Latest news with #federalregulation
Gizmodo
19 hours ago
- Business
- Gizmodo
Elon Musk-Founded Brain Implant Startup Says It's a ‘Disadvantaged' Business Despite Being Worth $9 Billion
Elon Musk, the rightwing culture warrior waging a 'civilization-saving' battle against the 'woke mind virus,' apparently isn't above taking advantage of diversity, equity, and inclusion (DEI) programs when it serves his business purposes. Neuralink, the $9 billion brain implant startup that Musk founded, recently characterized itself as a 'small disadvantaged business' in a federal filing with the Small Business Administration. The SBA website notes that Neuralink attested in its filings that it is a 'Self-Certified Small Disadvantaged Business.' According to the SBA, businesses can qualify for this designation if the company is '51% or more owned and controlled by one or more disadvantaged persons.' The firm must also 'be small, according to SBA's size standards,' the site states. According to the code of federal regulations, socially disadvantaged people are defined thusly: …those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control. The filing was first spotted by MuskWatch, a Substack focused on the Tesla billionaire, which accuses the company of having 'falsified federal forms.' MuskWatch published an excerpt from a form that it said was filed by Neuralink on April 24, in which the company checked the box affirming that it is a small disadvantaged business as defined in the code. The blog points out that the SDB designation can also only be legally claimed by companies owned by 'economically disadvantaged individuals,' and that federal regulations state that 'individuals with a net worth exceeding $850,000, excluding the value of their primary residence,' do not qualify as 'economically disadvantaged individuals.' Musk is obviously worth a lot more than that. It is certainly difficult to understand what disadvantaged group Neuralink could claim maintains ownership over the company. The structure of Neuralink's ownership isn't publicly available, but Musk held a majority stake in the company in 2019. The startup has since engaged in raising more funds, but primarily from Silicon Valley's lily white venture capital community. Gizmodo reached out to the firm for more information. The news is amusing and infuriating because two of the things Musk enjoys whining about most are the societal scourge of DEI and people who ask for help from the government. Now, his own company appears to be claiming it should get a federal handout because it is socially and economically disadvantaged. Of course, federal handouts have been the lifeblood of Tesla and SpaceX for many years. Since it was founded in 2016, Neuralink has sought to use neural implants and experimental science to usher in a new era of computer-to-brain interfacing. The startup received FDA approval for human clinical trials in May of 2023. Last year, the company streamed an interview with a quadriplegic who used Neuralink's brain implant to play video games. Prior to human testing, Neuralink trialed its implants on animals. While many of those test subjects are still alive today, many ended up getting euthanized. Some, allegedly, died quite horribly, leading to accusations of 'grotesque' animal abuse and a lawsuit from a physicians' group.
Yahoo
05-07-2025
- Business
- Yahoo
Opinion - We have filed the case that could overturn Wickard and limit Commerce Clause powers
Roscoe Filburn owned a wheat farm in rural Montgomery County, Ohio. When he used his own farm to feed his own family, he fell under the hammer of the federal government. It was 1938, and America was in the throes of the Great Depression and the Dust Bowl. Agricultural commodity prices—and specifically, wheat prices—fluctuated wildly, costing farmers their fortunes, farms, and families. In an effort to stabilize wheat prices, the federal government intervened and artificially capped the amount of wheat each farmer could grow. It sought to shrink the wheat supply while demand remained the same, and thereby increase the wheat price. Under this federal policy, the government eventually fined Filburn. Justifiably skeptical that this was within the federal power, Filburn challenged the fine in court. The case was Wickard v. Filburn — one that lives in infamy and whose effects are felt strongly to this day. Unlike the state governments, the federal government is one of limited and enumerated power: It possesses only the powers specifically granted in the Constitution, and no others. As such, it based its wheat scheme on Congress's power 'to regulate Commerce … among the several States.' Widely known as the 'Interstate Commerce Clause,' as its text indicates, this federal power is restricted to commerce that takes place between states. Wheat and similar commodities are often bought, shipped, and sold across state lines, and their availability within one state can affect markets in others. On its face, then, intervention into the wheat market could seem a reasonable expression of the power to regulate interstate commerce. But the federal government went much further than that. Filburn's case began in 1940, when the