Explainer Episode 89 - State Lessons for DOGE

In a little over 100 days, the Department of Government Efficiency, or "DOGE," has fundamentally remade the federal bureaucracy by slimming the workforce and ending federal contracts. So far, its major focus has not been on regulatory issues, but recent executive orders suggest that DOGE may soon set its sights on cutting back excess regulation. When it does, it should consider successful regulatory reform efforts that have been underway in the states for several years. This panel will focus on two of the most successful state regulatory reform initiatives, in Virginia and Indiana, and explore how similar reforms might be enacted federally.

Episode Transcript

Speaker 1 (00:02):
Welcome to the Regulatory Transparency Projects Fourth Branch podcast series.
All expressions of opinion are those of the speaker.

Speaker 2 (00:16):
Hello, and welcome to the Federalist Society's Regulatory Transparency Projects
Fourth Branch podcast. My name is Libby Dickinson and I
am the assistant director with the Regulatory Transparency Project. As
a reminder, all opinions expressed are those of the speakers
and not of the Federalist Society. Today we will be
discussing the work of the new Department of Government Efficiency
more commonly known as DOGE, and how it relates to

(00:38):
regulatory reform efforts at the state level. Our moderator today
is Jonathan Wolfson, the chief Legal Officer and policy director
at the Cisco Institute. Thank you all so much for
joining us today. I'll start by hunsting things over to you, Jonathan.

Speaker 3 (00:52):
Thanks Libby, and thanks to the Regulatory Transparency Project and
the Federalist Society for hosting today's podcast.

Speaker 4 (00:58):
It's a privilege for me to be here.

Speaker 3 (01:00):
Our guests today and our experts on today's panel are Reevabole,
who is the director of the Virginia Office of Regulatory Management,
and Patrick Price, who's General counsel to Indiana Governor Mike Brown,
and we're going to spend some time today talking a
little bit about what regulatory reform has looked like at
the state level and what sort of lessons both Reeve

(01:21):
and Patrick and their teams have learned that can be
applicable as DOGE and the Trump administration and other states
around the country consider how to address regulatory reforms. So,
Reeve and Patrick, thanks for both being here today. Thank you,
thank you for having us well, gentlemen. Every day there's
talk about how federal regulations make it harder for Americans

(01:43):
to build businesses, afford to live, keep their jobs, for
businesses to try to navigate all of this red tape.
But a lot of these discussions seem to ignore state
regulatory burdens, and in your roles, you have a chance
to tell the state story every single day. Can you
talk to us little bit Reve first and then Patrick
about how state regulations stifle your individual states and what

(02:06):
motivates you to work every day to improve the regulatory climate.

Speaker 5 (02:11):
Yeah, fantastic question, Jonathan. You know, I think that's exactly
right that if you look at you know, the popular
conversation of focus is almost exclusively on what's happening at
the federal level, and there's often you know, obviously there
are very very important things happening there, and you know,
the Trump administration I think has you know, taken a

(02:33):
very aggressive approach to reform, which you know, is is
is good to see. But there's also, you know, like
you say, a lot of really important and interesting work
happening at the state level as well. And to be
honest with you, it's something that I wasn't horribly familiar with,
you know, prior to taking on this job, I had

(02:53):
worked almost exclusively at the federal level, either in private
practice or or in the federal government. So it's it's
really been somewhat of an eye opener to Siege is
just how important UH state regulation is, UH and how
significant an impact it has on people's day to day
lives in some ways, maybe even more so at least

(03:17):
in certain areas than at the federal level, because I
think a lot of the federal regulations are they're very
very significant, UH in terms of the economic impact that
they have. They often apply to corporations or to you know,
relatively large entities, sometimes to the states themselves. Of course,
some federal regulations apply directly to people. What I've seen

(03:39):
at the state level is that, you know, since it's
you know, since it's somewhat closer to you know, the
people themselves, oftentimes the regulations are are even more impactful
in terms of how they affect people's day to day lives. So,
for instance, almost all professional licensing happens at the state level,
and it's a really really important topic because you know,

(04:04):
in the last few decades, more and more professions have
become subject to professional licensing, and it's really sort of
a gateway to the middle class. You know, if you
can get a job as a nurse or you know,
a plumber or an electrician, you know, it's a relatively
high paying job, but the state sort of gate keeps
in terms of who can can get into those professions.

(04:27):
So how the regulations are designed and how they're applied
is really really important in terms of people's ability to
get ahead. And you know, you talk about sort of
the motivation for you know, for doing this work. You know,
to me, that makes it really easy to come to
work every day because you know, you can see how

(04:48):
your actions are affecting people's day to day lives. You know,
we've been able to streamline a lot of those burdens
make it easier for people to get into the professions.
I think that that's really really important in terms of
rebuilding the middle class. And I think it's also very
very important and a time of very high inflation that
you have a larger workforce, that you allow people to

(05:12):
to get into these critical professions like nursing, where you know,
we oftentimes have a shortage, So at least from my perspective,
that's really sort of been the eye opener is sort
of how how much impact state regulation has on people's
daily lives, and how changes to those regulations can really have,
you know, significant implications in terms of the economy, inflation,

(05:36):
and you know, allowing hard working people to get ahead.

Speaker 4 (05:45):
Well, really, it's hard to really add a lot to
what you said. I think you don't want to call
out a couple of things. Reeve said that that I
very much agree with. I mean, there is so much
more attention on what the federal government does because there's
so much more money attached to it. And so you've
got the ads, you've got the big interest you have

(06:06):
the corporations, you have the lawyers and the marketing people,
the whole news cycle, whereas what the state does really
gets into more of the nitty gritty of individual lives.
And so, you know, it's neat just kind of highlighting
a few of the things Reeve said, like professional licenses,

(06:29):
what it takes to be a massage therapist or a
respiratory therapist or a radiation tech that the people that
live in your neighborhood, what it takes for them to practice,
how many hours of continuing education do they have to do,
what do they have to file? And I think the

(06:50):
estimate now is like something like what one in three
professions now requires some sort of government licensure. It's also
land use, like what you do on your property. What
childcare availability. That's a big issue we have in Indiana
that those are regulated at the state level, and so

(07:11):
how do we provide for a safe environment for children
but also create the incentives to have adequate childcare. If
you throttle back childcare too much, then there's not capacity.
People don't have somewhere to watch their children while they work.

