This post is the third and final in a series. Click to read the first and second posts.
Over the course of two posts, I have explored in detail my major takeaways from the new “10-out, 1-in” executive order. President Donald Trump sort of announced the order last Friday night with a Fact Sheet, but not the actual order itself. Remarkably, the order is still not on the White House website but can be viewed on a third-party website.
In this post, I offer my final set of observations on what the order is likely to mean during the second Trump administration. Note that the order specifically calls on the Director of the Office of Management and Budget — likely Russell Vought — to provide clarifying guidance on the details of implementing the order’s instructions to agencies. That could change some of the analysis below. I will provide additional analysis once that guidance drops.
With that, away we go.
The order also reverses the Biden administration by expanding OIRA review authority. As noted in yesterday’s post, the 10-out, 1-in executive order does more than just construct the Trump administration’s new iteration of a Rube Goldberg-esque regulatory budget regime; it is also dedicated to undoing the Biden administration’s valuable and important Modernizing Regulatory Review reforms.
One of the underappreciated steps the Biden administration took through this campaign was to actually relinquish presidential authority over the administrative state. I will repeat because I know that it sounds nuts: Biden voluntarily gave up presidential power. He did this by raising the threshold for what constitutes an economically significant regulation and by exempting the Department of the Treasury’s Internal Revenue Service (IRS) regulations from OIRA review. This may seem modest, but it flies in the face of a 50-year-long trend of presidents accumulating more and more power at the expense of the other branches of government.
It is no surprise, then, that Trump and Vought, both of whom are committed to a vision of an imperial presidency and a radical expansion of the unitary executive theory, have reversed both of these Biden-era changes.
The order reinforces the role of regulatory policy as a tool for maintaining racism and other forms of entrenched power disparities. As I’ve written elsewhere, the institution of cost-benefit analysis serves to entrench structural racism and other forms of entrenched power that run counter to widely shared American values. The Biden administration was sensitive to that and sought, through its revisions to Circular A-4, to sand off some of the most racist features of cost-benefit analysis, including by better accounting for regulations’ distributional effects and explicitly recognizing the legitimacy of human dignity and civil rights as legitimate regulatory ends — albeit ones that are improper to monetize. In rescinding Biden’s revised Circular A-4, the 10-out, 1-in order reinstates the previous racist order of cost-benefit analysis.
Similarly, the scope of the order’s regulatory budgeting requirements provides an insight into existing power structures, as well. With respect to cost-benefit analysis, it is indeed telling what kinds of policies must demonstrate their “economic efficiency” and which are deemed so important that they are exempt. Unsurprisingly, regulations that primarily benefit those lower rungs of the economic and political power ladder — environmental, worker health, and consumer protection, for example — have the most direct route to the cost-benefit analysis woodchipper. Those championed by elites — most notably, national security and military — receive a “get out of cost-benefit analysis free” card.
The order builds on this by exempting elite-preferred policies from its regulatory budgeting requirements. Specifically, it exempts “regulations issued with respect to a military, national security, homeland security, foreign affairs, or immigration-related function of the United States.” And it backs that up by providing the OMB Director with unilateral authority to provide exemptions for “any other specific regulation or category of regulations.” Now, who do you suppose will prevail on the OMB Director in securing those kinds of exemptions?
The order fails to make a persuasive policy argument that a regulatory budget scheme like the one it creates is even a good idea. To be fair, though, there is no persuasive policy argument for regulatory budgets — they are indefensible. First, capping the total amount of regulation is ridiculous unless there is some theoretical maximal level of regulation that is desirable in society. Obviously, that is not the case since new and emerging industries — chemicals manufacturers, the banking industry, artificial intelligence firms — are constantly finding new and innovative ways to harm the public interest.
Second, as noted in my previous post, under Executive Order 12866, which governs the White House centralized review process, generally all new regulations must pass a cost-benefit analysis test. In short, the rule’s very existence must make our society better off. The “logic” of regulatory budgeting, then, is to draw an arbitrary line in the sand and say, we, as a society, don’t want to be any better off than we are this point. It makes it official federal policy to leave proverbial points out the field. A while back, my Center colleagues and I explored the flawed theoretical underpinnings of regulatory budgeting. You can check that out here.
Given the Trump administration’s campaign to build an authoritarian administrative state, the order may not really matter in the grand scheme of things. At the risk of ending on a bleak note, it’s fair to ask whether — in light of all the truly outrageous things the Trump administration is perpetrating right now — this order really merits much concern. Our trans community friends are under attack. Our private data is being compromised. Entire programs are being illegally dismantled. Our constitutional order is being shredded before our eyes. By comparison, this order seems downright silly. (To give you a yardstick for how far we’ve come, the 2-out, 1-in executive order was one of the most radical, signature acts of Trump’s first term.)
Anyway, I’m still wrestling over the question of how much we should care about Trump’s 10-out, 1-in order. It could be that this order doesn’t amount to much over the next four years. But it may quickly become Trump administration’s Plan B for advancing its policy agenda if its blatantly unconstitutional tactics end up meeting fierce resistance in the courts.
