Dear Director Vought,

The undersigned, representing a broad coalition of statewide officials, state lawmakers and state and national organizations committed to the principles of federalism, write to express our strong support for President Donald J. Trump’s Executive Order Unleashing Prosperity Through Deregulation, signed on January 31, 2025. This Executive Order (EO) is a pivotal step toward reducing unnecessary regulatory burdens and promoting economic growth.

To maximize its impact, we urge the Office of Management and Budget (OMB) to strengthen the federalism review process as part of the EO’s implementation.

The federalism review process was first formally established under President Ronald Reagan’s Executive Order 12612 (1987), which required federal agencies to assess the impact of regulations on state governments to ensure that federal action did not undermine state sovereignty. In 1999, President Bill Clinton replaced Reagan’s order with Executive Order 13132, shifting the federalism review process from a strong safeguard of state authority to a more procedural consultation framework. While the new order maintained the concept of federalism review, it weakened enforcement by removing explicit constraints on federal agencies, making it easier for them to override state objections. Without meaningful enforcement mechanisms, agencies have frequently bypassed substantive state consultation, leading to the imposition of top-down federal regulations that place unnecessary burdens on states and grow the federal government.

Executive Order 13132 is not the only safeguard ensuring that state voices are considered in the regulatory process. The Unfunded Mandates Reform Act requires agencies to assess the financial impact of federal mandates on state, local, and tribal governments, prepare cost estimates, and ensure meaningful consultation before imposing unfunded regulatory burdens. Executive Order 12866, “Regulatory Planning and Review,” directs agencies to engage with state and local officials in the rulemaking process, assess cumulative regulatory impacts, and coordinate federal actions with existing programs. Similarly, Executive Order 12372, “Intergovernmental Review of Federal Programs,” strengthens intergovernmental partnerships by requiring federal agencies to coordinate with state processes in reviewing financial assistance and regulatory programs. These statutory and executive directives ensure that federal agencies consider state priorities, preventing unnecessary regulatory burdens and reinforcing the balance of power envisioned in the Constitution.

Federalism: The Best Defense Against an Expansive Federal Government

The United States was founded on a system that divides power between national and state governments, ensuring that policies reflect local needs while preventing excessively centralized control. A strong federalism review in the regulatory process is critical for:

1. Preventing DC Regulatory Creep – Federal agencies frequently expand their scope of authority beyond legislative intent, regulating matters that are best handled at the state and local level.
2. Creating a Natural Check on Future Administrations – Protecting state and community authority makes it harder for future administrations to rapidly expand federal control. When state governments exercise more regulatory authority, they have institutional incentives to resist federal encroachment, reinforcing the constitutional balance.
3. Enhancing Fiscal Responsibility – Federal regulations often impose unfunded mandates on states, increasing costs without providing necessary resources. Stronger federalism oversight ensures that regulations account for the financial strain placed on state governments, reducing wasteful spending and bureaucratic bloat.
4. Encouraging State-Led Innovation – States are laboratories of democracy that can tailor policy solutions to their unique economic, geographic, and demographic circumstances. A reinforced federalism review would protect the ability of states to develop policies that work more efficiently and effectively than broad federal mandates.

Recent Biden-era regulations illustrate how mandated federalism review have become little more than an afterthought, leaving states to challenge sweeping federal mandates in court rather than engaging in a meaningful consultation process upfront.

• The Environmental Protection Agency’s (EPA) Waters of the United States (WOTUS) rule was a prime example of federal overreach, where the agency expanded jurisdiction over state-managed waters without clear statutory authority or a substantive federalism impact assessment. The Supreme Court’s Sackett v. EPA decision (2023) struck down the rule after 27 states challenged it, arguing that EPA failed to consider state authority and imposed unlawful regulatory burdens.
  • The Department of Health and Human Services (HHS) issued a rule requiring states to cover gender-transition procedures under Medicaid, despite conflicting state laws. Fifteen states sued, arguing HHS failed to conduct a federalism review and coerced compliance by threatening federal funding. In July 2024, a federal court blocked the rule nationwide, finding HHS exceeded its authority and ignored state concerns.
  • The EPA’s New Source Performance Standards for Greenhouse Gas Emissions rule followed a similar pattern, imposing compliance costs on states without proper consultation. West Virginia and 26 other states sued, arguing EPA ignored state-led environmental programs and unlawfully forced a federal energy transition. In October

¹ Sackett v. Envtl. Prot. Agency, 598 U.S. 651 (2023).

