Statecraft
Statecraft
How to Budget for the SEC
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How to Budget for the SEC

"It was a complete and total process foul"

This is the second in a two-part series with my dad, Diego Ruiz. In the first episode, we discussed his time helping run a political campaign in Nicaragua, and later his time staffing California Representative Chris Cox. Today, we jump ahead to his time as executive director of the Securities and Exchange Commission (SEC) during the 2008 financial crisis.

In this episode, we discuss:

  • Why the SEC can’t fund itself

  • What not to say to congressional appropriators

  • How the SEC missed the Bernie Madoff scandal

  • Why it’s so hard to staff up an agency

  • What agency rulemaking will look like in the future

Thanks to my colleague Beez for her judicious transcript edits.


In 2006 you ended up in the executive branch, at the Securities Exchange Commission (SEC).

In 2006, Rep. Chris Cox (R-CA) got the nod from President Bush to chair the Securities and Exchange Commission. I had been working for Univision for almost 10 years, the last few in California, running different media properties.  We had a hankering to come back East. You were little, but I'm sure you would have voted yes as well.

I don't know that I had hankerings one way or another. I think I was nine.

You had a great tree house in California, which I built for you and your brother. Nonetheless, we came back to D.C.

I worked briefly at the Federal Communications Commission (FCC), then Chris asked me to come over to the SEC as Executive Director, which is essentially the Chief Operating Officer.

As Executive Director of the SEC, I ran all of the back-of-the-house operations: human resources, finances, and all the budget issues. I managed the relationship with congressional appropriators and the Office of Management and Budget (OMB) by putting together our funding request, getting it approved every year, and then executing it within the four walls of the SEC.

What goes into the SEC's finance department? What's happening in the back office?

The SEC is a curious case — a curious kind of independent agency. Its chairman is appointed for a set term and can't be fired. It generates quite a bit of revenue in the form of fees from public companies that file, broker-dealers, and investor advisors that have to register with the SEC. It also generates revenue from penalties and disgorgements that are ordered as part of an enforcement action against violators of securities laws.

Penalties and disgorgements?

A penalty is what it sounds like: you break the law, you're penalized, you pay a big fine. By the way, I should make clear that the Securities and Exchange Commission has civil authority, not criminal — so the SEC can't send people to jail, but it can disbar them. In an extreme case, it can forbid people from ever holding a position of responsibility in the securities industry. But most of the time, it just imposes penalties.

Disgorgements are basically the coughing up of ill-gotten gains: If you engaged in insider trading and made $10 million, the SEC can and will order you to disgorge that ill-gotten profit. There's authority, as in the case of insider training, to make you disgorge up to three times what you made.

Disgorgement is distinct from penalties, in that penalties punish you for breaking the law in a way that didn't necessarily lead to material gain — for example, you may have lied. You’d get a penalty for that, whereas disgorgement happens when you’ve stolen money. You have to cough it up.

The SEC generates a lot of revenues, but those revenues don’t fund the agency’s operations — it’s not a self-funded agency. It is reliant on an appropriation from Congress. It can’t fund itself, unlike the Federal Reserve System, which funds itself from the proceeds of its open market operations. When deposit institutions have their funds deposited in a Fed account, the Fed makes money off of that, off of bond sales, etc. Not so the SEC. The SEC turns that money over to Uncle Sam and then simultaneously has to go, hat in hand, to Congress for its annual appropriation.

Why isn’t the SEC a self-funded agency?

There's a lot of reasons for that. This is a long running debate, which nowadays typically runs on a left-right axis. Those in favor of self-funding tend to be Democrats advocating for agencies whose missions they approve. They want those agencies to have more power to do their mission, and self-funding is power that isn’t subject to cuts from Congress.

A recent example of that would be the Consumer Financial Protection Bureau (CFPB), Elizabeth Warren's brainchild, which was established with a self-funding model from the very beginning. It was very controversial at the time and still is, but it enables the CFPB to have some degree of independence and autonomy from Congress. Conservatives or Republicans who have a problem with self-funding for agencies want to have the funding lever as part of their oversight. There've also been Democrat appropriators who oppose self-funding, because appropriators appropriate for a living, and they don't want to give up that power. They have a good reason for thinking that way.

Every year my job was, among others, to work with the administration. By the way, I actually straddled the Bush and Obama administrations. I worked for 2.5 years under the Obama-appointed Chair, Mary Schapiro. I worked with the OMB to put together budget requests and then justify them to Congressional appropriations committees.

