[problemdomain]

Things are hardly so absolute.

The United States Constitution is the highest law, and provides for different treatment of foreign and domestic matters, so your statement is obviously false even under the most broad interpretation of "the government".

The President/Executive (closest to what many other countries would consider "the government") is also limited in most matters by the laws passed by Congress, so even assuming domestic regulation of cryptography were Constitutional (and I don't personally believe it would be), if Congress has not passed a law giving the Executive the authority to regulate it, the Executive cannot do so.