(07:34):
So now you have a workforce issue, and that becomes
a state economic development issue because potentially we put too
many restrictions on the creation of new child cares or
the number of children that can be in a childcare.
But you relax those too much and you have an
unsafe environment, and then you know children are harmed, and

(07:57):
that's a problem too. So there's a lot of those
really close to home issues that we deal with on
really a daily basis. The things that impact somebody's life,
that you work with, that you go to church with,
that you see on the street. Those are the issues
that we deal with. And it's interesting because there's not

(08:19):
that money behind it. You don't have the corporations, you
don't have the consultants, you don't have the news cycle,
and so we are really making decisions that impact our
neighbors' lives out of the limelight and out of attention.
And I think that's one of the things that motivates
me because a lot of the things that we look at,

(08:41):
we're about the only people putting scrutiny on them other
than the agency itself, and so that's a weighty responsibility
the FEDS, anything they do, you're going to have a
thousand eyes on it. But at the state level, some
of these regulations that I just discussed, you've just discussed
and an agency is going to put out you may

(09:04):
have five people look at it and two of them
are in this call here, So you know, that's that's
a way the responsibility. And then we think about the
decisions that we make, the regulations that we put in
place impact our neighbors and our communities. That's a lot,
and that's a reason to get up every day. That's

(09:26):
a reason to do your job, and that's a reason
to feel proud about what we do.

Speaker 3 (09:31):
That's that's great, Patrick, and I really do think that
the emphasis on how regulations affect these smallest entities, the
small neighborhood bookstore or neighborhood daycare, those those sort of
entities that might not be able to hire lawyers or
lobbyists to go and even in their state capitals to

(09:52):
represent them. But those folks, they you know, they're trying
to figure out how to navigate it. And obviously both
of your bosses hurt a lot of when they were
on the campaign trail. And so as a result, both
Governor Braun and Governor Youngkin made regulatory reform a significant priority.

Speaker 4 (10:07):
In their administrations.

Speaker 3 (10:09):
And it wasn't just something they give lip service to,
but they created a strong emphasis via executive orders by
putting senior folks in their administration, as evidenced by the
two of you being on this podcast, senior people like
y'all who are leading this entire process across their administration.
What are some of the key lessons that Indiana and

(10:29):
Virginia have learned in your efforts to date and in
your opinion, how might these lessons inform the work of
federal doje and omb Patrick, We'll start with.

Speaker 4 (10:39):
You, great question. So, I think one of the big
challenges you have with regulation generally is diffuse benefits and
concentrated interest so or concentrated harm, so, particularly professional licensing.
If you have highly restricted professional licensing requirements, it drives

(11:03):
up consumer prices generally, it makes things costly, It harms
society writ large, but each individual person at a very
small level, whereas that industry itself has a very high
stake in maintaining their limitations. And so one of the challenges.

(11:26):
Everybody's like, yes, I hate regulation, it's overbearing, but minor fine,
and so that's that's one of the challenges. It's kind
of like your congressman, you hate congress, but your congress
person's mine, and so That's one of the challenges that
anytime you're trying to cut regulation, there's usually somebody that's

(11:49):
invested in that regulation, and so you have to, you know,
be willing to push back on interest and be willing
to vocalize why you're doing it. And particularly it was
a number of these things, particularly the state deals with
where you don't have money parties, and you're talking about

(12:09):
they don't have the lobbyists, they don't have somebody that's
reviewing this. You're speaking up for the people that don't
have somebody. And so I do think that when you
do it larger and we copied Virginia where you have
like a twenty five percent reduction cut, you're not targeting
any one industry. You're not like, I'm not going to

(12:31):
take on this powerful association or that powerful lobbying group.
I'm taking on regulation writ large. And so then you're
working with the agencies to say, Okay, you need to
come up with a plan to reduce your regulation by
this much, and again you're not targeting any one, You're

(12:51):
targeting regulation as a whole. And so then it's like, okay,
we need to figure out the best way to reduce
it and then you can get more people in the
room and be like, we have to reduce it by
this much. Let's figure out where are the best ways
to do it, because there's always going to be somebody
pushing to keep their regulation and so that's always a challenge. Agree.

Speaker 5 (13:17):
Uh, yeah, No, I think Patrick is absolutely right. You
know that that's something that I've observed as well. I
had sort of read it in the public choice literature
that you have sort of these incentive problems, but to
actually see it in action has really been very, very striking,
you know. I think Patrick puts it perfectly when he
says the perspective is, you know, yeah, the accumulative burden

(13:39):
of regulation is a problem, but but our regulations are
actually really useful, you know, we want to keep those
and that's where having this you know, twenty five percent
or thirty three percent or whatever the target is across
the board goal I think is much more effective. It
reminds me of I think this was decade or more ago,

(14:01):
but there was a federal level some interest in closing
down certain military bases. And if you chose a particular base,
then of course everybody in the community and the senators
and the congress persons for the states would oppose it vehemently,
so they had to give a package, you know, of
multiple different bases of an up or down vote, and

(14:22):
you know that was more effective. So I think that's
definitely one of the principles. You know that in Indiana
and Virginia and the Idaho, you know, the other states
that have you know, done, you know, significant work in
this space that they've they've they've they've taken. Another thing
that I think is also sort of related to that

(14:43):
point is that you know, if you look at it,
and you know, I sort of see this every day
because we actually review the regulations, and even if you
don't have a vested interest, you know, like any one
regulation in isolation usually makes some sense. You know, it
may be over burden some in some respects, but overall,
you know, it's it's sort of thrust in the right direction.

