How major rules are surging under the Biden administration

Photo Credit: Getty

We've taken a look at the total numbers of significant regulations issued this year in the Biden administration as well as at the subsets of those rules affecting small business and state/local governments.

We have also pondered implications of the Congressional Review Act and the pressure it placed upon the administration to issue its costliest and most ambitious rules before late summer.

Waiting too late would render rules vulnerable to being overturned by a Congressional Review Act (CRA) resolution of disapproval should there be a change in administrations in 2025. That's because the CRA stipulates that rules not finalized before the final 60 legislative days of the 118^th Congress would be candidates for overturn.

Against this backdrop, on July 5, the day after Independence Day, the White House released the Spring edition of the twice-yearly Unified Agenda of Federal Regulatory and Deregulatory Actions depicting agency rulemaking priorities.

The new Agenda depicts 3,698 rules in the pipeline from more than 60 departments, agencies and commissions. These rules are comprised of those at the pre-rule, active (proposed and final) and long-term stages, as well as rules completed over approximately the past six months (that is, since the Fall 2023 Agenda).

Among the 3,698, there are 287 "Sec. 3(f)(1) Significant" (S3F1) rules in the new Spring Agenda.

The S3F1 term indicates a $200 million threshold for economic effects established by Biden's Modernizing Regulatory Review directive (Executive Order 14,094) of a year ago.

Seventy-nine of these S3F1 rules were completed over the past six months, compared to 52 of such rules the Fall 2023 edition. That's a 52 percent increase, indicating there might be something to the incentive powers of CRA deadlines.

Prior editions of the Agenda employed a $100 million "economically significant" threshold, a term now retired.

Those $100 million rules are still ostensibly caught in an Office of Management and Budget (OMB) net, as the CRA remains controlling with respect to what OMB is directed to review and supervise, despite Biden's E.O. 14,094.

In contrast to the new S3F1 rules, the CRA defines a "major" rule as one with $100 million in economic effects or that otherwise inflicts a "significant adverse effect on competition, employment, investment, productivity [or] innovation." The same OMB applying Biden's $200-million appellation to rules is required to make the assessment, although in the Biden era the fox/henhouse concept applies in the wake of E.O. 14,094 and its other progeny, an OMB rewrite of so-called Circular A-4 guidance to agencies on their conduct of regulatory analysis.

So long as Congress holds OMB's feet to the fire, the CRA preserves the requirement to assess the trajectory of $100 million rules despite Biden's raising of the threshold of what he deems highly significant to $200 million. As the chart below shows, there were 97 major rules completed over the past six months (79 of them S3F1, as noted), far exceeding anything witnessed over the past 10 years.

The 93 major rules depicted for Fall in the chart is simply an approximation, a linear projection for the 179 days remaining in the year following July 5. Summing up the new Spring output and that projected for Fall, the estimated total number of completed major rules for 2024 is 190.

Bottom line, we appear to be getting huge increases in major rules in the Biden era, and Congress needs to ensure that the disclosures are preserved and that oversight occurs.

On the one hand, one might expect major rules to be less than my straight projection given the CRA and its potential to dampen what is to come in 2024's election-infused environment. But interestingly, as the chart shows for 2016 and 2020-also election years-there were curiously more rules later on. So, we retain linearity here just for purposes of analysis, particularly since in recent history it has been conservative.

Upon a bit more reflection, "curious" might not be the right word. Instead, it might seem logical to expect a bit of a saddle shape for rules in an election year: a big early surge of major rules to beat the CRA deadline like we have seen reflected in the Federal Register, then a lull or trough during summer and early fall-but then a resumption of rulemaking regardless of election outcome.

Why a post-election resumption no matter the outcome? If Biden or a Democratic replacement prevails in November, then regulatory business-as-usual resumes. On the other hand, if Trump were to retake the White House, an outgoing Biden cohort would throw everything at the wall in the form of midnight rules up until Inauguration Day, knowing that a new administration could never and would never eliminate all of them, CRA notwithstanding.

With the Biden administration we are seeing a substantial increase in the issuance of major (and S3F1) rules. As the 2024 elections approach, and even in the aftermath, the pace and nature of rulemaking will be critical to watch. Longer term, ensuring transparency and adherence to CRA requirements will be an essential part of necessary vigilance, even in the wake of recent Supreme Court decisions that have imposed or reimposed important constraints on the administrative state. One can be sure regulatory advocates are already contemplating workarounds.

For further reading:

• "Biden Releases Spring 2024 Unified Agenda Of Federal Regulations," Forbes.
• What's the Difference Between 'Major,' 'Significant,' and All Those Other Federal Rule Categories? A Case for Streamlining Regulatory Impact Classification, SSRN /CEI
• OMB's Problematic Circular A-4 Rewrite: How Congress and OMB can Futureproof Regulatory Review, SSRN / CEI