The bill requires the head of each federal agency, before issuing any major rule, to estimate the rule’s cost to the public; identify any existing agency rule that could be repealed to offset that cost; and repeal any rule so identified. It also directs agencies to publish, in the Federal Register, a statement saying whether the major rule is "budget neutral"—defined as the rule’s cost equaling the total public costs eliminated by the identified repeals.
This changes two basic features of rulemaking: it folds intra-agency rule repeal into the economic calculus for new major rules, and it broadens the statutory definition of "rule" to include guidance and interpretative documents. The measure raises immediate implementation questions about measurement, legal limits where statutes require rules, and incentives for agencies to reshape or delay regulatory action rather than absorb costs.
At a Glance
What It Does
Before promulgating any major rule, agency heads must calculate the rule’s cost to the public, find existing agency rules whose repeal would offset that cost, repeal those rules, and publish a Federal Register statement identifying whether the major rule is budget neutral.
Who It Affects
All executive agencies that promulgate rules designated as "major" by OIRA or the agency (generally those with $100 million+ economic effects), plus regulated entities subject to affected rules, OIRA/OMB staff who track major rules, and compliance teams that prepare cost estimates and manage repeals.
Why It Matters
The bill forces agencies to internalize trade-offs by pairing new major rules with offsetting repeals within the same agency, potentially reducing regulatory accumulation but also creating operational, legal, and measurement challenges—and incentivizing strategic rulemaking.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
At its core the bill requires an agency to treat a new major rule like a budget item: estimate the burden it will impose on the public, then find and repeal existing agency rules whose elimination will cancel out that burden. The concept of "cost" is broad: agencies must account not only for direct financial impacts but also for costs incurred by the public to understand and implement the rule.
The agency must then publish a short statement with the rule in the Federal Register saying whether the agency achieved "budget neutrality."
The statute borrows the familiar "major rule" standard used by OIRA—$100 million or other significant economic effects—but it also makes the category explicitly trigger these offset requirements. Importantly, the definition of "rule" in this bill reaches guidance and interpretative rules, which agencies commonly use to explain obligations without going through full notice-and-comment.
At the same time the bill leaves several categories out (e.g., rates and particular-applicability rules, routine personnel or organizational rules), so agencies will need to map which of their instruments are exposed to repeal obligations.Practically, an agency faced with this statute will need new processes: standardized cost-estimation templates, inventories of candidate rules for repeal, legal reviews of whether a rule can be lawfully repealed given statutory mandates, and coordination with OIRA/OMB. The statutory text compels repeal of "any rule identified," which creates a mandatory, not discretionary, obligation to remove offsets the agency itself finds.
That requirement could force agencies into a choice between carrying out congressionally mandated rules and meeting the bill’s budget-neutrality mandate.The bill does not prescribe a methodology for calculating costs or for valuing the public costs eliminated by repeal. Nor does it create an independent adjudicative or enforcement mechanism beyond the standard avenues for challenging rulemaking under the Administrative Procedure Act.
Those omissions leave agencies discretion but also open prosecution grounds for litigation over methodology, scope, and the legality of compelled repeals.
The Five Things You Need to Know
The bill requires an agency to estimate a major rule’s cost to the public before promulgation and to identify agency rules that could be repealed to offset that cost.
Agencies must repeal any rule they identify as an offset; the obligation to repeal is mandatory under the text rather than permissive.
"Budget neutral" is defined as the cost of the major rule equaling the total public costs eliminated by the repealed rules.
The bill defines "rule" to include interpretative rules, general policy statements, and agency guidance, bringing many non‑binding instruments into the offset calculus.
The "major rule" trigger mirrors the OIRA standard (including a $100 million annual effect threshold) and also includes rules with major effects on competition, employment, prices, or U.S. competitiveness.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Provides the act's name: the Agency Accountability and Cost Transparency Act of 2025. This is formal but signals the bill’s stated policy aim—linking accountability to cost disclosure and offsetting.
Pre‑promulgation duties: cost estimate and offset identification
Directs agency heads to estimate the cost to the public of any major rule and to identify existing agency rules that "may be repealed" to offset that cost prior to promulgation. Practically, this imposes a procedural step that must occur before an agency issues a major rule, requiring cost modeling and an internal inventory of candidate repeals.