federal government had imposed a wheat cap for Filburn's farm. He abided by that cap for wheat he sold on the market, but he retained some additional wheat to feed his family and his animals. Despite this wholly local, non-commercial use of his own wheat, the federal government fined him for exceeding his quota. After two years of proceedings, the Supreme Court notoriously sided with the government. The court's reasoning? By eating wheat he grew himself, Filburn was failing to buy wheat on the national market, and by not buying wheat on the national market, he was engaging in an activity which, if others were to follow suit, could affect that national market. The federal government could therefore regulate even Filburn's family activity on his own farm in Ohio because it could hypothetically affect interstate commerce. Congress and federal agencies have taken that reasoning and run with it ever since. Under the logic of this precedent and ensuing cases, the federal commerce power has stretched to reach virtually every activity under the sun. To this day, the federal government uses these cases to assert a nearly limitless sweep of power. The Commerce Clause has become a catch-all justification for thousands of federal laws and regulations. Agricultural production? Interstate commerce. Public health? Interstate commerce. Obscure spider species? Interstate commerce. Real estate disclosures? Also, somehow, interstate commerce. For decades, public-interest lawyers like ourselves have sought to rework this line of jurisprudence. In April, our firm, the Center for the American Future, filed Corley v. U.S. Department of the Treasury, with the aim of restoring the Constitution's proper balance of power in this space. The plaintiffs in that case, a real estate attorney and a property owner in Lubbock, Texas, want to transfer residential real estate into a legal entity. This should be as simple as filling out the deed, handling the closing details, and signing the paperwork — that is how it has always worked. And real estate is about the most 'local' activity there is. It does not cross state lines, and each property is intrinsically unique. It is a stretch to say that such an activity, especially when no financing has been secured and no money has changed hands, falls within interstate commerce. But, predictably, the federal government has argues otherwise. The Treasury Department's Financial Crimes Enforcement Network, known as 'FinCEN,' has put in place roadblocks, rules, penalties, and paperwork for this simple intrastate activity. These extra steps require the disclosure of sensitive information, such as social security numbers, birthdates, closing costs, financing, and other data. FinCEN's claimed purpose is to combat money laundering, but its restrictions apply to every single person making a covered real estate transfer, regardless of whether he or she is suspected of a crime. Most importantly, the regulations apply with no regard to interstate commerce. Even if the property is next-door and is transferred for free, according to FinCEN, the agency can reach it under the Commerce Clause. Our Constitution is clear in restricting federal power. Whether Congress legislates or an executive agency regulates, no part of the federal government may expand beyond the powers set forth in the Constitution. For more than 80 years, those restrictions have been ignored as the federal commerce power has been pushed beyond the bounds of reason. But the Center for the American Future, through carefully crafted legal arguments, hopes to restore the Constitution's careful balance of power. Clayton Calvin is an attorney with the Texas Public Policy Foundation's litigation arm, the Center for the American Future. Matt Miller is a senior attorney in the Center for the American Future. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Forbes
01-07-2025
- Business
- Forbes
Trump's Deregulation Score: Mid-Year Federal Rules Tally Is The Lowest Ever Recorded
It's July 1, mid-year 2025. The federal regulatory landscape has undergone a dramatic transformation. Federal Register, July 1, 2025 After years of relentless compounding of federal rules and regulations and Federal Register pages--capped by Joe Biden's self-proclaimed 'whole-of-government' executive actions on the likes of DEI, ESG, net-zero and the 'care economy'--conventioal federal regulation as we have known it has largely stopped. The annual Ten Thousand Commandments report has, since 1993, tracked the inexorable accumulation of federal regulation. But mid-year data for 2025—Federal Register pages, total rules, significant rules, and executive orders—point to a striking departure from past trends. The Federal Register--the daily chronicle of federal rules, proposed regulations, and notices--is a key barometer of regulatory output. At this mid-point of 2025, the chronicle contains 'only' 1,255 rules among its generationally slender 28,799 pages. Coincidentally, today's Federal Register happens to be Trump's fattest at 895 pages. It also contains his highest number of both proposed and final rules. But many of the proposed and final rules populating the Trump-era Register consist