² Tennessee v. Becerra, No. 1:24cv161 (S.D. Miss. July 3, 2024).

2024, the Supreme Court declined to stay the rule while the case was before the D.C. Circuit Court of Appeals, but noted the challengers had a strong likelihood of success.

These examples underscore why a strong federalism review is not just a procedural formality but a necessary safeguard to prevent federal agencies from bypassing state authority. Without meaningful enforcement mechanisms, agencies will continue to treat federalism as an afterthought, forcing states into expensive and prolonged legal battles to protect their rightful regulatory authority.

Recommendations for Strengthening the Federalism Review Process

To enhance the effectiveness of the federalism review mandated by President Trump’s EO, we propose the following actions:

1. Mandate Comprehensive Federalism Impact Assessments – Agencies should be required to conduct detailed federalism impact assessments for all regulations affecting state governance. This should include an assessment of how the proposed federal regulation affects relevant state and local authorities, a justification for why the regulation should be overseen by a federal agency rather than state authorities, and an economic analysis of how the regulation shifts costs to state and local governments.
2. Formalize State Consultation in the Rulemaking Process – Agencies must engage in structured consultation with state officials before finalizing regulations. GAO reports have consistently shown that agencies lack standardized methods for involving states in regulatory decisions, leading to rules that fail to account for state-level expertise and realities.
3. Require Public Disclosure of Federalism Analysis – Federal agencies should be required to publicly release their federalism assessments to demonstrate that their proposed actions do not unduly interfere with state authority. This would enhance transparency and allow states to challenge overreach before regulations take effect.
4. Institute a Federalism Training Program for Agencies – A lack of federalism literacy among federal officials contributes to regulatory expansion. Agencies should train

personnel on federalism principles and require annual compliance reports on how they uphold state authority. Designate a Federalism Review Function within OMB – A dedicated function within OMB should ensure agency compliance with federalism requirements. This function would complement OIRA’s cost-benefit analysis by ensuring that federalism concerns are fully considered in regulatory review, preventing rules that improperly preempt state authority.

5. By reinforcing the federalism review process, the Office of Management and Budget can institutionalize protections against regulatory overreach and the unchecked expansion of federal authority. We urge OMB to issue detailed guidance to federal agencies, emphasizing the importance of federalism considerations in the regulatory process and ensuring agencies comply with President Trump’s EO requirements.

We stand ready to support OMB in implementing these reforms and look forward to working together to restore the proper balance of power, safeguard state authority, and promote economic prosperity by limiting federal intrusion into areas best governed by states.

