On January 31, the Trump Administration issued Executive Order 14912, titled “Unleashing Prosperity Through Deregulation” (the “Regulatory EO”), the purpose of which is to “promote prudent financial management and alleviate unnecessary regulatory burdens.”
The primary focus of the Regulatory EO is to limit the number of new regulations issued by federal agencies. Pursuant to the order, unless otherwise required by law or approved by the Director the Office of Management and Budget:
-
- For every one (1) new regulation to be promulgated, an agency must identify at least ten (10) existing regulations to repeal;
- For Fiscal Year 2025, each agency must ensure the “total incremental cost of all new regulations, including repealed regulations, being finalized this year, shall be significantly less than zero…”; and
- Any new costs imposed by a new regulation must be offset by the elimination of costs imposed by at least ten (10) existing regulations.
The Regulatory EO defines “regulation” broadly, to include:
an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency, including, without limitation, regulations, rules, memoranda, administrative orders, guidance documents, policy statements, and interagency agreements, regardless of whether the same were enacted through the processes in the Administrative Procedure Act….
The Regulatory EO lists some broad exclusions. Its directives do not apply to:
-
- regulations issued with respect to military, national security, homeland security, foreign affairs, or immigration-related functions of the United States;
- regulations related to agency organization, management, or personnel; or
- any other specific regulation or category of regulations exempted by the Director of the OMB, who shall exempt those regulations or categories of regulations that impose minimal costs or burdens on the private sector or that are requested to be exempted by the Assistant to the President and Chief of Staff or the Assistant to the President and Deputy Chief of Staff for Policy.
Although the OMB Director retains significant discretion and control over implementation of the Regulatory EO, we are likely to see a significant reduction in regulatory promulgation in 2025, as agencies work to “de-regulate” wherever they can, so as to free up their ability to adopt new substantive regulations. Moreover, proposed regulations that have been published for public comment, but not adopted as final, might be withdrawn and not adopted.
