Source: U.S. Chamber of Commerce

Regulations, when properly constructed, help implement laws passed by Congress. Some level of government regulation is necessary to ensure public safety, protect the environment, and promote competitive and free markets.

However, overreaching regulations are putting a severe strain on the workforce, time, productivity, and budgets of American businesses of all sizes, stifling economic growth and wages across the country.

In July 2024, the U.S. Chamber released the Growth and Opportunity Imperative with a goal of the U.S. reaching at least 3% economic growth, which is essential to expanding opportunities for American workers, raising wages, and improving standards of living. Key to achieving sustained 3%+ economic growth is growth-oriented public policy, including regulatory policy.

As a part of the U.S. Chamber’s 2025 State of American Business program, lawmakers and regulatory experts discuss the impact of regulatory overreach in the U.S., the significant costs imposed by regulations, and opportunities to course correct this year.

Impact of Overreaching Regulations on Businesses and Workers

Across the country, businesses and workers are spending too much time and money navigating regulatory requirements.

According to the latest U.S. Chamber and MetLife Small Business Index, 51% of small business owners say regulatory compliance requirements make it harder for them to grow their business.

During the 2025 State of American Business address, U.S. Chamber President and CEO Suzanne P. Clark stressed the urgent need to roll back the worst of the regulatory onslaught of the past four years to create opportunities for workers and businesses to thrive.

“As it stands, this unprecedented bureaucratic micromanagement of business will cost the economy $1.8 trillion and trickle down into Americans’ lives and pocketbooks through higher prices, lower wages, and fewer jobs,” said Clark. “And we will continue to work with the administration—as we did in President Trump’s first term—on this shared priority.

While some federal regulations are meant to spur positive changes or outcomes, they often have unforeseen consequences. Doug Holtz-Eakin, a former director of the Congressional Budget Office and current president of American Action Forum, says costs are costs when it comes to the impact of regulations on businesses. “If you’re a businessperson, you have to cover the costs, whether it’s a tax you have to pay or another way to get to the same thing – a regulation that they force you to comply with. It hurts your opportunity to hire people. It hurts your chances to expand. It hurts all the things we think of as productive in the economy, and that’s a headwind to growth.”

Regulatory burdens aren’t just shouldered by businesses. They are also passed on to consumers. “[Regulations] amount to a massive stealth tax, paid by the American people, through lower pay and higher prices for the goods and services that we buy every day,” says Rep. August Pfluger (TX-11), Chairman of the U.S. House of Representatives' Republican Study Committee.

“I worry about this continued expansion of the regulatory state as a real headwind to American prosperity,” says Holtz-Eakin.

Susan Dudley, the former director of the regulatory branch of the Office of Management Budget, points to the 1970s, 80s, and 90s as proof that an increase in competition and reduction in regulation led to “huge improvements in economic growth and social welfare because [before], we had innovations that were constrained by regulated activity.”

What’s more: Regulations not only increase costs for businesses, but also the amount of time business owners must spend filling out government paperwork to comply with federal regulations. And that creates strains on the productivity of business owners and their ability to run and grow their business.

“The Biden Administration’s regulations have imposed a paperwork burden that is equivalent to 360 million hours,” says Rep. Brandon Gill (TX-26). “If one person had to fill out all of that paperwork, it would take them an estimated 41,000 years.”

The Role of the Congressional Review Act

Dudley says the new Congress has a 60-day window to review proposed regulations (also known as rules) issued at the end of the last administration that are not currently final and pass a joint resolution disapproving them. President Donald Trump can sign these resolutions into law, voiding the proposed regulations and creating a higher burden for agencies to issue the same or similar rule in the future without Congressional approval.

Regulations issued after mid-August can be overturned using the Congressional Review Act (CRA). The U.S. Chamber has outlined three regulations Congress should take immediate action on to protect consumers and businesses.

The long game: For regulations issued before August 2024 and which have already taken effect, the process becomes much more cumbersome. Cutting these regulations cannot simply be done with a joint resolution of disapproval from Congress and a signature from the President. “To revise or rescind a regulation, agencies have to go through all the same steps that they went through to issue it in the first place,” says Dudley. “It’s a lengthy process.”

“Thousands of new regulations that impact not only business but impact jobs and our ability as a capitalist nation to do business and compete around the world,” said Rep. Pete Sessions (TX-17), Co-Chair of the DOGE Caucus. “We will work with the U.S. Chamber to make sure we not only address these needs but ensure that we have a tax code that ensures as America moves forward that capitalism and rule of law are important behaviors the American people will count on.”

Potential Benefits of Reducing Regulations

Reducing regulations gives businesses more flexibility to run and grow their business, creating more opportunities for workers and communities.

Removing overreaching regulations and associated costs will lower costs and help control inflation. “Take those costs out of the system, and you don't have to raise prices to cover it,” says Holtz-Eakin.

“Business owners and leaders in every industry feel the pain of bureaucratic micromanagement. Consumers and employees experience it in the form of higher prices, lower wages, and fewer jobs,” wrote Clark in a Wall Street Journal op-ed following the November 2024 election. “Some will cast the coming deregulation as an illegitimate power grab. It is the opposite. Deregulation rips economic power out of the hands of those who didn’t earn it and don’t know how to wield it. It gives power back to consumers, workers and business leaders.”

Bottom Line

Overreaching regulations are a strain on the time, productivity, and finances of businesses. They contribute to less economic growth and lower paychecks for workers.

Regulatory reform is an element of achieving economic growth, and policymakers should seize the opportunity to cut burdensome regulations through the CRA to grow our economy and help American workers and businesses reach their American dream.