President Trump Signs Executive Order on Unleashing Prosperity Through Deregulation
February 4, 2025 - On Jan. 31, 2025, President Trump signed an Executive Order (EO) entitled "Unleashing Prosperity Through Deregulation." Overall, it is "the policy of [the] Administration to significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life for each citizen." Federal agencies collectively finalized $1.4 trillion in net regulatory costs in 2024, making it the costliest year on record.
The EO is intended to promote prudent financial management and alleviate unnecessary regulatory burdens by changing the interagency regulatory review process, establishing a new regulatory budget, requiring agencies to eliminate 10 regulations for every new one issued, and extending Office of Management (OMB) review to Internal Revenue Service (IRS) rules and policy documents. A fact sheet is available here. The National Mining Association (NMA) continues to review the EO and its potential impact on the mining industry but below is an overview of several key provisions.
Regulatory Analysis Guidelines
The EO directs OMB to repeal the Biden administration's version of Circular A-4 and reinstate the longstanding 2003 version of Circular A-4. Recall that Circular A-4 provides guidance to federal agencies on the development of regulatory analysis, including important technical assumptions and policy approaches that guide federal agencies in reviewing their regulatory proposals, including cost-benefit analysis. The Biden administration's significant revisions to Circular A-4 were the first changes in over 20 years.
Notably, the federal government will go back to using the social discount rate of 7 percent per year, with the option of using a 3 percent discount rate. The Biden Circular A-4 collapsed this longstanding dual-rate approach into a single default social rate of time preference of 2 percent. Last year, we joined a broad coalition of nearly 30 business groups to file comments highlighting numerous concerns with the Biden administration's revised Circular A-4. In particular, emphasizing that the Biden administration's Circular A-4 would have resulted in federal agencies concluding that stringent regulatory proposals with high costs in the near-term and speculative benefits in the distant future were still cost-justified.
Regulatory Cap and "10 for 1"
The EO requires federal agencies, when proposing or promulgating a new regulation, to identify at least 10 existing regulations to be repealed. Any new incremental costs associated with new regulations must be offset by the elimination of existing costs associated with at least 10 prior regulations. The order also directs the heads of all agencies to, for fiscal year 2025, ensure the total incremental cost of all new regulations, including repealed regulations, being finalized this year, to be "significantly less than zero."
Regulatory Budget and Requirement for Rules to be Published in Unified Regulatory Agenda
The EO requires agencies to prepare a regulatory budget to be submitted to OMB in early September along with their fiscal budget requests. As done with the federal budget, the OMB Director will give each agency an allocation of incremental regulatory costs for the upcoming fiscal year. OMB will ultimately approve each agency's regulatory plan. Additionally, the EO requires agencies to ensure that every planned regulation appears in the semi-annual Unified Regulatory Agenda. Agencies are prohibited from issuing a rule that has not appeared in the Regulatory Agenda without OMB approval.
Broad Definitions of "Regulation" and "Rule"
The EO defines the terms "regulation" and "rule" broadly to include "memoranda, administrative orders, guidance documents, policy statements, and interagency agreements, regardless of whether the same were enacted through the processes in the Administrative Procedure Act." The EO also reinstates a 2018 memorandum of agreement between OMB and the Treasury Department regarding OMB's review of tax regulations.
While it is standard for EOs to exempt from OMB review rules that pertain to military or foreign affairs, or are limited to agency organization, management, or personnel matters, this order goes further and also exempts regulations addressing homeland security and immigration. The EO also directs OMB to exempt regulations as requested by the White House Chief of Staff or Deputy Chief of Staff for Policy.
Next Steps
The NMA will keep you informed of important developments. Please contact Tawny Bridgeford at tbridgeford@nma.org or Caitlin McHale at cmchale@nma.org if you have any questions.