What Happened?
Congress' research branch examined how the Trump administration's changes to federal rulemaking are reshaping the cost-benefit process agencies use to justify new rules. The changes could make it harder for agencies to justify new regulations.
The centerpiece is a "ten-for-one rule": for every new regulation an agency issues, it must eliminate at least 10 existing ones to offset costs. The order also sets a regulatory budget requiring that the total cost of all new rules be significantly less than zero.
Cost-benefit requirements did not come from Congress. They grew from executive orders, starting with President Bill Clinton's 1993 order, which created the Office of Information and Regulatory Affairs (OIRA) inside the Office of Management and Budget (OMB) and required agencies to analyze costs and benefits for any rule with an annual economic impact of $100 million or more.
Why Does it Matter to Me?
Agencies use cost-benefit analysis to weigh the costs and benefits of new rules.
The changes could make it much harder to justify regulations with long-term payoffs, such as environmental or climate protections, because those benefits may not show up right away.
President Trump also reversed a Biden-era change that had lowered the discount rates agencies use to calculate the value of future benefits. The Trump administration reinstated higher rates from 2003 guidance, and agencies must now adjust cost estimates to 2024 dollars using a seven percent discount rate.
Both Sides, Now
Opponents argue the requirements make it harder to issue rules whose benefits build over time, and that pulling historically independent agencies such as the Federal Reserve Board and the Federal Communications Commission under White House review could compromise their independence.
The administration acted through executive orders, not legislation. Executive Order 14215 extended cost-benefit review to independent regulatory agencies that were previously exempt because Congress designed them to operate outside presidential and OMB oversight. Congress could restore those exemptions or codify the new requirements by passing a law, but no such bill has moved forward.
What Happens Next?
As of June 16, OMB had not yet set the cost caps for fiscal year 2026.
The legal standing of extending review requirements to independent agencies remains unsettled, and the real-world effect of the zero-or-negative regulatory budget will depend on how OMB chooses to enforce it.
OMB holds the power to set those cost caps, and its decisions bear on how many new rules agencies can realistically issue. Will the courts or Congress act before OMB sets the fiscal year 2026 limits?
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