An Emergency Law to Extinguish Regulatory Dark Matter

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Many of us are pondering when things will return to normal. The short response is: never. …. Nothing will ever return to the “broken” sense of normalcy that prevailed prior to the crisis because the coronavirus pandemic marks a fundamental inflection point in our global trajectory.

—Klaus Schwab and Thierry Malleret, Covid-19: The Great Reset

Of well over 15,500 numbered U.S. presidential executive orders, a handful have addressed central regulatory oversight and made feints toward “cost-benefit analysis” of new rules and regulations. These enjoyed some staying power until the Biden administration.

What had been a three-pronged “whole of government” regulatory agenda on “equity,” “climate crisis,” and “competition policy” expanded in the first week of April 2022. Echoing Klaus Schwab, the United States now sports a “Whole-of-Government Effort to Prevent, Detect, and Treat Long COVID.”

Like the World Economic Forum chief cited above, Biden often proclaims the U.S. to be at one “inflection point” or another. His growing number of overlapping “whole of government” centralization of decision-making, spending, and regulation is more audacious than even the “pen and phone” of Barack Obama.

To “reform” the administrative state, numerous options for executive orders and legislation have been noted, up to and including an “Abuse-of-Crisis Prevention Act” to address this sort of power. While traditional options for regulatory reform (like budgeting, rule-cutting commissions, and report cards) are non-starters as far as the current administration is concerned, current GOP leadership will need to up its game, given its standing aside for Biden’s American Rescue Plan and its bipartisan complicity in the infrastructure bill and the looming embrace of the misnamed Bipartisan Innovation Act.

Apart from his successes with legislation, my suspicion is that much of Biden’s “whole of government” agenda will not be implemented by legislation, or even by regulation, which will become increasingly outstripped by sub-regulatory guidance documents, memoranda, notices, bulletins, letters and other forms of “regulatory dark matter” issued by unelected administrators. Guidance and directives are already prominent in Biden’s “big four” (so far) categories, with respect to procurement mandates to carry out “equity” and “climate” conceits, for example. In other cases, executive orders will ultimately manifest as final rules, as occurred with aminimum wage for federal contractors.

Despite the absence of prospects for reform at this moment, here we shall outline an emergency legislative vehicle that needs to be implemented stand-alone and also reinforced in a broader Abuse of Crisis Prevention Act. These need to include powerful management frameworks aimed at retrenchment of the central government and discipline of the elected and appointed executive branch, as well as career agency personnel.

During the Trump term, I issued a report that detailed an executive order that might govern abuses of agency interpretive rules and guidance documents. Some elements materialized in Donald Trump’s E.O. 13,891 on “Promoting the Rule of Law Through Improved Agency Guidance Documents,” which created portals for guidance disclosure and cemented some elements of Office of Management and Budget (OMB) oversight of guidance. Biden revoked the order.

Predating the Trump executive order and reintroduced in the 117th Congress, the Guidance Out of Darkness Act, or “GOOD Act,” would require agencies to publish all of their guidance in easily accessible form online. This objective was initially supported by then-California Sen. Kamala Harris, but such are the fruits of inflection points and reset.

Elements in the free market agenda presented below should be incorporated into congressional oversight hearings and into standalone legislation.

Plank 1. Reaffirm “official” but not-fully-enforced procedures for guidance document oversight. Congress could invoke policies of the George W. Bush era that have somehow escaped revocation, and the tenuous nod that Attorney General Merrick Garland gave last year to the notion that guidance is not legally binding. Legislation should incorporate these earlier procedures and codify the Trump order on guidance procedures.

Plank 2. Improve disclosure of guidance in a centralized location and publish a detailed summary of statistics for all agencies; this would go beyond Trump’s required agency portals and make a single centralized one (like this homemade version) enumerating guidance.

Plank 3. Incorporate guidance into the twice-yearly Regulatory Plan and Unified Agenda for Federal Regulatory and Deregulatory Actions.

Plank 4. Designate all guidance as either “Regulatory” or “Deregulatory”; this step would entail codifying certain procedures in Trump’s signature regulatory directive requiring the elimination of two rules for each significant rule added.

Plank 5. Modify the Congressional Review Act reporting template hosted on the Government Accountability Office’s (GAO) website (“Submission of Federal Rules under the Congressional Review Act”) to clearly designate “Guidance,” not merely certain limited rule types, as is current practice.

Plank 6. Future Guidance—Affirm that future agency guidance is null unless submitted to GAO and to both houses of Congress. As it stands, much rulemaking and guidance alike are invalid.

Plank 7. Past Guidance—Affirm that prior improperly issued guidance will not be regarded as in effect unless agencies formally back up and submit it.

Plank 8. Go beyond the Congressional Review Act’s submission process for guidance and disallow guidance that does not secure outright congressional approval.

Plank 9. Create a compendium of all validly issued guidance.

Plank 10. Ban initiation of certain federal agency guidance, especially in frontier and tech sectors that are abusing it and in any of post-COVID interventions.

Plank 11. Require public notice and comment procedures for guidance; this codifies some of what was in the Trump guidance order.

Plank 12. Deem guidance “significant” and increase OMB review of it, along with OMB review of independent agency rules that are now exempt.

The above is meant not as aimed at bolstering a “sound” administrative state, but as a step toward congressional lawmaking and the dismantling of the administrative state altogether. The pursuit of liberty rather than the pursuit of ever-increasing layers of government control is the goal. We require a far Greater Reset than the World Economic Forum’s merely “Great” one.