(15:07):
So you can see how over time this accretion happened,
just more and more builds up. This one makes sense,
and that one makes sense, but you ultimately end up
with something that's just this this overpowering, you know, crushing burden.
Cumulative weight of all of these regulations, and Jonathan, you

(15:27):
sort of made the point that you know, small businesses,
I think, in particular, find this impossible to navigate. The
corpus of regulations is so complicated that it's it's it's
much much easier just not even to go into business,
because it's you know, far easier to go to work
for a large company or they have an in house
legal department that can figure that all out for them. Uh.

(15:49):
And so I think it has a really negative effect
in terms of hurting the dynamism of the overall market,
you know, making it very difficult for new players to
enter the space. And that's where I think something like
a twenty five percent reduction makes a lot of sense.
You're you're you're cutting back on that that overarching burden,

(16:10):
and then you're leaving it up to the agencies and
the stakeholders to sort of figure out which twenty five
percent to cut. And you know, we've seen it's actually
worked out pretty well. You know, they they've sort of
done a pretty good job in my opinion, you know,
of finding where those cuts can be. But I think
you need an overarching target like that. And in terms
of lessons for DOGE, you know, and in the federal government,

(16:33):
you know, I love the ten for one that President
Trump put out. I think that's that's that's a great idea.
I think it would also be really uh worthwhile to
look at something like a percentage reduction target, or maybe
a dollar reduction target. You know, we're going to cut
regulatory burdens by you know X number, you know, billions

(16:55):
of dollars. I think that would also set a good
incentive to We're not just going to slow down the
growth of regulation, We're actually going to cut back on
this massive corpus of regulations we built up over decades
and decades.

Speaker 4 (17:11):
And if I could add something to what Reeve said,
it's not just the total weight of regulation that could
become crushing, it's it's those incremental changes as well. Because
if you think about your your a small business. You
went into business to do whatever that business is, whether
you know, your restaurant, your childcare, you're building widgets like

(17:31):
that is your job. You didn't go into business to
keep track of what are the latest regulations from the government.
And so if there is even a small workwhile regulatory
change every year, that in and of itself is a
burden because you have to be monitoring all the time,

(17:52):
you have to be changing your operations all the time,
and so having certainty or having like you know, this
is this is the ceiling, and it's only going to
get less restrictive. Something like that really helped with certainty
and understanding so that those people who want to be
doing their business can focus on their business, not on

(18:14):
whatever the regulators are doing.

Speaker 3 (18:18):
Yeah, and you know, the challenge for those small businesses
is that it doesn't stop with just the regulations. When
I was in the first Trump administration at the Labor Department,
we were trying to implement the President's executive order to
review and eliminate unnecessary guidance documents. And one of the
crazy things we found at the Department of Labor was
there were guidance documents that were decades old that existed

(18:42):
in only one place, and that was in the.

Speaker 4 (18:45):
Law library at the US Department of Labor.

Speaker 3 (18:47):
And that meant that if you were that small business
in Indiana, you could theoretically be in violation of a
guidance document that the only way you would know about
it would be as if you'd hired a high price
Washington DC lawyer to go and comb.

Speaker 4 (19:01):
Through the sheets of paper.

Speaker 3 (19:03):
Inside that library to find out whether or not your
actions at your business, at your restaurant, or what have
you was in compliance with that law. And you know,
guidance documents are one of those ways that in some worlds,
you know, it can be the concept makes a lot
of sense.

Speaker 4 (19:19):
Right.

Speaker 3 (19:19):
You write a complicated regulation and then the restaurant says, hey,
what do you mean by having you know, clean cooking oil,
and you know, they write this regulation that talks about it.
They're like, well, if I change it out every three days,
is that good? And the agency thinks they're being helpful.
They're like, yeah, change it every three days. Well, now
suddenly the law has become changed it out every three days,
not that that's what the regulation actually is. And if

(19:41):
somebody figures out a way to have change it out
every five days be just as clean and healthy for
the customers, then they feel like they're in violation of
the law. You two wrote a great blog post and
you were talking about guidance documents and you urge federal
reformers to not overlook these guides documents and kind of
take a playbook out of the last Trump administration and say, hey,

(20:03):
the resident made an emphasis on this guidance documents continue
to be issued in the prior administration, and as they're
trying to reduce these regulatory burdens, don't ignore the burdens.

Speaker 4 (20:14):
That guidance documents have.

Speaker 3 (20:16):
Talk a little bit about why guidance documents and the
burdens they impose are an important consideration. And then given
the vast number of guidance documents, is it just impossible
to deal with the costs and burdens of guidance documents?
Given how many you know, million guidance documents there happened

(20:36):
to be in the world.

Speaker 4 (20:37):
We'll start with you reading.

Speaker 5 (20:39):
Yeah, So I think, I think it's a fantastic you
know question, Jonathan, and I think and Patrick and my
piece we refer to it as regulatory dark matter, and
I think that's that's a good analogy or the other
analogy I'm often reminded of. And I'm not a classicist,
so I'm not one hundred percent sure this is true.
But there was a well I once read that the

(21:01):
Emperor Colligula, you know, in Rome, if you passed a law,
it had to be made publicly available, so he would
write the laws on the very top of the column,
so that nobody could see them that way. You know,
you were still making it available, but uh, you know,
complying with the letter of the law, but nobody knew
what the law actually was. I don't think it's quite

(21:21):
as sinister as that, but I think we're sort of
in a similar situation now where, you know, yet nobody
really knows how many guidance documents there are. In my
previous job at the Administrative Conference in the United States,
we did a project on guidance documents and the conclusion
we reached is nobody knows how many of these things

(21:41):
there are. It could be millions, because it could be
something as simple as you like you said, you know,
some thing in the law library, or you know, some
report on somebody's computer, and it's it's a really significant problem,
you know, for the for the reasons that we've been
discussing small businesses in particular. Even if they could somehow

