A regulatory budget would set a binding annual cost ceiling on new federal regulations across agencies, similar to how the discretionary spending budget operates for direct expenditures. Variants include strict caps requiring agencies to repeal one rule for every new rule (or for every dollar of new cost), cost-neutrality requirements within an agency, and looser "regulatory impact" budgets enforced through OMB review.
The first Trump administration's Executive Order 13771 imposed a "two-for-one" repeal requirement and a regulatory-cost ceiling, applied via OIRA review. Other administrations have used cost-benefit analysis and OIRA review but without a binding cap. Some proposals — backed by both Republican and a few Democratic lawmakers — would put a cap in statute.
Proponents argue that regulatory costs accumulate invisibly across decades, that agencies have no institutional incentive to remove obsolete rules, and that a binding cap would force prioritization, retrospective review, and political accountability for the regulatory state's total burden.
Opponents argue that regulations exist because Congress directed them or because they protect against real harms — pollution, financial collapse, workplace death — and that artificial caps would force agencies to repeal protective rules to enact new ones, ignoring whether the new rule is more valuable. They also argue that cost estimates are systematically uncertain.