How the Inflation Reduction Act Will Expand Regulation

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Ever since observers began tallying rule counts and pages in the Federal Register, detractors have complained about what poor measures such devices are. They might be semi-correct for the wrong reason. With the Inflation Reduction Act topping off two and a half years of “inflection points” and “transformative” legislation and “Whole-of-Government” interventions in “equity,” “climate,” “competition,” and much more, the all-encompassing federal government no longer need to issue regulations to control society and the economy.

Build Back Better was not needed to shift into the nation’s footing toward new domestic forever wars and the open-ended spending and regulation they entail.

Forget laws and regulations; with a federal government this large, any move from issuing sub-regulatory guidance documents (I’ve tabbed over 107,000) can send ripples through the economy and society. Given the power now bestowed to the bureaucracy, there’s little need to write rules anymore when using guidance documents will do. 

Let’s look at things anyway, though. Regulatory counts are useful for future reference to compare and disentangle the cumulative effects of laws, notice-and-comment rules and regulations, and all the (allegedly) sub-regulatory dark matter.

Since the 1970s—it was only then that rules began to be counted—through 2004, there were always over 4,000 rules issued annually. Nowadays, rules annually tend to clock in at over 3,000 (Trump tamped them down to 2,964 in 2019) but well short of 4,000.

Here we are in early August 2022. Note that in the chart below, overall rules stand at 1,843, putting us on target for a little over 3,000 again this year, from the same Biden administration that has hinted on numerous occasions at acting without Congress.

The year 2020—the final year of the Trump administration—closed out at 3,353 final rules, with 462 of them deemed “significant.” (Significant rules appear at the bottom of each column in the chart above.) That was Trump’s highest number of significant rules, whose three earlier years were all well below that—at 261, 201 and 222, respectively.

During each of Trump’s years, significant and non-significant rules were rolled back by Trump’s Executive Order 13,771, which required the elimination of two rules for each significant rule added. That had highly noteworthy if not permanent results. Also, Trump’s lesser tallies included moves deliberately intended to be deregulatory, which paradoxically requires writing a rule and adding to the overall count.  

Overall Biden rule counts so far are not high historically—yet. But Biden has no interest in deregulation, which he has described as “harmful.” Biden eliminated Trump’s one-in-two-out controls, removed a “Deregulatory” designation for agency rules, and scrapped the agency guidance document portals and guidance-issuance infrastructure begun by the Trump administration.

Biden’s first year brought 3,257 rules overall, 387 of them “significant.” But of those, 73 were part of Trump’s “midnight rule” flurry. Still, Biden’s 314 net during his first year—when freezes and assessments traditionally occur—has reachd the Obama levels of 2014.  

Just over midway through Biden’s second year, where do significant rules stand? As the chart shows, as of August 8, the Biden administration has issued 154 significant final rules. Maintaining the same pace would mean 101 new rules during the next 145 days, for a total of 255 significant rules. That’s not groundbreaking, but the pace could accelerate. For example, separately, there is a total of 258 “economically significant” rules in pipeline at the “Active” and “Long-term” stages in the recently issued Spring 2022 Unified Agenda depiction of federal regulations. “Economically significant” rules can have more heft than “mere” significant ones.

As the chart shows, significant rules in recent times have been substantially higher than Biden’s first and Trump’s final years. Obama topped the chart at 486 rules in 2016, and the Bush administration bestowed 428 rules in 2008.

The potential return of significant rules to pre-Trump levels bears close monitoring, but so does the trajectory of sub-regulatory guidance documents that can complement or replace that development.

The real task is to restore constitutional government and place limits on the supervisory strain of lawmaking. That must start with ending the abuse of crisis that has culminated in the inflation bill.