Congress Can Lock in President Trump’s Legacy by Using Reconciliation to Require Congressional Approval for Major Budgetary Regulations
Key Findings
- During his first term, President Trump finalized more than 500 deregulatory actions, which resulted in nearly $280 billion in savings.
- President Biden’s regulatory spending spree added trillions in new costs and fueled the debt crisis.
- Requiring Congress to vote on costly new regulations would reduce federal outlays by billions of dollars and prevent reckless spending by future administrations.
- Requiring congressional approval for regulations would have stopped the worst of the Biden administration’s runaway regulatory spending, but it would not block President Trump.
Background
During his first term, President Trump made historic strides in deregulation, accomplishing the most regulatory savings of any modern president.1 On President Trump’s first day in office, he immediately froze all proposed and pending regulations, ultimately withdrawing more than 1,500 planned regulatory actions.2-3 He also issued an executive order to limit the number of new regulations and require agencies to cut two rules for each new rule proposed, and offset any new regulatory spending with deregulatory savings.4 Further executive orders were issued to prevent agencies from using guidance to create legally binding rules and required agencies to make all guidance documents public.5 During his first four years, President Trump finalized more than 500 deregulatory actions, lowering regulatory costs by nearly $200 billion.6
President Trump has already supercharged those deregulatory efforts for his second term. On Day One, President Trump signed an executive order to rescind the Biden administration’s executive orders that promoted out-of-control regulatory spending and overregulation.7 He also issued an immediate regulatory freeze to pause implementation of proposed and upcoming rules.8 His landmark deregulatory executive order titled “Unleashing Prosperity Through Deregulation” requires federal agencies to cut 10 existing rules for each new regulation finalized, ensures that new regulatory costs are more than offset by savings, and requires the Office of Management and Budget (OMB) to conduct rigorous cost analysis of rules that are projected to have an economic impact of more than $100 million.9
President Trump also issued an executive order to create the Department of Government Efficiency which is tasked with identifying excessive and wasteful regulations and spending that should be cut.10 Already this office has brought billions in wasteful spending to the public’s attention. President Trump has also slashed unnecessary bureaucracy by implementing a hiring freeze for new federal employees and making other changes to personnel policy to stop overregulation by rogue bureaucrats.11
Unfortunately, this historic progress to reduce the size and scope of the federal bureaucracy can be undone by a future president with a pen and a power trip. Following his election, President Biden immediately issued a slew of executive orders to undo the progress made by President Trump and give agencies unprecedented power to regulate without restraint.12
The Biden administration added trillions in new regulatory costs
The size of the regulatory regime has reached record proportions. The code of federal regulations is more than 190,000 pages and contains more than 1.3 million regulatory restrictions and mandates.13-14 In the last four years, President Biden added nearly 1,200 new regulations to the books, adding more than 356 million paperwork hours spent on compliance.15 The Biden administration published nearly 357,000 pages worth of regulations, executive orders, and agency notices—a record high.16 Nearly 111,000 of those pages were added in his last year alone—one page of new regulatory material every five minutes.17
These new regulations came with an enormous price tag. Over the course of his term, President Biden finalized 319 economically significant regulations—the most of any president’s first term in modern American history.18 In fact, the Biden administration finalized nearly 42 percent more costly rules than President Obama, whose “pen and phone” strategy had set what was then a new record high in costly regulations finalized in a first term.19 By the Biden administration’s own accounting, the Biden regulatory spending spree added more than $1.8 trillion in new costs on the economy—nearly four times what President Obama’s first term regulations cost.20
In addition to costs that burden consumers and prevent business investment and growth, these regulations have increased federal spending by billions of dollars and worsened the national debt.21 From student loan forgiveness schemes to changing the way that food stamp benefits are calculated, President Biden used rulemaking to increase federal deficit spending by at least $1.6 trillion.
