Congress should act to protect the impartiality of federal agencies’ economic analyses of regulations.
The Biden administration, supported by thin Democratic majorities in the House and Senate, may soon begin issuing regulations to achieve its policy goals. A presidential memo from last month outlines the administration’s plan for modernizing the federal regulatory-development process within the executive branch. It calls for rulemaking-process improvements to promote goals such as public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, and equity.
But a close reading of Biden’s memo raises questions about whether the process improvements that it envisions will suffice to provide necessary transparency and accountability in rulemaking. In fact, Congress should consider taking additional steps in order to ensure transparency and accountability and to help make regulations authorized by existing statutes more efficient and cost-effective.
President Biden’s January 20 memo reaffirms, without elaboration, the principles of earlier executive orders about regulation issued by Presidents Clinton and Obama, which are themselves descendants of President Reagan’s landmark executive order of 1981 on regulation. Stated plainly, they are: to conduct a careful economic analysis before regulating; regulate only based on a reasoned analysis that the benefits justify the costs; pick regulatory options that provide the largest net benefits; ensure that regulations achieve their objectives at the lowest possible cost; and assess the performance of existing regulations in order to fix or cancel those that perform badly.
These executive orders provide commonsense and battle-tested principles for regulating, and they create pressure for regulators to estimate and publicly report benefits and costs — information that can facilitate discussions about more-economically sensible options. But they cannot prevent federal regulators generally from issuing costly and ineffective regulations, since they are enforceable only by White House officials and not by the courts.
So a larger question emerges: Is anyone, then, regulating the regulators? There is good reason, I’m afraid, to question the impartiality of federal agencies’ economic analyses of regulations. Loss of impartiality — e.g., self-serving analyses by federal regulators — can limit public and congressional understanding of the merits of regulatory actions, and can stymie oversight of the modern regulatory state.
This piece originally appeared at National Review Online
______________________
Randall Lutter is a senior fellow at the Manhattan Institute.
This piece originally appeared in National Review Online