of pauses, revisions and withdrawals rather than hammer-down regulation of business and the public. The trajectory seems clear--2025 is on pace to sport the lowest rule count of all time at an estimated 2,510 (that's just a straight-line projection). That would best Trump's own record for the all-time low rule count of 2,964 back in 2019. The takeaway seems to be that Trump's one-in, ten-out exectutive order is having real effects, as the gross counts are the lowest ever seen, and largely deregulatory in character besides. Historical rulemaking activity underscores the significance of these new developments. In 2024, agencies under Biden issued 3,248 final rules. Historically, rule counts were far higher, routinely and comfortably exceeding 4,000 before 2005--and even reaching teh 7,000s back in the 1970s. A linear projection for the Federal Register housing all this rulemaking activity and unwinding would place it at 57,598 pages on December 31. If that's what materializes, one would need to go back to 1992 and the first George Bush to find a Federal Register that thin. By contrast, the 2024 Federal Register under Biden ballooned to an all-time record 106,109 pages, easily breaking Obama's record of 95,894 in 2016. Under Biden's progressive activism, the nation was on the path of a million Federal Register pages per decade. Trump II is bucking these trends even more than the glance provided above. Before leaving office in Janiuary, Biden added 7,648 pages to the Register, leaving a 'net' of just 21,151 pages attributable to the Trump administration and heralding a straight-line projection even lower than 57,598 pages. All in all the pace suggests 2025 will easily undercut even Trump's 2017 low of 61,067 pages, which was the leanest Federal Register since, again, 1992. Similarly, while 2025 has seen just 1,255 rules, fully 243 of those are attributable to Biden, leaving Trump with a 'net' of already largely deregulatory rulemakings of 1,012. Such stalling of regulatory activity is unprecedented. Significant rules—those with economic effecs of $100 million or more, as defined by Executive Order 12866—are another critical metric. In 2023, Biden issued 342 significant rules--and counts in the hundreds have been common since tracking of them began in the 1990s. Trump's first term changed that, with his highest count of 214 coming in 2017 (a year that included some Obama rules). Trump's signficant rule counts never reached 100 in 2019 and 2020; and even here, a number were 'Deregulatory' under the auspices of the first term's one-in, two-out operational mode. Here at mid-year 2025, only 68 significant rules have been recorded, and these reflect the same concerted prioritization of regulatory streamlining that applies to rules generally under Trump. For example, as it happens, three of four 'significant' rules published just today are withdrawals/recissions of earlier rules or proposals. The final significant rule count for 2025, still TBD of course, seems poised to be among the lowest ever if not the lowest--and unquestionably so when deregulatory measures are netted out. The upcoming 'Unified Agenda of Federal Regulatory and Deregulatory Actions' is anticipated to showcase agencies' intended streamlining plans across the board. Executive orders, tools presidents routinely use to to govern the executive branch but also often employ to try to shape spending and regulatory policy for good or ill, also display a shift. As of today, Trump has signed 164 executive orders, an extraordinarily brisk pace compared to predecessors (well, most of them: FDR is a standout). However, unlike Biden's orders--which routinely expanded whole-of-government regulatory frameworks--Trump's 2025 orders emphasize dismantling Biden-era rulings and forcing courts to test the limits of streamlining frameworks. These efforts are substantially rooted in the Supreme Court's own recent rulings striking down prior regulatory over-reach, such as the now-discarded Chevron Doctrine. Particularly notable here is E.O. 14219's ('Ensuring Lawful Governance and Implementing the President's 'Department of Government Efficiency' Regulatory Initiative') directive to 'commence the deconstruction' of the administrative state by mandating reviews of regulations for legal consistency, national interest and slashing bureaucratic bloat. Fewer rules and pages translate to less red tape and less stifling of innovation, potentially unleashing fresh economic dynamism. Offsetting this--and addressed elsewhere and in need of careful monitoring--are Trump's own discordant tendencies toward intervention in the form of tariffs, antitrust, and an affinity toward price regulation in entertainment and health care. Swampy moves like these can overwhelm savings from deregulation. Compared to Federal Registers of prior yeasr, however, the leaner conventional regulatory enterprise we see here at mid-year 2025 marks a bold experiment in non-governance--in simple leaving things, businesses and people alone. The yet to be determined final year tallies will tell the tale, but we seem off to an extraordinary start with heretofore unheard-of low levels of conventional regulatory activity.
