Biden’s Rule by Regulator Will Have A Crushing Impact On Individuals and the Economy

It’s been challenging to keep up with all of the executive orders coming out of the White House since January 20th, but the about-face in how agencies construct and evaluate rules is enough to give one whiplash.  

Let me do a quick compare and contrast to illustrate the point.  

This order was issued by President Trump on January 30, 2017, and sets forth its purpose thus: 

“It is the policy of the executive branch to be prudent and financially responsible in the expenditure of funds, from both public and private sources. In addition to the management of the direct expenditure of taxpayer dollars through the budgeting process, it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations. Toward that end, it is important that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

This one was issued by President Biden on January 20, 2021, and sets forth its purpose thus:  

I [ ] direct the Director of [the Office of Management and Budget], in consultation with representatives of executive departments and agencies [ ] to begin a process with the goal of producing a set of recommendations for improving and modernizing regulatory review.  These recommendations should provide concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations. [ ] In particular, the recommendations should: identify ways to modernize and improve the regulatory review process, [ ] to ensure that the review process promotes policies that reflect new developments in scientific and economic understanding, fully accounts for regulatory benefits that are difficult or impossible to quantify, and does not have harmful anti-regulatory or deregulatory effects; 

The first order seems remarkably clear and coherent for something generated by the federal government. The second order, in contrast, is impossibly convoluted and incomprehensible, even for someone fluent in bureaucratese. I would really love to know, for instance, how a regulatory review process can codify a consistent standard for new rules that “fully accounts for regulatory benefits that are difficult or impossible to quantify.” 

I’d been scratching my head over the impossible order when the Wall Street Journal published an piece expressing similar incredulity, penned by a former director and associate director of the Office of Management and Budget (or OMB).

The authors began by reminding us that Congress defers much of the actual work of governing — producing the rules and regulations that implement laws — to executive branch agencies, which would happily regulate until the cows come home if given free rein. “For decades the primary protection against an abuse of this power has been a requirement that a regulation’s costs must not outweigh its benefits,” they wrote. “While each agency does its own cost-benefit analyses based on its own rules, OMB directs the agencies on how to do that and oversees the results. The new presidential memo tells OMB how to do that. The effects will filter down to every federal agency.”

They go on to translate President Biden’s directive into plain English:

“That means throw out traditional measures, use anything you can possibly find to promote the benefit side of the cost-benefit analysis, and don’t do anything that might impair new regulation or remove old rules. The message from the Biden administration is that wherever cost-benefit analyses might create an impediment to regulation, OMB should feel free to throw out the math and use whatever it can find in the annals of some fringe academic journal to justify the new rules.”

Then comes some well-deserved mockery:

“Want to regulate agricultural drainage ditches as ‘navigable waters,’ subject to federal rules and restrictions? Don’t worry about whether food costs might rise or farmers might go bankrupt. You can offset those costs with the societal ‘benefit’ of promoting the interests of future generations. Never mind that it can’t be measured. As long as it serves the desired end, that will be good enough.”

The directive issued by President Trump gave us the opportunity to prove over the course of four years that deregulation and market-based economics work. True deregulation allows for “sustained full employment without inflation,” as our authors go on to write. Biden’s push for re-regulation, on the other hand, gives unelected and unaccountable Administrative State apparatchiks carte blanche to regulate at will, irrespective of economic costs and potential casualties, by discarding a meaningful cost-benefit analysis.

That deference to federal workers no doubt delights entrenched government regulators, who rolled out the red carpet for Biden’s team of appointees, amidst much rejoicing from those who spend their careers imposing rules and regulations on the rest of us. But it bodes ill for the businesses, industries, energy producers and private citizens who must bear the massive burdens imposed by Joe Biden’s rule by regulator.  

MSLF’s fight to restrain the Administrative State just became all that much more urgent. I hope you’ll support us in that work.

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