(22:02):
digest the entirety of the CFR, you know, which I
think is a fiction, you know, even then, uh, they
wouldn't be anywhere close to, you know, knowing the answer,
because there's a whole separate, you know, corpus of guidance
documents out there so it's it's I think it's it's
been a blind spot historically. And and I you know,
really loved what the first Trump administration did in terms of,

(22:25):
you know, ensuring that those guidance documents were at least
put online. It baffles me that the Biden administration rescinded
that and you know actually basically you know, encourage the
agencies to take them back down. But you know, I
think the Trump administration has reinstated that order. I think
that that's that's great. I think that you know, what

(22:47):
we're both doing in both of our states, I think
is also you know, really uh pointed in the right direction.
So in Virginia, we actually require agencies not only to
cut requirements and regulations, but also to ensure one that
there are not requirements in guidance documents, that if it's
a requirement, it has to be moved to the regulation

(23:10):
or otherwise just not enforced. And then two, we look
at the aggregate length of the guidance documents, the total
number of words in the guidance documents, and what we
found is there's just an enormous amount of things out
there that are very complicated, very out of date, and

(23:30):
just can be massively streamlined. We recently had one of
our agencies that cut I think was something like five
hundred thousand words from a guidance document, which you know,
I put out a little write up on it. I
think that's roughly the length of Warrant Peace in terms
of the total number of words that they were cutting
from these guidance documents. So I think, you know, as

(23:54):
a Trump administration, doge and ohirah move forward. I think
it's really really important to ensure that guidance does not
get overlooked, That they're ensuring that the guidance is streamlined,
and that the guidance that they still do want people
to comply with is made easily available in a you know,

(24:15):
publicly accessible place on a website, and that it's very
very clear what the agency intends with that guidance document,
because that's the only way that businesses or citizens can
can effectively navigate the process.

Speaker 4 (24:35):
Yeah. I really love everything we've said. I'll take this
in a little slightly different direction to talk about kind
of why we have at lea why I think we
have guidance documents and what we've done to try to
address that. And you know, a big part of talking
about incentives. I'm big on incentives. But you know, in theory,

(24:59):
all the laws should be asked by the legislature. You know,
I think that's perhaps what are our founders envisioned and assumed.
But it's hard to pass laws, and then you know,
perhaps they're technical or whatever. So the legislature has delegated
some authority to agencies to do regulations, which carry the

(25:22):
effect of law, because lawmaking is hard. So you know,
agencies can do regulations, but particularly the federal level and
at some of our states, doing regulations is hard, and
so agencies still want to do things, and so you

(25:42):
start doing guidance documents and you're kind of passing that
law making down because you know, we hear this all
the time. Our agencies are like, well, we need to
be nimble, we need to be able to react. There's
changing circumstances, and you know, it takes too long to
change the law, takes too long to change with regulation,
and so we have to be able to adapt. And

(26:03):
so we have guidance documents, and so the need for
them as you're responding to a real need or we've
talked about like how often you have to change your oil.
You know that there is a real need for that.
That the challenge is and what we've seen, like in Indiana,
is that because it was hard to do regulations, and

(26:24):
agencies just started doing things through guidance documents and just
start creating requirements in guidance documents, and it's really hard
to police all of those things. And so what we
did in Indiana, and driven by the legislature, was try
to empower people who have the biggest incentives, so that
would be the people that these enforcement actions are being

(26:46):
taken against. And so our law was changed to get
rid of deference to the agencies and administrative proceedings. There's
no deference to their legal interpretation. There they have to
the agency has to prove its case by a preponderance
of the evidence, and if they rely on guidance documents

(27:09):
as the basis for their decision, the primary basis there's
mandatory attorneys fees to the other party. So the agency
has to be able to point to a statute or
regulation that justifies the requirement. And we've taken that that
you can't just say do whatever I want. Your regulation
has to spell out what it is that you want,

(27:31):
and so doing that you've now given tools to the
people who have these regulatory burdens put on them to
fight back. And so rather than like Reveride, trying to
go around and play whack a mole with the agencies,
you're empowering the people out there, empowering attorneys to police

(27:53):
the agencies and give them a mechanism because again, like
at the state level, a lot of the things we
deal with don't have those big money behind them. And
so you know, if it's the license for your your
profession or your business, do you have ten thousand dollars
to pay an attorney to fight two hundred and fifty

(28:14):
dollars citation? No, Like, that's not a good business decision.
But you know, if the attorney knows that they can
get their fees paid if they find challenges, Well, now
you've created you've essentially deputized private attorneys to help you
monitor what agencies are doing. And we've done training with

(28:36):
our administrative law judges on these standards, and so we'll
see like administrative law judge opinions that come out and
it will be like Agency A required this person to
do x X is only contained in this guidance document.
It's not in statute. It's not in regulation agency you lose,

(28:57):
and so it's kind of building that cult. Sure, you
train the aljs, you train the private attorneys, and you
help them police you.

Speaker 3 (29:09):
No, that's a great point in Patrick, as you're talking
about incentives and the importance of getting all those levers right.
You know, Reeve, how should states in Patrick? Maybe you
want to comment more after Reeve, but you know, how
should states in the federal officials try to set up
the right systems that create the incentives to get those

(29:29):
good outcomes right. You want to have systems that motivate
the legislature to write clear laws, that motivate the regulators
to regulate only where they need to and regulate only
with the least burdensome path. And you want the courts
to step in when the regulators fail to do that.

(29:49):
You want to incentivize the public to challenge the regulators
when they're.

Speaker 4 (29:54):
Getting coloring outside the lines.

Speaker 3 (29:56):
What are the systems that you have found, both in
Virginia and Indiana that do that? In Touch you already
mentioned some, but Reeve, if you want to maybe talk
about some of the ones in Virginia, and there's probably
others Patrick that you can think of or things that
the governor is considering doing as he continues his term
that really do put those levers in the right place.