Reuters
01-07-2025
- Business
- Reuters
Deregulation Orders Under the Second Trump Administration Practical Law The Journal
The second Trump administration has issued a number of broadly applicable executive orders and releases on deregulation designed to reduce rulemaking, eliminate certain existing rules, and exert broad presidential control over most federal regulatory agencies. These orders and releases have the potential to disrupt or even upend the modern US federal regulatory system, as well as many regulatory areas, including capital markets and finance, health care, the environment, energy, trade and investment, antitrust, consumer protection, and labor and employment. Market participants in regulated industries and their counsel must stay informed as these orders are implemented and their impact trickles down through various federal regulators. This article provides an overview of these developments and their implications for federal regulation. (For a collection of resources and commentary to help counsel manage developments arising during the second term of the Trump administration, see Trump Administration Toolkit on Practical Law; for the complete version of this resource, which includes information on Executive Order 14294 concerning 'overcriminalization' in federal regulations, see Deregulation Orders Under Second Trump Administration on Practical Law.) Freeze on New Rules Pending Administration Review On January 20, 2025, the White House issued a release (freeze order) referred to as a presidential action, ordering 'all executive departments and agencies' to: Refrain from proposing or issuing any rule in any manner, including by sending a rule to the Office of the Federal Register (OFR), until a department or agency head appointed or designated by the president reviews and approves the rule. The department or agency head may delegate this power of review and approval to any other person appointed or designated by the president, consistent with applicable law. Immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register, so that they can be reviewed and approved. Consider: postponing for 60 days from the date of the freeze order the effective date for any rules that have been published in the Federal Register, or any rules that have been issued but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise; opening a comment period during this 60-day period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules postponed under the freeze order; re-evaluating 'pending petitions' involving such rules; and 'further delaying, or publishing for notice and comment, proposed rules further delaying' such rules beyond the 60-day period, as appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law, and policy. Consult with the director or acting director of the Office of Management and Budget (OMB director) for rules that raise substantial questions of fact, law, or policy. Comply in all circumstances with any applicable executive orders concerning regulatory management. If rules do not raise substantial questions of fact, law, or policy during the 60-day postponement, no further action needs to be taken. Under the freeze order, the OMB director may exempt any rule deemed necessary to address emergency situations or other urgent circumstances, including rules subject to statutory or judicial deadlines that require prompt action. The term 'rule' in the freeze order follows the definition set out in the Administrative Procedure Act (APA) (5 U.S.C. § 551(4)). The freeze also applies to any: Regulatory action, as defined in Section 3(e) of Executive Order 12866, Regulatory Planning and Review (Sept. 30, 1993), as amended. Guidance document, as defined in Section 2(b) of Executive Order 13891, Promoting the Rule of Law Through Improved Agency Guidance Documents (Oct. 9, 2019), when that order was in effect. The freeze order expressly applies to any substantive action by an agency (normally published in the Federal Register) that 'promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking,' as well as to 'any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.' The freeze order directs that any communications regarding any matters relating to this review be addressed to the OMB director. Offsetting New Regulations On January 31, 2025, President Trump signed Executive Order 14192, Unleashing Prosperity Through Deregulation (Deregulation EO), which requires: Federal agencies that promulgate a new rule, regulation, or guidance to identify at least ten existing rules, regulations, or guidance documents to be repealed. Any new incremental costs associated with new regulations, to the extent permitted by law, to be offset by eliminating existing costs associated with at least ten prior regulations. The OMB director to identify and eliminate regulations, standardize cost measurements, and ensure compliance with the APA. The OMB director to provide the heads of agencies guidance on implementing this executive order, which includes, but is not limited to: processes for standardizing the measurement and estimation of regulatory costs; standards for determining what qualifies as new and offsetting