Walk me through that process — you start a dialogue between OMB and the SEC. How do you determine what the requested budget is?

Different OMBs might do it differently, but the process that I engaged in was basically a collaborative process that takes the last year as a baseline. You just kind of negotiate with OMB and present to them what you need.

Depending on who's in the White House, the philosophy at OMB might be different. The Bush administration paid a lot of attention to being as efficient as possible, not asking for big increases, and keeping any increases down, especially if the administration had other priorities.

The interesting thing about that process is that the agency's budget request is not your agency's budget request; it is the President's budget request. It is a part of the whole by the time it gets to Congress.

And this very curious dance often develops between the appropriators and Chairmen. The appropriators will receive the Chairman of the agency in their appropriation hearing, and ask, “Mister or Madam Chairman, did you request everything you need? Is there anything else you need from us?” It’s an invitation for the agency head to say, “Yes, actually, I need more. And actually, my President or OMB didn’t give me what I wanted, but now that I have your ear, Congressman, I’m going to ask you for more.” That's what they're fishing for.

Now, an agency head that actually responds in that way is inviting summary dismissal because the agency head is meant to salute the OMB budget request. That’s what the President is asking for. You don't go around your President.

And you work for the President. The agencies don't work for Congress.

There is this highly instructive story that makes the rounds in budget circles in Washington about a former head of the Army Corps of Engineers who was asked that question in his Senate appropriations hearing on the Hill. This head of the Army Corps of Engineers took the opportunity to say, “No, I think we're being underfunded in the President's request. I really don't think we're equipped to carry out our mission and we need more.”

He was on the street looking for work practically the next day. It was a complete and total process foul, and he paid the ultimate price for it, which was to get canned.

An agency’s main opportunity for any plus-ups is with the OMB — before it ever goes to Congress.

Yes, that is the main chance. But then of course Congress has its say.

This little dance that I described has different variations to it — here's another one that I encountered: I believe it was the first, maybe second year that Obama was in office. Senator Schumer decided that he wanted to give the Securities and Exchange Commission, I believe it was $20 million extra for enforcement.

This was in 2009, immediately after financial crisis enforcement entered everyone's minds?

I can't remember if it was 2009 or 2010, but financial crisis enforcement was absolutely on everyone's minds. There was a feeling that those greedy bastards on Wall Street got away with something, more people need to be in jail, more people needed to be brought to justice.

Enforcement always grabs a big headline. It's a good headline for the SEC, too — not just for the member of Congress who's providing the funding. In any event, Schumer got an earmarked $20 million for enforcement included in the appropriations for the SEC.

Now, that's great if you're sitting on the agency side and all of a sudden you have $20 million more than you would have otherwise, but it creates a whole bunch of additional questions and challenges for you. One of them is, “$20 million extra from what baseline?” Because externally, the SEC budget doesn’t distinguish between different divisions. It requires an internal calculation. “Is it a plus up from what we asked for? Is it a plus up from what we got last year? Is it a plus up from what we spent last year?”

Because Congress isn't deciding here's how much you're spending on HR, say, or giving SEC exact numbers by department.

Right. The other thing is, in an agency like the SEC, where the biggest expenditure is people, how do you spend $20 million extra for enforcement this year without knowing if it's going to be part of your appropriation next year too?

Because you're hiring people, you're hiring more lawyers, more investigators, more forensic accountants to prosecute these cases in year one. What do you do in year two if the money dries up? If Senator Schumer forgets about you in year two?

There's no way of saying, “We're gonna hire these people with that money and we're gonna hang on to 70% of it to pay their salaries later this decade?”

You can say it, but next year you're gonna have presumably a big bump-up in your headcount that you'll have to show. The full effects of that headcount won't be visible yet, because you hire people over the course of the year. That $20 million gets spent over time.

Let's assume you're spending it all on people: You can't hire $20 million worth of lawyers on day one.

And they can't all get results by day 30.

Right. So you're not paying an annualized salary till the end.

If you want to actually spend $20 million in year one, you actually have to hire probably $40 million worth — I'm making up these numbers. Because you're hiring over the course of the year and you won't actually spend all that money on salaries in one year, because it takes time to get people on board, and so on. At the end of year one, when you're going back for next year's appropriation, you’re now presenting double the head count that you got funding for in year one.