Speaker 5 (30:15):
Yeah. Absolutely, And I think, you know, I think I
think Patrick is absolutely right to sort of, you know,
to sort of put the emphasis on incentives. You know,
I think we're both, you know, in our state, sort
of coming at it from an economic perspective, and you know,
an economics incentives are everything. That's how you ensure that, uh,

(30:35):
you know, people engage in the behavior that you consider
more socially beneficial. And I think, you know, Jonathan, it
has to you know, I think ultimately at the federal
level sort of be a multi pronged approach. You know,
I think from a judicial perspective, you know, revisiting the
non delegation doctrine, you know, I think would would really

(30:56):
make a big difference in terms of setting the right
incentives for the legislature. But from an executive perspective and
in terms of what we've been able to do here
in Virginia, I think, you know, one thing that we've
done that I think has worked remarkably well, even better
than I sort of thought it would at the outset

(31:17):
is just setting a very clear goal and then working
with the agencies in order to achieve that goal. And
that's why I think something like a twenty five percent
reduction that both Virginia and Indiana have done, and then
backing that up, having you know, somebody like Patrick or myself,

(31:38):
having somebody in the executive branch in the governor's office
to actually participate and you know, oversee that process, I
think is really really critical. And I think, you know,
when past efforts have not succeeded, I think it's because
one of those two things are missing if you don't

(31:58):
set a clear goal. And this is why I think
it's constantly failed at the federal level up until the
first Prump administration is I think going back to Jimmy Carter,
you had so called retrospective review or basically the agencies
were asked to look at their old regulations and decide
do you need this or not? And surprisingly, you know,
every single time they say, yeah, we do need this,

(32:19):
you know, we need to carry it home. So it was,
you know, as an abject failure. It never went anywhere.
You know, Trump was the first one to actually change that,
you know, by putting in place the two for one
executive order, Now you had a clear goal. Now you
had something like a budget basically where if you want
to enact a new regulation, that's fine, but you're going

(32:41):
to have to find existing savings in order to offset that.
And then I think something like a twenty for five
percent reduction also works exceedingly well because you know, there's
a very clear goal that everybody is working towards. And
what I found is actually the agency officials really buy
it into it. And that's what sort of surprised me.

(33:02):
You know, I expected that, you know, having worked at
the federal level, that you'd get more pushback, but from
the agency officials perspective, I think they're concerns with previous
reform efforts were that it wasn't clearly defined, you know
what that twenty five percent was, what a regulatory requirement is,
How you actually hit that? They just had a lot

(33:23):
of questions, and that's why I think the second critical
element is having a centralized entity that can can supervise
that process. It's critical because we've been able to answer
those questions. We've been able to work with the agencies
to help them get to the twenty five percent and
find innovative ways to get to the twenty five percent,

(33:46):
and the end result is, you know, we will we
will hit the twenty five percent, you know, in the
next few weeks. I think we'll get across the finish line.
I think even more excitingly, we've saved one point two
billion dollars per year in terms of the change is
that we've made. So it produces significant results. But I
think it requires from an incentive perspective, that you have

(34:08):
a clear goal and you have somebody to work with
the agencies towards achieving that goal. And that's my hope
is that as Doge, you know, as omb you know,
really start digging into the federal regulations, that they will
ensure that those two elements are there, because I think
that's the difference between success and failure.

Speaker 4 (34:33):
Yeah, so again, I love everything Reeve said. I also
was laughing at your question, Jonathan, because it was almost
like saying, suppose we live in a civil libertarian utopia
where citizens take their responsibility seriously, legislators take their responsibility seriously,

(34:54):
and bureaucrats do as well. And I'm like, I would
love to live there, Jonathan. How do I get there?
I mean, I think that I'll start with the federal
level because that's where we've started. I think that, as
he said, it's going to take a multi pronged approach
because there are so many things that need to be changed.

(35:15):
Part of it is Congress has to be able to
pass laws, and they have to be able to pass
laws that are detailed and specific, rather than passing all
of the burden on to the agencies to actually set
the standards. Also, like tying in the guidance documents, I
think that the courts have a lot of responsibility there

(35:39):
because doctrines like our deference and some of those other
difference doctrines that the Court created a standard where the
agencies had absolute deference in interpreting their own regulations. And
so if I were an agency attorney, my recommendation to

(36:02):
my agency head and the federal system would be, we
should have very vague regulations and then do everything through
guidance document because we will get absolute difference there. If
we actually specify it in regulation, it can be attacked
and their challenges. But if we give ourselves a maximum
different or maximum flexibility and then do it all through guidance,

(36:24):
we're going to get absolute difference. From the courts. Well,
then that creates a perverse incentive. So I think getting
rid of the non delegation doctor and is Reeve mentioned
rolling back those differences, particularly Hour and the rolling back Chevron.
Rolling back those various differences is going to put more
burden on the agencies to be specific in their regulations,

(36:48):
not rely on guidance at the state level. It's interesting,
and as we've said, the target is really important. I
think one of the things when you have a target, too,
is you can incentivize agency heads because like Mike Pench
tried to do this when he was governor. He directed

(37:08):
all agencies to go back and review their regulations and
find things that they're outdated and all that. And as
Reeves said, like almost everybody's like, no, all our stuff
is great. We had like two agencies actually take it
seriously and cut their regulations. The rest didn't. Now, if
you if you celebrate those agencies, that helps. But like

(37:30):
when you have that target and it's like twenty five percent,
that's that's a floor, not a ceiling. So then when
your agency heads like hit their twenty five percent, it's like, hey,
you know, Agriculture has cut their regulations by twenty five
percent commerce or revenue. Why are you behind? So you

(37:51):
kind of create that. I think something else that he
mentioned that's really important is having somebody at the governor's
office level. And one of the things that we're trying
to stress and the broad administration is that all of
the lawyers that work in the agencies their client is
the governor. And that's a mental shift because, as I

(38:14):
was talking about earlier, if I was like working in
the federal system and an agency, my guidance to the
agency head would be, you know, do it all through guidance,
not regulation, because that gives us the most flexibility. But
if you're stressing to all of your agency attorneys, your
client is not your agency. Your client is the elected head,

(38:35):
and this is what the elected head's goal is. Work
on that. Don't just look at this from what is
best for my agency, what is easiest for me, but
look at your job is how do I carry out
my elected chief's policy goal? And his policy goal is this.

