On February 19, 2025, President Trump issued an executive order titled “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative” (“the Deregulation EO” or “EO”).1 The EO is the latest in a series of steps by the Trump Administration to downsize and reshape the administrative state.
This EO presents opportunities for regulated parties and other stakeholders to seek reform, rescission, or deprioritized enforcement of existing regulations. Section I of this client alert summarizes the Deregulation EO’s key provisions. Section II provides clients in regulated industries with initial guidance on navigating the implementation of the EO, which presents both opportunities and risks for regulated entities.
I. The Deregulation EO
A. Purpose
The EO states that it is the policy of the Administration to “commence the deconstruction of the overbearing and burdensome administrative state.” The EO also states it is an Administration priority to “end[] Federal overreach and restor[e] the constitutional separation of powers.” The EO aims to achieve these goals by refocusing “the executive branch’s limited enforcement resources” on those regulations “squarely authorized by constitutional Federal statutes.”
B. Rescinding Regulations
The first operative section of the EO instructs all agency heads—including “independent” agencies, “in coordination with” the Department of Government Efficiency (DOGE) and the Office of Management and Budget (OMB)—to begin reviewing all regulations within their sole or joint jurisdiction “for consistency with law and Administration policy.” Within 60 days of the EO’s issuance, agency heads must identify regulations that fall into any of seven “classes of regulations”:
(1) “unconstitutional regulations and regulations that raise serious constitutional difficulties”
This first class covers general constitutional concerns, including “exceeding the scope of the power vested in the Federal Government by the Constitution.”
(2) “regulations that are based on unlawful delegations of legislative power”
This second category appears rooted in constitutional nondelegation concerns. The nondelegation doctrine distinguishes between Congress’s constitutional delegations of power to agencies that may be necessary for governmental coordination, and broad, discretionary grants of legislative power to agencies that may violate separation-of-powers principles. Under existing precedent, an agency’s exercise of delegated power passes constitutional muster so long as Congress provided the agency with an “intelligible principle” to guide the exercise of that power.2 The nondelegation doctrine has been given more serious attention recently,3 and the EO seems calibrated to identify regulations that raise nondelegation concerns.
(3) “regulations that are based on anything other than the best reading of the underlying statutory authority or prohibition”
The third category implicitly references the Supreme Court’s 2024 decision in Loper Bright, which overturned Chevron.4 Under Chevron, courts deferred to an agency’s reasonable interpretation of ambiguous statutory language, even where the court believed a better interpretation existed. Now, under Loper Bright, courts should afford no deference to agencies’ interpretations of statutory language beyond the power of the agency’s interpretation to persuade.
(4) “regulations that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority”
This fourth class invokes the major questions doctrine, which requires that Congress “speak clearly if it wishes to assign to an agency decisions of vast economic and political significance.”5 Like the nondelegation doctrine, the major questions doctrine has received increased attention in recent years, and it is one the Trump Administration may be interested in expanding as part of its efforts to narrow the authority of certain administrative agencies.
(5) “regulations that impose significant costs upon private parties that are not outweighed by public benefits”
(6) “regulations that harm 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”
(7) “regulations that impose undue burdens on small business and impede private enterprise and entrepreneurship”
The final three categories are based more on practical considerations, rather than legal ones, and generally aim to capture regulations that are costly or harmful in some respect.
C. Enforcement Priorities
The Deregulation EO also instructs agency heads to “de-prioritiz[e]” certain kinds of agency enforcement actions and terminate certain existing enforcement actions. The EO directs agency heads to de-prioritize enforcement actions under regulations that are “based on anything other than the best reading of a statute,” as well as enforcement actions under regulations that “go beyond the powers vested in the Federal Government by the Constitution.” On a “case-by-case basis” and in consultation with OMB, agency heads also must terminate ongoing enforcement proceedings that do not comply with the Constitution, laws, or Administration policy.
D. New Regulations
To the extent that an agency wishes to promulgate new regulations, the Deregulation EO directs agency heads to consult with DOGE Team Leads and the Administrator of the U.S. Office for Management and Budget’s Office of Information and Regulatory Affairs (OIRA). In evaluating potential new regulations, DOGE Team Leads and the OIRA Administrator are to consider the seven factors described in Part I.B above. Agencies also must continue to abide by the existing process for OIRA review of significant regulations set out in Executive Order 12866, which was originally issued by the Clinton Administration.
E. Implementation and Exemptions
The EO provides agency heads 60 days to categorize their regulations in consultation with their DOGE Team Leads, the OMB Director, and the Attorney General. Once agency heads have categorized their regulations, the OIRA Administrator must consult with agency heads “to develop a Unified Regulatory Agenda that seeks to rescind or modify these regulations, as appropriate.”
The EO exempts military, national security, homeland security, foreign affairs, and immigration-related functions of the government. It also exempts any matter regarding the Executive Branch’s management of its employees and any other matter exempted by the OMB Director.
II. Initial Guidance And Thoughts On The EO
The Deregulation EO presents opportunities for regulated clients to help monitor and shape the rapidly changing regulatory environment. In particular, clients should consider whether regulations that govern their activities fall within any of the EO’s Section 2 criteria described above in Part I.B. If so, clients should be prepared for agencies to identify such regulations during the 60-day review process for future withdrawal or modification, and clients also should consider whether to proactively identify any such regulations in outreach to the government. For example, clients should take inventory of existing, unnecessarily burdensome regulations and consider preparing white papers on specific regulations to submit to agencies, OIRA, or DOGE. Once regulations have been identified for modification or rescission, clients should consider working with agencies to minimize any risk of Administrative Procedure Act challenges to regulatory changes.
The EO’s mandate to de-prioritize enforcement proceedings that are inconsistent with the Administration’s policies—and even to terminate existing enforcement proceedings on a case-by-case basis—provides a similar opportunity for clients currently engaged in enforcement proceedings or at risk of such proceedings to proactively engage with agencies.
At the same time, certain regulatory schemes that clients prefer or that they rely on for stability may come under scrutiny pursuant to the EO, creating uncertainty in industries sensitive to regulatory change. If clients are concerned that certain favorable regulations may be rescinded, they should consider whether to take proactive steps, including communicating with the government, to try to mitigate the likelihood of those regulations being targeted.
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As the Deregulation EO is implemented over the coming weeks and months, WilmerHale can help regulated clients navigate the Administration’s changes to clients’ regulatory environments. WilmerHale’s Administrative Law Transition Task Force and others are closely monitoring the Administration’s executive actions, as well as agency regulations and guidance. Our experienced team is available to advise companies on navigating regulatory uncertainty and how best to engage with agencies and the Administration to advocate for their desired regulatory reforms or, conversely, the maintenance of the status quo.
