What’s Ahead for Regulation in 2022?

There are two questions about the coming year in regulation. The first is what will happen. The second is what should happen.

What will likely happen is… pretty much the status quo. Three thousand and some new final regulations and total compliance costs in the neighborhood of $2 trillion. An administration’s first year is typically its slowest, as far as rulemaking goes, and its final year is its most active, especially if there is a party change. Things will likely ramp up a bit in 2022, especially as agencies begin to implement rules related to the big spending bills, but not by that much—especially since the Build Back Better spending bill is likely now dead.

First-year presidents and their appointees are still installing their personnel, forming their agendas, and learning the ropes. And if there was a party change, they spend a fair amount of time reversing and undoing the pervious administration’s policies, rather than making new rules. This seems to have been the case here, with the Biden administration undoing nearly all of former President Trump’s regulatory executive orders and several agency-issued regulations—though Trump’s disastrous trade policies remain intact.

An administration’s final year is typically is its busiest for rulemaking, so 2024 could be a very busy year for both regulators and regulated—especially if there is a party change. Midnight rushes also happen even when the incumbent wins, because the rulemaking process takes several months at minimum. A smartly run administration will make sure that high-priority regulations make it through this process even if they are confident in victory, just in case. But when the other side is about to take over, an administration will cram as much of its remaining agenda as it can into its final days. Nobody knows what will happen in 2024, but some form of a regulatory midnight rush is almost a certainty.

This coming year, the Biden administration’s second, will likely be in between its first and fourth years. Rulemakings will increase as agencies’ political appointees find their footing. But the increase will be smaller than it could have been, since the only major legislation passed this year was in the form of spending bills. A 50-50 Senate means additional substantive legislation is unlikely in 2022. While the spending bills that did pass have regulatory components, their focus was on spending, in the misguided view that spending was necessary to revive the COVID economy.

It is a big deal that the Build Back Better spending bill is likely now dead. Some of its regulatory provisions, especially for energy and environment, will likely come back in some other form. And President Biden will likely enact several of its planks without congressional input, using the same “pen and phone” tactic the Obama and Trump administrations used. If Congress changes hands in the midterm elections, look for something of a midnight rush before Congress’ next session convenes. This could also become a major source of rulemaking in 2023 if Republicans have the numbers to block most new legislation.

That’s what likely will happen. What about the separate question of what should happen? There are two main things. One is to ease the ongoing supply network crisis by repealing #NeverNeeded regulations that are slowing down trade, maritime shipping, trucking, and other important industries. The continuing fight against COVID-19 would benefit from a more reasonable FDA approval process, and fewer rules blocking access to telemedicine and other modern health care methods.

The second thing that should happen is to clean up the regulatory code. This is a long-term process, but President Biden has the opportunity to create a lasting positive legacy if he begins it. The best option is an independent regulatory cleanup commission that combs through different parts of the 185,000-page Code of Federal Regulations on a 10-year cycle. I wrote a paper outlining how a cleanup commission would work here. New regulations should also have automatic 10-year sunsets, renewable by Congress, so when they become obsolete, they would not linger on for decades, as they do now.

For more reform ideas, see Wayne Crews’s Ten Thousand Commandments report and the regulatory reform chapter in CEI’s Agenda for Congress.