President-elect Donald Trump promises to shake up Washington with his cabinet picks and the creation of a new Department of Government Efficiency headed by entrepreneurs Elon Musk and Vivek Ramaswamy. In a Wall Street Journal op-ed last month,1 Musk and Ramaswamy acknowledged that their vision for cutting government spending and staffing hinges on reducing the number of regulations the federal government administers, including those issued during the Biden administration, which the American Action Forum estimates have imposed costs totalling $1.8 trillion.2
On the campaign trail Musk joked about a ‘bonfire of nonsense regulations’,3 but overturning them may not be easy. Reform efforts will certainly face resistance from vested interests who benefit from them, as well as from agency employees.4 Here are some immediate actions the incoming Trump administration might take.
Pause regulatory activity
It is tradition—on a new president’s very first afternoon in office—for his chief of staff to issue a memorandum halting all regulatory actions until the new policy teams at agencies have a chance to review them. This pause will allow Trump officials to reassess and potentially stop progress on regulations not yet published by the outgoing Biden administration.
Rescind and issue executive orders
President Biden issued an unprecedented number of executive orders in his first days and months reversing Trump-era policies and establishing his own priorities. Trump will in all likelihood follow suit. For example, Trump has said that he would build upon his previous policy of eliminating two regulations for every new one, but this time with a 10-for-1 ratio!5 Musk and Ramaswamy have said they plan to use ‘executive orders to roll back regulations’. However, executive orders have limitations. They can only bind the executive,6 as President Biden found with the court reversals of his actions on immigration,7 student loan forgiveness8 and vaccine mandates.9
Developing a robust record that can withstand the inevitable legal challenges can take more than a year
Work with Congress to overturn regulations
The Trump administration will have a few months in which to collaborate with the Republican majority in Congress to use the Congressional Review Act (CRA)10 to disapprove regulations issued in the final months of Biden’s term. The CRA provides expedited procedures by which simple majorities in Congress can send resolutions disapproving regulations to the president’s desk. Trump signed 16 such disapprovals of Obama-era rules, and Biden used the CRA to disapprove three Trump-era regulations. Fewer rules may be eligible for CRA disapproval than during previous transitions, however. Biden agencies finalised their biggest priorities11 last spring, well out of reach of the CRA.12
Litigation and enforcement strategies
Musk and Ramaswamy have said that they will pause enforcement of regulations. That may work in some cases for a limited period of time (while the agency reviews the regulation), but by itself, an enforcement pause won’t rescind a regulation and is unlikely to provide companies the certainty they need to invest and hire. In cases where states and other litigants have challenged Biden regulations, the Trump administration could choose to settle lawsuits rather than defend the rules.
Direct agencies to revise and reverse regulations
Musk and Ramaswamy have said they would rely on recent Supreme Court decisions in Loper Bright v. Raimondo13 and West Virginia v. EPA14 to review and rescind regulations that they find exceed statutory authority. But Loper could also work against them because administrations will no longer automatically get judicial deference when they revise their interpretation of an ambiguous statute and reverse a predecessor’s rules.
Follow notice-and-comment procedures
All of the above strategies could offer relatively quick outcomes, but for most regulations on the books, the task of reversing or revising them is more cumbersome. Pursuant to the Administrative Procedure Act of 1946, agencies will have to develop a record justifying any change and subject that to public notice and comment before issuing a final rule. Developing a robust record that can withstand the inevitable legal challenges can take more than a year. Those records will need to be developed for each rule they want to rescind and won’t be done in one fell swoop or overnight.
Subject independent regulatory agencies to review
Another long-term action Trump may take is to require independent regulatory agencies, such as the Federal Communications Commission and the Securities and Exchange Commission, to subject their regulations to interagency review. He reportedly considered an executive order bringing them under review in his first term but ran out of time. This move could have bipartisan support and could increase accountability for these agencies.
President-elect Trump has promised sweeping regulatory reform. He has options for taking immediate action to revise and reverse individual regulations but durable reforms will require a longer investment and would benefit from support from Congress.
