January 19, 2021
Three Steps President Biden Can Take to Create a Progressive Regulatory Process
Senior Attorney at the Federal Deposit Insurance Corporation
President Biden has a once-in-a-generation opportunity to reform the regulatory framework, ensuring that the government is well-equipped to address the COVID-19 pandemic, skyrocketing inequality, climate and racial justice, and other 21st century challenges. The Trump Administration undertook efforts to rewrite the rulemaking procedures to roll back regulations, and there is no doubt that President Biden must reverse these new procedures. However, it is insufficient to simply undo these changes. The current system does not serve progressive values and must be reformed.
The Administrative Procedure Act provides a simple roadmap for notice-and-comment rulemakings, yet all presidents since Ronald Reagan have imposed additional procedures onto the system they inherited. In 2021, the result is an antiquated, ossified process that is unnecessarily time consuming, allows for significant corporate influence at all stages, and imposes analytical requirements that emphasize quantified cost-benefit analysis over other reasonable analyses. This system is not a neutral framework, but instead is one that works against progressive ideals. Here are three steps the Biden administration can take to ensure the regulatory process can effectively implement policies that protect our air and water, workplaces, and the economy.
Reform OIRA To Help Agencies, Not Micromanage Them
Two of the Office of Information and Regulatory Affairs’ (OIRA) most important functions are to ensure proposed regulations’ analyses adhere to quantified cost-benefit standards and to facilitate an interagency review process which allows agencies to provide comments to each other. Although these responsibilities are intended to create better regulatory outcomes, OIRA’s efforts in these areas have had the effect of weakening and delaying regulations.
Recently, OIRA delayed publication of the Centers for Disease Control’s COVID-19 guidance for weeks, sending it to officials with “no public health or scientific expertise,” and publishing a final version over the agency’s objections and in contradiction with established science. This is not uncommon. For the most consequential of rules, the interagency review process can postpone a rule’s enactment by months or years, preventing those who’d benefit from a rule from reaping its benefits during that time. More than 20% of rules reviewed in calendar year 2019 (99 of 475) were delayed by more than 120 days, and the longest was delayed by 420 days. At a time when America is facing immense challenges, agencies must be able to regulate more quickly than this process permits.
One reason for this delay is that agencies can frequently take weeks or months to return comments, prioritizing their own regulatory efforts over those of other agencies. To counteract this, OIRA must prioritize a robust and efficient interagency review process and dedicate additional resources to keeping on top of agencies to ensure they provide comments in an expeditious manner.
OIRA also must ensure that the views of structurally marginalized communities are heard by rule-writing agencies. Frequently, these impacted communities lack the institutional capacity to respond to Federal Register notices and fail to have their perspectives considered by agencies. OIRA should require agencies to follow best practices and conduct targeted outreach to representatives of underrepresented communities prior to submitting rules for review. OIRA could also conduct its own targeted outreach prior to approving any rule for publication to ensure that their views have been adequately considered before a rule is issued.
Additionally, OIRA should create an Office of Regulatory Innovation (ORI) to work with agencies to develop new regulatory policies that implement the president’s priorities. From its perch as a government-wide clearinghouse for regulations, OIRA is ideally situated to understand the president’s policy goals and translate them into regulation. For example, the incoming Biden administration, dedicated to addressing climate change, could use ORI to develop inter-agency policies to limit greenhouse gas emissions, especially in situations where an agency has not previously regulated to address that concern and lacks the institutional capacity to address climate change quickly and effectively. ORI could proactively pitch policies to agency political and policymaking staff and work to develop implementation strategies, or could reactively propose changes to regulations as they are submitted for review to further implement the president’s agenda. Although these functions are complimentary to OIRA’s regulatory review efforts, they are different enough that they should be assigned to employees other than the desk officers that review regulations and facilitate the interagency review process. OIRA’s staff should be expanded to accommodate ORI as well, from anywhere between doubling or even tripling its size.
