The U.S. Office of Management and Budget (OMB) published the first comprehensive regulatory
agenda of the second Trump Administration, which clearly indicates that President Trump is determined to slash regulations government-wide.
Regulatory reform was key to the success of his first term in office, and it looks set to play a prominent role again this term as the President works to improve affordability for all Americans.
According to OMB’s new
Unified Agenda of Regulatory and Deregulatory Actions, federal agencies are slated to publish nearly a thousand deregulatory actions over the next couple of years. At the same time, they plan to publish only a handful of key regulatory actions. The Unified Agenda and subsequent release of the regulatory data show an emphasis on shrinking the size of government and enacting meaningful fiscal reforms.
Regulatory Budgeting Provides Much Needed Reforms
In 2017, President Donald Trump put federal agencies on a
regulatory budget for the first time ever. He required them to offset each new rule with the elimination of two older rules, and he required agencies to add, on net,
no new regulatory costs for the public.
In the end, agencies eliminated five and a half older rules for each new rule and achieved a total net regulatory cost savings of
nearly $200 billion over four fiscal years. The regulatory cost savings achieved during the first Trump Administration was a true overall net reduction in federal regulatory output, not simply a cut in the rate of regulatory cost growth.
At the start of this term, President Trump
pushed agencies to dig even deeper. Rather than just imposing no new regulatory costs, he instructed them to ensure that total regulatory costs are “significantly less than zero.” He also pushed them to eliminate 10 old rules for each new rule. Given the
dramatic increase in regulatory output under the Biden Administration, that target is easily achievable.
The final
numbers for fiscal year 2025 reflect this. Agencies exceeded the President’s target of eliminating ten old regulations for each new one and instead issued 129 deregulatory actions for every one significant regulatory action. After only one fiscal year, the Trump Administration has recorded
$211.8 billion in net regulatory cost savings by rolling back regulatory burdens imposed by previous administrations.
The Unified Agenda as a Roadmap
The Unified Agenda
reveals a real plan to reduce regulations. It includes 981 deregulatory actions, 49 of which are classified as major. It designates 305 rule changes as regulatory, 55 of which are classified as major. Of course, the Unified Agenda reports only a small subset of the total universe of regulatory and deregulatory actions that can have a significant market impact. For example, many
significant guidance documents and other key actions may be regulatory or deregulatory but still not be included within the Agenda because they adhere to other agency coding and organizational conventions.
We cannot yet see the amount of cost and cost savings attributable to each planned item in the Unified Agenda but, based on the experience of the first Trump Administration and the extraordinary rise in regulatory costs under the Biden Administration, it is likely the second Trump Administration will consistently satisfy the President’s ambitious instructions throughout the coming years.
Based on the self-reported calculations of the government, the Biden Administration imposed a staggering
$1.8 trillion in new regulatory costs. That far exceeds the regulatory burden imposed over eight years by President Obama, whose rules President Trump previously had to unwind.
Deregulation Drives Economic Growth
Regulatory reform leads to economic growth.
Research shows that simply halting new regulations for a decade would boost the economy by 1.8 percent, as well as make prices more stable by decreasing inflation. That does not include any cost savings or attendant economic growth that might be generated by modifying or eliminating existing regulatory burdens. Over time, the cost, complexity, and cumulative burden of regulations have grown dramatically, forcing many to focus on
paperwork over real work, and stifling opportunities for innovation, competition, and personal freedom. Many businesses, in turn, pass these compliance costs on to their customers through increased prices, while the opportunity cost of forgoing the launch of new businesses, products, and services may be lost indefinitely.
Deregulation can help to reduce unnecessary regulatory complexity, burdens, and cost, leading to more innovation, dynamism, and growth in the economy.
Regulatory reform was an important part of President Trump’s first term in office, and now it looks set to help power the economy during his second term in office. He and his cabinet should be commended for the hard work on this very important, albeit often underrated, policy front.
