In April 2026, the White House Council of Economic Advisers issued the 2026 Economic Report of the President. Though seemingly not much noticed to date, Chapter 2 of that report is titled “Promoting Prosperity through Regulatory Reform”.
In brief, Chapter 2 makes the case that the growth of federal regulation has imposed significant costs on the U.S. economy by reducing productivity, discouraging entrepreneurship, limiting competition, and increasing prices for consumers. But these are also the reasons that regulatory reforms have the potential to produce substantial savings and economic gains.
Addressing “The Empirical Costs of Regulation,” the chapter reviews research on regulatory accumulation, and notes that the number of binding federal regulatory restrictions grew from roughly 400,000 in 1970 to more than 1.1 million in 2024, contributing to higher compliance costs and slower economic growth. It cites one study estimating that the expansion of the administrative state reduced annual GDP growth by 0.8 percentage points between 1980 and 2012, implying that the economy would be nearly 25 percent larger today—about $5.4 trillion in additional output—absent that regulatory surge.
Addressing “Potential Savings from Regulatory Reform”, the chapter discusses how deregulation could generate substantial economic gains. It cites estimates placing the annual cost of federal regulation at $2.1 trillion and estimates that repealing regulations adopted during the Biden Administration alone could increase GDP growth by approximately 0.29 percent annually over twenty years. Using a broader measure of regulatory costs, the chapter projects gains of up to 0.78 percent in annual GDP growth and federal deficit reduction of between $1.1 trillion and $2.9 trillion over ten years. The chapter also discussed the relationship between regulation and inflation, suggesting that regulation contributes to inflation by raising production costs and constraining supply. It cites research estimating that freezing regulatory growth for a decade would restrain the price level by 5.7 percent, equivalent to reducing annual inflation by roughly 0.6 percent.
After setting out the economic considerations as to when regulation can be an effective approach for beneficial outcomes, the chapter sets out a “Framework for Improving Regulation” by using stronger cost-benefit analysis, regulatory budgeting, periodic review of existing rules, and regulatory sunset provisions as administrative tools to promote growth, lower prices, and increase prosperity. It also provides descriptions of the current Administration’s efforts to “roll back regulatory overreach”, strengthen American leadership in technology, and unleash American energy. In sum, the chapter projects that regulatory reforms will generate major long-run savings and economic benefits.
For those interested in the economics of regulatory reform, regardless of whether one holds a supportive or critical perspective, this chapter of the 2026 report by Acting CEA Chair Pierre Yared and his colleagues warrants review.