The executive order seeks to reduce federal regulations by eliminating certain regulations and ensuring that all new regulations are low-cost.
On January 31, 2025, President Trump issued an executive order titled “Unleashing Prosperity Through Deregulation” (the Order) to halt what it referred to as “unnecessary, burdensome, and costly federal regulations” (see the Order and the fact sheet). The Order requires that whenever an agency enacts a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed. According to the Order, this practice will ensure that the cost of planned regulations is responsibly managed and controlled through a rigorous regulatory budgeting process.
The Order also requires that for fiscal year 2025, the cost of all new regulations should be “significantly less than zero,” as they should be offset by the elimination of costs associated with 10 repealed regulations. The Director of the Office of Management and Budget has been charged with implementing the Order and ensuring standardized estimation of regulatory costs. Regulations related to the military, national security, homeland security, foreign affairs, immigration-related functions, as well as agency organization, management, and personnel are exempt from the Order.
Deregulation policies such as this have the potential to significantly reduce federal regulations, which may create more favorable business conditions for certain sectors. Meanwhile, laws such as the Administrative Procedure Act (APA) remain in place. Such laws require agencies to adhere to notice and public comment procedures as well as provide reasoned justification for repealing a regulation — which could impact the ease with which the administration is able to remove existing regulations. In other words, laws like the APA will likely impact the number of regulations that can be repealed under the Order. Following the Supreme Court’s decision last term in Loper Bright, courts assessing the validity of agency action repealing regulations will apply their own independent judgment when interpreting the underlying statute at issue, and will not defer to the agency’s interpretation.
