Just after the July 4th Holiday, the Biden administration's Office of Management and Budget (OMB) released the Spring 2024 edition of the Unified Agenda of Federal Regulatory and Deregulatory Actions. This semi-annual publication outlines the rulemaking priorities of federal departments and agencies, providing a snapshot of upcoming regulations and the status of ongoing efforts. The Spring 2024 edition is particularly noteworthy as it implements Executive Order 14,094, which aims to modernize regulatory review by shifting the emphasis towards net benefits as perceived by the administration. This transformation has profound implications for regulatory oversight and the broader landscape of federal rulemaking.
The Shift in Regulatory Oversight
Since the early 1980s, the Unified Agenda has served as a critical tool for informing the public about upcoming regulations and the status of ongoing efforts. Traditionally, it has emphasized paperwork reduction, regulatory oversight, and balancing costs and benefits. However, the Biden administration has introduced a notable shift in focus through Executive Order 14,094. This order has altered the OMB's role from a regulatory watchdog to a promoter of net benefits--completely ignoring the costs to America's small businesses and working families. This changed posture attempts to make permanent the Biden Administration's goal of fundamentally altering the way we analyze regulatory policy in order to smooth the way of their "whole of government" approach to ideologial transformation of America.
Key Highlights of the Spring 2024 Unified Agenda
The Spring 2024 Unified Agenda presents 3,698 rules at various stages of production from over 60 federal departments, agencies, and commissions. This marks an increase from the 3,599 rules listed in the Fall 2023 Agenda. The breakdown is as follows:
Active Actions (2,361): These include pre-rule actions, proposed, and final rules anticipated or prioritized for the near future. This number has decreased from 2,524 in Fall 2023, indicating a potential slowdown as the 2024 election year progresses. Interestingly, only 405 of these active elements are new entries, up from 320 in the fall edition.
Completed Actions (689): These are rulemakings completed in the past six months, a significant jump from 431 in the Fall 2023 Agenda. This surge may reflect an effort to finalize rules before the 2024 election, mitigating the risk of Congressional Review Act (CRA) disapprovals in the event of an administrative change.
Long-term Actions (648): These actions represent anticipated priority rulemakings beyond 12 months, showing a slight increase from 644 in the previous agenda.
The Impact of Executive Order 14,094
Executive Order 14,094 has raised the threshold for what qualifies as a 'significant regulatory action' from $100 million to $200 million in annual economic impact. This change is intended to streamline regulatory oversight but also reduces the visibility of rules costing between $100 million and $200 million. Despite this, the CRA still designates rules with economic impacts of $100 million or more as 'major,' ensuring continued scrutiny for these rules.
The new classification, 'Section 3(f)(1) Significant' (S3F1), replaces the previous 'economically significant' designation. The Spring 2024 Agenda lists 287 S3F1 rules, a slight decrease from the 303 in the Fall 2023 edition. This shift reflects the administration's emphasis on larger economic impacts and aligns with the broader regulatory goals outlined in the executive order.
Agency Contributions to the Regulatory Pipeline
A handful of executive departments account for a significant portion of the rules in the pipeline. The Departments of the Treasury, Interior, Transportation, Commerce, and Health and Human Services lead the way, with 1,593 rules among them, accounting for 43% of the total. The Environmental Protection Agency (EPA) follows with 193 rules. Among independent agencies, the Federal Communications Commission (FCC) tops the list with 113 rules.
Implications for Future Rulemaking
The surge in major rule completions suggests an urgency to finalize rules before the CRA's resolution of disapproval process can be leveraged by a potential new administration. Notably, the Spring 2024 Agenda includes 97 major rules completed in the past six months, compared to 53 in the Fall 2023 Agenda. This trend may continue as the administration seeks to solidify its regulatory agenda ahead of the 2024 elections.
Historical Context of Regulatory Cost Growth
To fully grasp the implications of the Spring 2024 Unified Agenda, it is essential to consider the historical context of regulatory cost growth. The tempo of regulatory cost increases under the Biden administration has surpassed even the Obama era, which itself was marked by unprecedented regulatory expansion.
The Obama Era: A Surge in Regulatory Costs
President Obama inherited a regulatory state that cost just over $900 billion in 2009. By the end of his tenure, the regulatory state had grown to approximately $2.25 trillion, with an average annual growth rate of 11.72%. This surge significantly impacted small businesses, increasing the per-employee, per-year (PEPY) cost from $7,762 to nearly $19,000. This regulatory burden placed immense pressure on small businesses, stifling economic growth and innovation.
The Trump Era: A Slowdown in Regulatory Growth
In contrast, President Trump's administration aimed to combat the regulatory excesses of the Obama era. Promising to eliminate two regulations for every new one implemented, the Trump administration managed to slow the growth of regulatory costs to a historically low rate of 0.33% per year. This period of regulatory certainty allowed the economy to stabilize and grow, benefiting small businesses by reducing their regulatory burden to a manageable level.
The Biden Era: An Unprecedented Increase
The Biden administration has accelerated regulatory cost growth to an annual rate of approximately 16%. This increase has driven the total cost of federal regulations from $2.28 trillion to $3.65 trillion in just over three years. For small businesses, the PEPY cost has soared from $19,088 to $33,105, representing a staggering increase that threatens their viability and economic contributions.
The Economic Impact of Continued Regulatory Growth
The continued acceleration of regulatory cost growth under the Biden administration has profound implications for the economy. The Unified Agenda confirms that this tempo will persist, potentially leading to even higher regulatory costs in the final months of the Biden administration. If this trend continues beyond January 2025, the regulatory state could reach unsustainable levels, further hampering economic growth and innovation.
Projected Regulatory Costs: Two Divergent Paths
Looking forward, there are two possible paths for regulatory cost growth: one that maintains the current high tempo and another that reverts to a more measured approach.
High Tempo Path: If regulatory costs continue to grow at the current rate of 15.83% per year, the total cost of federal regulations could reach $7.6 trillion by January 2030. For small businesses, the PEPY cost could rise to $69,520.50, making it nearly impossible for many to survive.
Measured Approach: If the growth rate reverts to the historically low 0.33% per year observed during the Trump administration, the total cost of federal regulations would be $3.716 trillion by January 2030, with the PEPY cost for small businesses at $33,706.85.
The Need for Congressional Oversight
To prevent regulatory costs from spiraling out of control, robust congressional oversight is essential--especially in light of the Supreme Court's overturning of the notorious Chevron Doctrine in the LoperBright decision this term. The CRA provides a mechanism for reviewing and potentially disapproving costly regulations, ensuring that only those with clear benefits and minimal economic impact are implemented. Congress must hold the OMB accountable for adhering to rigorous cost-benefit analyses and maintaining transparency in the regulatory process.
Conclusion
The Spring 2024 Unified Agenda highlights the Biden administration's ambitious regulatory agenda and confirms the continuation of rapid regulatory cost growth. This trend, if left unchecked, could have severe economic consequences, particularly for small businesses. As the 2024 elections approach and beyond, the pace and nature of rulemaking will be critical to watch. Ensuring transparency, adherence to CRA requirements, and rigorous oversight will be essential in maintaining a balanced and effective regulatory framework.
The future of regulatory policy in the United States hinges on the decisions made in the coming months. Whether the country continues down the path of rapid regulatory expansion or reverts to a more measured approach will have lasting implications for the economy, small businesses, and the overall health of the regulatory state. It is imperative that stakeholders remain vigilant and advocate for policies that promote sustainable economic growth and regulatory balance.
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