The Regulatory Pendulum
Winston Churchill famously said that if government officials "make 10,000 regulations," they "destroy all respect for the law." We've long passed that point here in the United States. But what if, as a result of those regulations, the laws that govern us were subject to large reversals and restorations every four years? That is precisely the problem we face today.
In recent years, each time a new president has entered the White House, his administration has either repealed or reinstated many of his predecessors' regulations while implementing dozens more of his own. This regulatory volatility undermines not only the "steady administration of the laws," as Alexander Hamilton put it in Federalist No. 70, but also the effectiveness of federal agencies and, as Churchill recognized, respect for our system of government.
Under our Constitution, only Congress can make law. As Article I states: "All legislative Powers herein granted shall be vested in a Congress of the United States." The executive branch is charged with implementing and enforcing what Congress has enacted through Article II, which directs the president to "take care that the laws be faithfully executed."
Unfortunately, this is not how things work anymore — and they haven't for quite a while. Regulations issued by the executive branch have the full force of law, with binding effect. And for some time now, the annual number of new agency regulations implemented has substantially exceeded the number of laws passed by Congress. If we look at 2023 alone, 236 significant final regulations were put into effect, compared to fewer than 30 laws enacted by Congress.
And these new rules are costly. In the first three years of the Biden administration, executive and independent agencies issued 761 significant final rules at a total estimated cost of $454 billion — a record-setting figure at the time. As of September, new final rules issued in 2024 have exceeded $1 trillion in total costs, for a combined total since January 2021 of at least 1,009 rules and $1.7 trillion in new costs.
The sweeping impact of these agency-made rules has become all too familiar. But the less recognized aspect of the challenge is what might be called the "regulatory pendulum" problem: the phenomenon in which a president and executive agencies enact policy-oriented regulations that don't have the durability of legislation. If one president issues a regulation, a subsequent president might remove it. Then a third president can re-implement it — potentially in a more aggressive form. Down the road, another president of the opposite party can come in and remove it again. And on and on.
The net-neutrality rule offers an example of this pendulum in action. The Federal Communications Commission (FCC) adopted the rule during the Obama administration, revoked it during the Trump administration, then reinstituted it during the Biden administration. It would not be surprising to see a future FCC with a majority appointed by a different president revoke it again. As this regulatory pendulum oscillates, regulated entities — businesses, hospitals, universities, and more — become less and less certain what legal requirements will apply to them presently and in the future.
By contrast, in a system where Congress actually makes the laws, Americans would be less likely to experience the whiplash of the current regulatory environment. Once passed, legislation can only be changed with new legislation that runs the lawmaking gamut (or by constitutional amendment, which is more difficult still).
Though their contributions are not equal, each branch of the federal government plays an important role in the regulatory-pendulum problem. If we are to slow the pendulum, we will need solutions directed toward all three.
EXECUTIVE LAWMAKING
The pace and cost of new regulations issued during the Biden administration might surpass those of previous administrations, but the ongoing use of executive-branch power to make law is not new.
In 2014, President Barack Obama announced that if Congress wouldn't send him the legislation he wanted, he would find ways to achieve policy goals using his pen and phone. His "pen" was a metaphor for executive orders and other presidential directives, while his "phone" was a stand-in for his ability to rally people to his cause. Obama's administration proceeded to set what were then records for the number and cost of new regulations.
More recently, regulations have altered the law and added costs across numerous different realms all at once, affecting large swaths of the U.S. economy. Examples include the Treasury Department's beneficial-ownership rule requiring companies to report information about their owners, the Securities and Exchange Commission's (SEC) private-advisor rule regulating investment managers of private funds, the Labor Department's rule on tips and the federal minimum wage, the Environmental Protection Agency's (EPA) rules limiting mercury emissions and protecting the ozone, the Energy Department's energy-conservation rules for appliances and equipment, the Department of Health and Human Services' (HHS) minimum-staffing rules for long-term-care facilities, the FCC's adoption of digital-discrimination regulations, and the Federal Trade Commission's ban on new non-compete agreements, just to name a few.
But again, what is notable about executive-branch lawmaking is not simply the number and cost of regulations, but how frequently they are rescinded, restored, or augmented with each change in administration. This pattern departs from that of decades past, when the executive branch preserved some legal continuity and stability. Consider presidents' executive orders: There are now cumulatively almost 16,000 executive orders on the books that have been issued by 45 presidents going back to George Washington. Until the last two decades or so, presidents added to these orders but didn't subtract much; they might have modified, supplemented, or updated an old one, but by and large the body of executive orders stayed relatively consistent.