(38:57):
And so that's a message we're trying to push down
on hard and say, hey, we're all on the same team,
we're all speaking with the same voice, and this is
what your mission is and so we can say at
this level, like, don't cut the corners, don't take the
easy out, and then push that to them, and then

(39:18):
that helps them push back on their agency too, say no,
you know, there is this easy out, but I'm being
told from the top we have to do it the
right way. Yeah, and Patrick, along those veins.

Speaker 3 (39:32):
I think that the importance of leadership and that starts
obviously at the very top with the chief executive, whether
that's the governor in both of y'all's cases, or the
president and telling cabinet secretaries that that's part of how
they're going to evaluate them, that cabinet secretaries continue to
pass that message on to directors or assistant secretaries or

(39:53):
whatever the title is for sub agencies. Can you talk
a little bit Patrick about how both you your boss
the governor is implementing that across his administration and the
importance that you see in that message not just being
kind of, hey, I'm going to sign an executive order
and move on, and when you have a cabinet meeting
you never talk about it versus making it something that

(40:16):
is a constant reminder from your boss to all of
his direct reports.

Speaker 4 (40:23):
That's a great question for what we're doing. So I
will say as a preface, Indiana does not have civil
service protections the way like the federal government does or
some other states, and Brieth, I don't know what Virginia does.

Speaker 5 (40:40):
We do we do.

Speaker 4 (40:41):
So almost all of our employees in the state are
at will, so that helps. I mean that there's pluses
and minuses. You don't get the professionalism that you might
have with the civil service, but do you have a
little bit more control? And so, Jonathan to your question,
what Governor Braun has done, which has been a departure

(41:03):
from practice of prior governors where a number of these
efforts were done but not necessarily publicly trumpeted. What he
has been doing is doing executive orders. We've done I
think sixty four sixty five so far, which is well

(41:26):
ahead of his predecessors. I think he's done more than
Mike Penstad in his entire four years. So he lays
out a policy objective, say reduced by twenty five percent,
that has been communicated to the cabinet secretaries. These are
your objectives. They've got timelines. But then each of those

(41:49):
executive orders has various check in points. So on the
twenty five percent. Anytime they're readopting a rule, they have
to go through a rigorous ant analysis, and there's certain defaults,
like if your regulation hasn't changed in eight years, there's
a default assumption that it should be put into statue.

(42:09):
So now you have to give us your plan for
how you're going to work this into statue. Every year
under this you have to do an annual regulatory projection report.
Here's what we're going to be doing over the next year.
Here's the steps, the concrete steps we're taking to get

(42:31):
to that twenty five percent over four years. And that's
been true with virtually all of Governor Brown's executive orders.
There's some sort of check in step. There's a public
accountability step. So he's saying, this is what I'm doing,
and here is where there's going to be a check
in point where I'm going to hold myself publicly accountable

(42:52):
for what we've done, and then we're going to have
to release that. And so like on the twenty five
percent goal, we gave agencies four years, but we're not
going to say, hey, we're gonna wait three years and
nine months and then check in and you're gonna panic.
We're going to be checking in with you at regular intervals,
making sure you have a plan you're going to be

(43:13):
presenting that we're going to be policing it. So it
is it is active engagement. It is active monitoring with
public facing accountability steps at at critical junctures so that
you know that the outside world can say, yes, you

(43:34):
did what you said you were going to do.

Speaker 5 (43:39):
I would just sort of echo everything you know, Patrick said.
I think I think that's precisely right, and I think
that is what distinguishes you know, Indiana Virginia, Idaho. I
think is another great example of how this has you know,
really been successful. Uh, from cases where it hasn't been.
I think you have to have first of all, the

(43:59):
governor are you know, buying in one hundred percent? And
in Governor Youngkin's case, you know, he came in with
the goal of making Virginia the best place to live,
work and raise a family, and regulatory reform is a big,
big piece of that. So you know, the governor, the
chief of staff throughout the last three and a half years,
they've really really constantly emphasized and this is a critical

(44:21):
part of the mission we're trying to achieve and having
somebody like Patrick or myself or Alex Adams and Idaho,
you know, the people who have worked on this, who's
sort of a centralized entity that can supervise the process,
work with the agencies, work with the other secretaries. You know,
keep the emphasis on the issue because it's a long
term process. It's taken you know, us three and a

(44:43):
half years. And Patrick, you said similarly, you know you
set a goal of four years. You know, requires consistent
attention and then getting the buy in from the agencies
and the people at the agencies. I think it all
has to be there in order for it to work.
Otherwise I think you get into these incentive problems that
we've been discussing that if you set a goal, but

(45:04):
there's no backing behind that goal, there's nobody following up,
it's really really easy just to push it to the
side and either ignore it or you know, come up
with some small tweak that's really pretty meaningless and declare victory.
Like I won't give this specific example, mostly just because
I can't remember it, but I did sort of remember.

(45:25):
As we were sort of considering our reform, we talked
to a few other states, and one of the states
and Basically what happened is they took the requirements out
of the regulations and they put them in a guidance
document instead, and then they said, Okay, we got rid
of twenty five percent, Like, well, no, that's even worse.
You know now basically, you know, it's not even clear
whether it's enforceable. So if you give people the opportunity

(45:49):
to sort of, you know, cut corners, and they'll do it.
But if you ensure that that oversight, you know, continues
to exist throughout the process, that's where you get to
the meeting role reforms like what we've seen in Indiana
and Virginia and Idaho and the states where this has succeeded.

Speaker 4 (46:08):
And I think it's reely said that that buy in
from the top is where it starts.

Speaker 5 (46:16):
You know.

Speaker 3 (46:16):
One of the things that agencies, you know, you talk
about this process and everybody trying to you know, everybody
has their fiefdoms. One of the things that is disrupting
government and every other part of the world is AI.
And talk a little bit about is AI a useful
tool in accelerating these regulatory reform efforts? How could how

(46:38):
have your states used it or thinking about using it?
And how might federal omb or DOGE use AI to
supercharge their regulatory reforms?

Speaker 4 (46:46):
Reeve will start with you, Uh.

Speaker 5 (46:48):
Yeah, fantastic question. And I think this is really the
next big thing. I think this is what's really going
to you know, take the type of work that each
of our states has gone, what the federal government is doing,
and just supercharge it, you know, take it to the
next level. So here in Virginia, we actually just very
recently you know, kicked off a pilot project and for us,

(47:11):
this is going to be sort of the last kind
of major initiative that we under day. We've got about
seven to eight months left in office, so we will
hit our twenty five percent, but we don't want to
stop there. You know, that's not the governor's style. He's
fond of saying, you know, we're hitting the accelerator. So
we're we're really going to continue to accelerate all the
way to the end. And we think using using AI

(47:34):
to actually go in and basically scan the entire regulatory corpus,
compare it to the statute, uh and determine you know,
what's actually mandatory and what's discretion areya, what are you
you know, building upon the statute. And then the other
key piece of it is then comparing Virginia regulations to
those in other states. Uh So if Indiana, you know,

(47:57):
can you know they're barbers have or are half as
many training hours as as ours do, then we should
change ours. You know that there's you know, if it
works in another state, there's no issue, then that presents
a great opportunity to revisit your own regulations and look
at streamlining those. And the problem is, in the past,

(48:17):
you could do that. Alex Adams and Idaho told me
he did that. You know, they looked at South Dakota
and North Dakota and the states around Idaho. But it
takes a really long time if a human being is
doing that, Whereas AI can go in there and do
it not necessarily instantaneously, but like within a matter of
a few minutes basically sped out a result, and then

(48:39):
you could use that to help, you know, streamline the regulation.
So I think it's going to really be a game changer.
I think that states that are reluctant to do something
like this because it's you know, it's time consuming, I
think if they can use AI, it's going to save
them just an enormous amount of time and resources. So
I think it's going to make the sorts of reforms

(49:01):
more feasible nationwide.

Speaker 3 (49:03):
Uh.

Speaker 5 (49:03):
And I think at a federal level, you know, Doge
has already uh may made significant use of AI, as
I understand it, in the personnel space and in the
contracting space. So I think it's a very natural fit,
uh to apply that same sort of logic to the regulations.
And I think it will supercharge their efforts as well

(49:24):
and allow them to accomplish a lot more in a
short period of time than otherwise would have been possible.
That true, So.

Speaker 4 (49:34):
Shocking, IM would agree with everything Reeve said. I think
AI is uniquely advantageous in this space because one of
the big challenges with operating in this space is mapping everything.
And Reeve was saying that is a labor intensive job.

(49:54):
So you have you have statutes, you have regulations, you
have guidance documents, you have forms, you have all of
these things, and that is a challenge. And so you know,
like when I was reviewing regulations and we would get
them in and we've talked about like if you have
requirements and guidance they need to be in regulation. That
is one of the things that we would do, and

(50:16):
it would be very labor intensive. Like you whatever you're
changing childcare, you're changing pipeline safety, you're changing Medicaid claims forms,
whatever it may be. You've got your regulation. We would
then go check it against the guidance documents and the
forms of the agency to make sure all of the
requirements that they were imposing are actually in regulation or statute.

(50:41):
That is really time consuming. On the flip side of
that too, it's a challenge because every time a statute changes,
do you have a good map of all the regulations
and forms and guidance that's implicated. And those are things
that AI can do much quicker and simpler. And so
we've been taking some of the work that I did

(51:03):
when I was doing it in by hand, and we've
created several use cases that we're running through different AI
platforms and comparing. We're giving them the same things and saying, okay,
you do this and compare to the use cases that
I came up with, and things that might take me
a week, the AI, you know, can get eighty percent
of the way there in thirty minutes. Well, let's let's

(51:26):
do some iterative training and see if we can get
that up to like ninety five percent. And then you
know the next step will be working with the attorneys
because to do AI well, you have to know how
to use it and know how to program the terms,
and so then we can get the attorneys doing that
smarter work. Other things that we're doing, we're trying to

(51:49):
map out all of the statutory requirements for each agency
and then you can run that through AI and say,
compare what's in statute that this agency is supposed to
do with what its website says it's doing, and find
me all the areas that the agency is supposed to

(52:10):
do that it's not And on the flip side, give
me all the areas that the agency is doing that
are not actually in statute. And you know, as Reeve
was saying, you can have the regulations too. You can
compare it with other states as well. One of our
executive orders, and this was driven by statute as well,
was to do a professional licensing comparison. We have to

(52:31):
compare our requirements to several states. Well, that's a great
AI tool. You know, take the cosmetology requirements for Indiana
and compare them to these eight states and tell us
where they match up and where they don't like. Those
are very labor intensive tasks for an attorney, but they're

(52:52):
very quick for AI. And so the goal is to
try to use AI for those those menial comparison matching
mapping requirements and then have the attorney time being spent
on more of the strategic high level Where do we
want this to go? Is this something we should be
doing to do the qualitative evaluation and have the AI

(53:16):
do the grunt work to get there. And at the
end our goal is to have a much better product too.
But if our agencies have a flow map of this
statute changes, this regulation changes, here's what we need to
flow downstream and change. That's just going to make us better,
because that's one of the challenges. I'm sure Reeve, you've

(53:38):
seen that some of those ten year old guidance documar
forty year old guidance documents. Does anybody know if the
statutes or regulations have changed in there? Did anybody do
a comparison map? Is it even good? Like? Nobody knows?
And that's where AI can just help tremendously.

