Tucked away in the avalanche of President Biden’s early executive actions is the little-noticed but momentous creation of a new regulatory super-agency. Under the guise of “Modernizing Regulatory Review,” the Office of Information and Regulatory Affairs (OIRA) has just been given, through executive fiat, the charge of using federal regulatory authority to achieve administration goals. OIRA’s transformation from a check on agency excess to a pro-regulatory arm of the federal bureaucracy has significant implications for the power of the administrative state, and ultimately, for how Americans are governed.
OIRA began as a check on agency authority and is best known for ensuring that agencies consider the costs of any proposed regulation. As part of the Paperwork Reduction Act, President Carter created OIRA within the Office of Management and Budget to review agency reporting requirements in order to reduce government-imposed paperwork. Later, in an attempt to rein in governance by agency rule, President Reagan assigned to OIRA the additional task of reviewing draft and final regulations to ensure that projected benefits exceeded projected costs.
The past few administrations have all affirmed OIRA’s mandate to ensure responsible regulation. The Clinton administration retained the net-benefit approach to regulation, requiring OIRA to review regulations to ensure that benefits exceed costs and that regulations are supported by a “compelling public need.” President Obama similarly required the office to minimize regulatory burdens and ensure that “benefits justify . . . costs.” President Trump went even further by invoking a two-for-one policy whereby any proposed regulation would be offset by two revoked regulations and a regulatory cost-ceiling policy whereby any proposed regulatory cost would be offset by deregulation.
Under each of these administrations, OIRA performed the important function of ensuring that regulations were worth the cost. By and large, the office succeeded. A quantitative review found that OIRA had served a deregulatory function across administrations, imposing a significant check on the “most liberal agency proposals.”
Given OIRA’s oversight function, it has long been lambasted by the Left as a speed bump to aggressive regulation. Yet more recently, its longstanding critics on the left have begun to note the potential power of the office, and to advocate a reimagined OIRA that is a “force for making sure that the most progressive regulations get through the gate.”
The Left just got its wish. President Biden’s Modernizing Regulatory Review memorandum wholly transforms OIRA from a check on regulation into a regulatory-promotion office. Indeed, the Biden administration’s view of regulation as a public good—no matter the type or kind or cost—is on full display in the presidential memo. Formerly limited to checking the work of other agencies, OIRA must now use its power to “affirmatively promote” regulation. The office is directed to partner with agencies “to explore, promote, and undertake regulatory initiatives that are likely to yield significant benefits.” OIRA’s regulatory-promotion mandate is broad, ranging from environmental stewardship to human dignity, equity, and social welfare.
Just as troubling, the memo spells out the administration’s hostility to any attempt to cut back on regulation—no matter how needless or nonsensical. OIRA 2.0 is directed to review regulations to ensure they don’t have “harmful anti-regulatory or deregulatory effects.” That’s right: The order moves toward a blanket assumption that repealing a regulation is always harmful. Notwithstanding the many instances in which deregulation leads to innovation, job growth, and economic flourishing, the administration prejudges any attempt to minimize regulation as likely harmful.
The memo also ensures that any sort of cost-benefit “review” of a regulation is a review in name only. Under the new rules, OIRA is directed to “fully account for regulatory benefits that are difficult or impossible to quantify” (emphasis added). How does one “weigh” benefits that are “impossible” to measure? No doubt, these impossible-to-quantify benefits will weigh more than regulatory costs. This directive will ensure that no real weighing occurs at all. Under the Biden directive, OIRA becomes a smoke screen, the purpose of which is only to lend legitimacy to whatever policy the administration prefers—without regard to costs and consequences.
OIRA 2.0 greatly enhances the power of the administrative state. Indeed, the office will no longer serve as a meaningful check on costly regulation, and will instead have its power harnessed to create additional regulation without regard to cost. Ultimately, the Biden administration’s view of regulation as a public good means that administrative agencies will have even more power and our elected representatives—and the people they represent—far less.