That was the only way to spend the money. And in that year, that first year of Obama, Democratic Congress, post-financial crisis, and a big head of steam behind financial regulation in the form of Dodd-Frank, we were getting so much pressure from Congress to spend, spend, spend.

“We want to see you out there getting wins, putting bad guys behind bars.”

I would have appropriation staff, senior appropriation staff, calling me to check on our hiring numbers and our hiring pipeline over that year.

Wow.

They were getting engaged because they were giving us this money. We had to spend it. They didn’t want to see us slow-walking it or taking our time. They wanted us to be able to come back the next year and justify the levels they gave us. The last thing they wanted was for us to leave all this money unspent, which is yet another of the perverse incentives of Washington.

So you can’t say to Congress directly, “No, the president's budget is wrong.” Is there any way an agency head can *cough, cough* and implicitly ask for more money without breaking ranks?

I'm sure that you could hint and you could get a message across, but you probably don't want to do that as an agency head. You probably want to leave that at the staff level.

The danger is that, at the end of the day, appropriators are political animals, and they want credit. They're not necessarily in the business of giving you stuff without you asking for it, because in the asking comes a certain transfer of power. The asking is, in part, the coin of the realm — for the same reason that, if you're a rank-and-file member of Congress and you want a project for your district, you're going to have to ask for it. It's going to have to be on the record, and then you're going to have to vote for that appropriations bill. Even if you hate 99 percent of it, if your project is in there, that's how it works. You have to vote for it. If you don't vote for it, you'll never get another dime again.

This is not a direct comparison to an agency, but there's a lot of the same political dynamics at work. That *wink, wink, nudge, nudge* from a staffer — even a senior staffer like me — to the senior clerk of the appropriations committee: maybe it works, but most likely it doesn't. That’s not how that business gets transacted.

I'm sure there's downsides as an appropriator to giving any given agency more than they asked for. Are there political risks to splurging?

I don't think so. I think if you're an appropriator, you are by definition inured to the political risks of overspending, because your job is to spend. A billion here, a billion there. Pretty soon we're talking real money, right? I don't know if there's any real risk.

In fact, there's plenty of examples of agencies or cabinet departments getting more than the President asked for, and the President saying, “No, no, no; I don't want that much.” And Congress says, “You need that much because we want you to do A, B, C, and D.” Historically, it’s been Democratic appropriators who do that. In this day and age, I don't see many deficit hawks in either party.

I remember having big arguments with the Director of Enforcement — very bright guy, had a lot of respect for him. Logically, from his perspective, he wanted all that money and he wanted to hire, hire, hire.

He had a long list of things that he could do with those hires.

And he kind of understood that in order to spend $20 million, he would need to hire many more than $20 million worth of annual salaries. I was the one who had to tell him basically, “I'm sorry, I can't release all of this to you because that'll put us in a very bad position next year, and we might have to furlough or fire people or make other cuts in other parts of the building, which are just as important from a mission perspective.”

Were you able to put some of that money into other places in the agency?

Yes, we did. So it wasn't 100% people; we put it towards some forensic tools. I think that was the year when we embarked on a multi-year effort to build out a tips and complaints system. If I'm not mistaken, it was the SEC’s first foray into taking in the mass of tips that we received in one way or another and putting them through some sort of an AI-like triage process to figure out what to prioritize.

This was immediately in the aftermath of the Bernie Madoff scandal.

When did that drop?

The Madoff scandal had been brewing for something like 15 years over multiple administrations and SEC Chairmen, but it blew up in the interregnum between Obama's election and his inauguration in December 2008.

Those were dark days at the SEC because we were in the middle of the financial crisis which had been raging all year — but especially in the fall. At the height of the presidential election, John McCain briefly suspended his campaign. He tried to call off the second debate to urge everyone to come back to Washington and “fix it.”

How had the first debate gone?

I think Obama had gotten the better of him, but I don't think it was that bad. I think McCain had some big headwinds, not the least of which was the financial crisis itself. He was just looking to do something to change the narrative and throw a curveball into the mix.

And he didn't have any better idea than to say, “Let's suspend the campaign and fix it.” I just remember Obama licking his chops and saying, paraphrasing, “Sure, John, let's go. Let's suspend the campaign, and I'll go back and put this squarely on the desk of the incumbent President.” It didn't go well for McCain.

But anyway, I believe this is a carol for another Christmas. The financial crisis had many fathers. The SEC, I think, was by far the least of them. But in any event, we were still in the eye of the storm because we regulated a lot of the implicated entities.

