How core principles are gaining traction under Biden

We looked at the total number of significant regulations issued this year by the Biden administration, as well as individual regulations affecting small businesses and state and local governments.

We also considered the implications of the Congressional Review Act and the pressure it has put on the administration to issue its most expensive and ambitious legislation by the end of the summer.

Waiting too long would make the regulations subject to repeal by a resolution of disapproval under the Congressional Legislative Review Act (CRA) if there is a change of administration in 2025. This is because the CRA provides that regulations that have not been finalized before the last 60 days of the 118th legislative session are repealed.^t Congress would be a candidate for overthrow.

Against this backdrop, on July 5, the day after Independence Day, the White House released the spring edition of its twice-yearly A unified program of regulatory and deregulatory actions at the federal level outlining the agency’s rulemaking priorities.

The new Agenda represents 3,698 pending regulations from more than 60 departments, agencies, and commissions. These regulations include those in the pre-regulatory, active (proposed and final) and long-term stages, as well as regulations completed in the last six months (i.e., since the Fall 2023 Agenda).

Of the 3,698 provisions, 287 were “Section 3(f)(1) Significant” (S3F1) provisions included in the new spring programme.

The term S3F1 represents the $200 million economic impact threshold established a year ago by Biden’s directive to modernize regulatory review (Executive Order 14,094).

Seventy-nine of these S3F1 rules were completed in the past six months, compared to 52 such rules in the fall 2023 edition. That’s a 52 percent increase, indicating there may be something to the motivational power of CRA deadlines.

Previous editions of the Agenda had an “economic significance” threshold of $100 million, but this term is no longer used.

That $100 million in regulations is still allegedly stuck in the Office of Management and Budget (OMB) net, as the CRA retains control over what OMB is supposed to review and oversee, despite Biden’s Executive Order 14,094.

Unlike the new S3F1 rules, CRA defines a “major” rule as one that has $100 million in economic impact or otherwise has a “significant adverse effect on competition, employment, investment, productivity, or innovation.” The same OMB applying Biden’s $200 million appeal to rules is required to conduct the review, although in the Biden era, the fox/henhouse concept applies following EO 14.094 and its other offspring, OMB’s rewriting of so-called Circular A-4, guidance for agencies on how they conduct regulatory analysis.

As long as Congress holds OMB’s hand, CRA will retain the requirement to assess the trajectory of $100 million of regulations, despite Biden raising the threshold it considers highly significant to $200 million. As the chart below shows, 97 major regulations have been completed in the past six months (79 of them S3F1, as noted), far exceeding anything experienced in the past 10 years.

The 93 autumn main principles shown in the chart are only an approximation, a linear projection for the 179 days remaining in the year after July 5. Summing up the new achievements in the spring and those projected for the autumn, the estimated total number of implemented main principles for 2024 is 190.

In short, the Biden era is seeing a dramatic tightening of key regulations, and Congress must ensure that disclosures are followed and oversight is maintained.

On the one hand, you might expect the main rules to be less stringent than my immediate prediction, given the CRA and its potential to weaken what’s coming in 2024 in an election-saturated environment. But interestingly, as the chart shows for 2016 and 2020—also election years—there were more rules later on. So we’re keeping the linearity here just for the sake of the analysis, especially since it’s been conservative in recent history.

On second thought, “interesting” may not be the right word. Instead, it might seem logical to expect some form of saddle for election-year rules: a big, early surge in major rules to beat the CRA deadline, as we saw reflected in Federal Registerthen a period of calm or decline in the summer and early autumn, but then a resumption of lawmaking regardless of the election result.

Why reopen after the election, regardless of the outcome? If Biden or his Democratic successor wins in November, business regulations will return to normal. On the other hand, if Trump were to retake the White House, Biden’s outgoing cohort would throw everything at the wall in the form of midnight rules until Inauguration Day, knowing that the new administration could never and will never repeal them all, despite the CRA.

With the Biden Administration, we are seeing a significant increase in the number of major (and S3F1) rulemakings being issued. As we approach the 2024 election and even in its aftermath, the pace and nature of rulemaking will be critical. In the longer term, ensuring transparency and compliance with CRA requirements will be an essential part of the vigilance needed, even in the face of recent Supreme Court rulings that have imposed or reimposed important constraints on the administrative state. You can be sure that regulatory advocates are already considering workarounds.

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