Report: Biden Upends Role of Federal Regulators to Seek Climate, Social Justice Policies

A new Competitive Enterprise Institute report documents how regulations imposed by the federal government on the private sector have radically shifted since President Biden took office.

“The Trump administration tried to make federal agencies streamline and report on their regulatory actions and speed up regulatory approvals for businesses,” explained report author Clyde Wayne Crews, Jr.“But the Biden administration immediately reversed these modest liberalizations and instead has prioritized and inserted controversial, unrelated progressive causes into the regulatory process.”

The report, Ten Thousand Commandments, documents the huge regulatory burden imposed by Washington, now returning to pre-Trump levels by key measures like the number of rules issued and number of pages in the Federal Register. In addition to what the government taxes and spends, regulations and interventions cost the economy hundreds of billions—even trillions—of dollars annually. Using the most recent available data, the report pegs the regulatory cost burden at just under $2 trillion annually, on top of the $2.8 trillion the federal government now spends annually. Even then, there are many categories of federal intervention noted in the report that remain unmeasured.

Biden changes:

• Biden ending Trump policies that attempted to curb unneeded regulations, like his “one-in/two-out” Executive Order 13771 entitled “Reducing Regulation and Controlling Regulatory Costs”
• Biden ending a Trump era requirement that agencies publish their multitudes of guidance documents online, a reversal that makes regulations less transparent to the public and makes it easier for agencies to use and abuse such untrackable “regulatory dark matter.”
• Biden imposing “whole-of-government” mandates (on climate, equity, competition, etc.), pressuring regulators to take on issues outside their jurisdiction or competence. See: Executive Order 13985 entitled “Advancing Racial Equity and Support for Underserved Communities through the Federal Government.”
• Congress passing a spate of laws that turbo-charge the regulatory state, like the CARES Act, the American Rescue Plan, and the so-called “Infrastructure,” “Innovation” and “Inflation” Acts.

A few specific examples:

• The Federal Reserve is supposed to provide the nation with a safer, more flexible, and more stable monetary and financial system but now its focus has shifted to climate change, undertaking a “climate scenario analysis” in bank stress tests to steer capital away from fossil-fuel energy.
• The Employee Benefits Security Administration is supposed to ensure the security of the retirement, health, and other workplace-related benefits of America’s workers and their families. But now it is trying to amend the Employee Retirement Income Security Act of 1974 to get fund managers to consider climate change and other Environmental/Social/Governance (ESG) factors in assessing investment risks and returns.

What can be done to rein in over-regulation and help private sector freedoms and economic opportunity? It will take more than reforming any individual rule. The rulemaking process itself needs an overhaul, the report argues. For example:

• Rather than whole-of-government initiatives, agencies should be pared back to their alleged core missions – or in some cases abolished entirely.
• Congress should be required to vote on economically significant or controversial agency rules before they become binding.
• Congress should require agencies to issue annual transparency report cards on how many rules they issue, how many existing rules are on the books and what they cost, and how many go through penetrating rulemaking oversight (a process decaying under Biden).
• Congress should require agencies to clear out obsolete rules and trim down the 185,000-page Code of Federal Regulations. This can involve setting up an independent commission to identify bad regulations and send a cleanup package to Congress to vote on.
• Congress should require that new regulations automatically sunset after five years unless renewed by Congress, to prevent and clear out the buildup of regulatory sludge.  
• The White House Office of Management and Budget should reclaim its role as an impartial reviewer of regulatory costs and benefits, rather than bending over backwards to rationalize progressive political priorities.

“For the economic health and stability of a nation confronting inflation, supply-chain disruptions, debt, and other self-inflicted wounds, the regulatory process should be made as transparent as possible and should be brought under greater democratic accountability and constitutional norms,” Crews argues in the report.

• View the Ten Thousand Commandments report by Wayne Crews