Congress Must Mobilize To Halt Biden’s Radical Administrative State Transformation

[T]he genius of the Progressives in the late 19th century was to preempt or push large sectors of the emerging future (the environment, schools, electromagnetic spectrum, infrastructure, welfare, the medical world) into the political world.”

—Fred L. Smith Jr.

Alongside deleting the entire Trump-era deregulatory campaign (anybody remember “one-in, two-out”?), Joe Biden’s first day in office brought forth a memorandum called “Modernizing Regulatory Review.”

In it, Biden called for the Office of Management and Budget to “consider ways that OIRA [the Office of Information and Regulatory Affairs] can play a more proactive role in partnering with agencies to explore, promote, and undertake regulatory initiatives that are likely to yield significant benefits.”

The new approach entails “partnering” with agencies, not strictly supervising, questioning and disciplining them and their regulatory offal, as had been the ostensible function of OIRA since the early 1980s.

Now, over two years into Biden’s term, we find that misbegotten kickoff memorandum formalized with a new April 6 Executive Order 14,094 of the same name, making regulators less accountable than ever.

In any assessment of Biden’s proclamations on regulatory reform or regulatory review — as his barnstorming on the inflation and infrastucture laws demonstrate — one cannot simply accept at face value that he means what people normally mean by critical analysis and oversight of today’s regulatory enterprise.

Rather, one is forced first and foremost see Biden’s ambitions here in the context of his self-announced “whole-of-government” (WOG) pursuits that splay themselves unwelcomed and unbidden across much of American life and, if unopposed, will render limited government impossible. Biden’s ambitions include a damaging “competition policy” that encourages heighted federal meddling in private business and economic affairs, major interventions in the name of “climate crisis,” and most prominently now, trendy, cultish and divisive “equity,” ESG and DEI pursuits coordinated with suspect legality across agencies throughout the entire federal government. (Note: for a detailed discussion of this fishy WOG agenda its implications for the expansion of government and the loss of liberty and constitutional normalcy, see the recent edition of Ten Thousand Commandments).

The month of April brougher a two-fer, as Biden’s extreme progressive agenda was escalated yet again with a mischevious new April 21 Executive Order to “Revitalize Our Nation’s Commitment to Environmental Justice for All.”

As the left’s COVID machinations betrayed its North Star pursuit of a Universal Basic Income to effectuate a custodial administrative state, Biden’s array of “equity” and “DEI” usuprations reinforce the progressives’ warlike pursuit of social “reparations” incorporating massive fiscal and regulatory wealth transfers. These are now embodied in state pilot projccts but are bound for a federal goverment near you, the skids greased by the Biden administration’s incitement of animousities and inter-group blame nation-wide.

Congress and normal policymakers need to wake up, and fast. The advocates of limited government did not start this disruptive episode in U.S. history, but they need to stomp the brakes.

To start, the the 118^th Congress needs to address Biden’s transformative “Executive Order on Modernizing Regulatory Review.” Biden’s initial directive and subsequent actions (see details here and here) continue to affirm that the administration’s goal is not to impose strict cost-benefit analysis and to rigorously supervise agency regulators. Already (as few acknowledge since there’s an industry behind it), cost-benefit analysis happens rarely enough, particuarly fram any cross-agency or aggregate perspective, to be a non-phenomenon from any big-picture standpoint).

Biden’s philosophy instead is one of transforming any governmental action undertaken by the White House “net beneficial” — but as the progressive left sees “benefits.” We observe a strange non-professed yet naked utilitarianism in top-down regulatory analysis; one that does invoke “distributional effects,” but seems heedless of the rights of those being distributed from.

A future Congress might better serve the nation by abolishing and replacing OIRA altogether than to abide permanence in the interventions and transformations that Biden is making in that body’s role, some of which will be noted below. Instead of these disruptive changes undermining already often non-existent, misdirected and uncomprehending review, a replacement office challenging the obsolete regulatory premises of our day taken for granted in Biden’s order could become the new imperative. These not merely obsolete but faulty assumptions embedded in today’a regulatory review orthodoxy range from “market failure,” to “net benefits,” to the knee-jerk top-down central planning that Biden mischaracterizes as “bottom up, middle out.”

Bottom line, no agency can perform cost-benefit analysis when its very presence is a cost. Often regulation fails to work, even on its own merits, and any actual “Modernizing Regulatory Review” that Congress should tolerate would recognize that fact.

Biden’s new order also undermines the cardinal governmental virtues of transparency and disclosure that it invokes without irony. The following observations addressing some of the foregoing concerns are offered also in light of Biden’s proposed rewrite of the Office of Management’s “Circular A-4” on “Regulatory Analysis” guidance to agencies that accompanies his order:

The Universe of “Significant Regulatory Actions” Deemed to Warrant Centralized Review is being Decreased

Even before Biden, guidance and orders on the books for assessing costs never encompassed the full sweep of regulation and intervention for which Washington is culpable. Now Biden proposes to capture even less.