If we examine the first six months of each new administration during the last 25 years, we can see how that continuity has receded. In the first six months after President George W. Bush replaced President Bill Clinton, Bush revoked only six executive orders. All but one dealt with labor-union issues, an area of law that has long been contested by the two parties. But Bush didn't change any of Clinton's executive orders pertaining to regulatory policy, including Executive Order 12866, which sets up the White House Office of Management and Budget (OMB) process for centralized review of agency regulations.
During his first year in office, President Obama revoked eight executive orders, including the labor-related orders issued under Bush as well as one concerning the regulatory process (EO 13422). Obama's revocations went beyond labor law to address new subjects, including one on stem-cell research and another on terrorist interrogations. When President Trump entered the White House, he too revoked nine of Obama's executive orders and issued numerous orders of his own. Trump did not rescind any of Obama's directives on the regulatory process, but he did repeal some orders on climate change and energy development.
These changes by past presidents pale in comparison to the flurry of activity that occurred at the outset of the Biden administration. In its first month alone, the administration issued at least 32 executive orders or directives — far beyond what any of the last seven presidents issued. Fourteen of these revoked, in whole or in part, 34 of Trump's orders, including all six related to the regulatory process and a host of others affecting energy development, infrastructure permitting, apprenticeships, TikTok, border security, refugee vetting, the financial system, and more.
One might agree or disagree with the specifics of any of those measures, but the trend of rescinding predecessors' directives has clearly gained both volume and speed as time has passed. One can safely predict that this trend will accelerate the next time a new party gains control of the White House.
Something similar has occurred with agency regulations. Though each president comes in and appoints agency officials to focus on his own priorities — particularly those that had been core aspects of his electoral campaign — there had been some continuity among administrations. But as the far-ranging scope and impact of executive-branch lawmaking has become more apparent, presidents have evinced a stronger desire to undo the major initiatives of previous administrations.
For example, the Obama administration implemented many costly and controversial rules — including the EPA's climate rules targeting power-plant emissions and the Labor Department's joint-employer rule and retirement-investment fiduciary rule. When the Trump administration came into office, agencies revoked some of those high-visibility Obama rules: not just the energy and labor examples, but also net-neutrality mandates, the Education Department's Title IX sexual-misconduct regulations for colleges, the EPA's rule regarding waters of the United States, and the Department of Transportation's fuel-economy requirements, among others.
Finally, the Biden administration arrived in 2021 and began to revoke rules promulgated by the Trump administration in an even more aggressive manner. Officials attempted to pull them out root and branch, in many cases not just ending the rules that had been implemented, but also swinging the pendulum back to the Obama-era rules — or more ambitious versions of those rules.
According to the Brookings Institution's regulatory tracker, half of the first 50 regulatory actions taken by the Biden administration were rescissions, reversals, or delays of the prior administration's actions. And the pendulum continues to swing for many other important issues, including the FCC's net-neutrality rule and the EPA's climate rules mentioned above, as well as the Labor Department's overtime requirements, HHS's abortion-related regulations, and some immigration rules. Others still might join them.
The Biden administration's abrogation of Trump-era regulations has extended to rules about the rulemaking process itself. During the Trump administration, numerous agencies added a regulation sometimes called the "rule on rules": a requirement specifying the procedures needed to issue new rules and guarantee due process. The more consequential the rule was, the more procedural protections the public would be afforded, including protections against the misuse of non-binding guidance documents. The Biden administration proceeded to revoke these safeguards at roughly a dozen agencies.
Another aspect of the regulatory pendulum is that it has accelerated despite the presence of the Office of Information and Regulatory Affairs (OIRA) — the centralized regulatory-review office within OMB. OIRA has historically exercised oversight of executive-branch agencies, serving as a long-term source of discipline, stability, and restraint. But for most of the first two years of the Biden administration, the president did not appoint or even nominate a head of OIRA to oversee the regulatory process. Congress finally confirmed Richard Revesz as administrator at the end of 2022, but his most significant action has been revising the guidance OIRA provides to federal agencies for regulatory analysis known as "Circular No. A-4."
That revised guidance turned out to be a pendulum-type event itself — one that destabilized the rules for cost-benefit analysis and other regulatory assessments that had been in place for 20 years. Those changes to Circular No. A-4 will likely facilitate more regulation and higher regulatory costs. But instead of promoting continuity and stability, the types of changes made all but ensure that Circular No. A-4 will be subject to the regulatory pendulum during future administrations.