Speaker 3 (53:57):
Well, Patrick and Reeve, this has been really fastating and
useful information as we wrap up. One last question, if
you could give some advice to DOGE to other states
thinking about not only regulatory streamlining, but any other initiative
that you would recommend that a reform minded state or
federal agency undertake to try to make itself more transparent

(54:20):
and promote efficiency and government. As we wrap up, do
you have any thoughts on that you'd like to share.

Speaker 5 (54:32):
I'm happy to go first if our so. So, yeah,
So I think it's a great, great question, Jonathan, and I.
So you mentioned efficiency and transparency, and you know, I
sort of tend to think of things and economic terms,
so you know, my my focus is usually on efficiency,
but what I've really been struck by is just how

(54:55):
powerful transparency is as well. And another thing we've done
in Virginia that you know, we haven't discussed on this call,
but I think it's sort of another major accomplishment of
our office at least or the governor. Governor Junkin's initiatives
that I think, you know, could inform work at the
federal level in other states. So the governor, you know,

(55:18):
really focused on regulatory burdens when he came into office,
but he was also really interested in the permitting process,
because you know, it takes a really long time to
get a permit. It's a black box. You don't really
know where it is in the process. So another major
initiative that we've been working on these last three years
is to create a dashboard, a permitting dashboard that has

(55:40):
every single permit application in the state government online, uh
and you can log on to this site. It's permits
dot Virginia dot gov and you can track a permit
exactly like who you would a FedEx package. Basically, it
tells you, you know, all the steps in the process,
how long it's supposed to take, long it's actually taking.

(56:02):
And what we found is, you know, even when you
don't change the permitting at all, even if you leave
all of those steps in place, the transparency is a
game changer because you know, we've talked a lot about incentives.
It fundamentally shifts the incentives. If nobody knows where the
permit is and there's no accountability, whereas if you know, oh,
it's that person who has it. You know, why has

(56:24):
it been sitting on his desk for the last two
hundred days? You know, then the solution presents itself, you know,
very very quickly. And what we found is just creating
this transparency alone, our Department of Environmental Quality has reduced
their processing times by two thirds. They've cut by sixty
five percent the average time it takes to get a

(56:45):
d to permit UH and the other state agencies you
know who now are working on the you know now
have their permits up on the platform. They haven't added
them up quite as long. We're working with them to
try to achieve significant processing time reductions there as well.
So I think just making information available to the public

(57:08):
can be extraordinarily valuable because it really starts to set
the right incentives. I think you've seen this with dose,
you know, the fact that they've undercover uncovered just enormous
amounts of wasteful spending that people were not even aware of,
And I think just making that information available is hugely important,

(57:28):
and I think it fundamentally shifts the incentive. So I
think efficiency is very very important. I think transparency is
equally important, and anything you can do to make the process,
you know, more open, more clear to the public what's happening,
I think it makes a huge difference and really incentivizes

(57:50):
major reform.

Speaker 4 (57:52):
Gotcha, you be the last words, Well, I agree with
Reeve again. You know it really transparently is huge. That's
one of Governor Braun's biggest themes. I think someone just
told me yesterday, the like I think, I hear Governor
Braun say transparency every week, and there's that. I think.
Something else to keep in mind is we have a

(58:15):
federal system for a reason. We've got these fifty laboratories
of democracy. And so that's what I found really heartening
and reassuring, was like when I found doctor Adams, I
found ree Bull that there are people across the country
doing similar things. You've got Governor Youngkin, You've got Governor Little,

(58:36):
you have a lot of enterprising Governor Braun. Shouldn't blot
him out. You've got a lot of very enterprising leaders
at the state level. And we each have our own unique,
you know, twist on our democracy, but there's a lot
of common themes, and so, you know, it's great to know,

(58:59):
like when I talk with Reeve or doctor Adams and
they're like, Okay, we did this and there was some
short term pain, but it was worth it in the
long run. And that is really helpful because all of
these efforts there's going to be short term pain. There's
going to be pushed back, and you know, when you've
got somebody else that's already blazed that trail and can

(59:20):
tell you it's worth it when you get to the end,
that helps. And you know, we're each doing different things,
and so the more that we collaborate and share ideas,
it helps. And I think it's energizing too, because you
start to talk to like minded people, they're like, oh,
we're doing this well, that that makes me think about

(59:41):
something that we can do. And then we come back
and you know, you're kind of raising the bar each time,
and and that's that's really fun and really energizing. So
I think we just encourage, you know, Doge to keep
doing the States, to keep doing it, for like mind
minded people to collaborate as much as we can.

Speaker 3 (01:00:04):
Well, Patrick and Reeve, thank you so much for your
time today, thank you for your insight, thank you for
your service, and for continuing to sound the horn that
this is important effort not just at the federal level
but at the state level. And thank you to Livy
and the Regulatory Transparency Project and the Federalist Society for
hosting today's event.

Speaker 4 (01:00:24):
Awesome you Livy, Jonathan.

Speaker 5 (01:00:26):
And Reeve absolutely, thank you. Thanks, thanks to all of you.
This was great, awesome.

Speaker 2 (01:00:33):
Well I'm gonna, you know, throw that back and say
thank you all so much for joining us today. Thanks
to Jonathan for moderating this great conversation, UH and to
Reeve and Patrick for sharing your insights from the state
regulatory reform perspective. Thank you to our audience for tuning
in today, and if you're interested in learning more about
all of our programming here OURTP discussing the regulatory state

(01:00:56):
in the American way of life, please visit our website
at reg Project dot org.

Speaker 5 (01:01:00):
That is r e G reg Project dot org. Thank you.

Speaker 1 (01:01:10):
On behalf of the Federal Society's Regulatory Transparency Project. Thanks
for tuning in to the Fourth Branch podcast to catch
every new episode when it's released. You can subscribe on
Apple podcasts, Google Play, and speaker lays from our TP.
Please visit our website at Regproject dot org. That's our
egproject dot org.

Speaker 5 (01:01:38):
This has been a FEDSC audio production.