Zero to prosperity? New Trump executive order is a good start

Donald Trump’s return to the White House has brought a wave of executive orders, including his new “Unleashing Prosperity Through Deregulation” directive.

Building on his first-term’s two-for-one rule, this order mandates that for every new regulation, at least 10 must be lined up for elimination, with the total cost of new regulations remaining “significantly less than zero.”

Some will see Trump’s new tariffs as in direct conflict with that sentiment, but let’s look at it.

Highlights of the executive order

Along with surpassing the ambitions of Trump’s previous two-for-one rule, Unleashing Prosperity stipulates that “no regulation shall be issued by an agency if it was not included in the most recent version or update of the published Unified Regulatory Agenda.”  

The order also directs that “The Director [of the Office of Management and Budget] shall revoke OMB Circular No. A-4 of November 9, 2023 (Regulatory Analysis), and all accompanying appendices, guidelines, and documents, and shall reinstate the prior version of Circular A-4, issued on September 17, 2003.”

There isn’t much to recommend the 2003 version of Circular A-4 either, as it either allowed or couldn’t prevent the existing massive regulatory state we have. We urged Congress to prevent Biden’s rewrite, to no avail. We expect more is yet to come from Trump beyond merely defaulting to the earlier A-4, however. This is hinted at when Unleashing Prosperity refers favorably to Bill Clinton’s governing regulatory review EO 12866—but with the qualification “as amended, or any successor order” fully three times. That looks like a giveaway that further regulatory reforms are in the offing. Over at Forbes, I discussed Unleashing Prosperity and ways to make it stick.

Beyond less than zero

Dusting off EOs and adding new ones: Biden rescinded many of Trump’s previous deregulatory measures. Now, those are seemingly being reinstated beginning with Unleashing Prosperity. We might, for example, anticipate a reupping of a Trump order that called for appointing “regulatory reform officers” and task forces at agencies, as well as a reinstatement of Trump’s executive order requiring portals for sub-regulatory guidance documents, as well as directing the issuance or reissuance by agencies of commitments regarding how they intend to use such documents and protect the public from abuses.

Aggressive use of the Congressional Review Act (CRA): As widely discussed, the CRA will play a crucial role in repealing regulations enacted in the final months of Biden’s term. Targeted repeals (here’s an inventory) can strongly bolster less-than-zero.

The DOGE effect, and terminating departments, agencies and programs: The Elon Musk-led Department of Government Efficiency (DOGE) can play an important role, seemingly (fingers crossed) recognizing the advanced fusion of spending and regulation under which we live. Much regulation is indirectly created through federal spending, subsidies, grants and loan guarantees and a colossal contracting and procurement apparatus. Therefore, permanently “unleashing prosperity” must involve cutting off the water and shutting down regulatory agencies altogether. Otherwise, agencies and their agendas will recover. This is a notion we emphasized in CEI’s recent Free to Prosper: A Pro-Growth Agenda for the 119th Congress.

Legislative reinforcement of Trump’s executive actions: Trump’s one-in, 10-out apparatus is a form of regulatory budget, offsetting costs with removals of costs. Along with its duty to terminate departments, agencies and programs, Congress needs to institutionalize a more formal regulatory cost budget to reinforce 10-for-one as well as to bolster other anticipated Trump executive orders (such as ones addressing regulatory dark matter, and “emergency” rationales for slashing rules as opposed to adding them). Along with many legislative options such as regulatory reduction commissions and sunsetting, the proposed REINS Act (Regulations from the Executive In Need of Scrutiny) would require congressional approval for certain major regulations and guidance documents.

Trump’s 10-for-one order signals a major shift in regulatory policy and a refreshing about face after four years of Biden’s whole-of-government economic and social regulatory ambitions. The bottom line for confronting an overgrown administrative state is that more structural reforms are necessary to prevent the otherwise inevitable re-growth of weeds. Net zero processes could help serve as a foundation for these long-term overhauls by reinforcing constitutional normalcy and, at long last, demonstrating the administrative state’s clay feet.

For more see:

“Trump’s Ten-For-One “Unleashing Prosperity Through Deregulation” Executive Order: What’s Next?” Forbes

“A Banger Trump Executive Order Abolishing Regulatory Dark Matter,” Forbes

“Trump’s Ten Rules Out For Every One Rule In: How Would That Work?” Forbes