It is naïve to think that one administration can proceed with ambitious revocations and replacements without the pendulum swinging back the other way during a future administration — perhaps even further than it had initially. As Hamilton warned in Federalist No. 72, that approach, if widespread and pursued at an accelerating pace, risks a "disgraceful and ruinous mutability in the administration of the government."
DESTABILIZING, POLARIZING, AND WASTEFUL
One might ask whether a less restrained executive is such a bad thing. Presidential administrations have embraced the regulatory pendulum for a number of reasons, one of which is that congressional dysfunction has made lawmakers much less likely to act on pressing matters facing the country. Repealing or replacing policies an administration regards as detrimental — even temporarily — may be helpful.
But when deployed to excess, there are also serious drawbacks. The first is that executive lawmaking and the regulatory pendulum lead to legal and constitutional instability. For regulated businesses, schools, hospitals, churches, local governments, and individuals, regulatory swings produce uncertainty — making it extremely difficult to plan future-oriented actions like capital expenditures and employee training.
Executive lawmaking also destabilizes our constitutional order. The extent to which the executive branch has the legal authority to carry out these regulations at all has been hotly contested. During the Trump years, some advocacy groups challenged the administration's immigration-restriction rules for going beyond statutory authority, or for violating the Administrative Procedure Act (APA). The Supreme Court held as much with regard to the Department of Homeland Security's repeal of the Deferred Action for Childhood Arrivals program (commonly referred to by its acronym, DACA).
During the Biden administration, the Court has continued to hold that agencies are issuing regulations that exceed their statutory authority. Examples include the Centers for Disease Control and Prevention's rule prohibiting evictions of renters, the Department of Education's student-loan cancellation rules, and the EPA's power-plant rule. This is not to say that either party is right or wrong, or whether there has been too much or too little regulation of these matters, but rather to illustrate the consequences of disputes over our government's separation of powers.
A second problem is that the volume and speed of regulatory changes leads to enormous costs, waste, and inefficiency. Relatively little attention has been paid to the costs of the Biden administration's rulemaking, despite the fact that its officials have already doubled the prior record for total regulatory costs in less than half the time. Perhaps a kind of numbness has set in about cost numbers after the surge in federal spending levels during the Covid-19 pandemic, but $454 billion in new regulatory costs during 2021 to 2023 alone had enormous consequences. With that number now approaching $1.7 trillion in total new-cost impositions, the potential for adverse economic impacts has never been greater.
For some perspective on how large those costs are, consider that fiscal discretionary spending in 2024 for everything the federal government does — providing for national security; operating the Treasury, Labor, and Commerce departments; enforcing environmental regulation; and carrying out every other domestic program — was set at $1.7 trillion (with $886 billion of that for defense). The annual GDP of Spain, the world's 15th-largest economy, is just slightly less than that figure.
The higher the regulatory costs, the more likely businesses and other regulated entities will engage in wasteful and inefficient spending. The EPA's mercury standards for coal- and oil-fired power plants, to take one example, went into effect in 2012 but were invalidated by the Supreme Court in the 2015 case Michigan v. EPA. EPA officials had estimated that the new standards would cost plant operators as much as $9 billion per year. By the time the Court struck them down, the regulated parties had already spent the money to comply.
Examples like this demonstrate that revoking regulations doesn't simply restore the status quo ante; actions have already been taken in response to the rules when they were in effect. And the pendulum continues to swing: Nearly a decade later, the EPA is trying to reimpose its mercury standards on power plants.
The regulatory pendulum can also exact another type of economic cost known as rent-seeking. If regulated entities don't know what the rules will be amid court decisions and changes in presidential administrations, they might request support from the government and lobby for subsidies — behavior that undermines fairness and competition in the economy and leaves taxpayers on the hook. Or regulated parties might simply decline to comply with regulations as they wait to see what happens, making the regulatory state less effective as a whole.
A third problem is the deleterious consequences for our political system. Unlike Congress, where representatives of at least two parties are present and the minority is not totally powerless, the executive branch is an all-or-nothing proposition wherein only one political party controls it at a given time. Compared to congressional laws that require accommodation and compromise in order to pass, executive orders and agency regulations are much less likely to reflect the varied interests of a diverse citizenry.
When being elected to the White House becomes a winner-take-all way to make laws — where the elected majority can do what it wants, without needing support from the minority — partisans feel more pressure to gain control of the presidency. We have observed this in recent presidential elections, which featured divisive campaigns and narrow margins of victory. That pressure might help explain some disturbing developments in our politics: In a University of Virginia poll conducted in August and September of 2023, 38% of Trump supporters and 41% of Biden supporters said it is acceptable to use violence to stop the other side from achieving its policy goals. In a PBS News Hour/NPR/Marist poll conducted in March 2024, 20% of U.S. adults said that Americans might have to "resort to violence to get the country back on track."
