Terry Gerton You are a long time advocate for smarter regulation and regulatory reform. I want to start by getting your general thoughts about the Trump administration’s plan to use AI to review existing regulations.

Susan Dudley We saw a leaked slide deck from July recently, and I wrote about that in a recent Forbes column. And I think it’s very bold and aggressive. So the slide deck suggests that they will use AI, and using AI, they will be able to reduce the quantity of existing regulations by half. And my conclusion reviewing that deck is that it’s rather naive.

Terry Gerton Not all regulation is bad, but there is a lot of it. As you’re thinking about reviewing regulation, do you see a positive role for AI? How can it help?

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Susan Dudley Yes, I think AI can be very valuable. It can be useful for screening existing regulations, comparing statutory requirements to the regulatory requirements. So that initial screen, I think, could be extremely valuable. I think it can also be useful for reviewing public comments, because regulations have to go through notice and comment and screening through and sorting and categorizing what could be hundreds of thousands of comments. I think AI will be able to do that very efficiently. And I would also love to see AI, new techniques, but also more traditional AI tools, evaluate whether regulations are actually achieving their expected effects.

Terry Gerton How would you see AI deployed to address some of the challenges that are inherent in a broad-based regulatory review?

Susan Dudley AI in Virginia, they have used AI to look at the statutory requirements that the regulatory agencies face and evaluate to what extent do the regulations go beyond those requirements. That’s a first step. Then Virginia, then real people, the policy officials, the lawyers, the analysts, then will look at that list and say, oh, there are very good reasons for going beyond the statutory mandate and here’s why, but it also highlights cases where maybe it wasn’t thought through, and that within the bounds of their statutory authority, they can cut back on some regulations. Another thing they’re doing in Virginia that I think is valuable is a comparative look at what other nearby states are doing. So they find if, for example, they require hair braiders to go through 100 hours of training, whereas another state may require 30 or 50, to step back and say, why are we doing it differently and can we make it easier for small businesses and others to thrive in our state?

Terry Gerton So some basic comparisons, some look at frameworks, some pointing out where there are outliers, those are the kinds of things where you think it’s a useful tool.

Susan Dudley Yes, I think it can be extraordinarily valuable.

Terry Gerton What are some of the things that you think AI shouldn’t be used to do?

Susan Dudley It should not be used to draft a regulation, it certainly should not be used without careful human involvement. So not just a human to maybe check it at the end, but you need a human every step of the way. The regulatory process is a complicated and time-consuming legal process that requires first, yes, looking at the statutory authority, but then also doing substantive fact-based analysis. And that’s something where AI can help. But you really need humans to evaluate. I think the other thing about the regulatory system is that it’s often litigated. So agencies will issue a final regulation, and I know, as you know well, the courts, their parties may sue and courts will intervene. What courts will be doing is evaluating, if you’re deregulating, evaluate the supporting documentation you’ve provided for the new rule and compare it to what was provided before, a sloppy or briefly written AI support document is not going to be able to compare to hundreds of thousands of pages that maybe have been available in the original.

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Terry Gerton I’m speaking with Susan Dudley. She’s the founder of the Regulatory Studies Center at George Washington University. Susan, with those sorts of caveats in mind, you mentioned in your Forbes article some real concern about the DOGE assertion that they could reduce the time to deregulate by 93%. Tell me about your concerns with that number.

Susan Dudley I mean, I think they do identify a real problem, but I think first, they’re optimistic about the fraction of regulations that can be, that are not required or are not mandated. So there have been recent Supreme Court decisions that say that agencies need to adhere more closely to their statutory, the authority that the statutory language grants them. But this 50% would suggest that agencies overreached in 50% of the regulations that are on the books, and I think that’s probably overstating things. I think it also ignores the need for a record to support the new regulation, and we know that agencies need to provide just as robust a record, to deregulate as they did to regulate, per State Farm decision from 40 or so years ago. And that includes both legal record to support the new legal interpretation but also the substantive factual scientific record. And I think that’s what seems to be missing from at least what I understand of the DOGE claim.

Terry Gerton So assuming they’re going to go forward with using AI to deregulate, and those slides have a pretty tight timeline, end of September, early October, what would you suggest that they put in place as an oversight mechanism to make sure that they don’t make some of the mistakes that you just articulated?

Susan Dudley I think they need to pay careful attention to the litigation risk. So they may succeed. So as you say, we should be seeing deregulation proposals being rolled out in the Federal Register now, September and October, according to that schedule. And then a quick turnaround in the agencies after responding to 30 or 60 days of public comment, and then final regulations issued by January 20th, 2026. So as you say, it’s a very aggressive time schedule and bold goal. And even if they achieve that deadline, I think what they’re forgetting is that what comes next is the litigation. And will that record that they’ve developed stand up to judicial scrutiny? And I think it won’t unless they put more time and care in the drafting of those revisions.

Terry Gerton How much of a market disruption would you anticipate with 50% deregulation and in so short a period of time? How will businesses and agencies adapt to such a perhaps sweeping change in the regulatory structure?

Susan Dudley Yeah, I think that’s a great question, and I suspect that in many cases, they won’t. For regulations that have been in place for a while, they’re part of business practices. Companies are not going to say, oh, we’ll no longer provide disclosure for certain things because it’s part of good business practice. So there may be some regulations that are purely burdensome and don’t have significant benefits. And I could see companies being willing to no longer comply with those. But yes, I think it won’t be as big a disruption, or the benefits that the Trump administration might expect by deregulating may be much less because these are already part of the way people do business.

Terry Gerton Do you think there are areas where deregulation could go too far, especially in areas that are associated with public safety, public wellbeing?

Susan Dudley I tend to believe that the incentives are there to protect your customers, to protect citizens, and especially, we talk about litigation, but you would face a lot of liability if you did things that you knew would be hazardous. So I’m probably less concerned than some might be on that ground.

Terry Gerton What advice would you have for policymakers and legislators who really want to pursue modernization using AI? Are there particular guardrails that you’d want to make sure they put in place before they start?

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Susan Dudley I think they really need to think through the unintended consequences and the implications of changes. So you might see, AI might identify one area that’s not required by statute or not mandated, but what are the connections with other parts of the regulatory system? Now that, going back to your first question, Terry, that’s something that I could see AI might do well, is to look at all those connections and identify areas where some regulations may be in conflict with others. I mean, you do hear that sometimes from small businesses, I can’t do this because one regulation tells me I have to do something and the other tells me the opposite. But we could create those inconsistencies if they’re not careful.

Terry Gerton Sounds like you wind up back where many advisors do with AI, which is people need to be in the loop.

Susan Dudley I think that’s right. I think you really need experts for both the legal and the policy arguments.

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