- - Tuesday, January 26, 2021

Last week, in one of his first actions as president, Joe Biden rescinded former President Trump’s well known “one-in, two-out” executive order for regulations. 

In so doing, President Biden has lifted all regulatory cost caps on executive agencies, meaning federal regulators can once again take actions that spend the public’s money ad infinitum.

The new Biden directive is not a surprise, but it is a disappointment. It’s a slap in the face to anyone who cares about placing reasonable limits on executive power.

Executive Order 13771 was signed by former President Trump in 2017. Receiving most attention was its requirement that for each new regulation agency added, two should be removed. However, a far more important aspect of the order was the system of regulatory caps that it established.

Regulators have always been constrained in terms of how much taxpayer money they can directly spend, since Congress allocates a fixed budget to them each year. However, the same constraints have not extended to their regulations. In theory, regulators could undemocratically “spend” as much of the public’s money as they wanted, by forcing us to comply with rules that our elected representatives do not vote on but that nonetheless cost us dearly.

With Mr. Trump’s order, for the first time, regulators did not have unlimited license to spend as much as they see fit with their rules. They had a budget to stay within. This was a historic moment in the history of the federal regulatory process. Over the four years Mr. Trump was in office, he demonstrated that the new budgeting system could work — albeit imperfectly. The system had warts, to be sure, but those could be worked out over time.

To abandon the system whole cloth — as Mr. Biden did last week — is to state that there should be no limits. It’s hard to see how any president could think this is a good idea. In essence, it’s as if our money belongs to them and not us.

Mr. Biden’s actions portend that he plans on aggressive use of regulatory actions during his time in office. The floodgates are opening, and a regulatory tsunami is about to rush through.

In somewhat more optimistic news, Mr. Biden also announced plans last week to modernize the regulatory review process that some regulations are required to go through. A small number of federal regulations receive economic analysis and undergo review by the Office of Management and Budget (OMB), mostly to ensure the analysis meets certain standards and rules align with presidential priorities.

This process has never worked well, in part because OMB’s guidelines depart from sound economic practices. They are riddled with value judgements, for example, about the worth of human life or the relative value of the future compared to the present. Most regulatory impact analyses OMB signs off on are woefully incomplete, or worse, political advocacy documents masquerading as objective science.

Mr. Biden’s decision to revisit guidelines that have caused so much trouble is long overdue. In principle, this should be celebrated. But in practice, the move may portend even more problems. For one thing, Mr. Biden’s memo emphasizes nebulous factors like equity and human dignity. That’s all well and good, in theory, but could mean a departure from the Trump administration’s no-nonsense approach to tallying costs and benefits.

Another problem is that Mr. Biden is once again putting the keystone cops — OMB — in charge of the updates. The same bungling bureaucrats made a mess of things the last time they updated the guidelines, which was back in 2003. (Note that Mr. Biden is also reversing Mr. Trump’s civil service reforms, which would have made it easier to fire public employees who don’t do their jobs.)

Together, Mr. Biden’s actions probably signal a deliberate shift away from evidence-based policy and toward more of the same old tired politics and activism. Time will tell how this all plays out. But most likely, these actions bode poorly for Americans, who in the end will have to pay for all this profligacy.

• James Broughel is a senior research fellow with the Mercatus Center at George Mason University.

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