Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative
This order directs federal agencies to flag regulations that may:
Exceed federal constitutional authority
Exceed the powers Congress is allowed to delegate
Stray from underlying statutory authorization
Impose costs on private parties that outweigh public benefits
Undermine areas of national interest like foreign policy and technology
Place undue burdens on small businesses and entrepreneurs
Agencies are directed to prioritize regulations that constitute “significant regulatory actions” as defined in the 1993 EO 12866, meaning rules that may cause, among other problems, a significant economic cost for the economy overall, particular economic sectors, or state and local governments. In this last regard the order is clearly a positive for federalism. After these regulations are identified, the Office of Information and Regulatory Affairs will work with agencies to rescind or modify them. In the interim, agencies are directed to de-prioritize actions—including enforcement proceedings—rooted in regulations that stray from statutory or constitutional authority.
What to watch: While the order includes agency guidance documents in its definition of “regulation,” its prioritization of “significant regulatory actions” excludes such documents from consideration, even though guidance was used extensively by the Biden administration to place significant burdens on states and communities, as well as to impose gender- and racial-identity policies that most Americans reject. While the order doesn’t forbid agency leaders from adding these policies to their list of regulations in need of reversal or modification, it could benefit from explicitly placing them on the table. Indeed, the 2007 EO 13422, referenced in this order, contains a section that classifies as “significant guidance documents” any guidance that meets the same burden thresholds used to define “significant regulatory actions.”
A second factor to watch is that while EO 12866 classifies regulations with an estimated economic impact above $100 million to be “significant,” the Biden administration applied a $200 million threshold. If agencies rely on the prior administration’s classification of which rules were “significant,” they will likely miss regulations that impose substantial costs on states and communities.
February 19, 2025