Musk and Ramaswamy think they have new power to cut federal regulations. Here’s why it’s not so simple

By Tami Luhby, CNN

(CNN) — Elon Musk and Vivek Ramaswamy intend to lean on two recent Supreme Court rulings that they argue will make it easier to tear up a multitude of federal regulations.

The duo, who President-elect Donald Trump named to lead the newly formed Department of Government Efficiency, known as DOGE, point to the decisions in West Virginia v. Environmental Protection Agency in 2022 and in Loper Bright Enterprises v. Raimondo earlier this year, both of which limited federal agencies’ regulatory authority.

However, multiple legal and regulatory experts told CNN that Musk and Ramaswamy are misinterpreting the decisions, which could actually make it harder to overturn existing rules.

“These recent Supreme Court rulings won’t make their life easier in reducing the stock of existing regulations,” said James Broughel, senior fellow at the Competitive Enterprise Institute, a free-market think tank that aims to reduce regulations. Decisions “like Loper Bright work against them,” he said.

Major rulings

In the Loper Bright ruling, the justices overturned long-standing judicial precedent that required courts to give deference to federal agencies’ rulemaking when a law is ambiguous, with the new decision meaning that courts will give more scrutiny to the regulatory moves the executive branch is making. In the West Virginia case, the Supreme Court cut back agencies’ power to address issues of major economic and political significance when Congress hasn’t explicitly given the agencies those authorities.

“Together, these cases suggest that a plethora of current federal regulations exceed the authority Congress has granted under the law,” Musk and Ramaswamy, who have many business ventures that would benefit from fewer regulations, wrote in a recent op-ed in The Wall Street Journal. “DOGE will present this list of regulations to President Trump, who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission. This would liberate individuals and businesses from illicit regulations never passed by Congress and stimulate the U.S. economy.”

But there are several problems with the pair’s assertions, said Nicholas Bagley, an administrative law expert and University of Michigan Law School professor.

“Those are cases that limit agency discretion,” he told CNN. “The cases add nothing to the executive branch’s power to reconsider old regulations.”

Plus, federal departments would still have to follow the administrative process to overturn a rule – by issuing a new regulation in its place. The agencies would have to justify why they are changing the regulation and allow the public to comment on the proposed rule. The cumbersome effort would require significant agency resources, could take several years and would likely be subject to legal challenges after the new regulation was finalized.

“It’s a very painstaking, very difficult process that’s likely to fail in most cases,” said Richard Pierce Jr., a George Washington University law professor who specializes in administrative law and government regulation.

Slashing needed workers

What’s more, the endeavor would require a lot of assistance from agency staffers – the very workers that Musk and Ramaswamy have promised to cut. The duo argue in the op-ed that a reduction in the number of federal workers should at least be “proportionate” to the number of regulations eliminated, adding that fewer employees would be needed to produce and enforce regulations in the future.

That could backfire, experts say.

“These are the people that they’re going to need to review all these regulations,” Broughel said. “If they really want to make a major dent in the stock of regulations, they’re going to need people who have been working with these regulations day in and day out, and that’s the career civil service staff.”

Trump also promised a massive rollback in regulations during his first term, but he was more successful in slowing the pace of new regulations rather than slashing a multitude of existing ones, Broughel said.

During Trump’s first administration, the Council of Economic Advisers published a report in 2019 that said the president’s deregulatory actions would raise household income by $3,100 after five to 10 years. Also, it noted that the introduction of new regulations was being kept to a minimum.

There is, however, a way to eliminate some of the regulations recently implemented by the Biden administration. GOP lawmakers can use the Congressional Review Act to overturn rules enacted in the final months of President Joe Biden’s term, and those reversal measures are not subject to the Senate filibuster, meaning Republicans will only need 50 votes in the upper chamber to wipe those newly enacted Biden rules off the books. Roughly 100 rules could be eligible, according to a list compiled by Public Citizen, a consumer advocacy group.

Conflicts of interest

Both Musk, who owns X and is CEO of Tesla and SpaceX, and Ramaswamy, a biotech entrepreneur, have reasons to want to slash regulations, which could interfere with their vast business portfolios. For instance, in a town hall on X last month, Musk repeatedly criticized government regulations, citing their interference with his companies.

“It’s quite arduous getting regulatory approval,” Musk said while discussing his Neuralink startup that develops implantable brain-computer interfaces. “It does slow us down, and I think we should be able to go faster in the US with advancing Neuralink technology and other technologies that are out there unrelated to my company.”

CNN’s Tierney Sneed contributed to this report.

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