Two-for-One Regulatory Reform

January 30, 2017

Executive Order 13771 imposed a "regulatory budget" on federal agencies, requiring that for every new significant regulation issued, at least two existing regulations be identified for elimination, and that total incremental regulatory costs for the fiscal year be no greater than zero. The order raised questions about whether the executive could override Congressional regulatory mandates—when Congress directs an agency to regulate, an arbitrary requirement to eliminate two regulations may conflict with the agency's statutory obligations. Critics argued the order created an unconstitutional condition on the exercise of congressionally delegated power and could lead agencies to violate their statutory duties. The mechanical two-for-one formula bore no relationship to the merits of individual regulations, potentially forcing agencies to eliminate beneficial rules simply to satisfy an arbitrary numerical constraint.