regulations; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section. The total incremental cost of all new regulations, including repealed regulations, in fiscal year 2025 to be significantly less than zero. The head of each agency to: identify the offsetting regulations on an aggregated basis for regulations that increase incremental cost (as described in the Deregulation EO); and provide the agency's best approximation of the total costs or savings associated with each new regulation or repealed regulation. The OMB director to identify for each agency the total amount of additional incremental costs that will be allowed for that agency in issuing new regulations and repealing regulations during each fiscal year after fiscal year 2025. Expanded Oversight of Federal Agencies On February 18, 2025, President Trump signed Executive Order 14215, Ensuring Accountability for All Agencies (Oversight EO), which expands White House oversight of federal regulatory agencies, including independent agencies (as defined in 44 U.S.C. § 3502(5)) like the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Federal Communications Commission (FCC) (for more information, see Federal Independent Agencies in the June 2025 issue of Practical Law The Journal). Under the Oversight EO: All executive departments and agencies, including independent regulatory agencies, must submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register. Independent regulatory agencies must consult with the White House on their priorities and strategic plans, and the White House will set their performance standards. The attorney general, subject to the president's supervision and control, will provide authoritative interpretations of law for the executive branch. The Oversight EO notes that it: Does not apply to the Board of Governors of the Federal Reserve System (Federal Reserve Board) or to the Federal Open Market Committee in its conduct of monetary policy. Applies to the Federal Reserve Board in relation only to its supervision and regulation of financial institutions. The Oversight EO requires the OMB director to: Provide guidance on implementation of the Oversight EO to the heads of executive departments and agencies submitting new regulatory actions for review under the Oversight EO. Agency submissions by independent regulatory agencies may begin within the earlier of 60 days from the date of the Oversight EO or completion of the implementation guidance. Establish performance standards and management objectives for independent agency heads, as appropriate and consistent with applicable law, and report periodically to the president on their performance and efficiency in attaining these standards and objectives. Review on an ongoing basis the independent regulatory agencies' obligations for consistency with the president's policies and priorities. Consult on an ongoing basis with independent regulatory agency chairs and adjust the agencies' apportionments by activity, function, project, or object, as necessary and appropriate, to advance the president's policies and priorities. The adjustments to apportionments may prohibit independent regulatory agencies from expending appropriations on particular activities, functions, projects, or objects, provided the restrictions are consistent with law. Additionally, each independent regulatory agency chair or head must: Regularly consult with and coordinate policies and priorities with the OMB director and the directors of the White House Domestic Policy Council and the White House National Economic Council. Establish a White House liaison position in each agency. Submit an agency strategic plan developed under the Government Performance and Results Act of 1993 (Pub. L. 103-62, 107 Stat. 285 (1993)) to the OMB director for clearance before finalization. The fact sheet accompanying the Oversight EO states that Article II of the US Constitution vests all executive power in the president, 'meaning that all executive branch officials and employees are subject to his supervision.' The Oversight EO asserts that previously the independent agencies 'have exercised enormous power over the American people without Presidential oversight.' Rescission or Modification of 'Unlawful Regulations' On February 19, 2025, the Trump administration issued Executive Order 14219, Ensuring Lawful Governance and Implementing the President's 'Department of Government Efficiency' Deregulatory Initiative (DOGE EO), which: Sets out a process for identifying, reviewing, and rescinding or modifying 'unlawful regulations.' Provides directives to agency heads regarding revised priorities for handling new and ongoing enforcement actions. 