Biden Draws Conservative Ire Over 'Social' Regulatory Reform

By Al Barbarino
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Law360 (January 22, 2021, 7:26 PM EST) -- President Joe Biden's day-one order for "Modernizing Regulatory Review" calls on the Office of Management and Budget to craft a new set of regulatory recommendations that will "promote the public interest" in line with his four top priorities, a move that more conservative voices characterized as a push toward "hyper-regulation."

In Wednesday's order, Biden called on the director of the OMB, in consultation with other government agencies and executive departments, to provide "concrete suggestions" on how the regulatory review process can address his four previously stated major priorities: the COVID-19 pandemic, the economy, racial inequality and climate change.

"Regulations that promote the public interest are vital for tackling national priorities," the order said.

Biden called on the OMB to "as soon as practicable … provide concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations."

"These recommendations should be informed by public engagement with relevant stakeholders," he added.

The order is in line with a four-decade-old process that calls on the OMB's Office of Information and Regulatory Affairs to request and review executive branch regulatory actions, a process commonly associated with a so-called cost-benefit analysis of the impacts on society.

Biden reaffirmed the Obama-era Improving Regulation and Regulatory Review executive order, the text of which promotes the "open exchange of information and perspectives among state, local, and tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole."

The Obama order also fosters "scientific integrity," a highly topical item amid the coronavirus pandemic.

Biden asked the OMB to "consider ways that OIRA can play a more proactive role in partnering with agencies to explore, promote, and undertake regulatory initiatives that are likely to yield significant benefits."

He also called for recommendations that "ensure that regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities."

Historically, conservatives have pushed for less regulation and a lower regulatory budget, and they have criticized the social and public interest-related regulatory measures that some argue are hard to quantify, such as the "racial justice" and "human dignity" components identified in Wednesday's order.

Dan Bosch, director of regulatory policy at the center-right think tank American Action Forum, said in a blog post Thursday that OIRA's primary function in its review process has been to "ensure that agencies properly assess a regulation's costs and benefits to society," adding that he believes Biden's order signals that "regulations will be a major — if not the primary — means of implementing the administration's agenda."

"While regulations should be more beneficial to society to justify costs, the seeming shift of priorities toward benefits rather than a balanced analysis appears aimed directly at justifying a significant ramp up in federal regulatory activity over the next four years," Bosch wrote.

Clyde Wayne Crews, a senior fellow with the libertarian think tank Competitive Enterprise Institute, warned that the new process is "likely to do away with cost/benefit analysis by elevating unquantifiable aims as benefits."

"The aim is to put weight on the scales of whether or not to regulate such that the answer will always be in the affirmative, replacing market operation and civil society with government in the pursuit of a range of non-quantifiable goals," he wrote. "The [order], in a nutshell plainly translates into a new architecture for never-ending regulations as long as the left declares that benefits exceed costs.

Crews likened the order to "hyper-regulation" and said the "plan is about gutting the restraint of the past four years."

Also on Wednesday, Biden instituted a regulatory freeze on pending rules issued by the Trump administration, telling government executive department and agency heads to first give his administration a chance to review them.

That order said agencies should immediately withdraw any finalized rules that haven't yet been published in the Federal Register and "consider" 60-day postponements for published rules that haven't yet taken effect.

House Judiciary Committee Chairman Jerrold Nadler, D-N.Y., was among those to applaud both orders, calling them "welcome relief for American families across the country" in a statement issued Thursday.

"It is critical that we use every tool to confront the COVID-19 pandemic, safeguard our communities, promote human dignity, and address the climate crisis," Nadler said. "This important step by the Biden administration will direct agencies to modernize and strengthen our regulatory system to ensure that it is transparent, responsive, and accountable."

--Additional reporting by Jon Hill. Editing by Jill Coffey.

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