A Congressional Regulatory Report Card Can Begin To Address Biden’s New Attempts To Downplay Regulatory Costs

The Federal Register website, portals like Regulations.gov and other online databases make it far easier than in pre-Internet times to acquire information on the assortment of federal rules affecting us, and to learn about regulatory trends.

We cannot learn much about costs of the regulatory regime, though. The executive orders and laws meant to supervise, disclose and streamline the “hidden tax” of regulation were experiencing benign and malign neglect even before Joe Biden.

Now, with the Biden administration’s new “Modernizing Regulatory Review” executive order (E.O. 14,094) and its proposed update of guidance on regulatory analysis (“Circular A-4,” as it’s known in bureau-speak), most of the regulatory “Costberg” will not only be neglected, but denied altogether.

Biden is engaged in unrestrained pursuit of aggressive ESG-style and other “net benefits” as the progressive left sees them — on the likes of climate, interference in free-market competiton, “equity” and redistribution, digital currency and plenty more. Sometimes, these are combined: we’ve just learned of a proposed 30 percent climate tax on cryptocurrency mining.

This year, Congress needs to take major steps to prevent these assorted “whole-of-government” pursuits whose premises Biden would love to cement in place with his re-write of Circular A-4. And Congress needs to prevent that rewrite itself, now on target to be completed about a year from now.

Otherwise an unhealthy and anti-liberty approach to the preparation of cost-benefit analyses will become a fixture in the U.S., and elevate federal government regulatory lordship generally. (For a taste of some of the costs a revamped C-4 would systematically neglect, expand the image of a “One-Pager on Unmeasured Costs of the Administrative State and Regulation” below; even the current regime neglects most costs of government intervention).

On the bright side, the 118^th Congress has already introduced a slate of worthwhile regulatory reform bills; that’s even knowing Biden would likely veto every single one of them.

After all, as Rep. Bob Good of Virgina pointed out at a Hill forum hosted by the Competitive Enterprise Institute (my organization), demonstration votes in the House are worthwhile.

Alongside, plenty more can be done with or without legislation to make information on the regulatory state’s scope and costs more complete, accessible, relevant and user friendly. Both parties claim to value transparency and disclosure, so the low-hanging fruit — even if the progressives reject everything else with respect to regulatory streamlining, deregulation, and simply keeping their nose out of others’ business — ought to be a “Regulatory Transparency Report Card” (let’s call it).

Relevant regulatory data should be compiled and summarized for the public both to inform a new legislative phase of regulatory streamlining and liberalization, and to monitor results and progress when a program of federal downsizing is finally put into effect.

Even if Democrats won’t get on board, the GOP can begin the process by having the Congressional Budget Office, the Government Accountability Office, one or more committees, or even a lonesome congressional or senate office compile versions of report cards. Biden and Obama, after all, enjoyed doing things unilaterally, from immigration policy to eviction moratoria to student loan forgiveness (not an endorsement).

When eventually formalized, suggested components of such a Regulatory Transparency Report Card (some appear below) could be officially summarized in charts in the federal budget, the Unified Agenda of federal regulatory actions, the Economic Report of the President, on regulations.gov, presented within a resurrection of the defunct Regulatory Program of the U.S. Government (perhaps more on that later), or elsewhere.

In preparation, there are a few things to keep in mind. One cannot look at the daily Federal Register and get a sense of rules that are being cut (well, OK, probably none are) nor of which agencies are adding the most rules, nor of which of a flow of rules might be reducing burdens rather than expanding them. Such gaps remind us that even mere rule-counts were non-existent prior to 1976.

In addition to revealing burdens, impacts, and trends, the primary contribution of a report card approach is to help reveal what we do not know about the regulatory state—such as, for example, the percentage of rules for which their issuing agencies failed to quantify either their costs or benefits. The project needs to be ambitious enough to sweep aside in its entirely the exercise-in-obscuity that is Circular A-4.

In addition, current reporting poorly distinguishes between rules and guidance documents affecting the private sector versus those purportedly affecting only internal government operations. Providing historical tables for all elements of the regulatory enterprise will surely ultimately prove useful to scholars, third-party researchers, members of Congress, the public and reformers.

By making agency activity more explicit, especially at a time when shenanigans in cost-benefit analysis are being pursued to rationalize unacceptable new government intervention in our lives, a regulatory transparency report card could help induce policy makers to not only take the growth of the administrative state seriously but to at long last afford it the same weight as fiscal concerns. Below is a proposed inventory, and pardon the jargon and bureau-speak. Some steps would require legislation, but much could be done unilaterally by the ambitious and hardheaded.

