For federal regulators, the stakes have never been higher. On the one hand, the Biden Administration sees regulation as an important mechanism to advance its ambitious
policy priorities — and is employing a whole-of-government approach unprecedented in terms of both its breadth and depth — for example, to address climate change, to advance its pro-labor agenda, and to regulate artificial intelligence.
On the other hand, the Supreme Court, with its 6-3 conservative majority, is taking aim at regulatory overreach. In its last two terms, SCOTUS has shown a growing interest in
curtailing the so-called administrative state, narrowing the ability of regulators to interpret broadly their statutory authority — for example, by vacating Biden regulations to forgive student loan debt and narrowing the scope of federal jurisdiction over waters subject to pollution control. The current SCOTUS term — which began in October — offers more of the same. Among the cases to be decided are those challenging long-standing tenets of administrative law, such as the major questions doctrine, the non-delegation doctrine, and Chevron deference.
The stakes are high because, once in place, regulation has staying power. The Code of Federal Regulation (CFR), a compendium of all federal rules — has grown from just two volumes in 1938 to approaching 250 volumes and more than 185,000 pages — four times larger than the U.S. Code of Laws, a compendium of statutes enacted by Congress. Containing more than one million restrictions (and counting) and touching every aspect of American life, the CFR has expanded by 3% year after year (see Figure 1), reflecting the roughly 3,500 new rules issued annually by more than 70 regulatory agencies employing hundreds of thousands of regulators.
When crafted well, regulation saves lives and improves the quality of life. Our food is safer, air is cleaner, consumers are better informed, and household savings are better protected — in no small part because of regulation that sets a high bar on performance that Americans have come to expect. But when crafted poorly, regulation can extinguish opportunity: builders who must wait more than a decade for a federal permit, food processing facilities that must adhere to thousand-page rulebooks from two different federal agencies, innovators who must navigate an increasingly lengthy and costly government approval process that, in some cases, was never applied to competing products that had been in commerce for decades.
Whether a regulation provides a net plus or minus depends critically on the process used to create it. A flawed process leads to flawed outcomes, and vice versa.
With so much riding on regulation, now is an opportune time to identify and fix flaws in the process. The purpose of this report is to propose a new reform, developed by the author in collaboration with the Progressive Policy Institute, that would promote transparency and rigor in federal rulemaking. It has recently been introduced in Congress as H.R.8204, the “Regulatory Early Notice and Engagement Act (RENEA) by Representatives Don Davis (D-N.C.), Tim Burchett (R-Tenn.), and Guy Reschenthaler (R-Pa.).