Mandatory repeal of identified offsets
Requires the agency to repeal any rule it identified as an offset. That language converts the identification exercise into an affirmative duty to act—an unusual statutory command that may create direct conflicts with statutory obligations or practical constraints where existing rules are required by statute or linked to legal commitments.
Federal Register statement of budget neutrality
Requires agencies to publish, with each major rule in the Federal Register, a statement that identifies whether the rule is "budget neutral." This creates a paper trail but does not specify content, methodology, or review standards for the statement beyond the statutory definition of budget neutrality.
Definitions: 'agency,' 'budget neutral,' 'cost,' 'major rule,' and 'rule'
Sets key definitions: 'budget neutral' ties the rule’s cost to the total public costs eliminated by repeals; 'cost' explicitly includes costs to understand or implement a rule; 'major rule' uses familiar OIRA/agency economic thresholds (including $100 million) and broader economic harms; and 'rule' expressly captures guidance and interpretative documents while exempting particular‑applicability, personnel, and non‑substantive procedural rules. Those definitions determine which instruments and impacts the repeal obligation covers and will govern agency scope decisions.
This bill is one of many.
Codify tracks hundreds of bills on Government across all five countries.
Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Regulated entities that face high compliance costs: By forcing agencies to seek offsets, the bill could lead to repeal of older burdensome rules and reduce aggregate regulatory burden for some firms and industries.
- Compliance and regulatory-affairs teams: The statute standardizes a cost‑estimation and repeal process, giving compliance officers a clearer record to rely on when planning and budgeting for regulatory change.
- Policymakers and budget analysts: The required Federal Register statements create a searchable public record tying new major rules to specific offsets, which legislators and analysts can use to track regulatory accumulation.
Who Bears the Cost
- Federal agencies and their staffs: Agencies must develop cost‑estimation methodologies, maintain repeal candidate inventories, execute repeals, and defend decisions—an administrative and legal workload that will require staff time and possibly new budget resources.
- Public-interest groups and beneficiaries of existing rules: Repeal obligations could remove safeguards or benefits established by prior rules, shifting costs onto populations those rules protect (e.g., consumers, workers, environmental beneficiaries).
- OIRA/OMB and legal counsel: OIRA will face increased coordination responsibilities, and agency attorneys will field more complex statutory and APA challenges when repeal and promulgation interact.
- Regulated markets and businesses: While some firms may gain from repeals, others face uncertainty as protections or prescriptive frameworks are pulled; that instability can raise compliance costs and legal risk.
Key Issues
The Core Tension
The bill forces a trade-off between two legitimate objectives: making the cost of major regulatory action transparent and preventing unchecked regulatory accumulation, versus preserving agencies’ ability to carry out statutory mandates and protect public interests; achieving strict budget neutrality may either frustrate congressionally required protections or encourage agencies to game cost measures or delay needed rules.
The bill creates substantial implementation questions that the text does not resolve. It gives no methodology for measuring the "cost to the public" or for valuing the public costs eliminated by repeals.
Agencies will need to decide how to value non‑monetary effects (e.g., public health benefits) relative to compliance costs, and those choices will be litigated. The mandatory repeal language also collides with statutory realities: some rules implement statutory obligations and cannot be repealed without congressional action, while others are bound up in cross‑agency or interlocking regulatory schemes.
The statute limits repeals to rules "of the agency," so offsets cannot be found in other agencies, which may make it difficult to find adequate, lawful offsets in specialized agencies.
The inclusion of guidance and interpretative rules in the definition of "rule" expands the universe of instruments subject to repeal, which could strip away nonbinding clarifications agencies used to operationalize statutes. That increases risk of regulatory instability and may shift more policymaking into formal rulemaking or statute.
Finally, the bill lacks an explicit enforcement mechanism or timing rules for repeals and does not reconcile its requirements with the Administrative Procedure Act’s notice‑and‑comment or with statutory commands that prescribe particular regulatory outcomes. Those gaps create judicially reviewable flashpoints and give regulated parties incentives to litigate process and substance.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.