Regulatory Transparency Report Card:

Suggested Official Summary Data by Program, Agency & Grand Total

(with Five-Year Historical Tables)

• Tallies of “economically significant” rules by department, agency, and commission, by cost tier (below is an option from Ten Thousand Commandments, and an “ALERT Act” component; note that Biden’s “modernization” executive order and Circular A-4 rewrite would now exclude as significant those rules alleged to cost less than $200 million annually)

• Number and percentage of interim final rule (IFR) enactments and reviews, since most are presumably “significant” but escaped public notice and comment.
• Breakdowns of the broader number of rules that are “major,” “significant” as well as allegedly minor.
• Tallies of significant and non-significant guidance documents, memoranda, and other “regulatory dark matter” by department, agency, and commission (Trump instituted this and Biden deleted it; however I’ve compiled residual disclosures here; proposed legislation exists to restore formal portals).
• Rankings of the most active executive branch and independent rule-making agencies.
• Identification of which agencies increased rule output most in absolute and percentage terms.
• Numbers and percentages of executive and independent agency rules deemed “Deregulatory” (that is, a restoration of the distinction made in Trump’s E.O 13,771, now deleted by Biden).
• Numbers and percentages of rules affecting small business by significance and whether or not a “Regulatory Flexibility Analysis” is required; assessment of “Deregulatory” components.
• Depictions of how regulations and guidance accumulate as small businesses grow.
• Preliminary “regulatory budgeting”: Tallies of regulatory and guidance cost estimates (these will always be reckonings, not actual calculations), including subtotals by agency and grand totals by regulatory category: paperwork, economic (for example, financial, antitrust, communications), social, health and safety, environmental; Aggregate cost estimates of regulation and guidance (that is restoration of neglected Regulatory Right-to-Know Act requirements).
• Numbers and percentages of regulations that contain these seemingly unattainable numerical cost estimates.
• Numbers and percentages of rules lacking cost estimates, with explanations (Instead of the self-assuredness of regulators and their A-4 bible, compile “statistics” on what we do not know about regulatory burdens).
• A breakout of “traditional” Federal Register analysis, including number of pages and proposed and final rule breakdowns by agency; also reconciliations with other reporting vehicles, such as numbers of rules new to the Unified Agenda; and numbers of rules that carry over from previous years.
• Number of major rules reported on by the Government Accountability Office in its formal database required by the Congressional Review Act (many are seemingly not properly submitted).
• Number/percentage of agency rules and guidance documents presented properly to Congress in accordance with the Congressional Review Act (these are even harder to assess than those presented to GAO, and would be an important item for Congress to tackle unilaterally right away).
• Assessment of rules that purportedly affect internal agency procedures alone.
• Numbers and percentages of rules facing statutory or judicial deadlines that limit executive branch ability to restrain them, or for which weighing costs and benefits is statutorily prohibited.
• Percentages of rules and guidance documents reviewed (and not reviewed) by the OMB and action taken. (This could entail a reconstruction of items from the one-time Regulatory Program of the U.S. Government.)

The foregoing is is not exhaustive, but representative of things worth knowing.

The accumulation of regulatory guidance documents, memoranda, interpretations, bulletins, circulars and other regulatory dark matter to implement or influence policy (neglected in the new Circular A-4 update proposal) calls for greater disclosure and inventorying than exists now, thus any report card would need constant improvement and tweaks. Attention not just to rules but to these “sub-regulatory” guidance documents is particularly urgent in the wake of legislation (virus, “rescue,” infrastructure, inflation, tech “investment”) enacted over the past three years that will prove hyper-regulatory. Small business feeling the heat may generate some energy for reforms.

Otherwise, pressure from states could eventually prompt Congress to address regulation. The Constitution’s Article V provides for states to check federal power, of course. Many state legislators have indicated support for the Regulation Freedom Amendment, which reads, in its entirety: “Whenever one quarter of the members of the U.S. House or the U.S. Senate transmit to the president their written declaration of opposition to a proposed federal regulation, it shall require a majority vote of the House and Senate to adopt that regulation.” While similar legislation to require Congress to approve rules has gone nowhere, states may have their say.

In the final analysis, when Congress ensures transparency and disclosure and assumes responsibility for the growth of the regulatory state, the resulting system will be one that is fairer and more accountable to voters. It will certainly exceed the negative contributions of a Circular A-4 rewrite under far-left progressives. But even congressionally enforced transparency is not enough.

After all, Congress is responsible for the fiscal budget, yet deficits remain the norm and we find ourselves enveloped in another debt limit wrangle despite the costs being above board. The same or worse games will plague any future regulatory “budget” without a federal downsizing accompanying it.

The more fundamental concern of today is Congress’ own arrogation of excess power to itself, a phenomenon that has escalated since 2020. The primary questions now are over not merely the role and legitimacy of the administrative state, but over the legitimate scope of federal power as such if we are to call ourselves a limited constitutional republic. Regulatory reform in part calls for laws against laws. Reversing Biden’s misbegotten “modernization” of regulatory review is just step one.