'Unlawful Regulations' and Regulations That 'Undermine the National Interest' The DOGE EO instructs agency heads, in coordination with their DOGE team leads (as described in Executive Order 14158, Establishing and Implementing the President's 'Department of Government Efficiency' Deregulatory Initiative (Jan. 20, 2025)) and the OMB director, to initiate a process to review all regulations subject to their sole or joint jurisdiction for consistency with law and administration policy. Within 60 days of the date of the DOGE EO, agency heads, in consultation with the attorney general as appropriate, are instructed to identify regulations that: Are 'unconstitutional' or 'raise serious constitutional difficulties,' such as those 'exceeding the scope of the power vested in the Federal Government by the Constitution.' Are based on: 'unlawful delegations of legislative power'; or 'anything other than the best reading of the underlying statutory authority or prohibition.' Implicate matters of social, political, or economic significance 'that are not authorized by clear statutory authority.' Impose: 'significant costs upon private parties that are not outweighed by public benefits'; or 'undue burdens' on small business and impede private enterprise and entrepreneurship. '[H]arm the national interest by significantly and unjustifiably impeding' technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives. In conducting this review, agency heads are instructed to: Prioritize review of those rules that 'satisfy the definition of 'significant regulatory action'' in Executive Order 12866 (Regulatory Planning and Review), as amended, issued September 30, 1993. Provide a list of all regulations, classified in accordance with the DOGE EO guidelines, to the administrator of OIRA within OMB within 60 days of the date of the DOGE EO. Agencies are instructed to follow the processes set out in Executive Order 12866 for submitting regulations for review by OIRA. The administrator of OIRA is then instructed to consult with agency heads to develop a 'Unified Regulatory Agenda that seeks to rescind or modify these regulations, as appropriate.' Agency heads are further instructed to consult with their DOGE team leads and the administrator of OIRA on potential new regulations as soon as practicable. In evaluating any potential new regulations, agency heads, DOGE team leads, and the administrator of OIRA are instructed to consider, in addition to the factors set out in Executive Order 12866, the factors set out in the DOGE EO. Revised Enforcement Priorities The DOGE EO establishes revised priorities for handling new and ongoing enforcement actions and instructs agency heads to: '[P]reserve their limited enforcement resources by generally de-prioritizing actions to enforce regulations that are based on anything other than the best reading of a statute and de-prioritizing actions to enforce regulations that go beyond the powers vested in the Federal Government by the Constitution,' subject to their obligation to discharge their legal obligations, protect public safety, and advance the national interest. Determine whether ongoing enforcement of any regulations identified in their regulatory review is compliant with law and administration policy. Agency heads, in consultation with the OMB director, are instructed to 'direct the termination of all such enforcement proceedings that do not comply with the Constitution, laws, or Administration policy,' on a case-by-case basis and 'as appropriate and consistent with applicable law.' The DOGE EO instructs the OMB director to issue implementation guidance, as appropriate, and provides the OMB with the authority to issue exemptions from application of the DOGE EO. The DOGE EO language, together with the process specified in the EO, introduces the potential for subjective decision-making and inconsistency into determinations on amendments or other action on existing rules that are well established, provide market utility, or had a sound basis for agency adoption. The DOGE EO does not apply to any: Action related to a military, national security, homeland security, foreign affairs, or immigration-related function of the US. Matter pertaining to the executive branch's management of its employees. The DOGE EO includes broad language without definition (for example, 'best reading') and grants wide discretion to agency heads and acting heads to identify for rescission or amendment regulations that they believe fit the criteria set out in the DOGE EO. The DOGE EO language, together with the process specified in the EO, introduces the potential for subjective decision-making and inconsistency into determinations on amendments or other action on existing rules that are well established, provide market utility, or had a sound basis for agency adoption. Repeal of 'Unlawful Regulations' On April 9, 2025, the Trump administration issued a presidential memorandum (PM) entitled Directing the Repeal of Unlawful Regulations, which directs federal regulatory agency heads to prioritize repeal of regulations that are 'unlawful' under ten notable US Supreme Court decisions in undertaking the review and repeal of regulations directed under the DOGE EO. The DOGE EO directs the 'heads of all executive departments and agencies' to identify certain categories of 'unlawful and potentially unlawful' regulations within 60 days of the date of the order and begin plans to repeal those regulations. The PM notes that in undertaking this process, agency heads are instructed to prioritize evaluating each existing regulation's 'lawfulness' under the following US Supreme Court decisions: Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). West Virginia v. Environmental Protection Agency (EPA), 597 U.S. 697 (2022). SEC v. Jarkesy, 603 U.S. 109 (2024). Michigan v. EPA, 576 U.S. 743 (2015). Sackett v. EPA, 598 U.S. 651 (2023). Ohio v. EPA, 603 U.S. 279 (2024). Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021). Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 600 U.S. 181 (2023). Carson v. Makin, 596 U.S. 767 (2022). Roman Catholic Diocese of Brooklyn v. Cuomo, 592 U.S. 14 (2020). The White House also released a fact sheet with further explanation regarding the cited cases. The PM asserts that 'notice-and-comment proceedings are 'unnecessary' where repeal is required as a matter of law to ensure consistency with a ruling of the United States Supreme Court,' and that '[a]gencies thus have ample cause and the legal authority to immediately repeal unlawful regulations.' Notably, the PM specifies that, in effectuating repeal of 'facially unlawful' regulations, agency heads are directed to finalize rules without notice and comment, where doing so is consistent with the good cause exception under the APA. The PM asserts that this exception allows agencies to dispense with notice-and-comment rulemaking when that process would be 'impracticable, unnecessary, or contrary to the public interest.' The PM further asserts that 'notice-and-comment proceedings are 'unnecessary' where repeal is required as a matter of law to ensure consistency with a ruling of the United States Supreme Court,' and that '[a]gencies thus have ample cause and the legal authority to immediately repeal unlawful regulations.' The PM directs that: Immediately following the 60-day review period for identifying unlawful and potentially unlawful regulations under the DOGE EO, agencies take steps to effectuate the repeal of any regulation, or the portion of any regulation, that 'clearly exceeds the agency's statutory authority or is otherwise unlawful.' The repeal of each unlawful regulation is to be accompanied by a brief statement of the reasons that the APA's good cause exception applies to permit the agency to dispense with applicable notice-and-comment requirements. Within 30 days of the conclusion of the review period, agencies submit to OIRA a one-page summary of each regulation that was initially identified as falling within one of the categories specified in the DOGE EO but which has not been targeted for repeal, explaining the basis for the decision not to repeal that regulation. Practical Implications and Further Action Trump's EOs and PM raise questions about the administration's authority over independent agencies created by Congress and will likely be challenged in court on constitutional grounds. In the meantime, they are sure to have a chilling effect on the federal agency rulemaking and enforcement process, at least in the intermediate term. These orders can also be expected to significantly impact, and have already begun to impact, the activities of most major federal regulatory agencies, including: The Commodity Futures Trading Commission (CFTC). The Consumer Financial Protection Bureau (CFPB). The Consumer Product Safety Commission. The Department of Commerce. The EPA. The FCC. The FTC. The Food and Drug Administration. The SEC. Federal prudential bank regulators including: the Federal Reserve Board; the Federal Deposit Insurance Corporation (FDIC); and the Office of the Comptroller of the Currency (OCC). The Trump orders are already making a notable impact on banking and crypto and digital asset regulation (for more information, see 2025 Trump Administration Transition Toolkit: The First 100 Days on Practical Law and SEC Regulation of Crypto and Digital Assets Under Trump 2.0 in the June 2025 issue of Practical Law The Journal). Trump's EOs and PM raise questions about the administration's authority over independent agencies created by Congress and will likely be challenged in court on constitutional grounds. In the meantime, they are sure to have a chilling effect on the federal agency rulemaking and enforcement process, at least in the intermediate term. Recent regulatory actions in response to the Trump deregulation orders and the PM include: Banking deregulatory activity. US prudential bank regulators, including the FDIC, the Federal Reserve Board, and the OCC, have undertaken or been directed to engage in significant deregulatory efforts. (For more information, see Trump Administration Toolkit on Practical Law.) OMB notice of request for information (RFI). On April 11, 2025, OMB issued an RFI soliciting 'ideas for deregulation from across the country.' OMB seeks comment from the public on regulations that are 'unnecessary, unlawful, unduly burdensome, or unsound.' Comments should address the background of the rule and the reasons for the proposed rescission, with particular attention to regulations that are inconsistent with statutory text or the Constitution, where costs exceed benefits, where the regulation is outdated or unnecessary, or where regulation is burdening US businesses in unforeseen ways. Department of the Treasury (Treasury) repeal release. On April 15, 2025, the Treasury issued a 