The costs of equity-obsessed policymaking are generally paid in the currency of bad governance, and America must brace for another invoice. President Joe Biden took steps this month to “modernize” the regulatory process. These actions, an executive order and accompanying proposed guidance documents, loosen the fiscal-analysis constraints that bind agencies’ rulemaking, pivoting instead towards ill-defined and often subjective considerations such as “equity.” The executive order seeks “to proactively engage” “underserved communities,” including racial minorities, women, and “persons otherwise adversely affected by persistent poverty or inequality.”
Biden’s strategy to excise from the governing process fiscal checks, restraints, and oversight mechanisms – and to replace them with carefully solicited input from demographic groups the administration perceives as political allies – is deeply flawed. While stakeholder input is, indeed, indispensable to good governance, it ought not be considered a panacea; and it is certainly no substitute for traditional accountability measures. Moreover, the White House proposes revisions to existing analysis guidance that “emphasize…promoting distributional fairness and equity.” Who defines “fairness and equity” remains to be seen.
Though Biden seems once again to have advanced progressive notions of equity at the expense of sound policymaking, precisely how executive-branch officials will implement these provisions is yet unknown. Nevertheless, considering the President’s record, his executive order and its accompanying proposed guidance likely signals another pivot towards ideology, away from prudence. Take the administration’s promotion of environmental, social, and governance (ESG) considerations in retirement investing, its attachment of costly workforce policies to CHIPS Act subsidies, or its commitment to protectionist “Buy American” provisions. In these cases, and in many more, Biden’s dogged pursuit of ancillary left-wing priorities has hamstrung his own capacity to achieve stated policy aims.
To increase input of the of diverse stakeholders, Biden’s executive order directs agencies to limit “duplicative” meetings. Bureaucrats will likely limit each “meeting requester” to one meeting in each “stage of the regulatory process.” This could backfire, however. “On one hand, limiting repetitive meetings may prove somewhat helpful, but for many significant rules, the technical nature of various minute aspects may require precise input from relevant stakeholders across multiple sessions,” argues Dan Goldbeck, director of regulatory policy at the American Action Forum. “Arbitrarily limiting this often key [Office of Information and Regulatory Affairs]-to-stakeholder exchange of information could lead to certain issues going unresolved or unaddressed.”
While administrative rulemaking at times requires bureaucrats to weigh and act upon grand principles, more commonly, it entails the comparatively banal tasks of competent and fiscally responsible administration. Properly done, most regulating is rather procedural and technical – perhaps even a bit dull.
Biden’s order further raised the threshold for the annual economic impact a proposed rule must have to be subjected to an administrative cost–benefit analysis from $100 million to $200 million, adjusted regularly for inflation. Cost–benefit analysis is a type of administrative review to promote fiscal responsibility by requiring executive agencies to estimate their proposals’ likely net value to the public – typically in dollar terms. The White House further proposes to adjust the calculation methods of such analyses to weight more heavily regulatory initiatives’ estimated long-term benefits, allowing agencies to justify more upfront spending with promises of remote advantages.
In a recent blog post, OIRA Administrator Richard L. Revesz argues “these new steps will produce a more efficient, effective regulatory review process.” Friends of good governance should promote not just efficiency and efficacy – but also fiscal accountability. By eliminating such accountability, says U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley, Biden’s proposals “will fundamentally undermine the concept of cost-benefit analysis, allowing the administration to hide the true costs of their aggressive regulatory agenda.”
And given the raw number of regulations the administration is implementing, agencies may require more oversight, not less. Indeed, agencies seem to have had little trouble operating under the old threshold of $100 million, successfully producing vast quantities of new regulations. “Agencies issued 59 final regulations last week, after 65 the previous week,” the Completive Enterprise Institute’s (CEI) Ryan Young wrote in mid-February. “That’s the equivalent of a new regulation every two hours and 51 minutes,” he added, noting that “agencies are on pace to issue 2,970 final regulations this year.”
If agencies maintain their regulatory pace, according to Young, the 2023 Federal Register will exceed 79,000 pages. In the past three decades, agencies have tallied more than 114,000 final rules. “If it were a country, U.S. [regulatory costs] would be the world’s eighth-largest economy (not counting the United States itself), ranking behind France and ahead of Italy,” says CEI’s “Ten Thousand Commandments” report for 2022.
Cost–benefit analyses and other procedural checks introduce in the regulatory process a necessary measure of accountability. Among other advantages, such measures can restrain bureaucrats who seek improperly to implement ill-conceived social policy. Scrapping them or diluting them with subjective metrics to swell the federal Leviathan will do no good.
David McGarry is a policy analyst at the Taxpayers Protection Alliance.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.