The Biden administration’s student loan repayment pauses cost taxpayers $105 billion.22-24 Its student loan bailout plan was expected to cost $430 billion until it was struck down by the U.S. Supreme Court.25 President Biden’s other student loan bailout—achieved by changes to the income-driven repayment plan—will cost taxpayers at least $276 billion over the next decade, with some estimates ranging as high as $536 billion.26-27 His unilateral and unlawful food stamp expansion added another $250 billion in new costs to the program.28-29 The Biden administration’s Medicaid “streamlining” rule—which gutted program integrity and made it more difficult to quickly remove ineligible enrollees—will cost $224 billion over the next decade.30-31 Its rule to allow states to make more directed Medicaid payments in managed care will add another $116 billion.32
President Biden’s rule unilaterally expanding ObamaCare subsidies will add another $34 billion in federal costs.33 His rule setting new staffing standards at long-term care facilities will add $17 billion in new federal outlays.34 The Biden administration’s rule to weaken “public charge” determinations—which will increase welfare enrollment among aliens—is expected to cost taxpayers $27 billion.35 Two of its emissions regulations are expected to add $111 billion in new costs to the deficit, largely to “clean vehicle” tax credits.36 These are just a few of the major Biden-era rules that the Congressional Budget Office (CBO) has actually scored—the total budgetary impact of President Biden’s regulatory spending spree would likely be much higher.
The national debt is more than $36.3 trillion and is nearly 123 percent of GDP.37 President Biden has overseen a $4.6 billion increase to the debt each day of his presidency, adding a total of $8.5 trillion to the debt.38 Interest payments on the debt alone are more than $890 billion and will continue to grow.39
President Trump has a historic opportunity to undo the damage caused by the Biden administration and return to an era of American prosperity. But Congress must take action to cement this legacy and ensure that future presidents will be constrained in their efforts to increase regulations.
Congress should suspend costly regulations that do not have congressional and presidential approval
Congress should require major regulations—those with a price tag of $100 million or more—to receive congressional and presidential approval before going into effect.40 This would ensure that major regulations are subject to additional scrutiny and that the American people have a voice in the regulatory process via their elected representatives. The Regulations from the Executive in Need of Scrutiny (REINS) Act, which was included in the House-passed Limit, Save, Grow Act during the 2023 debt ceiling negotiations, is one vehicle to do just that.41-43
Under the REINS Act, all major rules—regulations with an economic impact of more than $100 million annually—would require approval from Congress and the president before being implemented.
Congress could adopt a reconciliation-friendly version of this by limiting the requirement to major budgetary rules—costly rules that increase federal outlays. Deregulatory actions that save money would be exempt from the approval requirement, allowing presidents to cut red tape and reduce the size of government without facing obstacles. Executive actions related to tariffs would also be exempt, as they do not increase federal outlays, and Congress could delay implementation until 2027 to ensure the Comptroller General and OMB are prepared to fulfill any new duties. Once implemented, major regulations that would impose new costs on federal taxpayers would be suspended and could only be advanced if approved by Congress and the president.
Congressional approval requirements must pass through the budget reconciliation process
Requiring congressional and presidential approval for major budgetary rules is fully appropriate for budget reconciliation. Budget reconciliation is an attractive vehicle for spending restraint, as it is not subject to a cloture vote and therefore requires a simple majority for passage in the Senate, as opposed to 60 votes.44 However, only provisions that can pass the Byrd rule can be included in reconciliation legislation.45
Under the Byrd rule, a provision is considered extraneous, and therefore unable to be included in budget reconciliation language, if it falls under one or more of six categories. These include not changing outlays or revenues, producing an outlay increase or revenue decrease that is not in line with the committee of jurisdiction’s budget instructions, being outside of the offering committee’s jurisdiction, producing a change in outlays or revenue that is merely incidental to the non-budgetary components, increasing the deficit beyond the covered budget window, or recommending changes to Social Security.46
In general, this means that provisions of a reconciliation bill must be primarily budgetary in nature, although simply having a budgetary impact does not guarantee that it will comply with the requirements of the Byrd rule. Additionally, provisions without an impact on the budget are allowed to remain in a reconciliation bill if they are terms and conditions of a budgetary provision.47 If a provision is not compliant with the Byrd rule, a point of order can be raised against the provision on the Senate floor.48 The presiding officer of the Senate makes a ruling on if the provision complies with the Byrd rule, which can only be overruled with 60 votes.49
The Senate parliamentarian—a non-partisan staff member of the Senate—advises the presiding officer on whether provisions meet the Byrd rule tests.50 While the presiding officer often listens to the parliamentarian’s advice, the decision is ultimately that of the presiding officer, which is the vice president, the president pro tempore, or another member of the majority party assigned to the duty by Senate leadership.51
Requiring major budgetary rules to receive congressional and presidential approval before implementation would clearly meet Byrd rule standards.
The purpose of requiring congressional approval is to rein in runaway federal spending created by bureaucrats. There are numerous examples of the Biden administration using rulemaking to dramatically increase federal outlays, and requiring congressional approval for such regulations would have resulted in significantly less federal spending.52 The approval requirement would only apply to major rules that increase federal outlays. Regulations that are not major rules, are not budgetary in nature, and do not increase federal outlays would not be affected. This makes clear that the primary purpose is to control the sharp rise in spending through regulation.
Congress could strengthen this further by requiring the comptroller general—who oversees the Government Accountability Office (GAO)—to produce independent cost analyses of major rules. This would provide supplemental funding for the GAO to implement the requirement, directly impacting spending by a specific amount while saving taxpayer dollars over the long term.
Congress has previously delayed the implementation of specific federal regulations through reconciliation, suggesting that there is no Byrd rule barrier for delaying the implementation of major budgetary rules prior to their approval by Congress and the president. In 2022, for example, Congress delayed President Trump’s prescription drug rebate for 10 years.53 CBO has also concluded that the REINS Act “would have significant effects on direct spending, revenues, and spending subject to appropriation,” even if it was unable to “determine the magnitude” of those effects.54 The Senate has previously allowed provisions that CBO concluded had an unquantifiable budgetary effect to survive Byrd rule challenges and pass through reconciliation.55
For example, the Senate parliamentarian advised that a provision on vaccine pricing was allowed under the Byrd rule after CBO concluded that the provision would “affect the prices the federal government would pay,” even though CBO acknowledged it did not have “the ability to estimate its budgetary effects.”56 The fact that it is difficult to predict how and when Congress will use this approval requirement does not undermine its clear budgetary impact.
Congressional approval requirements could have stopped the worst of the Biden administration’s runaway regulatory spending
Requiring congressional approval for major budgetary rules could have stopped the worst of the Biden administration’s costly regulations. Nearly two dozen major rules issued by President Biden faced strong bipartisan opposition in the last two years alone, and the most costly and excessive regulations would have likely been blocked by Congress.57
Between 2023 and 2024, members of Congress filed Congressional Review Act (CRA) disapprovals on 118 major rules.58 At least 23 of those disapprovals passed at least one chamber, with 11 passing both chambers but being vetoed by President Biden.59
Requiring congressional approval for costly new rules is a more powerful tool to stop runaway executive branch spending than the CRA because Congress would be required to proactively approve new major budgetary rules before they can be implemented, not just be able to occasionally claw some of them back after the fact. At an absolute minimum, requiring congressional approval for costly rules would have prevented at least these 23 regulations from taking effect, as Congress specifically voted to rescind them after implementation.
At least four of these regulations had CBO scores showing significant increases in federal outlays.60-63 These four regulations alone account for $844 billion in new outlays.64 Congress would also have been able to potentially prevent hundreds of billions of dollars in other new costly regulations.
Congressional approval requirements would do little to impact President Trump’s deregulatory agenda
While this requirement would have stopped some of the worst regulations adopted by the Biden administration, President Trump’s deregulatory agenda would have been largely unaffected. In 2019, the Trump administration finalized nearly 100 significant rules.65 The majority of the regulations issued were deregulatory and therefore would not have required congressional approval.66 Of the remaining 32 regulations, 40 percent were not considered major, and 25 percent did not increase federal spending.67 All told, only seven of these rules would have been subject to the congressional approval requirement.68 Three of these seven actions simply implemented statutory requirements, two were later reversed by the Biden administration, and two were enjoined or halted by the courts.69
Because President Trump was focused on deregulation and shrinking the size and power of the government instead of expanding it, nearly all his first-term agenda would have been exempt from these requirements. President Trump has already acted quickly to restore order to the border, cut red tape, and undo the damage caused by the Biden administration. With Congress’s help, those actions can be protected from future administrations and cement the deregulatory legacy of President Trump for generations to come.
The Bottom Line: Congress must use reconciliation to require approval of costly regulations, cement President Trump’s legacy, and safeguard against future regulatory spending.
The Biden administration will go down in history as having seized unprecedented regulatory power. Even in its waning days, the Biden administration attempted to squeeze taxpayers through the power of rulemaking and the administrative state.70 Fortunately, President Trump is ushering in a new era of economic prosperity, unburdened by heavy-handed government regulation. To cement this legacy and prevent future presidents from using the regulatory state to push new spending and stunt economic growth, Congress must require congressional and presidential approval for major budgetary rules.
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