Biden and Regulatory Review

Big changes may be coming to White House regulatory oversight.

President Biden seems to be poised to dramatically change how the White House reviews proposed agency regulations. I argued in a recent post that it would be better  to expand the focus of  regulatory review beyond cost-benefit analysis to include important values such as social justice and environmental quality. Biden may be moving in that direction.

Since Reagan took office, the White House Office of Information and Regulatory Affairs (OIRA) has reviewed the cost-benefit analyses submitted for all significant proposed regulations.  Progressives have never bought the idea of OIRA as the technocratic guardian of value-neutral economic analysis.  This is partly because they view cost-benefit analysis as inherently biased against regulation, and partly because they view OIRA as a backdoor for industry lobbying.

There are several signs that Biden is reconsidering OIRA’s intense focus on cost-benefit analysis. One of his executive orders establishes a task to modernize regulatory review.  He instructed the task force to provide “concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.”  The executive order emphasizes the need to ensure that “regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities.”   This dovetails with another executive order that attempts to reorient agencies toward social justice issues. But economics is still in the picture, as shown by an executive order requiring the government to establish a new estimate of the social cost of carbon.

Personnel decisions also indicate a desire to refocus OIRA.  We don’t know  yet who will direct the office, but many key subordinate positions have been announced. Biden picked Sharon Block as the #2 person in the office. She held several labor-related positions in the Obama Administration and has spent the last few years as part of a Harvard project on reimagining the role of labor. Sam Bagenstos, a Michigan law professor specializing in disability law, will be OIRA’s general counsel.  OIRA’s new senior counselor Sabeel Rahman was the head of a progressive think tank.  These are strong signals of a change in direction at OIRA.

It’s clear that the Biden OIRA will give a lot more attention to social justice issues, whether involving race or workers.  None of the appointments so far seems to have a strong economics or environmental focus.  We’ll have to see who Biden nominates to head OIRA in order to get a clearer sense of how environmental quality and impacts on future generations will figure into the new OIRA.  The one thing that’s clear is that some fundamental changes are coming to the agency.

Biden Administration, Cost Benefit Analysis, OIRA