Sincerely,

Coordinating Organization

Tony Woodlief

Senior Fellow

Center for Practical Federalism at State Policy Network

Statewide Officials

Chris Brown

Public Service Commissioner

Northern District Mississippi

Wayne Carr

Public Service Commissioner

Southern District Mississippi

Andy Gipson

Commissioner of Agriculture and Commerce Mississippi

Rick Pate

Commissioner of Agriculture and Industries Alabama

Andrew Sorrell

State Auditor Alabama

Ryan Walters

Superintendent of Public Instruction Oklahoma

State Legislators

Alabama

Senator Will Barfoot

Chair, Judiciary Committee

Senator Lance Bell

Chair, Fiscal Responsibility and Economic Development Committee

Senator Chris Elliott

Chair, County and Municipal Government Committee

Senator Sam Givhan

Vice Chair

Judiciary Committee

Senator Dan Roberts

Chair, Contract Review Permanent Legislative Oversight Committee

Senator Shay Shelnutt

Chair, Banking and Insurance Committee

Senator Larry Stutts

Chair, Children and Youth Health Committee

Representative Russell Bedsole

Vice Chair, State Government Committee

Representative Ron Bolton

Member, Public Safety and Homeland Security Committee

Representative Chip Brown

Chair, Ports, Waterways and Intermodal Transit Committee

Representative Mack Butler

Member, Constitution, Campaigns and Elections Committee

Representative Danny Crawford

Chair, Agriculture and Forestry Committee

Representative Ben Harrison

Member, Constitution, Campaigns and Elections Committee

Representative Bill Lamb

Member, Ways and Means General Fund Committee

Representative Phillip Rigsby

Member, Constitution, Campaigns and Elections Committee

Representative Troy Stubbs

Member, Commerce and Small Business Committee

Representative Ernie Yarbrough Member, State Government Committee

Arizona

Representative John Kavanagh Chair

Appropriations Committee

Florida

Representative Dean Black

Vice Chair, Education Administration Subcommittee

Representative Monique Miller Member

Ways and Means Committee

Idaho

Senator Cindy J. Carlson Member

Education Committee

Representative Jordan Redman

Member, Environment, Energy and Technology Committee

Indiana

Representative Joanna King Deputy Speaker Pro Tempore

Iowa

Senator Adrian Dickey Chair, Workforce Committee

Senator Sandy Salmon

Vice Chair

Veterans Affairs Committee

Representative Barbara Ehardt Chair

Local Government Committee

Kansas

Representative Susan Humphries Chair

Judiciary Committee

Representative Patrick Penn Chair

Legislative Modernization Committee

Representative Sean Tarwater

Chair, Commerce, Labor and Economic Development Committee

Representative Barb Wasinger

Chair, Administrative Rules and Regulations Joint Committee

Representative Kristey Williams

Vice Chair, K-12 Education Budget Committee Majority Caucus Chair

Louisiana

Representative Beryl Amedee Vice Chair, Education Committee

Representative Gabe Firment Chair, Insurance Committee

Representative Charles Owen

Chair, Special Committee on Military and Veterans Affairs Committee

Representative Mark Wright Majority Leader

Maine

Representative Billy Bob Faulkingham Minority Leader

Mississippi

Senator Kevin Blackwell Chair, Medicaid Committee

Senator Lydia Chassaniol Chair, Tourism Committee

Senator Jeremy England Chair, Elections Committee

Senator Joey Fillingane Chair, Judiciary B Committee

Senator Brian Rhodes

Vice Chair, Forestry Committee

Representative Shane Aguirre

Chair, Banking and Financial Services Committee

Representative Lester Carpenter Chair, Military Affairs Committee

Representative Jim Estrada

Member, Banking and Financial Services Committee

Representative Randy Rushing Chair, Municipalities Committee

Representative Lee Yancey

Chair, Business and Commerce Committee

Representative Henry Zuber III Chair, State Affairs Committee

Missouri

Senator Brad Hudson

Vice Chair, Education Committee

Representative Sherri Gallick

Chair, Economic Development Committee

Representative Alex Riley Majority

Floor Leader

Senator Nick Schroer

Chair, Judiciary and Civil and Criminal Jurisprudence

Nebraska

Senator Kathleen Kauth

Chair, Business and Labor Committee

North Carolina

Representative Jake Johnson

House Deputy Majority Whip

Ohio

Representative Sarah Fowler

Arthur Chair, Education Committee

Representative Gary Click

Chair, Community Revitalization Committee

Representative Kevin Ritter

Member, Finance Committee

Oklahoma

Senator Jerry Alvord

Vice Chair, Business and Insurance Committee

Senator Micheal Bergstrom

Chair, Administrative Rules Committee

Senator David Bullard

Chair, Retirement and Government Resources Committee

Senator Shane Jett

Vice Chair, Administrative Rules Committee

Senator Julie McIntosh, M.D.

