Musk and Ramaswamy think they have new power to cut federal regulations. Here’s why it’s not so simple
4 min read
Elon Musk and Vivek Ramaswamy are betting on recent Supreme Court rulings to help them scale back federal regulations, hoping to make it easier for businesses to operate without burdensome rules. They argue that the rulings, particularly the 2022 West Virginia v. Environmental Protection Agency and the 2023 Loper Bright Enterprises v. Raimondo, will curb the power of federal agencies and allow them to rescind existing regulations that they believe exceed the authority granted by Congress. However, legal experts say the path to reducing regulations is far from straightforward and may actually complicate their efforts.
Both rulings suggest that federal agencies cannot impose major regulatory changes without explicit congressional approval. In Loper Bright, the Supreme Court ruled that agencies could not be automatically granted deference when making decisions in areas where laws are ambiguous. This decision would require courts to apply more scrutiny to the rules created by agencies. In West Virginia, the Court restricted the EPA’s ability to regulate areas of major economic or political significance unless Congress has directly given the agency such power. Musk and Ramaswamy see these decisions as a green light to roll back existing regulations, particularly those in place under the Biden administration, which they argue are excessive and harmful to businesses.
However, legal experts argue that these rulings do not give the executive branch any additional authority to unilaterally overturn regulations. “These cases limit agency discretion but do not provide a basis for the executive branch to rescind old rules,” explained Nicholas Bagley, a professor at the University of Michigan Law School. While agencies may have less leeway in interpreting ambiguous laws, they still need to follow the rigorous administrative process to change or eliminate rules, including justifying changes and allowing public input. This process can take years, involve significant resources, and is often subject to legal challenges.
The administrative process is further complicated by Musk and Ramaswamy’s proposal to reduce the size of the federal workforce. The pair has argued that cutting federal employees will help streamline the regulatory process. However, experts caution that this could backfire. “The people they want to cut are the very ones who have been working with these regulations for years,” said James Broughel, a senior fellow at the Competitive Enterprise Institute. “If they want to eliminate regulations, they need experienced staff to guide them through the process.”
Historically, previous efforts to slash federal regulations have been less successful than promised. During his first term, former President Donald Trump focused on slowing the introduction of new regulations, rather than undoing existing ones. According to the Council of Economic Advisers, Trump’s regulatory rollback efforts were projected to raise household incomes in the long term, but the overall impact on eliminating existing regulations was limited. This reality highlights the challenges that Musk and Ramaswamy would face in their push to reduce the regulatory landscape.
One avenue that could help achieve some of their goals is the Congressional Review Act (CRA), which allows Congress to overturn recently enacted regulations. This is a faster, more direct approach than challenging individual regulations through the courts or administrative processes. Under the CRA, Republican lawmakers could overturn about 100 regulations passed in the final months of the Biden administration, which would not face a filibuster in the Senate and could pass with only 50 votes. This method has the potential for significant changes to Biden-era rules, but it is limited to regulations implemented during the final period of his presidency.
The push to reduce regulations is not just an ideological position for Musk and Ramaswamy; it is also driven by personal and financial interests. Both have extensive business portfolios that could benefit from fewer regulatory hurdles. Musk, in particular, has been outspoken about the regulatory barriers his companies face, such as the approval process for his brain-implant company, Neuralink. In a town hall on X, Musk expressed frustration with what he perceives as an overly slow regulatory system that delays the development of innovative technologies. “It’s quite arduous getting regulatory approval,” Musk said. “It does slow us down, and I think we should be able to go faster in the US.”
While Musk and Ramaswamy’s desire to cut regulations aligns with their business interests, legal experts caution that achieving such a goal will not be as simple as citing Supreme Court rulings. The regulatory landscape is complex and would require careful, time-consuming legal and bureaucratic efforts to navigate. While their goals may be popular with some business leaders, the real challenge will be in translating these ambitions into meaningful policy changes.
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