ERASER Act

Bill Summary

The ERASER Act (S. 30) is a statutory “regulatory budget” proposal that would require federal agencies to eliminate three existing regulations for every new regulation they issue. It adopts and tightens the spirit of the former 2017 “two-for-one” executive order by making it law and by adding a cost discipline for major rules. The bill’s premise is to slow the accumulation of federal regulations and force regular retrospective review, while aiming to hold down the aggregate cost of the regulatory state.

Definitions anchor the bill in existing administrative law. “Agency” and “rule” have the meanings in the Administrative Procedure Act (APA), 5 U.S.C. § 551, which generally covers both executive departments and independent regulatory commissions. “Major rule” follows the Congressional Review Act’s definition in 5 U.S.C. § 804—typically rules with an annual economic effect of $100 million or more or significant cost/price or competitiveness impacts. “State” is defined broadly to include states, D.C., U.S. territories, and federally recognized tribes, underscoring federalism and tribal considerations.

Section 3 imposes the core requirements:

- For any new rule, an agency may not issue it unless it has repealed three or more existing rules that were adopted through notice-and-comment under 5 U.S.C. § 553. The repealed rules, “to the extent practicable,” must be related to the new rule, limiting pure apples-for-oranges swaps while still providing agencies some flexibility.

- For any new major rule, there is an added fiscal guardrail: the total cost of the new major rule must be less than or equal to the combined costs of the three or more repealed rules. The Administrator of OIRA (within OMB) must certify this cost comparison. This embeds OIRA as the cost referee and formalizes a regulatory budgeting function in law.

- The bill explicitly excludes interpretative rules, general statements of policy, and agency organization/procedure/practice rules from being counted for repeal, and only permits repeal of rules that were originally adopted via notice-and-comment. In practical terms, agencies cannot meet the quota by tossing out nonbinding guidance or internal manuals; they must identify actual legislative rules to repeal, and those repeals must be published in the Federal Register.

- Applicability is confined to rules that “impose a cost or responsibility” on non-governmental persons or state/local governments. The Act does not apply to rules dealing solely with agency management, personnel, or procurement. Practically, this means deregulatory rules that reduce burdens (and so do not impose costs) would generally not trigger the three-for-one requirement; the constraints fall most squarely on new rules that add obligations or costs to the private sector or governments.

Section 4 directs the Government Accountability Office (GAO) to conduct an inventory and cost study: a baseline report one year after enactment and every five years thereafter, detailing the number of rules and major rules in effect and an estimate of the total economic cost they impose. This is intended to provide transparency and a data foundation for Congress and the public to assess regulatory accumulation and costs over time.

Key implications and operational issues:

- This bill would codify a stringent regulatory offset regime across the entire administrative state, including independent regulatory agencies. It is more rigid than prior executive guidance because it sets a fixed three-for-one ratio and a hard cost cap for major rules.

- Agencies seeking to issue a cost-imposing rule must find at least three notice-and-comment rules to repeal and justify those repeals under the APA’s “reasoned decisionmaking” standard. Repealing rules just to meet a quota could be vulnerable to litigation if the agency does not supply a substantive, record-based rationale that aligns with the underlying statutory mandates and considers reliance interests.

- The cost test for major rules looks only at costs, not net benefits. While OIRA historically emphasizes benefit-cost analysis under E.O. 12866 and related guidance, the statute would require major rules to be cost-offset even if their benefits far exceed their costs. That could force agencies to hunt for sufficiently “costly” old rules to repeal, and may necessitate retrospective cost estimation for older rules that lacked robust cost analyses at the time.

- The “relatedness” clause (“to the extent practicable”) aims to prevent gaming but also gives agencies discretion. How strictly OIRA or courts interpret “related” could determine how feasible compliance is across diverse regulatory programs.

- There are no explicit exceptions for emergency, court-ordered, or national security rules that impose costs. Agencies might therefore face delays in responding to urgent public health, environmental, or financial market risks while they identify and repeal three qualifying rules.

- Because only rules imposing costs are covered, deregulatory actions that remove obligations likely fall outside the Act’s constraints, potentially accelerating deregulatory agendas while slowing new protections.

Overall, the ERASER Act would significantly recalibrate the rulemaking landscape by binding agencies to a repeal quota and a cost ceiling for major rules, shifting OIRA further into a gatekeeping role, and providing periodic GAO-led accounting of the regulatory stock and its estimated cost. Advocates view it as a disciplined check on “red tape” growth; critics see it as a blunt instrument that could block needed protections and distort policy choices by prioritizing cost reduction over net social welfare and statutory missions.

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