01-28-2025

Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis

MemorandumView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: A presidential memorandum directing all federal departments and agencies to take immediate action to reduce the cost of living by reviewing, and likely repealing, existing regulations.

Money: The memorandum does not appropriate new funds. It claims that regulations from the prior administration cost the average American household almost $50,000, while the new administration's first-term agenda reduced regulatory costs by nearly $11,000 per household. Independent analyses on the total cost of federal regulations vary, with recent estimates of the annual cost per household ranging from approximately $14,500 to over $22,000.

Your Impact: You could see prices change for major expenses like fuel, food, housing, cars, and healthcare. This could mean lower costs in the short term but may also affect long-term environmental quality, consumer protections, and the availability of certain products like electric vehicles.

Status: This memorandum was issued on January 20, 2025, and directs immediate action from all executive departments and agencies. It is a formal directive with the force of law within the Executive Branch.

What's Actually in the Memorandum

This memorandum is a presidential directive ordering the heads of all executive agencies to prioritize actions that provide "emergency price relief" to Americans. It frames the primary cause of recent inflation as a combination of excessive government spending and burdensome regulations from the previous four years, which it argues artificially limited the supply of essential goods and services.

Core Provisions:

  • Agencies are ordered to take action to lower the cost of housing and increase housing supply.
  • Agencies must work to eliminate unnecessary administrative costs in healthcare.
  • The directive targets requirements that increase the cost of home appliances for elimination.
  • It calls for the removal of "harmful, coercive 'climate' policies" that are said to increase food and fuel costs.
  • The Assistant to the President for Economic Policy must report on the implementation of these directives every 30 days.

Stated Purpose (from the Sponsors):

The stated goal is to combat the historic inflation crisis and improve the quality of life for American families.

  1. To restore purchasing power to the American family.
  2. To increase the prosperity of the American worker by creating employment opportunities and encouraging discouraged workers to rejoin the labor force.
  3. To dismantle policies that drive up prices for fuel, food, housing, vehicles, and healthcare.

Key Facts:

Affected Sectors: Energy, Housing, Healthcare, Automotive, Manufacturing, Agriculture.
Timeline: The directive is effective immediately as of January 20, 2025, with progress reports due every 30 days.
Scope: The memorandum applies to all executive departments and agencies, making its scope national.

The Backstory: How We Got Here

Timeline of Events:

The Post-Pandemic Economy (2021-2024):

The period preceding this memorandum was marked by significant economic turbulence. Following the COVID-19 pandemic, the U.S. economy experienced a surge in inflation, reaching 40-year highs. Economists attribute this to a combination of factors. Large-scale fiscal stimulus packages, such as the American Rescue Plan, injected trillions of dollars into the economy to prevent a deeper downturn, boosting consumer demand. Simultaneously, global supply chains were severely disrupted, leading to shortages of goods from computer chips to lumber. This dynamic of high demand chasing limited supply drove prices up across the board. The previous administration also pursued regulatory actions focused on climate change and environmental protection, particularly targeting emissions from the energy and automotive sectors, which critics argued constrained domestic production and increased costs.

Why Now? The Political Calculus:

  • This memorandum was issued on the first day of a new presidential term, signaling a swift and decisive reversal of the previous administration's economic and regulatory philosophy.
  • It directly addresses the cost of living, a key issue for voters, by framing it as a crisis caused by the prior administration's policies.
  • The action serves to fulfill campaign promises to "cut red tape" and unleash American energy production, priorities for the new administration's political base.
  • By issuing a memorandum, the President can direct the entire executive branch to begin this policy shift immediately, without waiting for congressional action.

Your Real-World Impact

The Direct Answer: This directive primarily affects industries subject to federal rules, but its goal is to indirectly affect all Americans by lowering the prices of goods and services.

What Could Change for You:

Potential Benefits:

  • Lower Prices: If the directive succeeds, you could see lower costs for gasoline, new homes, automobiles, and everyday appliances. The memorandum specifically claims that regulations account for 25% of the cost of a new home.
  • More Choices: A loosening of environmental standards for vehicles could lead to a wider availability of new gasoline-powered cars and potentially lower sticker prices.
  • Job Growth: Proponents argue that reducing the regulatory burden on businesses will lower their costs, encouraging them to expand and hire more workers.

Possible Disruptions or Costs:

Short-term (First 1-2 Years):

  • Regulatory Uncertainty: The process of repealing complex regulations can be lengthy and create uncertainty for businesses, particularly in the energy and automotive sectors.

Long-term:

  • Environmental Impacts: Rolling back climate and environmental regulations could lead to higher levels of pollution and impact long-term environmental health.
  • Consumer Protection: Some regulations are designed to ensure product safety and efficacy. Reducing these could introduce risks for consumers.
  • Economic Volatility: Critics of this approach argue that inflation is a complex global issue and that deregulation alone may not solve it, while potentially creating other economic or social problems.

