Biden changes rules to dodge scrutiny of new regulations

An executive order signed by President Biden makes it easier for agencies to impose regulatory changes without review or public scrutiny.

President Biden signed the order on April 6. It significantly altered how the government reviews major regulatory changes, allowing some new regulations to escape cost-benefit analysis and making it more difficult to track them.

The new Biden rule doubled the threshold for regulations to qualify for special government review based on estimated economic impact, hiking it from $100 million to $200 million.

Mr. Biden cited inflation to justify the change.

He also tasked the government with altering the way it conducts cost-benefit analyses of regulation changes. Those proposed changes, which are not yet finalized, would make the government less objective and more likely to advocate for a regulation proposed by the administration, economic analysts said.

Ryan Young, a senior economist with the Competitive Enterprise Institute, said the result of Mr. Biden’s executive order and the other proposed changes is “fewer challenges to rules, less transparency and a freer hand for the executive branch to act without the legislature and the judiciary checking them.”

He said the new $200 million threshold is already shielding new regulations from scrutiny, calculating that the Biden administration is on pace this year to issue only 18 economically significant rules that will meet the new $200 million threshold and thus require additional review and transparency. Last year, under the $100 million threshold, the administration issued 43 rules.

“That’s a fair amount of rules that are now going to be flying under the radar,” said Mr. Young, who tracks federal regulations.

It’s tougher to track rules that are dodging the extra analysis under the new threshold because any regulation with an economic impact of less than $200 million won’t be flagged in the federal register.

“We may hear about it and we may not,” Mr. Young said.

Only one of the nine new regulations issued by the Biden administration qualified for scrutiny under the new threshold. The June 5 regulation made a broad array of annual adjustments to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicare cost plan and other federal benefits for the elderly.

Among the eight new regulations that ducked additional scrutiny are a regulation establishing a health benefits program for U.S. Postal Service employees and a State Department rule hiking visa fees for students, tourists and others.  

An analysis by the Brookings Institution characterized the change as “incremental” and overdue.

The $200 million threshold should be raised even higher, to $332 million, if adjusted fully for inflation, said Connor Raso, senior associate general counsel at the Public Company Accounting Oversight Board and a Brookings contributor.

Mr. Raso said the higher economic impact threshold will better utilize limited staff resources in the Office of Information and Regulatory Affairs, which conducts the oversight, and will allow it to deliver “higher impact” reviews.  

The rules change comes amid increasing criticism of Mr. Biden’s regulatory push.

Mr. Biden’s green energy goals, for example, have led to an array of new efficiency rules for a slew of household appliances, including microwaves and toothbrush chargers. The effort is forcing manufacturers to produce more costly products that they say reverse innovation by decades and potentially eliminate thousands of U.S. jobs.

Congress has tried to put the brakes on some of Mr. Biden’s regulations and has passed a series of bipartisan measures that seek to overturn them. The president has vetoed most of it, including a measure to overturn new emissions limits for heavy-duty trucks that critics say will boost equipment costs and ultimately consumer prices.

Mr. Biden also vetoed congressional legislation overturning his $400 billion student loan forgiveness program and a new Environmental Protection Agency rule expanding federal regulatory power over land and water.

Republicans and other critics have accused Mr. Biden of executive branch overreach and the Supreme Court has sided with them in some instances.

The high court recently tossed out the student loan forgiveness program and in May rejected the new EPA water regulations.

As the Biden administration has sought to decrease regulatory scrutiny, Republicans in Congress are seeking ways to increase it.

The GOP-led House earlier this year passed legislation that would require congressional approval beforehand for any new regulation that impacts the economy by more than $100 million annually.

Across the U.S. Capitol, Sen. John Thune said even the regulations that meet the economic threshold for scrutiny are dodging scrutiny, because agencies are using “cherry-picked data” that overstates benefits and understates costs.

Mr. Thune, South Dakota Republican, introduced a measure earlier this year that would require federal agencies to conduct a more “transparent and objective analysis” of the economic impact of proposed regulations, particularly for small businesses. It would also require agencies to justify the need for the regulation and consider less burdensome alternatives.

The measure is set to die in the Democratic-controlled Senate but is more likely to make it to the floor for a vote if Republicans take control of the chamber in 2024 and the GOP looks for ways to impose tighter controls on executive branch regulatory actions following Mr. Biden’s spree.

“All too often, federal agencies issue overly burdensome regulations without adequately assessing the impact on consumers and small businesses,” Mr. Thune said. “Unfortunately, this lack of transparency has become commonplace in the Biden administration. My legislation would hold government agencies accountable by enforcing rules that require them to analyze the economic impacts of onerous regulations before imposing them on the economy.”