The “Guidance Out Of Darkness Act” Is The Low-Hanging Fruit Of Regulatory Reform

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We often marvel that we don’t actually know how many federal agencies exist. And the number of “commissions” and programs (many expired and now unauthorized)? Forget it.

That in turn implies we don’t know how many rules and regulations there are.

Sure, agencies issue over 3,000 rules every year, and we can easily count those. But they also issue thousands of guidance documents, “interpretative” rules and policy statements, plus scads of other materials not exposed to the sunshine of public notice-and-comment. These can affect everything from labor policy to higher education to finance, yet these don’t always (almost never) wind up in the Federal Register like ordinary rules do.

Granted, guidance documents are ostensibly non-binding — but are you going to argue with an agency holding permitting authority over your business? Besides, influencing policy, not mere offering position statements, is prevalent. Some major policy initiatives of our era — like the Securities and Exchange Commission’s “Disclosure Related to Climate Change” and the Environmental Protection Agency’s “Waters of the United States” transformations — started as interpretive guidance. Similarly, the inclusion of “gender identity” in the definition of “sex” originated in a 2016 Department of Education and Department of Justice “Dear Colleague” letter. The Labor Department Wage and Hour Division’s policies reclassifing some independent contractors as employees and defining “joint employment” were 2015 and 2016 “Administrative Interpretations.”

There’s so much agency nudging outside the normal Administrative Procedure Act notice-and-comment process that we took to calling the phenomenon “regulatory dark matter.” Just below I’ve pasted a “word cloud” I extracted from Some of it would qualify as guidance, some not; some occupies a gray area. But as Washington continues its hyperspending and displacement of the private economy and wields the carrots and sticks of procurement and contracting to get its way, every agency proclamation bears monitoring.

Unfortunately, a surge in policy-by-guidance appears to be inevitable unless steps are taken to counteract the recent alarming consolidation of power in Washington. During the past three years, we have witnessed an unprecendented multi-trillion dollar legislative profusion on infrastructure, “innovation” and “inflation” spending (what Washington calls “investments”). Those will have regulatory effects, plus spawn waves of guidance. In addition, Biden’s dramatic cross-agency progressive social and climate pursuits, rooted in the broader progressive ESG campaign, will pile more arbitrary and unilateral agency interpretations atop the already unknown, unfathomable and unaccounted-for.

For some, all that proliferation, confusion and the sheer unavoidable presence of Washington may be OK; for others, not so much. It’s bad enough for the federal government to direct its spending (your taxes) to domestic and international ends with which you may not not agree; but the hazards of regulatory dark matter have escalated with Biden’s March 20 veto of legislation that would have protected citizens’ retirement savings from getting channeled toward ESG conceits that will dramatically expand government-by-guidance. This intolerable development — one might regard it the caboose on a long train of abuses — needs to be addressed with utmost urgency but is beyond our scope here.

Read the full article at Forbes.