Dismantling the Administrative State: A Framework for Analyzing the 2025 Executive Order on the Deregulatory Initiative and Its Implications for Organizational Design
Context
To enhance our understanding of the executive order issued by the president on February 19, 2025, titled “Ensuring Lawful Governance and Implementing the President’s Department of Government Efficiency Deregulatory Initiative,” we have developed a descriptive model from an organizational design perspective. This model serves as a baseline for our analysis. We will first present the model, followed by our analysis. The president’s order directly addresses the concept of the administrative state, which we referred to in previous articles as a deep state. Those deeply involved in the administration’s executive orders regarding DOGE will notice a pattern consistent with dismantling the deep or administrative state. It will not be easy, as the enforcement of the executive order focuses on regulations that are “unequivocally authorized” by constitutional statutes, and the process inherently involves interpretation by agencies. Statutes and constitutional provisions are rarely crystal clear, and determining what is “unequivocal” requires a careful, structured interpretive process that ultimately will go to the Supreme Court.
I. Model
Organizational Design and Legal Dynamics in the U.S. Administrative State: A Government Affairs Perspective
Abstract
This framework examines the evolution, legal foundations, and enforcement procedures of the U.S. administrative state through the lens of organizational design. Federal agencies—such as the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA)—are analyzed as legal actors and complex organizations whose structures and internal processes affect policy implementation. Recent judicial developments, notably the Supreme Court’s decision in Loper Bright v. Raimondo (2024), which effectively overruled Chevron’s deference, are discussed concerning their implications for organizational autonomy, accountability, and the balance between expertise and democratic oversight.
1. Introduction
The U.S. administrative state, which comprises various agencies responsible for enforcing federal constitutional statutes, plays a crucial role in contemporary governance. From an organizational design perspective, these agencies are not just bureaucratic implementers but structured entities designed to balance specialized expertise with accountability to democratic institutions. This framework examines the internal design of the administrative state, emphasizing the procedures mandated by the Administrative Procedure Act (APA) and the evolving judicial landscape that now requires courts to exercise greater independent judgment in statutory interpretation. The discussion highlights how these legal changes may encourage agencies to reassess their internal processes and organizational structures.
2. Historical Evolution and Organizational Design Foundations
The administrative state emerged prominently during the Progressive Era and expanded during the New Deal and Great Society periods. Early administrative theorists, including Woodrow Wilson, advocated for separating politics from expertise, an idea that laid the groundwork for modern bureaucratic design. Agencies like the Interstate Commerce Commission and later entities such as the EPA and FDA were conceived as organizations with specialized functions, designed to manage complex technical issues beyond the scope of traditional legislative bodies. This historical evolution underscores a fundamental tension: the need for specialized, expertise-driven governance versus the imperative of maintaining democratic oversight and accountability.
3. Legal Framework and Shifting Judicial Oversight
Congress has long delegated legislative power to administrative agencies under the Necessary and Proper Clause (Article I, Section 8, Clause 18). Landmark cases—including J.W. Hampton, Jr., & Co. v. United States (1928) and Mistretta v. United States (1989)—affirm that such delegation must adhere to an “intelligible principle.” The 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. established judicial deference to agency expertise when interpreting ambiguous statutes. However, the recent Supreme Court decision in Loper Bright v. Raimondo (2024) signifies a significant departure by requiring that courts interpret statutory ambiguities independently rather than deferring to agency expertise. From an organizational design standpoint, this shift challenges agencies to reconfigure their decision-making processes and emphasizes the need for more transparent, clearly defined internal protocols. It likely strengthens internal mechanisms to withstand increased scrutiny, thereby preserving regulatory integrity and public trust without traditional deference.
4. Organizational Analysis of Enforcement Mechanisms
Enforcement within the administrative state is characterized by structured procedures—ranging from inspections and investigations to administrative hearings—codified in the APA and tailored by agency-specific statutes. Agencies like the EPA and SEC implement these procedures via internal divisions and specialized units, reflecting an organizational design emphasizing process rigor and accountability. For example, a typical enforcement process may be structured as follows:
This framework enforces statutory compliance and reflects the organizational logic—where each step is designed to mitigate risk and ensure fairness—central to public sector management.
5. Due Process, Accountability, and Organizational Legitimacy
Due process, enshrined in the Fifth and Fourteenth Amendments, forms a cornerstone of legal and organizational legitimacy. Landmark rulings such as Goldberg v. Kelly (1970) and Mathews v. Eldridge (1976) have set precedents that mandate notice, hearing opportunities, and effective appeal rights. These requirements are internalized within agency processes as part of an organizational commitment to fairness and transparency. In an era of heightened judicial scrutiny following Loper Bright, agencies must design internal processes that comply with legal norms and reinforce public trust in government operations.
