Deregulation's Two Directions

The administration has completed 752 regulatory rollbacks since last fall ^[1]. It is also, this week, investigating whether the federal government has the legal authority to block a single city's tax on luxury second homes. Donald Trump calls that municipal levy a "disaster."

I am looking to see if the Federal Government has any legal right to avert this disaster, before it is too late, for the millions of people who cherish New York and want to see it thrive, as opposed to becoming a filthy, crime ridden, decrepit place of mockery and scorn. — Donald Trump

A government cutting rules by the hundreds while reaching into a single city's tax code looks like a contradiction. It is actually a single logic running in two directions. Deregulation flows down to companies the administration favors. Federal power flows out to sub-national governments it opposes. Start with the loosening. Trump extended the TikTok divestiture deadline four times, then lifted the federal-device ban after an Oracle and Silver Lake-led consortium took over the U.S. business, suspending a law Congress passed through executive discretion ^[2][3]. FCC Chairman Brendan Carr is reopening broadcast ownership caps for consolidators while simultaneously threatening to revoke the licenses of networks Trump criticizes ^[4][5]. The administration removed the DOJ antitrust chief, declined merger investigations, and dismissed inherited Biden-era lawsuits ^[6]. Guidance governing proxy-advisory firms, the companies that tell shareholders how to vote, was withdrawn ^[7]. Each move loosens a federal constraint on a business constituency the White House has reason to keep close. Now the other direction. The administration attempted to terminate New York City's congestion pricing program, the first of its kind in the country; a federal judge blocked the move and did not mince words about the reasoning ^[8].

It is difficult to imagine more arbitrary and capricious decision-making than that at issue here. — Lewis J. Liman

The administration appealed ^[9]. The Justice Department is suing California and Virginia over their state-level gun restrictions even as it scraps federal firearms regulations by the hundreds ^[1]. A draft executive order would have created a DOJ task force to dismantle state AI laws and threatened to withhold $42.45 billion in broadband funding from noncompliant states ^[10]. Before Zohran Mamdani took office as mayor, Trump was threatening to withhold federal funding from New York City and deploy the National Guard ^[11]. The administration has made the pattern explicit. Trump and his allies have begun labeling a cluster of recently elected city leaders as "socialist" and "luxury belief" radicals. The group includes Mamdani in New York, Bruce Willson in Seattle, and Abigail Spanberger in Virginia. The administration frames them as warranting federal countermeasures ^[12]. This is not inference. It is stated intent: the administration is telling the public which governments it considers adversaries and why it is using federal authority against them. There is a related habit worth noting. When courts rule against the administration, it tends to route around the ruling rather than accept it. After the Supreme Court affirmed birthright citizenship, Trump issued orders creating carve-out exceptions. After courts rejected one tariff regime, he imposed new tariffs under a different statute. On congestion pricing, the administration appealed after losing at the district court level ^[13]. Court opinions are treated as technical documents to be redesigned, not final judgments. The pattern has limits, and they are worth taking seriously. The draft order to preempt state AI laws was halted after a 99-to-1 Senate vote rejected a ten-year state AI moratorium and bipartisan resistance from state officials made the political cost too high ^[10]. The climate rollback is genuinely broad, not selective: the administration is repealing the 2009 endangerment finding that is the legal basis for all federal greenhouse gas regulation, dismantling the National Center for Atmospheric Research, and restricting the terms "sustainability" and "climate change" at the Department of Energy ^[14]. That is a structural dismantling of an entire regulatory domain, not a targeted move against a political opponent. Congress, state governments, and the sheer scale of the administrative state are institutional checks that can still slow or stop the pattern. Mayor Mamdani, responding to Trump's funding threats, offered his own description of what is happening.

I will treat his threats as they deserve to be treated, which are the words of a president and not necessarily the law of the land. — Zohran Mamdani

He is right about the mechanism and wrong to be reassured by it. A president deciding, case by case, which levels of government and which companies get to set their own rules amounts to a particular kind of large government: one whose reach is determined not by statute but by the political alignment of the target.