A Record That Demands Replication

The numbers from ORM’s End of Administration Report, released in January, are striking enough that they bear repeating. Virginia agencies conducted systematic, regulation-by-regulation reviews across every executive branch agency, guided by cost-benefit analysis requirements and clear reduction targets set by ORM.

Preventing harmful changes to the state building code may have shaved more than $24,000 off the price of a new home, generating over $700 million in annual savings for homebuyers. Department of Professional and Occupational Regulation licensing reforms cut approval times from 33 days to 5.5 days, producing $277.7 million annually in savings. Virginia DEQ’s combined permitting and compliance reforms generated $270.6 million in total annual savings, while achieving a 65 percent reduction in processing times.

These gains translated into real improvements in the cost of doing business in Virginia. None of this happened by accident either. It happened because Virginia built an institution, focused and grounded in economic analysis, and gave it a clear mandate.

The Federal Gap

The Trump administration has made deregulation a genuine priority in its second term. The "one-in, ten-out" executive order, the expansion of OMB regulatory review to independent agencies, and the acceleration of OMB review timelines have all moved the process in the right direction. But the hard work is only beginning.

There is a structural gap that none of these initiatives addresses. The federal government has never systematically reviewed all the regulations it has on the books. An executive order from the Clinton administration actually requires agencies to "periodically review" existing regulations to ensure they are still necessary. Agencies have largely ignored this obligation however. There is no framework for retrospective review and analysis, no dedicated office, and no universally agreed-on methodology.

The Code of Federal Regulations today runs to more than 190,000 pages across 50 titles. Virginia's four-person office delivered $1.4 billion a year in savings to a state of eight million people. The math for what a systematic federal effort could achieve is no doubt similar.

AI Changes the Calculus

The historical objection to comprehensive retrospective review has always been resources. Regulations on the books vastly outnumber newly proposed regulations, and working through them manually requires time and effort that no administration has been willing to dedicate given the short-term focus of most politicians.

That objection is becoming obsolete. In the final phase of the Youngkin administration, Virginia began deploying AI tools to supplement its review processes. Youngkin’s Executive Order 51 directed agencies to use AI as part of their reviews. AI tools scanned every guidance document on the Virginia Regulatory Town Hall website and, in most instances, identified opportunities to shorten them by an additional 10 to 50 percent. The tools flagged contradictions within and between regulations, compared Virginia's rules to neighboring states, and produced preliminary cost-benefit assessments. This is work that would have taken human analysts weeks to compile.

AI does not replace human judgment. Agency officials must still assess AI-generated analyses for accuracy and usefulness. But it dramatically reduces the front-end work that has created so much resistance to retrospective review. For the federal government, this is the missing piece. A problem that has always prevented systematic review is now solvable.

What OMB Should Do

The Office of Management and Budget is the right institutional home for this initiative. OMB already oversees review of new regulations, making it uniquely positioned to develop a framework for retrospective review and coordinate its execution across agencies.

The most direct step would be to issue new guidance and a memorandum giving agencies both the methodology and the mandate to systematically reassess existing regulations. The guidance should direct agencies to use AI tools to identify candidates for elimination, assess costs and potential savings, and compare rules with counterparts in other jurisdictions.

The administration could go further. A new executive order could establish an explicit review schedule, where every regulation would be reassessed on a fixed cycle. More durably, Congress could shift the default presumption for regulations from perpetual life to sunset, requiring agencies to affirmatively defend rules or else they expire. A sunset framework could have tailored timelines calibrated to the nature or cost of each rule, so that regulated entities can invest and plan with confidence. More importantly, Congress could correct the structural problem: the assumption that every regulation should last forever without scrutiny. Doing so would help ensure these reforms outlast the current administration.

That last point is the one Virginia’s situation makes urgent. Virginia’s ORM initiatives demonstrated what is possible when an administration commits to systematic review. But its durability was never guaranteed. The federal government now has the opportunity to build something more permanent, an institutional infrastructure for retrospective review that survives changes in administrations.

The Lesson from Richmond

Virginia ran a four-year experiment in regulatory modernization, documented the results in careful detail, and, unfortunately, is now providing a live demonstration of what happens when reforms exist only at the pleasure of the executive.

The federal government should replicate what worked. It should also do what Virginia didn’t. Build reforms that last.