OIRA must be reformed so that its efforts help, rather than harm, agencies’ regulatory efforts and the public.
Use All Available Policymaking Avenues
Agencies tend to use the notice-and-comment, or informal, rulemaking process to enact policy, but they are not required to do so: Informal rulemaking is but one procedural option amongst many that agencies may use to articulate policy, and the others may be much quicker. Rather than relying almost solely on informal adjudication, agency officials should examine their full range of authorities and adopt the procedures best suited for the situation.
Agency officials should consider using adjudications to interpret current law in more progressive manners. With some limitations, agencies are permitted to give force to new interpretations of statutes and regulations, akin to the development of common law by the courts. Although policymaking in this manner is not appropriate in every situation, agencies may find it an effective way to move policy more quickly than by rulemaking, requiring fewer procedural steps and opportunities for delay than the ossified rulemaking process.
Additionally, agencies should make use of enforcement discretion. Enforcement offices cannot investigate or prosecute every allegation of wrongdoing, and may therefore set priorities that offer certainty to the public as to the probability that a particular action will be prosecuted. Agencies may, for example, issue non-binding “no-action letters” which tell the public that staff will not recommend enforcement actions for a particular set of facts and circumstances, or may declare prosecution of specific cases as “low priority.” The Obama Administration took the latter course with DACA, and the policy was nearly as effective as a rulemaking—the Supreme Court declared that the Trump Administration could not repeal DACA without sufficient analysis.
Ensure Economic Analyses Capture Relevant Factors
Cost-benefit analysis (CBA) is an exercise intended to assist agencies in evaluating the merits of regulations by understanding the costs that would be placed on regulated parties and the benefits that would flow to the public. However, agencies frequently conduct CBA in ways that are biased against progressive values while simultaneously being overly formulaic; CBA frequently ceases to be a beneficial analytical tool.
When conducting analyses, agencies should consider regulatory impacts that cannot be or are not easily quantified. Quantification has the benefit of permitting agencies to easily compare two numbers, but allows for significant corporate influence in ways that individuals and good government groups cannot possibly match. Wealthy corporations are most likely to have data relevant to a given rulemaking than structurally-marginalized communities likely to benefit from the rule. Corporations therefore have the opportunity to provide data to regulators or withhold it, depending on their interests, and may also sway the process by hiring so-called experts to produce analyses of every potential cost of proposed regulations while regulatory beneficiaries face innumerable challenges in countering such claims. Quantification also encourages agencies to place an emphasis on easily-quantifiable impacts, rather than on those that are more diffuse and harder or impossible to quantify. In one instance, a Food and Drug Administration rule on e-cigarettes was weakened because vape shops would lose revenue while the data on whether millions of young adults would become addicted was not sufficiently clear. Agencies should consider quantification as one method of analysis to be used in conjunction with others—such as whether regulations promote values such as equality, equity, and fairness.
Agencies should also analyze regulations in relation to specific items in President Biden’s agenda. The administration could require all agencies to ensure that every rule promotes competitive markets, for example, even if particular agencies are not traditionally tasked with achieving that priority. For example, concentration in the pharmacy market has resulted in significant patient harms. Although they are not considered antitrust regulators, the Department of Health and Human Services and its subcomponents could address this competition issue via their public health regulations. Similarly, all agencies could be required to ensure that their regulations decrease economic inequality or reduce racial disparities.
President Biden faces an unprecedented need to reshape the regulatory process and must not simply return to the pre-Trump status quo. Those rules allowed regulated entities to use regulatory processes to escape scrutiny and failed those reliant on government regulation to protect their health, safety, and welfare. Especially now, in the midst of the COVID-19 pandemic and unacceptably high levels of unemployment, the American public deserves a government that follows science, ensures the participation of previously excluded communities, and emphasizes equity when regulating, not just quantified costs and benefits.
There are many opportunities for the Biden administration to reform the regulatory process. The ones described here would ensure that the government effectuates policy quickly, effectively, and in manners that emphasize progressive values.