And then the Bernie Madoff scandal broke, and that one was squarely on the lap of the SEC. There’s no way to avoid that. No two ways about it.

Over the course of those 15 years, we’d had inspectors and examiners in his shop and looking at the books. We'd received tips that we had inadequately followed up on. He had, oftentimes by a hair's breadth, gotten away with perpetuating his scam. And the SEC didn't catch it. It was, in many ways, asleep at the switch.

I only remember the outline of the scandal. I understand its Ponzi scheme nature, but why wasn't the SEC able to catch Madoff sometime in the intervening decade and a half?

That's a great question. And there's been a lot written on this, but, there were tips from people who understood the investment advisor business. They could tell that, from a mathematical perspective, there was no way he could be generating those types of returns.

His returns were incredibly consistent, too. It wasn't just that they were good year after year. It was that they were consistent. Usually, you have cycles, peaks and valleys. You have sectors that overperform or underperform, even if you're a dominant investor.

I think, in the SEC's defense, there's just a lot of investment advisors out there and broker-dealers to examine. The structure of the SEC has changed somewhat since I left. What was then the Office of Compliance Inspections and Examinations has since been upgraded to a division. I believe it's gotten more resources.

But still there are many, many, many more investment advisors and advisory firms than you have the manpower to truly examine year after year. It's a fractional reserve system, just like a bank. If everyone wants their money out of the bank at the same time, the entire banking system collapses.

“Your money isn't in this building; it's in Harry's house!”

Exactly. It's the old Bedford Falls building and loan model. Your money's in Joe's house.

And, it's similar for examinations: You do enough exams that over time you hit maybe every investor advisor, but you're not hitting them every year. You're not digging deep every year and you're looking for certain things that may raise red flags.

The bottom line is that, in Madoff’s case, we missed those red flags. In retrospect, but probably even at the time, some of those red flags should have been very obvious. And they weren't. We didn't catch it.


So after five years at the SEC, you ended up at PepsiCo in a government affairs role, right? There's one story I want you to tell about a factory closure. I think you know which one I'm talking about.

Yes. I arrived at PepsiCo with the remit of handling all corporate regulatory issues in the government affairs and public policy shop. And in week two of my being there, my boss calls me into his office and asks, “Hey, would you like to also run the Latin America government affairs shop? Our government affairs person for LATAM just left.”

And I said, “Yes, please!” I was very excited to get that additional responsibility. So I double-hatted for all of my time at PepsiCo, which ended up being almost 10 years.

In the context of my Latin America work, we determined that we had to close our biggest food plant in Argentina, a plant in one of the larger suburbs of Buenos Aires.

This plant made chips — salty snacks of the Frito-Lay line, which is part of PepsiCo. This plant was old. It was increasingly encroached upon by residential neighborhoods that didn't appreciate the noise and the smells. As delicious as the tasty smells are, it's different when they're in your backyard.

But most importantly by far was the union that its workers had joined. In Argentina, the unions hold outsized power in the balance between employer and employee. This particular union that represented the workers at that plant was Trotskyist, violent, and recalcitrant. It made operating this plant a money-losing game. They sank the operations and the profitability of this plant just by the very nature of the positions they held. They believed, as an article of faith, that the company had to turn over the means of production to the workers because that's what aligned with their Trotskyist ideology.

You don't mean “Trotskyist” as a general slur?

I don't mean Trotsky as an epithet. I mean that they had Trotsky reading groups and they were affiliated with a Trotskyist splinter party. They literally believed that the means of production had to be in the hands of the worker and that the company that signed their paycheck every other week was their oppressor.

We had tried to work with them over the years, and there were more reasonable factions to the union, but this was the faction that was in power. At the end of a long process, we determined that we had to close that plant down.

We had another plant about five hours away, which was more modern and pretty state-of-the-art. It happened to be right next to the potato-growing region of Buenos Aires province, so from a supply chain perspective, it was perfect. And it was outside of the control of this particular union bargaining unit. So we mapped out this process for months. We carefully thought it through from HR, legal, and production perspectives.

For a while, we had contingency plans to import product from Brazil to cover any sort of shortages that we might encounter. I was in charge of the government affairs and policy communications piece of this, which involved working very closely with the national, provincial, and local town government — which thankfully were all aligned, at the time.