Member, Health and Human Services Committee

Senator Dana Prieto

Vice Chair, Select Agencies Committee

Senator Kendal Sacchieri

Member, Appropriations Committee

Representative Toni Hasenbeck

Chair, Postsecondary Education Committee

Representative Molly Jenkins

Vice Chair, Administrative Rules Committee

Representative Clay Staires

Vice Chair, Appropriations and Budget Select Agencies Subcommittee

South Carolina

Senator Tom Davis

Chair, Labor, Commerce and Industry Committee

Representative Travis A. Moore Member, Judiciary Committee

South Dakota

Representative Aaron Aylward

Member, Local Government Committee

Tennessee

Senator Brent Taylor

Vice Chair, Commerce and Labor Committee

Representative Jody Barrett

Member, Finance, Ways, and Means Committee

Representative Clay Doggett

Chair, Criminal Justice Subcommittee

Representative William Slater

Chair, Education Administration Subcommittee

Texas

Senator Bob Hall

Chair, Administration Committee Representative Mark Dorazio

Member, Human Services Committee

Utah

Representative Kay Christofferson Chair, Transportation Committee

Representative Ken Ivory Chair, Federalism Commission

Representative Nicholeen Peck Member, Education Committee

Representative Jorden D. Teuscher Chair, Rules Committee

Virginia

Delegate Nick Freitas Member, Finance Committee

West Virginia

Delegate Elias Coop-Gonzalez Member, Education Committee

Delegate Daniel Linville

Chair, Environment, Infrastructure and Technology Committee

Wisconsin

Senator André Jacque

Chair, Natural Resources, Veteran and Military Affairs Committee

State and National Policy Organizations

Fred Birnbaum

Director of Legislative Affairs

Idaho Freedom Foundation and Idaho Freedom Action

Erin Bendily

Senior Vice President Pelican Institute

Jen Brown

President

Utah Citizens for the Constitution

Jon Caldara

President

Independence Institute (CO)

Cindi Castilla

President

Eagle Forum of Texas

Blaine Conzatti

President

Idaho Family Policy Center

David Cox Assistant

Director

Arkansas Family Council

Wayne Crews

Fred L. Smith Fellow in Regulatory Studies Competitive Enterprise Institute

CJ Szafir

President

Institute for Reforming Government (WI)

Wendy Damron

President & CEO Palmetto Promise (SC)

Tami L. Fitzgerald

Executive Director NC Values Coalition

Becky Gerritson

Executive Director

Eagle Forum of Alabama

Paul Gessing

President

Rio Grande Foundation (NM)

Jonathan Haines

Executive Vice President

Virginia Institute for Public Policy

Kimberly Hermann

Executive Director

Southeastern Legal Foundation.

Cindy Honcoop

President

Eagle Forum of Washington

Orlean Koehle

President

Eagle Forum of California

Joseph G. Lehman

President

Mackinac Center for Public Policy (MI)

Mandy Ludtke

President & CEO

Wyoming Liberty Group

Carolyn McLarty

D.V.M. President

Eagle Forum of Oklahoma

Board Member, Eagle Forum (National)

Gene Mills

President

Louisiana Family Forum

Chuck Muth

President

Citizen Outreach Foundation

Cole Muzio

President

Frontline Policy Council (GA)

Richard Nelson

Executive Director

Commonwealth Policy Center (KY)

Annette Olson

Chief Executive Officer

The John K. MacIver Institute for Public Policy, Inc.

Justin Owen

President & CEO Beacon Impact (TN)

Bobbie Patray

President

Eagle Forum of Tennessee

Jackson Reese

Executive Vice President California Policy Center

Gayle Ruzicka

President

Eagle Forum of Utah

Pete Sepp

President

National Taxpayers Union & NTU Foundation

Stephanie Smith

President/CEO

Alabama Policy Institute

Jim Stergios

Executive Director Pioneer Institute (MA)

Brenda Talent

CEO

Show-Me Institute (MO)

Jameson Taylor, Ph.D.

Director, Center for Governmental Renewal AFA Action

Lynn Taylor

President

Virginia Institute Action

John R. Toedtman

Executive Director

Caesar Rodney

Institute (DE)

Kristen A. Ullman

President

Eagle Forum (National)

Jeff Vanderslice

Director, Federal Government Affairs R Street Institute

Lucas Vebber

Deputy Counsel

Wisconsin Institute for Law & Liberty

Jim Vokal

Chief Executive Officer Platte Institute (NE)

James Whitford

Co-founder, CEO True Charity