Trump's Deregulation Plan Falls Flat Analysis Finds

Key Concepts

• Deregulation: The process of removing or reducing government regulations.
• Administrative Procedure Act (APA): The federal law governing the process by which federal agencies develop and issue regulations.
• Good Cause Exception: A legal provision under the APA that allows agencies to bypass standard notice-and-comment rulemaking procedures during emergencies or for minor, non-controversial rules.
• Regulatory State: The collection of federal agencies and rules that oversee various sectors of the economy and society.
• Notice and Comment: The standard, legally required process for creating or repealing federal regulations, involving public transparency and input.

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1. The Failure of the "Good Cause" Deregulation Strategy

The Trump administration sought to accelerate the repeal of federal regulations by expanding the use of the "Good Cause Exception" under the Administrative Procedure Act (APA).

• The Plan: The administration directed federal agencies to bypass the traditional, multi-year rulemaking process by claiming that certain regulations were illegal based on a list of 10 specific Supreme Court cases.
• The Outcome: According to an exclusive analysis by Bloomberg Law, this initiative has largely "flopped." Despite high-level directives from the White House, the strategy was not widely adopted by federal agencies.
• Limited Application: The few instances where this shortcut was utilized were primarily clustered around anti-DEI (Diversity, Equity, and Inclusion) initiatives, where agencies cited Supreme Court rulings on affirmative action to dismantle programs favoring minority-owned businesses.

2. Legal and Institutional Barriers

The primary reason for the failure of this deregulatory shortcut lies in the legal risks associated with the APA.

• Agency Counsel Resistance: General counsels at various federal agencies determined that using the "Good Cause Exception" for broad deregulation was legally untenable.
• Litigation Risk: Agency lawyers concluded that the high probability of losing in court and the resulting litigation burden outweighed the benefits of the shortcut.
• Procedural Requirements: Federal law mandates that repealing a regulation must follow a process as rigorous as creating one. Bypassing this via the "Good Cause" exception invites immediate legal challenges that the administration was not prepared to sustain.

3. Alternative Methods of "Neutering" the Regulatory State

While the attempt to rapidly repeal regulations via the "Good Cause" shortcut failed, the administration has found success in other areas to diminish the power of federal agencies:

• Staffing and Resource Depletion: By failing to fully staff commissions (e.g., the SEC) and reducing the number of regulators, the administration has effectively limited the government's ability to "police the beat."
• Sidelining Agencies: In cases like the Consumer Financial Protection Bureau (CFPB), where direct elimination was blocked by the courts, the administration has opted to sideline the agency, rendering it less effective.
• Shifting Enforcement Priorities: By changing the focus of enforcement, the administration can effectively neutralize the impact of existing regulations without needing to formally repeal them.

4. Long-term Implications and Reversibility

The analysis highlights a critical distinction between different types of deregulatory actions:

• The "Sticky" Nature of Repeals: Formally repealing a regulation through the full APA process is a permanent and costly endeavor. If a regulation is successfully repealed, a future administration cannot easily reinstate it; they must undergo the entire multi-year rulemaking process again.
• The "Fluid" Nature of Enforcement: Actions such as shifting enforcement priorities or shrinking agency staff are highly impactful in the short term but are significantly easier for future administrations to reverse.

Synthesis

The Trump administration’s attempt to use the "Good Cause Exception" as a "silver bullet" for rapid deregulation has proven ineffective due to the rigid legal requirements of the Administrative Procedure Act. While the administration has successfully weakened the regulatory state through staffing shortages, enforcement shifts, and agency sidelining, the formal, legal repeal of regulations remains a slow, burdensome, and legally precarious process. The "delta" between the administration's ambitious rhetoric and the actual results underscores the enduring power of established administrative law in checking executive authority.