The same party was in control of each of the three layers of government. That party was a pro-market, pro-Western, business-like group of folks, but we had to do something that was pretty risky, which was to bring them into our confidence before we were ready to hit the button and shut the plant down.

We laid out all our plans for offering a buyout package to every one of the employees, which was much more generous than required by law. We shared our contingency plans for what we would do and what we would ask the government to do in the case of some sort of violent action on the part of the union, which we totally foresaw. We knew it would happen. More concretely, we knew that they would take over the plant, barricade themselves inside, and hold out and try to generate sympathy. They’d do this to gain a better negotiating position, generate publicity for their cause, et cetera.

We knew because that's the way they operated in other contexts, in other plants. There were other Western companies, non-Argentine companies, that had manufacturing facilities in that general area, that had experience with these unions. That’s the type of thing that they did.

This was in 2017, when Argentina had come from a long period of government by the Peronist party. They gave free rein to these types of actions from unions, workers groups, or picketers just blocking roads, doing takeovers, squatting on private property and company property. So we had all sorts of contingency plans drawn up for what to do in case each of these scenarios played out.

The worst case scenario is the one that actually played out. The buyouts went off without a hitch: We closed down the plant. We offered everyone buyouts. I think 85%, 90% of people took them, but this core group held out, refused to take the buyout, and took the company to court. Then, in the middle of the night, they broke into the plant and rousted the private security guards that we had hired to be on site.

We had given instructions to the security guards that if someone broke in and tried to take the plant, they’d just leave with no violence. That’s exactly what happened: the core union members barricaded themselves inside the factory. They held out for several weeks. We went through all the legal processes necessary to get them out, which culminated in an eviction order from a judge.

We then worked with the Buenos Aires police to effectuate the eviction, which took place one morning as I landed from the US. I took the overnight plane, landed at Ezeiza International Airport, and while I was in the car heading into town from the airport, every TV station suddenly had their satellite and microwave trucks outside the plant. They were covering it live, breaking into their regularly-scheduled programming to cover the police eviction of the Trotskyist squatters.

It was a scene. It was page one news and a live news update breaking into programming everywhere. There was basically a battalion of, I don't know, a few hundred police. It was a big operation because the plant was two city blocks. There was a big wall around it and they had to contain it, but it was in the middle of a residential neighborhood.

They had to cut traffic. They had to go in. There was a crowd of people outside that were the first line of defense for the people barricading inside. Their sympathizers were outside, and they had set up all these barricades. They set tires on fire. They started hitting the cops and throwing things at them.

They were dispersed, and eventually, the police started battering down the gate of the factory. Meanwhile, the squatters were up on the rooftop of the factory, and they started hurling park benches, cinder blocks, pieces of bricks, and pieces of roof tile down onto the police below.

The other thing that they did was pour the cooking oil for making the chips all over everything, including on the stairs going up to the roof so that the police would slip and fall. It was just a mess. Ridiculous. I went in later that day, and it was just — the damage was pretty extensive.

There were five people wounded over the course of the day, and they were all police officers. This police woman caught a park bench on the side of her leg, and it broke. Eventually, of course, they got them out.

In spite of the obvious black eye of the publicity, the whole operation worked out perfectly from our perspective — and specifically from the government affairs perspective, which is what I was handling.

From a policy communications perspective, we actually had multiple government officials, up to and including President Macri, going on the air and defending PepsiCo by name. We had the governor of the province, the minister of security, and the local mayor going on the radio and TV and saying what these criminals did in taking over the plant and hurting the police was unconscionable. They said that all they did was cause businesses to fail, that PepsiCo had no choice, and that PepsiCo did everything exactly as they should have.

You can't buy that kind of coverage. That kind of support from government officials is absolutely priceless, and that came out of our groundwork.

We talked earlier about people responding to incentives, and politicians, especially. And in this case I think the secret to our success was in ensuring that the incentives were aligned and in place for PepsiCo to get that kind of support from local elected officials.

First, they had an incentive to keep PepsiCo in the country. We weren't taking away employment; we were shifting it. We just had to shut down that plant, but we were creating jobs elsewhere, for products that were iconic. People love them. They didn’t want to see us leave. They had every incentive to work with us to make our staying in Argentina feasible.

They also had an interest in the world and the country seeing the extreme tactics that these people used, and seeing these people for what they were, which was saboteurs and wreckers.

We did take a big risk, which was that, once you broaden the circle and you tell more people about it, especially government folks, you run the risk of it leaking. We managed it well and in the end it worked as well as it could have.