'direct' final rule entitled Eliminating Unnecessary Regulations, in which the Treasury states that it is conducting a review of existing regulations with the goal of reducing regulatory burden by revoking or revising existing regulations that meet the criteria set out in the DOGE EO and the PM. The rule states that, 'In support of that objective, this direct final rule streamlines titles 12 and 31 of the Code of Federal Regulations (CFR)' by removing regulations and portions of regulations that are 'no longer necessary, or have no current or future applicability and, therefore, no longer provide useful guidance.' The regulations or portions of regulations removed are: Federal Financing Bank Bills, 12 CFR Part 810; Book-Entry Procedure for Federal Financing Bank Securities, 12 CFR Part 811; TARP Standards for Compensation and Corporate Governance, 31 CFR Part 30; TARP Conflicts of Interest, 31 CFR 31.211 through 216; and Civil Penalty, 31 CFR 1010.820. CFTC actions. An April 8, 2025 keynote address by Acting CFTC Chair Caroline Pham noted the following actions that she has taken in furtherance of the Trump orders: realignment of the CFTC Division of Enforcement task forces to 'end regulation by enforcement and refocus on fighting fraud and helping victims'; issuance of an advisory on the CFTC's new policy regarding self-reporting, cooperation, and remediation and another advisory related to DOE referrals; and launch of an initiative aimed at expeditiously resolving a backlog of noncompliance matters that do not involve customer harm or market abuse. House Committee on Financial Services (HFSC) Letters On April 1, 2025, HFSC Chair French Hill and committee members issued a release on a series of letters sent to agencies requesting the rescission, modification, or re-proposal of specific Biden-Harris administration actions that 'reduce competition and innovation and must be rescinded or significantly modified.' According to the release, 'These rules and guidance lacked proper cost-benefit analysis, would have significant negative economic consequences, and frequently ran afoul of statutorily-mandated procedures intended to ensure well-formulated rulemaking.' The committee sent the following letters on specific rules: Interagency letter to Acting FDIC Chair Travis Hill, Acting Comptroller of the Currency Rodney Hood, and Federal Reserve Board Chair Jerome Powell. Letter to Acting FDIC Chair Hill. Letter to Acting Comptroller of the Currency Hood. Letter to Federal Reserve Board Chair Powell. Letter to Acting CFPB Director Russell Vought. Letter to Treasury Secretary Scott Bessent in his capacity as Financial Stability Oversight Council chair on subjecting nonbank financial companies to prudential supervision by the Federal Reserve Board through updates to the Analytic Framework and Nonbank Designation Guidance. Digital Assets and Financial Technology HFSC Chair Hill and Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence Chair Bryan Steil and subcommittee members sent letters urging the federal banking agencies and the CFPB to withdraw several regulatory actions that they assert have restricted financial institutions' engagement in digital assets and hindered the growth of fintech companies: Interagency letter to Acting FDIC Chair Hill, Acting Comptroller of the Currency Hood, and Federal Reserve Board Chair Powell. Letter to Acting CFPB Director Vought. SEC Rules On March 31, 2025, the HFSC sent a letter to then-Acting SEC Chair Mark Uyeda, stating that the SEC had recently lost sight of its mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. The committee encouraged the SEC to withdraw the following final and proposed rules: These SEC rules appear to be candidates for review and potential rescission under the DOGE EO.
E&E News
05-06-2025
- Business
- E&E News
Calif. lawmaker weakens Trump-proofing bill on ‘fraudulent' dam releases
SACRAMENTO, California — A Democratic state lawmaker is weakening her proposal to penalize federal officials for releasing water from dams under false pretenses in a deal with water agencies, farmers and business groups who had previously opposed the bill. What happened: David Burruto, a spokesperson for Assemblymember Diane Papan, confirmed Thursday that she has agreed to significantly amend her AB 1146 , which was a response to the Trump administration dumping water from two Central Valley dams in January and falsely claiming it would help fight the Los Angeles fires. Papan has agreed to remove most of the enforcement measures from her bill, according to a Thursday email sent by industry and agricultural groups to assemblymembers and confirmed by Burruto. Those include provisions that would have given state water regulators interim relief power against dam releases deemed fraudulent and required federal officials or water agencies that get water delivered from the federal government to pay fines of up to $10,000 a day. Advertisement As a result, the California Chamber of Commerce, the California Farm Bureau, the Association of California Water Agencies and other farming and water groups previously in opposition will no longer fight the bill, according to the email.