6. Challenges and Future Directions in Organizational Design
Loper Bright's decision to overrule Chevron presents significant challenges. Agencies may encounter increased litigation and regulatory uncertainty as courts independently interpret ambiguous statutes. For organizational design specialists, this calls for a reassessment of internal mechanisms—especially those that balance the application of technical expertise with the necessity for transparent decision-making. Proposed reforms include:
• Stronger Congressional Guidance: Using clearer statutory language minimizes ambiguity and better directs agency enforcement.
• Increased Transparency: Implementing process redesigns that facilitate greater public participation and oversight, enhancing democratic accountability.
Such reforms aim to reconcile the inherent tension between expertise-driven efficiency and democratic control, ensuring that agencies can continue to operate effectively in a shifting legal environment.
7. Conclusion
The administrative state’s evolution—shaped by historical developments, legal mandates, and organizational imperatives—remains at the nexus of expertise and democratic accountability. As federal agencies confront a post-Loper Bright landscape, their internal organizational designs must adapt to sustain enforcement efficacy while enhancing transparency and accountability. By integrating principles of organizational design with robust legal and procedural frameworks, policymakers and administrative leaders can better navigate the challenges of modern governance.
References
• Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).• Gunningham, N., Grabosky, P., & Sinclair, D. (1998). Smart regulation: Designing environmental policy. Oxford University Press.
• Howlett, M., & Ramesh, M. (2003). Studying public policy: Policy cycles and policy subsystems. Oxford University Press.
• Klitgaard, R. E. (1991). Controlling corruption. University of California Press.
• Kraft, M. E., & Furlong, S. (2019). Environmental policy and politics. CQ Press.
• Lowi, T. J. (1969). The end of liberalism. American Political Science Review, 63(1), 1–18.
• McNollgast, B. (1991). Positive theory and the administrative process. In P. Hammond (Ed.), Handbook of public economics (Vol. III, pp. 693–770). North-Holland.
• Wilson, W. (1887). The state: Elements of historical and practical politics. D.C. Heath and Company.
Other Sources Consulted
• Proposed Model for Reasoning, Explaining, and Predicting Statements About the Idea of a Deep State
• What Loper Bright Means
II. Analysis
The executive order referenced in the framework is evaluated and interpreted considering the themes and findings of the previous model, which analyzed the organizational design and legal aspects of administrative state dynamics.
1. Overview and Purpose
The executive order, dated February 19, 2025, sets forth a deregulatory initiative to reduce what the Administration deems “overbearing” regulatory actions. Its stated purpose is twofold:
• Focus Enforcement: Direct limited enforcement resources only toward regulations unequivocally authorized by constitutional Federal statutes.
• Deconstruction of the Administrative State: Initiate a systematic review and rescission of regulations that exceed statutory or constitutional bounds.
This dual mandate reflects concerns addressed in the model about the tension between the expertise-driven enforcement mechanisms of agencies, such as the EPA and FDA, and the necessity for increased democratic accountability and adherence to the Constitution.
2. Key Provisions and Their Organizational Implications
a. Regulatory Review and Rescission
• Scope of Review: Agency heads must assess all regulations for constitutional consistency and compliance with Administration policy in coordination with designated DOGE team leads and OMB officials.
• Criteria for Rescission: The order specifically identifies several categories of regulations—including those based on unlawful delegation of power, those not grounded in a “best reading” of the statutory authority, and those imposing disproportionate costs—that must be examined for potential rescission.
Interpretation:
From an organizational design perspective, this mandate forces agencies to reassess internal rulemaking and enforcement protocols. The model highlighted that agencies are structured around specialized processes and internal checks that historically have balanced technical expertise with broader public policy goals. The executive order, however, directs a more rigorous recalibration that may curtail agency autonomy by narrowing the range of acceptable regulatory interpretations. This reflects a shift from a system that values technical expertise to one emphasizing adherence to a more politically defined interpretation of constitutional limits.
b. Enforcement Discretion
• Prioritization of Enforcement: Agencies are instructed to de-prioritize enforcement actions not rooted in the “best reading” of statutory authority or extend beyond constitutional powers.
• Termination of Proceedings: After reviewing ongoing enforcement actions, agency heads may terminate those that conflict with constitutional or policy standards.
