In the first 100 days of his second term, President Trump has moved aggressively to cut back the reach of the federal regulatory apparatus that intrudes into every aspect of American life.
On his first day back in the Oval Office, President Trump issued an Executive Order rescinding 78 orders and memoranda issued during the Biden administration dealing with the environment, energy, gender, and DEI. He followed up with an Executive Order directing federal agencies in the future to remove 10 existing regulations for every new one they issue, and to ensure that the total net cost of all new regulations they issue each year is significantly less than zero.
The president has directed the Department of Energy to cut, cancel, or pause the effectiveness of a raft of regulations launched in the previous administration as a part of the Biden war on household appliances. And he has directed the Federal Energy Regulatory Commission, the Environmental Protection Agency, and other agencies to add five-year automatic sunset provisions to their existing energy-related regulations.
President Trump has also directed federal agencies to review the lawfulness of their existing regulations in light of ten Supreme Court decisions from the last five years, and to immediately repeal those regulations without going through new notice and comment rulemakings where immediate repeal is consistent with the “good cause” exception to the procedural requirements of the Administrative Procedure Act.
These and other efforts being made by President Trump to reduce the burden of federal regulation are sorely needed. It has been estimated that American businesses spend between $2 Trillion and $3 Trillion per year to comply with federal regulations. These staggering compliance costs are ultimately borne by American households in the form of higher prices for products and services, lost jobs, and slower economic growth.
Every American should applaud the dramatic efforts made by President Trump in the first 100 days of his second term to reduce the number of federal regulations that burden our lives and livelihoods. Going forward, there are two additional steps that the president can and should take by executive action to further reduce the cost and dramatically improve the quality of future regulations.
First, the president should direct federal agencies to write their new regulations, and revise their existing regulations to the extent necessary, to ensure that the legal requirements contained in the regulations are expressed in terms of specific rules that provide clear and unambiguous direction as to what is permissible and what is prohibited. Everyday examples of rules include speed limits and the rules of a game.
In stark contrast, many existing regulations express their requirements in terms of imprecise standards that provide only general guidance for the expected performance of the regulated party. Examples of regulatory standards include environmental regulations requiring that a permit holder develop and administer an impact mitigation plan that provides “adequate” protection to the environment.
The imprecision of regulation based on standards creates needless uncertainties about compliance that fuel protracted administrative disputes and repeated cycles of litigation that often delay and sometimes kill worthwhile development projects. Justice Scalia often noted that the rule of law is fundamentally a “law of rules.” The president can honor the memory of Justice Scalia, greatly improve regulation, and strengthen the rule of law by directing executive branch agencies to regulate by rules rather than standards.
Second, President Trump can also greatly improve regulation and strengthen the rule of law by directing federal agencies to set their regulatory compliance deadlines in a way that does not undercut the constitutional right of regulated parties to challenge the legality of the regulations that cover them.
Typically, regulatory compliance deadlines are set in terms of calendar dates: the regulated party must do this by date one, that by date two, and so forth. This approach often leaves a regulated party in a difficult position. If it elects to challenge the legality of a new regulation and takes no steps to comply while its litigation advances, and its challenge is ultimately unsuccessful, it may then not be able to achieve compliance before the deadlines specified in the challenged regulation. As a result of missing the deadlines, the regulated party may incur additional expenses in the form of fines and penalties.
If, on the other hand, the regulated party challenging a new regulation takes steps to comply while its litigation advances, and its challenge is ultimately successful, then it will have wastefully disrupted its operations by spending money to make unnecessary adjustments for compliance. And worse still, if the steps taken by the regulated party are too expensive to undo because they may involve the modification of significant assets, then any victory achieved by the regulated party in litigation will have no practical benefit. The regulator will prevail even while losing in court.
No regulated party should be denied the effective protection of the laws that provide for judicial review of agency regulations simply because of the compliance deadlines in the regulation and the length of time it takes to challenge the regulation in court.
The president can fix this serious injustice by directing federal agencies to ensure that their regulations are written to explicitly suspend all the compliance deadlines in a challenged regulation until the litigation has been completed on the merits. The president should further direct that, If the legality of the challenged regulation is ultimately upheld, the agency must reset the compliance deadlines of the regulation and extend them by an amount of time at least as great as the time required to complete the litigation and resolve the challenge on the merits.
During the first 100 days of his second term, President Trump has taken bold steps to dramatically cut back the scope and reach of federal regulation. If he takes the additional executive actions proposed here, he can greatly improve regulation, strengthen the rule of law, and dramatically mark the beginning of the second 100 days of his term.
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