Who's Most Affected:

Primary Groups: Oil and gas companies, electric utilities, home builders, automobile manufacturers, and farmers stand to be most directly impacted by changes in regulation.
Secondary Groups: Consumers, environmental advocacy organizations, and workers in industries with strong safety and environmental regulations.
Regional Impact: States with significant energy production, such as Texas, North Dakota, and Pennsylvania, may see more direct economic effects than other regions.

Bottom Line: This memorandum initiates a government-wide effort to lower your cost of living by cutting regulations, which could reduce prices but may also reverse policies related to climate change and consumer protection.

Where the Parties Stand

Republican Position: "Cutting Red Tape to Fight Inflation"

Core Stance: The Republican party generally believes that excessive government regulation stifles economic growth and is a primary driver of inflation.

Their Arguments:

  • ✓ Regulations act as a "hidden tax" on consumers, as businesses pass compliance costs on to them.
  • ✓ Reducing energy regulations will lower gas prices and make America energy independent.
  • ✓ A freer market, with less government interference, is the most efficient way to increase supply and lower prices for all Americans.
  • ⚠️ While broadly supportive, some may have concerns about the repeal of specific regulations that benefit their constituents or local industries.
  • ✗ They oppose what they term "coercive" climate policies that they argue harm the economy without significant environmental benefit.

Legislative Strategy: To support the administration's deregulatory actions through congressional oversight and to pass legislation that would make it harder for future administrations to enact new regulations.

Democratic Position: "Protecting People and the Planet"

Core Stance: The Democratic party generally believes that government regulation is necessary to protect consumers, workers, and the environment from market excesses.

Their Arguments:

  • ✓ Regulations provide crucial safeguards for clean air and water, food safety, and financial stability.
  • ✓ They argue that corporate consolidation and price gouging, not regulation, are significant contributors to inflation.
  • ⚠️ Some Democrats may agree that specific regulations are outdated or inefficient, but they advocate for a careful review process rather than wholesale repeal.
  • ✗ They actively oppose the rollback of climate regulations, arguing that the long-term costs of climate change far outweigh the short-term costs of compliance.

Legislative Strategy: To use congressional hearings to scrutinize the administration's deregulatory actions, to challenge the repeals in court, and to build public opposition by highlighting potential negative impacts on health and the environment.

Constitutional Check

The Verdict: ✓ Constitutional

Basis of Authority:

This memorandum relies on the President's executive authority under Article II of the U.S. Constitution, which vests the "executive Power" in the President and includes the duty to "take Care that the Laws be faithfully executed." A presidential memorandum is a well-established tool for directing the actions and policies of executive branch agencies.

Article II, Section 1 of the U.S. Constitution: "The executive Power shall be vested in a President of the United States of America."
Article II, Section 3 of the U.S. Constitution: "[The President] shall take Care that the Laws be faithfully executed..."

Constitutional Implications:

Executive Power: The memorandum is a valid exercise of the President's power to manage the executive branch. It does not create new law or appropriate money, but rather directs how agencies should prioritize their existing legal authorities.
Precedent: Presidents of both parties have historically used executive orders and memoranda to direct agencies to review, modify, or prioritize certain regulatory actions.
Federalism: This directive focuses on federal agencies and federal regulations, so it does not directly overstep into powers reserved for the states.

Potential Legal Challenges:

While the memorandum itself is unlikely to be successfully challenged, the specific actions agencies take to implement it will face legal battles. Opponents will likely sue individual agencies under the Administrative Procedure Act (APA).

  • Arbitrary and Capricious: Courts require agencies to provide a well-reasoned explanation for changing or repealing a rule. A legal challenge would argue that an agency's decision to repeal a regulation based solely on a presidential directive, without a new factual basis, is "arbitrary and capricious."
  • Failure to Follow Procedure: The APA generally requires agencies to go through a public notice-and-comment process to repeal a rule, just as they would to create one. Challenges could arise if agencies try to bypass this process. A recent Supreme Court ruling makes it easier to challenge older regulations, potentially opening the door for more lawsuits.

Your Action Options

TO SUPPORT THIS DIRECTIVE

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121 "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to support the President's actions to cut regulations and lower prices."

30-Minute Deep Dive:

  • Write a Detailed Email: Contact members of the House Committee on Oversight and Accountability and the Senate Committee on Homeland Security and Governmental Affairs, expressing your support for their oversight of this deregulatory effort.
  • Join an Organization: Research and join free-market or limited-government advocacy groups that support deregulation.

TO OPPOSE THIS DIRECTIVE

5-Minute Actions:

  • Call Your Rep/Senators: [Capitol Switchboard: (202) 224-3121] "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to oppose the rollback of health, safety, and environmental protections and to conduct strong oversight of these deregulatory actions."

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper outlining your concerns about the potential impacts of deregulation on your community's environment or public health.
  • Join an Organization: Research and join environmental, consumer protection, or public interest advocacy groups that work to defend federal regulations.