Congress should stop the White House from rewriting ‘Circular A-4’

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Barring an extension, next week (June 6) is the deadline for comments on the White House Office of Management and Budget’s proposed re-write of “Circular A-4” guidance to federal agencies on the how to do regulatory analysis.

It may sound obscure, but Circular A-4 is important for sizing up the regulatory costs that the federal government imposes. The previous version dates back to 2003. Joe Biden’s April 6 Executive Order 14,094 on “Modernizing Regulatory Review” kicked off this new program. Other supplemental guidance on regulatory analysis, such as a “Primer” on the preparation of “Regulatory Impact Analyses” will likely be addressed in short order as the process unfolds.

Hang on, y’all. Not so fast!

The progressive worldview and pro-regulatory principles of this White House ought not be permanently baked into the future regulatory analysis apparatus of an already overreaching Administrative State. Congress should not permit the Draft Circular rewrite to proceed any further without requiring the Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA) to address the decay in government regulatory oversight.

We made the case against a rewrite in a memorandum to the Hill and in outlets like Forbes and SSRN. I also had the opportunity to make a personal appeal for Congress to intervene in oral and written testimony in the House Budget Committee’s May 24 hearing on “Removing the Burdens of Government Overreach.”  

The re-write as presented will not only fail to repair but deepen the politicization that has converted OIRA from a watchdog against regulatory excess into a promoter of Biden’s “whole-of-government” progressive regulatory conceits.

We have often discussed this transformation in regulatory philosophy elsewhere. Readers can see it for themselves in Biden’s initial “Modernizing Regulatory Review” memorandum (formalized in the new executive order) and in preambles to recent editions of the semi-annual Unified Agenda of Federal Regulatory and Deregulatory Actions.

  • Numerous observers and interested parties can and should submit formal comment to OMB to influence the rewrite. It is even more important that Congress call a freeze and reassert control over the regulatory process. Some of the concerns that merit stopping the OMB rewrite include: 
  • The failure to comply with existing regulatory disclosure law such as the “Regulatory Right-to-Know Act” (the “annual” Report to Congress on regulatory costs and benefits was last seen for fiscal year 2019) and the suspect (or at least untrackable) adherence to mappable reporting of rules and guidance documents to both Congress as the Government Accountability Office;
  • The recent abandonment of executive order-based regulatory streamlining, protections for the regulated, and accountability for civil servants (all part of Biden’s revocation of Trump regulatory streamlining); and certain unilateral agency moves dampening regulatory disclosure (such as reversals of streamlining initiatives at the Departments of Transportation and Health and Human Services, and even at the EPA).
  • The Biden-induced abandonment of guidance document portals and formal mandatory procedures for the preparation of such documents;
  • The underlying paucity of cost-benefit analysis in spite of the homage continually paid to it;
  • The wholesale failure to provide the aggregate regulatory cost estimate that is not only mandatory but necessary to claims of “net-beneficial” policy within some reasonable regulatory budget constraint;
  • A failure to recognize that “market failures” and “behavioral biases” emphasized by the Draft Circular A-4 as rationales for rulemaking pale in comparison to political failures;
  • The continued omission of independent agencies from central review, even as their presence in the ongoing pursuit of progressive ends now being incubated rather than restrained by OMB is surging;
  • The emphasis on a soup of “distributional effects,” “equity,” “net benefits,” “behavioral biases” and the like in the Draft Circular A-4 is a recipe for expanding federal government authority past a point of no return for liberty and constitutional normalcy.

Congress should recognize that already, even without the Circular A-4 revamp, Biden has raised the threshold for the “significant” regulations that ostensibly receive more scrutiny from $100 million from $200 million annually.

The White House Circular A-4 rewrite must be seen in context of the progressive legislative transformations of recent years that serve to uniformly expand the federal government and its power. Instead, regulatory liberalization and shrinkage of bureaucracy are urgent. A watered down Circular A-4 is of no help in that effort.

The last step of a final rewrite cannot be first. Congress should press pause on a process that is increasingly designed to make it easy to add but not to subtract regulation. Merely influencing a rewrite of Circular A-4 will not suffice in today’s policy setting.