The universe of “significant regulatory actions” deemed by Joe Biden to warrant review is being, naturally, decreased. Instead of a rule costing $100 million annually being deemed “significant” and triggering extra inquiry, the threshold rises to $200 million, to be later adjusted by OIRA itself with GDP changes to narrow the inventory for inspection.

This is a problematic for at least two reasons; one, already, too much (nearly all) regulatory action not deemed “significant” is escaping critical review. Second, the number of significant actions by the traditional measure of $100 million undertaken by Biden that affect small business and state and local governments appears to be on the upswing. This latter is not yet a trend, but is visible, and is highly likely to accelerate in an easily detactable way—unless deliberately obscured in suspect fashion (such as by the changes made via the new Order). In the wake of highly costly and regulatory legislation pushed by Biden himself such as the American Rescue Plan and the problematic “Infrastructure” and “Inflation” laws, increased mandates are a certainty.

Many regulatory actions already deemed non-significant (let alone significant at $100 million) by OMB would be considered highly significant by those subject to their strictures and bound to comply.

Executive Order 14,094 Overly Politicizes Regulation

Biden’s executive order also deems significant those “policy issues for which centralized review would meaningfully further the President’s priorities.” We know from experience with Biden’s proclamation and those of agencies enlisted in his whole-of-government campaigns that the adminstration’s priorities unfailingly will assert “net benefits” and expand the federal enterprise and its power.

Policymakers who doubt this are hereby invited to confirm what “centralized review” will mean from the public pronouncements by acting OIRA administrators in “Introductions” to the OMB’s “Unified Agenda on Federal Regulatory and Deregulatory Actions” since the Biden administration began. Introductions to the now-bipolar Agenda in the Trump-era touted deregulation.

Rather than boast of success in regulatory streamlining, Biden’s OIRA heads uniformly amplify whole-of-government pursuits, rarely if ever call regulation into question or restrain it (apart from exceptions like hearing-aid access), nor act as the adult in the room to call out the excesses of progressives. The adminstration’s leadership is composed of those very same progressives.

Congress must appreciate, as we have discussed in the recent past, that the supervisory role that the OIRA once (partly, never thoroughly) embodied is being eliminated. Instead, the one-time semi-watchdog finds itself being inexorably (willingly, alas) converted into an advocate, promoter, and amplifier of regulatory pursuits—not a steady and strict hand on the reins. This is particularly dangerous given the dangerous knee-jerk propensity to abuse economic crises and shocks with expansion of federal programs, a situation that this order will further automate and worsen with its endorsement of a prevailing “great narrative” set in opposition to ordered liberty.

The Office of Information and Regulatory Affairs (OIRA) is Already Ignoring Existing Law on Regulatory Oversight

Biden proposes to reduce the amount of “significant” regulation reviewed at a time when the OMB has already failed to issue its annual Report to Congress on regulatory costs and benefits since fiscal year 2019. Required by the Regulatory Right-to-Know Act, the annual cost-benefit roundup is also to be accompanied by an aggregate regulatory cost assessment (not just for individual agencies) that has been ignored almost since its inception. Even the inadequate 10-year lookback OMB adopted in its stead has vanished from recent editions.

In addition, we have reason to suspect that agency sub-regulatory “guidance documents” are not being properly submitted to Congress and to the Government Accountability Office as required by the Congressional Review Act, making them of dubious legality on a scale so vast that the only cope is to ignore it. The cherry on top is the absence of even the Information Collection Budget on federal paperwork, whose genesis, fittingly, lies in the same 1980-81 era that spawned OIRA.

The Normal Idea of Offsetting Older or Obsolete Regulations when Issuing New Ones is Shoved Further in the Background

As noted, one of Biden’s first actions was eliminating all the Trump-era regulatory oversight measures such as one-in, two-out. It is notable now that there is no restoration of even a lighter version of this in the new directive, and the one-time “Deregulatory” designation for rules—surely, the least anyone can ask—disappeared with Biden’s appearance.

Progressives’ Vision of “Distributional” Effects of Regulations Is a Recipe for Purposefully Expanding Government.

As shown in both “Modernizing Regulatory Review” and the April 21 “Environmental Justice for All” executive order, modern progressives’ malign vision of “Equity” is being built into the review process—and rulemaking itself—in a way that will expand government irretrievably, well beyond the reasonable or anything the Framers would countenance.

Surprisingly enough, the term “equity” indeed does appear in the Clinton-era Executive Order 12,866 on “Regulatory Planning and Review” three times, the directive that Biden’s E.O. 14,094 on “Modernizing” supplements. But “equity” now bears little resemblance to the prior generation’s notions of “equality of opportunity” and other forms of societal normalcy. The new framing means institutionalizing identity politics in the regulatory process, and the pursuit of regulatory wealth transfers that progressives will always see as net-beneficial. The Clinton order had already replaced Ronald Reagan’s E.O. 12,291 (”Federal Regulation”) directive requiring that benefits “exceed” costs with a call to merely “justify” them. Now with Biden, that mere “justification” is further softened with the rebranding of OIRA into a promoter of “net benefits.”

