10-for-1 Rule: EO Mandates Agencies Repeal 10 Regulations for Every New One, Signaling Supercharged Deregulatory Philosophy

On January 31, 2025, the White House unveiled Executive Order 14192, titled “Unleashing Prosperity Through Deregulation,” an ambitious directive aimed at reshaping the regulatory landscape by requiring agencies to repeal 10 existing regulations for every new one proposed. This move signals a dramatic acceleration of the administration’s commitment to deregulation. While the executive order does not single out any specific government department or agency policy, it could be one of the new administration’s most consequential directives in terms of messaging and potential impact.

The EO mandates that “whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least 10 existing regulations to be repealed.” The first Trump administration implemented a smaller-scale version of this directive, requiring agencies to identify two regulations for repeal for each new one proposed. The supercharged EO is just as likely to result in a slowdown of newly issued rules as it is in the repeal of a substantial number of them, given the administrative burdens associated with rolling back duly enacted regulations. Either way, the message is clear: agencies under the second Trump administration are expected to be as much engaged in the deregulation business as they are in the regulation business and to play an active role in advancing the White House’s deregulation efforts.

To, in its words, “significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life,” the EO directs federal agencies to take the following actions:

• “10-for-1” Rule. The EO mandates that the total incremental cost of all new regulations finalized in fiscal year (FY) 2025 be “significantly less than zero.” To achieve this goal, agencies proposing new regulations must identify 10 existing ones for repeal. Under this policy, the director of the White House Office of Management and Budget (OMB) is tasked with providing agency heads with guidance to standardize the measurement of regulatory costs and determine which regulations qualify as “new” and “offsetting.”
• Annual Regulatory Cost Submissions. Starting in FY 2026, each agency head must submit to OMB an estimate of the costs imposed by new regulations, alongside the costs of regulations slated for repeal. The OMB director must approve both the new regulations and the offsetting repeals and will provide each agency a “total incremental cost allowance,” effectively a regulatory budget.
• Reinstatement of Prior Cost-Benefit Analysis. A less publicized aspect of the EO is its repeal of a 2023 OMB directive — OMB Circular A-4 — which had guided agencies on how to evaluate the costs and benefits of a regulation, and its reinstatement of the prior version in effect since 2003. The most notable aspect of the 2023 version was the reduction of the discount rate (a measure used to account for future economic impact) to 2%, which significantly increased the expected benefits of regulation over time. Agencies will instead use a 7% “base rate” to estimate the opportunity cost of capital (i.e., the expected growth of capital investments) and a 3% rate to estimate the social rate of time preference (i.e., the rate at which society is willing to trade current consumption for future consumption).

The EO applies to both formal and informal agency rules but exempts rules relating to the military, national security, homeland security, foreign affairs, immigration, and agency organization or personnel. It also clarifies that the 10-for-1 rule applies “[u]nless prohibited by law,” meaning that regulations mandated by Congress may not necessarily be subject to the EO. Additionally, the OMB director is authorized to exempt rules that impose only minor costs on the private sector or those the White House deems necessary to exempt.

The EO’s impact will vary. Agencies like the Department of Justice and the Federal Trade Commission, which do not historically engage in significant rulemaking, may feel negligible impact. Agencies like the Environmental Protection Agency, the Securities and Exchange Commission, and the Internal Revenue Service, on the other hand, use rulemaking authority more frequently and could face substantial challenges. But since the administration retains the power to waive through regulation regardless of its costs, benefits, or compliance with the 10-for-1 rule, whether any agency truly feels a pinch remains to be seen.

A potentially overlooked aspect of the 10-for-1 rule is that repealing a regulation is often easier said than done. This is because a regulation promulgated through notice and comment must be repealed in the same manner, a time-consuming process for the agency and one that often invites court challenge. With that in mind, the primary impact of the 10-for-1 rule may be a significant reduction in new regulations rather than a simultaneous repeal of many existing ones. Agencies seeking to remain active may find themselves shifting resources from rulemaking to enforcement.

The first Trump administration’s 2-for-1 rule faced legal challenges, but a public interest group and a collection of states saw their lawsuits dismissed for lack of standing. Using those cases as precedent, to earn a ticket into court, a challenger will likely need to identify a regulation that was delayed or not enacted because of the 10-for-1 rule, and demonstrate that this resulted in concrete harm — a tall order just for the right to present the challenge, let alone succeed.