Washington’s new motto is: When you run out of other people’s money, keep spending anyway.
It’s a sad state of affairs when a national debt approaching $28 trillion is not already regarded as sufficient “stimulus” spending, particularly when so little of the latest bailout package will go toward credible COVID-recovery efforts.
Former president Donald Trump tried to freeze regulatory costs, to the extent of even arguably saving hundreds of billions annually, with his “one-in, two-out” order, which asked that two regulations be repealed for every new one that was introduced.
President Joe Biden predictably scuttled that on Day One with executive order of his own entitled, “Revocation of Certain Executive Orders Concerning Federal Regulation.”
But Biden’s early removal of public safeguards against an ambitious administrative state contained another more consequential move about which American businesses need to be aware.
There are a few dozen laws passed at the federal level every year, but over 3,000 regulations issued by unelected federal bureaucrats. (These were the regulations that Trump tried to streamline.)
The Swamp floats thousands of other rafts, too. These are the guidance documents, memoranda, interpretative bulletins, circulars, letters, and various other kinds of “regulatory dark matter” that spew from agencies, that, while not law, add to federal regulatory-compliance burdens.
In addition to striking one-in, two-out, Biden eliminated a Trump executive order requiring that these myriad proclamations be made readily available to the public.
Examples of the sorts of sub-regulatory decrees expected to return include:
- Obama-era Labor Department interpretations on whether someone is an independent contractor or an employee and proclamations expanding joint-employer rules in franchising (essentially specifying when both the franchiser and franchisee could be treated as a worker’s employer).
- Extension of the employer-mandate deadline and continuation of noncompliant policies under Obamacare.
- Housing and Urban Development Department guidance insinuating that refusal to rent or sell to an ex-con may constitute violation of the Fair Housing Act.
- The Department of Justice/Education Department “Dear Colleague Letter on Transgender Students.”
- Driverless-car guidance from the National Highway Traffic Safety Administration and “commonsense guidelines” on a Driver Mode for smartphones.
And so on, and so on. Trump’s executive order requiring agencies to make proclamations publicly available was called “Promoting the Rule of Law through Improved Agency Guidance Documents,” and it directed agencies to maintain on their websites
a single, searchable, indexed database that contains or links to all guidance documents in effect from such agency or component. The website shall note that guidance documents lack the force and effect of law, except as authorized by law or as incorporated into a contract.
As of late 2020, I found that over 73,000 documents had been included in agencies’ portals. It is these commonsense disclosures that Biden is eliminating.
There is some time to correct course, if Congress takes note. As part of his order, Trump also directed executive agencies to issue a final rule on guidance — we’ve taken to calling them “FROGs” — and specifically to set up internal procedures for their creation and posting. Thirty agencies issued FROGs, all of which provided for searchable disclosures, by the time Biden took office.
Since these “rules on rules” are part of the Code of Federal Regulations, Biden cannot strike them out with his pen as he did the underlying Trump order. Nonetheless, Biden has directed agencies to “promptly take steps to rescind any orders, rules, regulations, guidelines, or policies, or portions thereof, implementing or enforcing” the Trump orders that he rescinded.
When asked at a briefing why President Biden rescinded an order aimed at transparency, White House press secretary Jen Psaki ducked and accused the Trump White House of erecting “unnecessary hurdles and cumbersome processes for agencies.” That is a clear signal that the Biden White House prioritizes the convenience of bureaucrats over the public’s right to know about the rules they are being told to follow.
Senator Ron Johnson (R., Wisc.) and 20 other senators wrote to Biden, urging him to reinstate the document-transparency order. In the letter they note that as a senator in California, Kamala Harris supported the Guidance Out of Darkness (GOOD) Act — legislation similar to the aforementioned Trump-era order.
Better disclosure and fairness for guidance has also been recommended by the bipartisan Administrative Conference of the United States, which has noted that “members of the public may feel bound by what they perceive as coercive guidance” and “sometimes find they have no practical escape from the terms of a policy statement.”
Trump’s orders were always going to be vulnerable to Biden’s “build back better” regime, but congressional and public watchdogs should try to put the president on a better track. One key might be found in another Biden order, “Modernizing Regulatory Review,” which downplays the importance of considering regulatory costs when crafting rules. Yet it also directs his administration to
identify reforms that will promote the efficiency, transparency, and inclusiveness of the interagency review process, and determine an appropriate approach with respect to the review of guidance documents.
That’s not a bad line, and it’s not clear how it got in there. But at least it could open the door to discussions with Congress regarding another attempt to pass the GOOD Act (which passed the House once before) and other measures.
In the long run, there need to be new measures that go further than Trump did in harnessing the regulatory state and making its decrees, including sub-regulatory guidance, more transparent.
- Deeming guidance significant when it imposes costs above a given threshold.
- Retaining notice and comment for significant guidance.
- Incorporating independent agencies into review and transparency processes.
- Reinstating agency guidance portals and setting up a single, government-wide portal.
- Affirming that guidance and rules alike are null unless properly submitted to the Government Accountability Office and to Congress.
Biden could easily remove the administrative state’s grip on our economy and well-being by reinstating and extending the public safeguards necessary to protect citizens from the largest government on earth. But will he want to?