It is imperative that Congress look closely at the equity language in Biden’s new executive order not just alone (again, it was there in Clinton’s), but in context of this administration’s sweeping regulatory pursuits and the shift in OIRA’s function from a regulatory overseer to campaigner, and to decide whether Biden’s program is good for America or instead is overly divisive and will artificially pit group against group, generating discontent and agitation for more government growth.

Biden is not coy about his intentions to expand Washington into the economy, finance, medicine; and in our personal lives and social interactions. “Improving Regulatory Analysis” for Biden means “analysis” that, “as practicable and appropriate, shall recognize distributive impacts and equity.” Interventions that the Biden administration will not “justify” in the name of equity are likely to prove few. Congress cannot afford to ignore the deeper implications of radicalized “whole of government” pursuits that cement further federal powers.

“Guidance Documents” Do Not Appear in the New Biden Executive Order

Among much oversight Biden eliminated, and in keeping with his desire now to obscure the universe of significant rules to allow them to escape analysis, Biden eliminated a Trump executive order to merely require online “Portals” for the public to access agencies’ confounding torrent of guidance documents (I’ve tallied residue Portals here).

Each year, we get a few dozen laws from Congress, several thousand regulations from agencies (seemingly on the rise under Biden), plus uncounted guidance documnets, memoranda, notices, circulars, bulletins, administrators’ interpretations, letters, and so forth, many of which can have regulatory effect or otherwise cause concern among those subject to a particular agencies oversight or zeal for the net-beneficial. The recent torrent of legislation in concert with Biden’s “whole-of-government” pursuits effectively guarantees a surge in guidance. These are inadequately addressed not merely in the E.O. and in the Circular A-4 draft, but across the entire regulatory enterprise.

Congress Needs to Do All it Can to Prevent Biden’s Announced Rewrite of the Office of Management’s “Circular A-4” on Regulatory Review.

OMB’s Circular A-4 (indeed not updated since 2003 as the Biden administration notes) provides guidance on the conduct of regulatory review and analysis and instruction on preparing “regulatory impact analyses.” Biden’s “Modernizing” calls for a rewrite. But Circular A-4 already leaves out most of the universe of regulatory costs. Under Biden’s regulatory philosophy, it will not only leave out more, but effectively redefine many regulatory costs as benefits. Congress must quickly take steps (hearings, denial of appropriations, whatever legitimate means necessary) to prevent any rewrite under the auspices of the radical progressivism that this administration embodies, up to and including abolishing OIRA (something the prog left wanted to do before Biden came along with his reformat).

Once upon a time, despite some inherently tainted assumptions in the Administrative State model, it might have been possible to collaborate on a good faith rewrite or update exercise for Circular A-4. But today’s OIRA is too compromised against regulatory oversight and too actively pro-regulatory to perform a committed and energetic regulatory review function. The left already sees regulatory review as such as constitutionally suspect (in the socialist house-of-mirrors perpsective that in reality dispenses with the Constitution altogether and replaces it with a fourth branch of government), rather than seeing the administrative state itself as questionable. Any A-4 rewrite will be tainted with disdain for strict cost-benefit analysis altogether, despite invoking those terms, an eventuality observable both explicitly and reading between the proposal’s droning bureaucratic lines.

Circular A-4 simultaneously embodies both the reason regulators in the past could get away with abuses, and the reason it cannot be useful in remedying regulatory overreach to come. Circular A-4 embodies an archaic 20th Century taxonomy that enshrines the Administrative State as such, believes in agency “expertise,” and obscures or leaves out most regulatory burdens; and now, unless prevented, it will embody a modern “reset” progressive taxonomy that would obscure even more unless Congress puts a stop to it.

In Summary

The push from progressives is to remove executive action from cost-benefit scrutiny altogether and from congressional oversight besides, by replacing the notion that regulation is a costly last resort with the pursuit of progressive conceits of centralized planning, politicized net benefits and displacement of the private sector.

Unfortuntately, the GOP is culpable to a large degree in the legislative tranformations of which Biden can and is now taking advantage (An example is Commerce Secretary Gina Raimondo “requiring companies that receive [CHIPS Act] funding to tell us how they plan to provide affordable child care for workers,” a directive not part of the law but instead yet another iteration of regulatory dark matter).

The preambles to the Spring and Fall “Unified Agendas” under Biden, Senate testimony and responses to questions for the Senate record of Biden’s appointee to head OMB’s Office of Information and Regulatory Affairs, the disregard of the aforementioned mandatory Report to Congress, and the lack of sympathy with the burdens of regulatory compliance on the public as such affirm the new pro-regulaory, pro-intervention environment.

Before Biden, one suspected that cost-benefit, limited as it already was, if not totally abandoned, considerably downplayed. Now Biden has effectively told us so.

Most that Biden wishes to regulate ought not be; “Modernizing Regulatory Review” worthy of that designation would seek the reduce the already excessive influence of the federal government in our economy, society, lower-level governments, communities, families and in our personal lives. Congress will need to mobilize and respond.

Further reading on the Biden progressive transformation of regulatory review: