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Upon inauguration, the Trump administration implemented a regulatory budget such that in net new regulations should...

Upon inauguration, the Trump administration implemented a regulatory budget such that in net new regulations should add zero additional cost of compliance to the economy. They also added to this a 2-out, 1-in approach which requires two regulations be eliminated for every new regulation. The early analyses of this program are starting to be published.

1. Why have both both a 2-out, 1-in approach in addition to a low budgetary target for costs?

2. The defenders of this approach believe it to be consistent with cost-benefit analysis and the current OMB operates an interagency approach such that the regulatory budget applies for the gov’t as a whole rather than on an agency-by-agency basis. What additional assumptions do you believe are necessary for these regulatory requirements to be consistent with the outcomes from a pure cost-benefit rule?

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