Musk, Ramaswamy put spotlight on proliferation of U.S. regulations

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In mid-October, the Defense Department issued new cybersecurity rules for federal contractors, estimating that private firms would have to spend about $42 billion to implement them.

Two weeks later, the Department of Health and Human Services issued new guidance on payment rates for home health-care services. Companies would have to spend roughly $900 million to comply, the agency said.

And a few weeks after that, the Federal Aviation Administration issued enhanced safety standards for some aircraft. The cost to businesses: Another $900 million.

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All told, the private sector will have to spend roughly $1.8 trillion to implement federal rules approved under President Joe Biden, according to an analysis of agency projections by the American Action Forum, a center-right think tank. That figure dwarfs the roughly $115 billion in regulatory costs approved during President Donald Trump’s first administration, as well as the $900 billion in costs approved during President Barack Obama’s entire eight years in office, the think tank found.

The surge in regulations, long maligned by Republicans, is getting fresh attention as Trump prepares once again to take office. As part of their nongovernmental “Department of Government Efficiency,” tech entrepreneurs Elon Musk and Vivek Ramaswamy have vowed to move rapidly to slash federal rules, with plans to have Trump immediately freeze “thousands” through executive order and permanently undo thousands more.

Ramaswamy claims “a majority” of existing regulations are unconstitutional and argues that scrapping them could usher in a “new dawn” for the country, reflecting the broader anger among business executives about Biden’s regulations.

“‘Regulate now, ask questions later.’ That was the Biden approach,” Ramaswamy said in a social media post last November. “We now have a popular mandate & constitutional duty to fix it.”

But experts say slashing federal regulations could be easier said than done. Even the most financially onerous regulations typically aim to achieve noble goals – protecting the environment, say, or empowering consumers – and their costs are weighed against those benefits.

For instance, the most expensive Biden administration regulation – a new tailpipe emissions rule for cars and trucks – is estimated to cost the private sector hundreds of billions of dollars. But the Environmental Protection Agency said the rule would prevent up to 2,900 premature deaths and 18,000 cases of childhood asthma by 2045, generating economic benefits that outweigh the costs by $29 billion a year.

“There’s a longtime confusion around the word ‘regulation.’ People associate it with red tape and bureaucracy. But these are public protections,” said Lisa Gilbert, co-president of Public Citizen, a consumer advocacy organization.

Defenders of Washington’s regulatory regime say federal rulemaking has become more prolific and more complex to match the modern economy. For much of the 19th century, the U.S. government’s functions were fairly limited: delivering mail, maintaining a military, running the patent office. At the beginning of the 20th century, new federal agencies were created to curb corporate monopolies and address labor abuses. Government expansion under Presidents Franklin D. Roosevelt and Lyndon B. Johnson, both Democrats, brought new waves of federal oversight and scores of new agencies.

The number of “economically significant” federal rules – defined as those having an effect on the economy of at least $100 million a year – was flat from the 1980s through the 2000s, under both Republicans and Democrats, according to the George Washington University Regulatory Center. Then came the 2008 financial collapse, which spawned a surge in regulatory activity as Obama and congressional Democrats toughened Wall Street oversight (while overhauling the health-care system).

Even Trump, despite his pledge to slash regulations, implemented many in his first term, including rules requiring hospitals and insurers to disclose more data.

Samuel Hammond, senior economist at the Foundation for American Innovation, a think tank that supports curbing federal regulation, said an increasingly dysfunctional Congress was in part responsible for the uptick in executive branch rulemaking: “The less Congress does, the more that gets pushed off to the White House,” Hammond said.

Many conservatives nonetheless argue that the regulatory increase is not just unproductive but illegal. Rather than convincing Congress to approve new laws, they say, federal agencies have tried unilaterally to bend existing statutes to support new policy goals.

The conservative majority on the Supreme Court has bolstered that idea in recent rulings, including a decision overturning a long-standing precedent that courts should defer to federal agency interpretations of ambiguous laws – a standard that gave the executive branch more latitude to craft expansive regulations. Ramaswamy frequently points to the June ruling discarding Chevron v. Natural Resources Defense Council as a pivotal step toward reining in the “administrative state.”

“There’s been very few checks on the administrative state and the executive branch – they’ve worked backwards, seeking to do something ideologically and then use legislative justification,” said Akash Chougule, vice president of Americans for Prosperity, a right-leaning group.

Chougule pointed to a Labor Department rule that expanded the definition of full-time employees by issuing a more expansive set of criteria under which workers could not be classified as independent contractors. Liberals say the rules are protecting workers’ benefits, while conservatives have claimed the regulations create counterproductive burdens for both workers and employers.

Many nonpartisan experts believe the current process for promulgating rules broadly undermines the effectiveness of the federal government. Jennifer Pahlka, co-founder of the U.S. Digital Service under Obama and now a senior fellow at the center-right Niskanen Center, has been at the forefront of examining how opaque or risk-averse regulations have created “Rube Goldberg” contraptions that have undermined their own goals. For instance, she has scrutinized health-care rules intended to exempt doctors from Medicare reporting requirements that instead required the same doctors to submit even more paperwork.

“Things need to change,” Pahlka said. If DOGE does “awful things then there are people like me, who will be seen as having defended them, who may feel sick to our stomachs. [But] the reality is what happens in the actual implementation of regulations has become far too invisible to the political class – and that has made achieving policy goals much more difficult across the government.”

Even some liberals see downsides from increasingly complicated federal rules: They can give an unfair advantage to large firms with access to lobbyists and legal teams. Critics have pointed, for instance, to aviation regulations that appear to let Boeing set its own rules for aircraft safety, and rules about internet access that have been influenced by tech giants and their advocacy network.

More recently, lawmakers in both parties have assailed new Treasury Department reporting requirements meant to provide more transparency about the ownership structures of small firms. All but one member of the House voted last year to extend the filing deadline under the new requirements. Treasury officials have said they will impose penalties only on firms that “willfully violate” the new rules.

Hammond, of the Foundation for American Innovation, blames “what political scientists call ‘regulatory communities’ – groups of professional technocrats who are deeply embedded in the industries they regulate.” These career officials have too much power over everything from food safety to health care to poverty policy, Hammond said, adding: “Pretty much every part of government has this problem – this outsourcing of policies to civil servants with their own fiefdoms.”

Kathy Stack, a former career official who served under presidents of both parties in the White House budget office before leaving government in 2015, said she has found that, in Republican administrations, regulators focus more on improving implementation of existing programs and tackling bureaucratic barriers.

By contrast, she said, “Democrats focus on creating new programs and the mandates are always about the shiny new stuff.” Biden officials, for example, “didn’t really try” to reform outdated federal regulations, Stack said. “My sense was they were stretched so thin because their agenda was about very large programs and getting them going.”

Musk and Ramaswamy are projecting optimism about reversing course. But federal law specifies a time-consuming process for repealing regulations, and legal scholars say the courts are likely to strike down any unilateral attempt to immediately cease their enforcement.

Meanwhile, their work is already raising questions about self-dealing: Reuters reported in December that Trump’s transition team is recommending an end to crash reporting requirements for autonomous vehicles. Ending the requirement would most clearly benefit Tesla, Musk’s electric car company, which has reported most of the crashes under the National Highway Traffic Safety Administration program.

“It’s easy to castigate regulations in the abstract, but they often respond to very real concerns,” said Nicholas Bagley, an administrative law expert at the University of Michigan. “We have a lot of regulations because there are a lot of demands for regulations.”

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