To restore a well-functioning political system within our constitutional order, many of the policy matters that swing back and forth between administrations need to be resolved by persuasion and compromise in Congress, leading to more stability and durability in the law. That has not been happening. Instead, U.S. laws and regulations are subject to the wild swings of presidential elections and executive-branch lawmaking.
Such lawmaking has become so consequential, and has been able to address so many policy topics, that it has increased the tendency of presidents of both parties to use their "pen and phone" to pursue their policy objectives without Congress. That inclination does not appear likely to recede anytime soon.
CONGRESSIONAL ABDICATION
Given its constitutional lawmaking authority, the national legislature is the branch of government that one would expect to address the lack of "steady administration" and the "ruinous mutability" of the law we see at the federal level today. After all, laws passed by bipartisan majorities in Congress typically have much more enduring effects than presidents' executive orders or agency regulations. What are the prospects for a congressional revival of more permanent, settled law?
Congress has worked on a variety of potential regulatory-process reforms for decades. Several bills introduced during the current Congress reflect these ideas and have considerable merit. Examples include the Renewing Efficiency in Government by Budgeting Act, the Regulatory Accountability Act, the All Economic Regulations are Transparent Act, and the Sunshine for Regulatory Decrees and Settlements Act. All of these measures would bring notable improvements to the current regulatory system, from developing a regulatory budget to cap the costs of regulation (an idea I previously proposed in these pages) to increasing public awareness and participation opportunities in agency rulemaking. Lawmakers have proposed and reintroduced some of these bills since the Obama administration.
The reality, however, is that Congress has taken almost no substantive steps to address executive rulemaking since the passage of the APA in 1946. During the last 40 years, the only reforms that stand out are the Unfunded Mandates Reform Act of 1995, the Congressional Review Act of 1996, and the Information Quality Act in 2000. After those went into effect, Congress has enacted nothing else of consequence that would address agency rulemaking generally or the regulatory-pendulum problem in particular.
Although the need for Congress to address both the regulatory process itself and its vague delegations of authority to agencies over the years is greater than ever, lawmakers are unlikely to pass any immediate solutions. Congress has only become more decrepit in recent years: Too many lawmakers no longer think of themselves as members of an independent branch of government with its own powers and prerogatives. Some members have publicly called on the president to make laws unilaterally without Congress — congressional Democrats' urging President Biden to cancel student-loan debt comes to mind, as does Republicans' rejection of an immigration bill in favor of future executive action.
Congress's inaction and weakness empower executive-branch agencies to proceed with ever more doubtful legal authority, ever greater costs and scope, and rules that sometimes appear to be based more on ideological goals than expertise or experience. Instead of mitigating the problem of the pen and phone, Congress enables it. Instead of reducing the uncertainty of the regulatory pendulum, it exacerbates it. This leaves regulated parties in a difficult spot.
The Supreme Court recently handed Congress a lifeline with its ruling in Loper Bright Enterprises v. Raimondo. The Court's decision overturned the doctrine known as Chevron deference, meaning courts no longer have to automatically defer to agencies' interpretations of ambiguous statutes. Congress now has an opportunity to reclaim some of its institutional power, to write clearer laws that defer less to agencies and reflect accommodations and compromise among the people's representatives. Lawmakers can do this in many ways, from changing their own committee rules to investing more in institutional capacities to enabling committees and bipartisan coalitions to drive more of the congressional agenda. But as AEI senior fellow Philip Wallach recently wrote, "many legislators...want to embrace their branch's responsibilities, but the burden is on them to change their institution's habits....[T]here is no substitute for legislating more and legislating better."
In controlling agency regulation, the preferred solution is for Congress to act. But at the moment, lawmakers do not appear likely to rise to the challenge. And yet the need to address the regulatory-pendulum problem remains, so we must turn our attention to the third branch of government: the judiciary.
A ROLE FOR THE COURTS
If regulatory challenges have no legislative solution, and we can no longer assume the executive branch will exercise self-oversight and self-restraint, people and institutions will have to address their regulatory problems elsewhere.
Many private-sector businesses prefer not to take their disputes to court; they would rather bring their concerns to officials in the elected branches. But as the amplitude of the regulatory pendulum's swing increases, these private entities find themselves stuck: They don't want to antagonize regulators or the government generally, but they can't abide the constantly shifting rules.
