting the economy. After all, monetary policy is controlled by the Federal Reserve, and fiscal policy is set by Congress. People often think that the president has these levers and buttons and dials can be used to find tune the economy. That's not true. The president doesn't have that ability. There's not endless amounts of money lying around. To actually make a fiscal differences to rescue the economy, you need Congress to appropriate.
A president's reputation rises and falls with gross domestic product. The state of the economy can determine whether a president is re-elected and how their legacy holds through history. But how much can a president actually control on his own? For decades, the field of political science was dominated by the notion that presidents have very little formal power, and the little that was there was far too often focused on veto power or the appointment power of the president. But that has changed.
The appreciation and increased use of of unilateral action have developed a new age of presidency. Even if you take away the fact that the government has grown substantially and the types of technologies and ability to project power are much larger now than they were in the 1790s. No one could look at a contemporary president and not conclude that that office has substantially more power and authority than early presidents. Some of the most memorable executive orders throughout history include President Roosevelt's order to authorize the detention of Japanese American citizens. Harry Truman's attempt to nationalize the steel industry.
And President Kennedy's requirement that government contractors implement affirmative action policies. In cases where president's actions are eventually overturned, either through congressional action or more commonly through litigation, it can take years. And so this provides a an important and powerful instrument for the president to change policy. Then I have an article two where I have the right to do whatever I want as president, but I don even talk about that. From border walls to tariffs to reversing environmental regulations, President Donald Trump has pushed the boundaries of the presidency by often acting alone.
I don't think there's any question that Trump really has pushed the envelope far beyond what any prior president had done. On August 8, 2020, after weeks of failed negotiation with Democrats, President Trump sidestepped Congress by taking things into his own hands. Through these four actions, my administration will provide immediate and vital relief to Americans struggling in this difficult time. The only one of these executive orders that spends money or reduces taxes that have any fiscal effects the one concerning unemployment. I don't think it is constitutional, but to try to claim that it was constitutional, he looked around for money that Congress had appropriated, that he could claim he was using. And what he came up with was some money at the Federal Emergency Management Administration, FEMA, which was for disaster relief. That money was for forty-four dollars billion and could last five to six weeks.
The CARES Act that Congress passed in March 2020 included two hundred fifty billion dollars in unemployment benefits. That right there shows you how limited executive orders are. There's not endless amounts of money lying around. To actually make a fiscal difference to rescue the economy, you need much more. You need Congress to appropriate much more, which is why you need legislation. As a shorthand rule, it's easier for a president to screw up the economy in the short term than it is to make it better. Trump's famed Muslim bans are arguably an example of that. After years of litigation and a number of iterations, the Supreme Court upheld the ban in June 2018. Foreign policy experts have claimed that the national security concerns could be significant. But aside from that, the Council on Foreign Relations estimates that the ban could mean up to 132,000 lost jobs and sixty-six dollars billion in economic loss per year.
Losing potential scientists, potential mathematicians, potential engineers, potential technologists from majority Muslim countries, that's a disastrously bad thing to do for the economy. That also applies to immigrants. In other words, the role of immigrants in American economic growth, the success of immigrants. That's what defines the the United States. And it is an absolute myth that immigration is taking jobs away from native-born Americans. While Trump is known to openly push the norms of unilateral action, President Ronald Reagan was famous for his quiet and strategic use of them. Reagan was the grand master of executive orders because he understood what they could and could not do. President Reagan, as you know, was very hostile to social spending and wanted to cut social programs back a great deal. But the other main area where he was active with executive orders was in deregulation.
Only a month into his presidency, President Reagan signed the iconic executive order twelve two ninety-one. It was designed to reduce the burden that federal regulation places on the economy. The order was significant in two ways. It required all agencies to issue a regulation only if the potential benefits to society outweigh the costs. Once an agency drafted the proposed rule, it required that it be submitted to the Office of Information and Regulatory Affairs for review.
OIRA was within the White House and would give the administration authority or the agency's regulatory activities. On the face of it that sounds sensible.
Why would one want to do something that costs more than it benefits us?
But with many of the kinds of regulations he most strongly opposed, the benefits are very hard to measure. If you have an environmental regulation that makes the airless dirty, we may not immediately notice that we're breathing better air. And it may be very hard to guess how many fewer of us will get cancer or emphysema because of reduced pollutions. Reagan's twelve two ninety-one was vaguely written, leaving a lot for interpretation. Some studies claim that it makes it difficult to reach its original intent. Still, twelve two ninety-one is known as one of the orders that have changed the course of history. So much so that even Democraticsuccessors like Presidents Clinton and Obama didn't repeal it, but instead elaborated on it.
Clinton's asked that equity was taken into account and Obama's human dignity and fairness, values that opponents say are impossible to quantify. Conceptually, what one would want to do is looking at overtime what agencies did in terms of the cost-benefit analysis that were implemented and see how that affected their regulatory choices. What would make this hard is todo the counterfactual, what they would have done otherwise? And then the second thing is one would have to take a stance and what the cost benefits were successfully done. So nobody was doing mathematically sophisticated cost-benefit analysis gets to answer the question as to whether how to make the tradeoffs in an ethical sense.
President Obama was once a skeptics of executive measures, but growing frustrated with the differences between him and his colleagues on Capitol Hill. We are not just going to be waiting for legislation. He gradually began to embrace the president's power to act unilaterally. I've got a pen and I've got a phone. Daniel Gitterman, a professor of public policy at UNC-Chapel Hill, calls the Obama presidency a coming out party for executive power. He argues that as the chief executive of the largest and most powerful enterprise in the country, the federal government, Obama achieved substantial policy goals such as minimum-wage, paid sick leave, and fair labor laws for federal workers.
There is a tiny little provision ina the 1949 statute on federal procurement that gives the president some authority for economy and efficiency reasons to directly affects procurement policy. If you're a defense contractor, the government is your major business. Their hope is to get the camel nose in the door. So we've done it for federal employees. We've done it for companies that contract with the government. Will this then make it a little more likely that Congress will come along and legislate it. Good afternoon, everybody. When talking about Obama's legacy on executive action, the Deferred Action on ChildhoodArrivals program, or DACA, is one often mentioned.
Immigration policy to make it more fair, more efficient, and juster. The policy, which still stands today, instructed the Department of Homeland Security to stop deporting and provide temporary legal status for immigrants who illegally came to the U.S. as young children. Opponents argue that Obama overstepped his constitutional right and within months of taking office, the Trump administration vowed to dismantle the program. Is being rescinded. But in June 2020, the SupremeCourt blocked the Trump administration's plan. Immigration is obviously an extraordinarily contentious, difficult issue where compromise is proven remarkably hard.
It's not a great surprise that became a locus of executive orders. Several studies have highlighted the economic contributions of the approximately eight hundred thousand DACA recipients. Libertarian think tank Cato Institute estimates that cutting the program could shrink the economy by two hundred and eighty billion dollars over the next decade. That clearly has large macroeconomic consequences. The other arguments are forgive the jargon they're deontological, which means that their duty-based. There's stuff you're supposed to do because it's right. There are multiple goods in evaluating policy and often doing the trade-offs is very difficult.
The ambiguity of Article two inthe Constitution has left presidents with the ability to take initiative on a number of policy areas that could be questionable. When the economy is suffering and an election is approaching, there's an inclination to push those boundaries beyond the norm. And we're doing that without the Democrats. Central to that check is public opinion. When a president succeeds in acting unilaterally, especially in a way that hasn't been done before, that sets a precedent. And so you wind up with the potential of kind of a ratchet effect.