Interpretation:
The model underscored that robust enforcement mechanisms, including inspections, hearings, and due process safeguards, are central to the administrative state’s legitimacy. By shifting enforcement discretion, the order may reduce reliance on agency expertise and institutional judgment, potentially leading to more fragmented or inconsistent enforcement practices. The emphasis on a strict statutory reading echoes the recent Supreme Court decision in Loper Bright v. Raimondo (2024), which challenges the long-held deference to agency expertise and calls for increased judicial—and now executive—scrutiny.
c. Promulgation of New Regulations
• Continued Adherence to EO 12866: While the order preserves the existing process for new rulemaking, it instructs that additional criteria—mirroring those applied in the regulatory review—be considered.
• Consultative Approach: New regulations must be developed in close consultation with DOGE Team Leads and the Office of Information and Regulatory Affairs (OIRA), integrating broader constitutional and policy compliance considerations.
Interpretation:
This provision strengthens the move toward more centralized oversight of regulatory development. It requires agencies to align new rulemaking efforts with a revised, efficiency-driven framework, potentially restricting the scope for innovative or technically complex regulations that could otherwise benefit from the administrative state's specialized expertise.
3. Comparison with the Administrative State Framework
The model detailed how the administrative state evolved as an expertise-based entity designed to handle complex regulatory challenges through processes codified in the Administrative Procedure Act (APA). It emphasized that:
• Agency Expertise vs. Democratic Accountability: There is a core tension between relying on specialized bureaucratic expertise and ensuring that agency actions remain subject to democratic oversight.
• Legal and Organizational Balance: Historical precedents like Chevron deference balanced these forces by allowing agencies some latitude in interpreting ambiguous statutes, whereas the more recent Loper Bright decision began shifting power back to the courts.
Interpretation:
The executive order can be considered a further institutional response to this tension. By demanding stricter adherence to constitutional limits and narrowing agencies' discretion in both enforcement and rulemaking, the order intensifies the drive for democratic accountability. However, it also risks undermining the expertise that has traditionally enabled agencies to manage complex regulatory landscapes efficiently. In effect, the order attempts to redesign the organizational parameters of the administrative state, emphasizing constitutional compliance over administrative autonomy.
4. Organizational Challenges and Future Directions
Reconfiguration of Internal Processes:
• Transparency and Accountability: Agencies will likely need to implement new internal review mechanisms to document and justify their regulatory interpretations and enforcement actions.
• Coordination with DOGE Teams: The introduction of DOGE Team Leads represents a structural innovation that promotes “government efficiency.” However, it may impose additional bureaucratic layers that require careful integration with existing organizational hierarchies.
Potential Risks:
• Reduction in Technical Expertise: As agencies are pressured to narrow the scope of regulatory enforcement and rulemaking, essential technical and scientific expertise may be sidelined.
• Increased Litigation: The order’s strict regulatory criteria may lead to an uptick in legal challenges, as stakeholders contest both rescinded and altered regulations—a dynamic that could ultimately undermine regulatory stability.
Finally
The executive order represents a radical rethinking of regulatory governance within the administrative state. In line with the arguments developed in the framework paper, it embodies a deliberate move to reorient agency operations toward a model of strict constitutional compliance and efficiency. While this may enhance democratic accountability by limiting regulatory overreach, it also challenges the established organizational design- the core of what is perceived as the administrative or deep state- that has traditionally utilized specialized expertise to address complex policy issues. Moving forward, agencies must balance these competing imperatives, ensuring that efforts to curtail overreach do not inadvertently undermine the technical capacities necessary for effective governance.
Note:
This interpretation contextualizes the executive order within a broader academic discussion about the optimal design for the structure of the federal government. It emphasizes the potential benefits of increased oversight alongside the risks of reducing agency expertise and flexibility.
Another point is that even when enforcement focuses solely on regulations that are “unequivocally authorized” by constitutional statutes, the process inherently involves agency interpretation one by one. Statutes and constitutional provisions are seldom crystal clear, and determining what is “unequivocal” requires a careful and structured interpretive process involving likely many interactions between the agency, the Office of Management and Budget, DOGE, and the White House.
Agencies can follow a multi-step procedure that ensures rigor and transparency, such as:
1. Comprehensive Statutory Analysis:
- Legal Research: To identify explicit authorizations, begin by reviewing the statutory language, legislative history, and relevant case law in detail.
- Identifying Clear Provisions: Focus on provisions that appear to grant regulatory power without ambiguity.
2. Establishment of an Internal Review Panel:
- Cross-Disciplinary Team: Assemble a panel comprising legal experts, policy analysts, and subject specialists.
- Intelligible Principle Assessment: Evaluate whether the delegation of power meets the “intelligible principle” standard—drawing on benchmarks from cases such as J.W. Hampton, Jr., & Co. v. United States and Mistretta v. United States.