Before we close, I want to go back to the SEC. As you've described this to me, agencies like the SEC have historically had a lot of freedom of action within their congressional mandate.

How do you think a bunch of the recent Supreme Court decisions on the relationship between the executive branch and the legislative branch will change how agencies like the SEC operate, or how congress operates?

I think we're going to see some big changes in the way independent agencies operate. These changes might not be as visible for a while, because we have Republicans returning who have traditionally defended the notion that agencies mustn't act outside of the scope of their organic authorizing legislation.

I think it would be different if we had an incoming Democratic administration that would have to now grapple with the reach of the Chevron deference decision.

Loper Bright Enterprises v. Raimondo overturned the concept of Chevron deference, which is deference from courts to the opinions of the agency, absent clear congressional intent. And the major questions doctrine, which comes out of West Virginia v. Environmental Protection Agency, limits what an agency can do absent clear congressional authorization.

I think those are game-changing decisions. The Trump administration is likely to come in and overturn a whole lot of what the Biden agencies did, and new actions can take form in different ways. It's not easy to undo a regulation that's already been adopted, but they're clearly going to do that. You can see it coming at the SEC, which in the Joe Biden/Gary Gensler years has been especially active.

I think the Federal Trade Commission (FTC), which looks at matters of competition and antitrust, is another area where you're going to have a lot of undoing. The Environmental Protection Agency and a lot of their environmental rules, I think, are ripe for undoing.

It's not easy, as I said. There's a process for conducting rulemakings at agencies that is governed by the Administrative Procedure Act, which is an act of Congress from many years ago that laid out the process by which agencies can create new rules. In short, the process requires a whole lot of public involvement, public notice, the opportunity for the public to comment, and a very specific process for the agency taking into account and actually addressing each and every one of those comments. That's not a short process. It's not quick work to undo a rule that has been adopted under that process, because you have to essentially reverse-engineer that same lengthy process.

The question for me is, “What do agencies do going forward with new rulemakings now that you have some pretty clear and groundbreaking decisions from the Supreme Court saying ‘You, Mr. Agency Head, cannot go off in any direction you want on matters where Congress has not given you the authority to do so, or has not spoken clearly on it?’” I’m curious because, up till now, a lot of agencies under Democratic administrations have adopted the rule they want and invited the lawsuit.

More often than not, especially in these last few years, those agencies lost the lawsuits for these reasons. And now you have Supreme Court jurisprudence, not just lower court jurisprudence, to stop them before the case gets too far along. So, I don't know if that changes the calculus for any future Democratic administration.

What Gary Gensler did at the Securities and Exchange Commission on rulemakings on climate disclosure, on the regulation of investor advisors, and other things where there was not clear authority — he interpreted authority where I think most courts would say he didn't have it.

The question is, “Will agencies in the future do that in the hope that they will succeed at court?” I just think it's much less likely that they’d succeed at court now. So what's the endgame for them if they don't see a possible positive outcome at the end of the road?

Do you think we'll see less agency rulemaking, or just more restrained agency rulemaking?

I think that it would be more restrained, under a Democratic administration, or at least more carefully thought-out, so that they could justify it under existing congressional authority, as opposed to taking a flyer on a matter that conceptually emanates from the penumbras of what Congress actually authorized.

I’m also wondering how agencies in the Trump II administration will work — specifically, how will they interact with whatever the DOGE might do?

I think in the first year, there's some amount of rule-reversal that they can engage in using the Congressional Review Act, which would allow for the most recent rules adopted by the outgoing administration, within a certain time period, to be undone by a congressional review process.

But then, will they use the Administrative Procedures Act to undo some of the Biden-era rules by rulemaking? Does DOGE live up to this vague promise to somehow change the way in which rules are adopted? Will it make it easier to clear away old, outdated, inefficient rules? That's a big question mark. I don't know the answer to that, but it conceptually holds some promise. If there's an easier way to get rid of some of those rules, then we're in for a whole different kettle of fish.

If not, then I think it's going to be a very similar dynamic to what we've seen before, whenever a Republican administration takes over for a Democratic one. And we have the additional factors of Chevron deference being overturned and the major question doctrine to back up a more conservative understanding of the proper role of independent agencies.

I think we'll close there. Readers, that was my dad, Diego Ruiz, joining me on Statecraft. We should do this again sometime.

We absolutely should. It's been a joy. Thank you for having me.

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