The second Trump administration is likely to bring big changes to both the Department of Labor and Securities and Exchange Commission as major Biden administration rules could be overruled in courts, walked back, or replaced entirely given Republicans’ penchant for deregulation, sources said.
Separately, among the new dynamics within the incoming administration is the Department of Government Efficiency, or DOGE, which Trump said in a November statement will “provide advice and guidance from outside of government.” DOGE will be run by billionaires Elon Musk and Vivek Ramaswamy, both of whom have said they’re aiming to slash federal spending and reshape government agencies.
Both Musk and Ramaswamy have criticized the SEC and current Chair Gary Gensler.
After a federal appeals court on Dec. 11 struck down the SEC’s approval of Nasdaq's board diversity rule, Ramaswamy posted on Musk’s X platform, “When an agency like the SEC is so repeatedly & thoroughly embarrassed in federal court for flouting the law, it loses its legitimacy as a law enforcement body.”
Musk on Dec. 12 responded with a post of his own saying, “The SEC is just another weaponized institution doing political dirty work.”
That same day, Musk posted a letter from his attorney to Gensler stating that the SEC is preparing “numerous counts” against Musk following a multiyear investigation. The letter didn’t include any specifics.
With Musk and Ramaswamy in charge of DOGE, they will soon wield uncertain power in Washington. What impact that will have on the SEC and DOL is an open question, sources said.
“There is definitely a gravity toward streamlining and making the government smaller,” said Igor Rozenblit, managing partner at Iron Road Partners and former SEC staffer from 2010-2021, noting that in Trump’s first term he signed an executive order stating that for every new rule an agency issues it must repeal two others.
For the DOL and particularly its Employee Benefits Security Administration, DOGE could further restrict its already tight budget, said Andrew Oringer, who heads the Wagner Law Group's New York office and serves as its general counsel.
“Having lesser resources could make the department less able to come out with new regulations, new interpretations, new authority,” he said. “I think there’s a potential tamping down on their ability to do enforcement.”
Oringer added, “There’s a concern that a general initiative to reduce the size in government could impact the way in which the DOL is oriented.”
Lisa M. Gomez, who leads EBSA as assistant secretary for employee benefits security in the Biden administration and will be out her job come Jan. 20, said it’s imperative EBSA’s resources aren’t cut because it is a small agency with a lot of responsibility.
Any reduction in EBSA’s budget would affect “our ability to be able to service all participants in both retirement and health areas,” Gomez said, referencing a December spending bill lawmakers were considering. “So we are trying to make sure that folks in Congress are aware of this.”