The DOGE Daze of Regulatory Reform

The new “Department of Government Efficiency” (aka “DOGE”), led by Elon Musk and Vivek Ramaswamy, aims to downsize the federal government and tame the federal bureaucracy. DOGE (which is not actually a government department) is seeking help identifying regulations that should be rescinded or repealed. As detailed in a Wall Street Journal op-ed, they aim to achieve these goals through presidential directives, not legislation.

I am skeptical DOGE can fulfill its ambitious objectives through unilateral executive action, particularly without exquisite attention to relevant administrative law constraints. As I explain in an essay for the new Civitas Outlook (where I am a contributing editor), there are few deregulatory shortcuts. Absent legislative action, reforming and undoing rules is typically a long slog.

From my Civitas Outlook article:

It is a core principle of administrative law that amending or revoking a regulation generally takes the same amount of time and effort that it took to adopt the regulation in the first place. If rules governing the amount of energy a dishwasher may use or requiring specific corporate disclosures went through notice-and-comment rulemaking, rescinding such rules will have to go through the same process, even if the agency believes it should never have adopted the rule in the first place. As the Supreme Court explained in 1983 in its landmark Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. decision (commonly referred to as State Farm) “the direction in which an agency chooses to move does not alter the standard of judicial review established by law.” In doing so, it expressly rejected the argument that it should be easier to rescind regulations than to impose them in the first place. To the contrary, the Court explained “an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for t change beyond that which may be required when an agency does not act in the first instance.” . . .

Musk and Ramaswamy suggest they can get around this problem because the President “can, by executive action, immediately pause the enforcement” of regulations DOGE concludes lack adequate statutory authorization, to “liberate individuals and businesses from illicit regulations never passed by Congress” and buy time for agencies to formally rescind them. If only it were that simple. Many regulations impose burdens on the private sector without requiring direct enforcement. Banks and financial institutions, for instance, must certify compliance with applicable rules, whether they believe an enforcement action is likely. Until existing regulations are repealed, those who refuse to comply act at their own risk. Even in the face of executive branch non-enforcement, regulatory penalties may accumulate, and firms would remain at risk of later enforcement actions by subsequent administrations. Some regulations can also be enforced through citizen suits, such as those filed by environmental and consumer groups and litigious state attorneys general. The President has no authority to “pause” such suits, even if he believes the underlying rules lack legitimate legal authority.

As I note in the article, the first Trump Administration made these same mistakes, particularly at the Environmental Protection Agency (which I wrote about at the time).

Musk and Ramaswamy think their efforts will be aided by the Supreme Court’s recent decisions in West Virginia v. EPA and Loper Bright Enterprises v. Raimando, but I am skeptical here too.

These decisions were significant rebukes to self-aggrandizing agencies. Both reaffirmed the foundational principle that federal agencies lack the power to do much of anything until Congress delegates power to them—what we might call a “Delegation Doctrine.” The EPA, National Marine Fisheries Service, Consumer Financial Protection Bureau, and all of the other alphabet soup agencies were created by Congress and solely imbued with that power Congress sought to bestow. That any of these agencies see a problem and has an idea for a fix, does not license unilateral action absent legislative authorization, nor may agencies rummage around in the U.S. Code seeking previously undiscovered sources for newly sought authority. Pouring new wine out of old bottles is not faithful execution of the laws.

Yet West Virginia, by its terms, is limited to “extraordinary cases,” such as those implicating major economic or political significance. It is not a universal trump card. Loper Bright Enterprises will actually make it more difficult for the executive branch to revise some longstanding interpretations of agency authority because courts will have no obligation to accept the new interpretation. (In this regard it is worth remembering that Chevron deference was born out of Reagan administration efforts to deregulate.) Moreover, as The Chief Justice explained in his opinion for the Court, prior agency interpretations upheld by courts remain good law, protected by statutory stare decisis, even if they relied upon Chevron. Both decisions can be deployed against recent agency power grabs, but neither is a simple antidote to long-entrenched regulatory programs.

Musk and Ramaswamy are correct that agencies (and courts) have not always adhered to the principle that they may only exercise the power Congress delegated to them. The Council on Environmental Quality is a case in point, having long asserted the authority to issue regulations implementing the National Environmental Policy Act that Congress never authorized. The Federal Trade Commission is another. Insofar as these and other agency programs, regulations, and initiatives were never properly authorized, the Trump administration should be able to unwind these programs if it so chooses. But this cannot be done immediately through executive edict or without attention to legal niceties.

Deregulation and regulatory reform are worthy goals, but efforts to achieve these ends without attention to legal constraints are likely to do more harm than good. Substantial effort will be expended with little to show for it. The bottom line is quick and dirty efforts will not achieve much deregulation. In future posts, I will try to outline some strategies that might bear more fruit.

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