Some regulated entities are concerned about not only the regulatory pendulum, but also how to figure out which regulations apply to them. This is understandable, given that federal regulators now issue rules outside their traditional lanes: Agencies aside from the EPA try to regulate the environment, agencies aside from the Equal Employment Opportunity Commission try to regulate discrimination and advance "equity" in the workplace, and agencies aside from the Labor Department and the National Labor Relations Board try to regulate employment and union issues. This leads regulated entities to question whether such rules are truly based on agency expertise or if they are more ideological in nature.
Such rules may or may not be desirable, but they will likely form a greater part of the accelerating regulatory pendulum in the future. For regulated parties, there are few options besides litigation.
Judges in general might also prefer not to address issues that appear to involve policy judgments — under the Constitution, those issues are best resolved by the elected branches. But courts recognize the need to ensure that the law is followed and that agency actions are not arbitrary or capricious. That's not a trivial task: The Obama administration lost over 40 cases before the Supreme Court by unanimous decision. Not all were regulatory cases, but the losses suggest that even though someone, somewhere in the government said the agencies' positions were valid, all nine justices — those considered liberal as well as those considered conservative — agreed that the action was not legally or constitutionally defensible.
How might courts address the regulatory-pendulum problem? Tackling issues of administrative law is one way. As mentioned above, for the last 40 years, courts have granted Chevron deference to agencies — including, as Justice Brett Kavanaugh noted during the Loper Bright oral argument, "when the agency changes position every four years."
Back when the Court issued its Chevron ruling in 1984, the thinking was that deference to executive-branch expertise would provide consistency and stability from agency experts. But Chevron and subsequent rulings delivered the opposite result.
Now that the Supreme Court has overruled Chevron, we will observe whether definitive judicial interpretations made based on the laws Congress enacts are more stable than the rules adopted and reversed by executive rulemaking, which were formerly accorded deference. Either way, Chevron is not the be-all and end-all: Courts can address executive lawmaking and promote steady administration of the law in other ways, too.
One method involves the major-questions doctrine, which the Court invoked in the 2022 case West Virginia v. EPA. That decision invalidated an EPA power-plant rule on the basis that it is up to Congress to make the law or provide a clear delegation of authority on matters with significant economic and political consequences. The major-questions doctrine hardly stands alone, either. In its last term, the Court ruled on at least four regulatory issues, which dealt not only with Chevron deference, but also the SEC's in-house courts, the timing of constitutional and legal challenges to agency action, and the funding structure of the Consumer Financial Protection Bureau.
Close judicial review of the regulatory process is likely to continue. Some may criticize increased judicial intervention in matters affecting policy, but if the pendulum continues to swing, the courts' role is inevitable and probably necessary. Litigation of agency authority under the major-questions doctrine will continue, and other cases will emerge about the limits of agency power.
Something else to watch for is the non-delegation doctrine, which defines the realm in which only Congress can make laws. One has to look back to the 1935 case of Schechter Poultry v. United States for the last time the Supreme Court ruled that a federal regulatory scheme was an improper delegation of Congress's lawmaking authority to the executive. But in 2019, some members of the Court indicated an openness to considering its application further, which might be the ultimate method for slowing the regulatory pendulum of executive-branch lawmaking.
Additionally, it would not be surprising to see litigants raising, and the Supreme Court addressing, other aspects of agency power that are at odds with either the APA, the organic statutes empowering particular agencies, or the Constitution more broadly. Such litigation could correct earlier decisions from the late 1940s through the 1970s that reduced the fairness and due process involved in agency administration of the laws, which the APA in particular was meant to provide.
SLOWING THE PENDULUM'S SWING
That the judiciary will be called upon to address some of the challenges presented by the regulatory pendulum and other regulatory problems is quite clear. Less certain is whether the executive branch and a future president will exercise more self-restraint, or whether a new Congress might at long last decide to capitalize on Chevron's demise to restore its lawmaking prerogative.
The underlying dynamic behind increased executive-branch lawmaking and the regulatory-pendulum effect is the hyper-polarization of our politics and our citizenry. Policy ends are overtaking the vital procedural means that undergird a representative democracy — that is a much more significant issue than the state of the regulatory system itself.
If and when our political system returns to bridging divides rather than reinforcing them, the prospects for a more effective and constitutional regulatory system will improve. In the meantime, we must deal with the realities of the regulatory system as they are today, and continue to look for ways to better it by all lawful means available.