3. Standardized Protocols and Documentation:
- Process Documentation: Develop clear, documented protocols (e.g., decision trees or checklists) that outline the steps for interpreting statutory language and determining constitutional clarity.
- Transparent Rationale: Record all interpretative decisions, including how and why a regulation is unequivocally authorized. This creates an audit trail for internal accountability and external judicial scrutiny.
4. Interagency Consultation and Peer Review:
- Collaboration with Oversight Bodies: Engage with bodies such as the Office of Management and Budget (OMB) and the Office of Legal Counsel to ensure consistent application across agencies.
- External Review Options: To incorporate a range of perspectives and enhance legitimacy, consider mechanisms for external peer review or public comment.
5. Final Decision and Reporting:
- Internal Approval: After the rigorous review process, agency heads formally decide which regulations meet the unequivocal authorization threshold.
- Reporting and Transparency: Decisions and their underlying rationale should be reported to oversight bodies and made available for judicial review, thereby reinforcing the commitment to transparency and accountability.
By following this process, agencies can reduce the inherent ambiguities in statutory language while ensuring that their enforcement priorities are constitutionally grounded and transparently justified. This rigorous interpretative framework aligns with the post-Loper Bright judicial mandate for independent statutory interpretation and supports the recommended organizational reforms to enhance accountability in the administrative state.
Artificial intelligence (AI) is an alternative that could be used for this monumental task or is currently in use. It can play a valuable role in supporting this process.
Ways to Integrate AI:
Automated Statutory Analysis:
AI-driven natural language processing (NLP) tools can sift through vast amounts of legislative texts, case law, and regulatory documents. These tools can identify key statutory language, flag ambiguous provisions, and highlight language that meets or falls short of the "unequivocal" standard. This accelerates the initial phase of statutory analysis, ensuring that human experts have a focused set of issues to review.
Case Law and Precedent Retrieval:
AI systems can rapidly search and analyze relevant judicial decisions (e.g., J.W. Hampton, Jr., & Co. v. United States, Mistretta, and Chevron cases) to extract insights and patterns. This helps agencies benchmark their interpretations against established precedents and ensures that the analysis aligns with the “intelligible principle” requirement.
Decision Support Systems:
AI can support internal review panels by providing decision-support tools that present data-driven insights, risk assessments, and predictive analytics. For instance, by comparing historical enforcement actions with statutory interpretations, AI can help forecast potential legal challenges or compliance risks associated with a particular regulatory decision.
Standardization and Documentation:
AI systems can help standardize the documentation process. By automatically generating audit trails, summaries, and reports of the interpretative process, AI ensures that the rationale behind each decision is transparently recorded. This is crucial for both internal accountability and for meeting external judicial scrutiny in a post-Loper Bright environment.
Collaboration and Continuous Learning:
AI tools can facilitate interagency collaboration by aggregating and comparing interpretative frameworks from different agencies. Additionally, machine learning models can be continuously updated with new judicial decisions and legislative changes, ensuring that the analysis remains current and reflects the evolving legal landscape.
While AI offers these significant advantages, it’s important to note that it should be used as an augmentative tool. Human experts must still make final interpretations and regulatory decisions, accounting for the subtle, contextual judgments that AI cannot fully replicate.
In summary, by integrating AI into the statutory analysis and regulatory review process, agencies can enhance their internal decision-making transparency, consistency, and efficiency. As highlighted in the model's conclusion, this directly supports the need for robust internal protocols, as highlighted in the conclusion of the paper, ensuring that agencies are better equipped to navigate the complexities of modern governance under a post-Loper Bright legal framework.
Final Remarks
A group of friends from the “Organizational DNA Labs” (a private group) compiled references and notes from various theses, authors, and academics for the article and analysis. We also leveraged AI platforms such as Gemini, Storm, Grok, Open-Source ChatGPT, and Grammarly as research assistants to save time and check expressions' structural and logical coherence. Our use of these various platforms aims to verify information from multiple sources and validate it through academic databases and equity firm analysts with whom we have collaborated. The references and notes in this work provide a comprehensive list of the sources utilized. As the editor, I have taken great care to ensure that all sources are properly cited and that the authors are duly acknowledged for their contributions. The content is primarily based on our analysis and synthesis of the sources. The compilation, summaries, and inferences reflect our dedication and motivation to expand and share our knowledge. While we have drawn from quality sources to inform our perspective, the conclusion represents our views and understanding of the topics covered as they continue to evolve through ongoing learning and review of the literature in this business field.
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