On his first day in office, President Joe Biden quickly set about undoing some of his predecessor’s signature policies: He said the United States would rejoin the Paris Agreement; he halted construction of a wall along the Mexican border; and he ended the ban on travel to the U.S. from Muslim-majority countries.
Tucked into all of those high-profile moves, though, was a memo with a title seemingly designed to be ignored: “Modernizing Regulatory Review.” Sent to the press at 9:43 p.m. on Wednesday in the middle of the Tom Hanks-led inaugural celebration, the White House was not expecting the dry document to drive headlines or set American hearts aflutter.
But the memo could unleash a wave of stronger regulations to reduce income inequality, fight climate change and protect public health. Among left-leaning experts on regulation, it’s a signal that Biden could break with 40 years of conservative policy.
“I realize what I’m about to say to you sounds absurd,” James Goodwin, a senior policy analyst at the Center for Progressive Reform, told HuffPost. “It has the potential to be the most significant action Biden took on day one.”
The order could eventually lead to major changes at the Office of Information and Regulatory Affairs, an extremely obscure White House office located inside the only slightly less obscure Office of Management and Budget. OIRA, as it is known, is charged with vetting proposed regulations and has the power to weaken, delay or even kill new rules proposed by other government agencies.
Since then-President Ronald Reagan gave the agency expansive powers with an executive order during the conservative boom times of his first term, progressives have bemoaned OIRA’s narrow economic cost-benefit focus, arguing that it ignored social and environmental costs and benefits not easily translated into dollar amounts.
““I realize what I’m about to say to you sounds absurd. It has the potential to be the most significant action Biden took on day one.””
“Progressives, and to some degree government agencies, have always lamented that because the benefits are harder to measure, cost-benefit analysis always puts regulation at a disadvantage,” said Stuart Shapiro, a public policy professor at Rutgers University and former OMB staffer.
Citing a theoretical Environmental Protection Agency rule to limit mercury pollution, Shapiro noted it would be much easier to measure how much compliance would cost businesses than how much society might benefit in terms of lives saved, illnesses stopped or childhood development protected.
Lobbyists and other corporate interests have historically seen OIRA reviews as their last chance to block or delay regulations designed to protect consumers and workers and mandate safety measures. During President Barack Obama’s administration alone, it delayed a mandate for the installation of rear-view cameras on cars for years and watered down rules protecting workers from exposure to dangerous silica dust and regulations governing the disposal of toxic coal ash.
Biden’s order appears set to dramatically overhaul that process, saying regulatory reviews should instead promote “public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.” It also says OIRA’s director should proactively encourage agencies to develop rules that benefit the public.
“For the past several decades, we’ve seen Democratic administrations being almost apologetic about using regulations to advance the public interest,” said Matt Kent, who works on regulatory policy for Public Citizen. “This is a real change of pace.”
Left-leaning attention to OIRA grew during the Obama administration, when a Harvard Law professor named Cass Sunstein ran the office. Sunstein, who had worked at the University of Chicago Law School with the president, remains a well-known public intellectual and the highest-profile person to ever hold the top job at OIRA.
But liberals said he was far too hostile to regulations. Liberal groups, including the Center for Progressive Reform, said he regularly weakened regulations at the request of corporate interests. Around the time of his departure, Sunstein defended his work, comparing himself to former Oakland Athletics’ general manager Billy Beane of “Moneyball” fame. He argued that the regulations he vetted provided a net $91 billion boost to the American people.
Biden has yet to nominate someone to head OIRA, a job which requires Senate confirmation and would have major influence over how the order is implemented. The possibility that he picks one of Sunstein’s ideological compatriots is the primary reason left-leaning regulation experts haven’t popped their champagne just yet.
In a Bloomberg op-ed on Friday, Sunstein praised Biden for choosing a “pragmatic path” on regulation, noting that the memo reaffirmed a 2011 Obama administration executive order.
But other signs point to a potential shift from the Obama-era approach: On Thursday, Bloomberg Law reported that Sharon Block, a staunch ally of labor unions and former member of the National Labor Relations Board, is Biden’s pick to serve as OIRA’s associate administrator and top official for the time being. In April, Block wrote an op-ed backing a major overhaul of OIRA to make it friendlier to workers.
“I would hope that the next administration will ask itself about every single action it takes—how does this action help the lives and livelihoods of American workers, especially workers of color who were disproportionately harmed by the pandemic,” she wrote in The American Prospect. “Not every federal agency will be well positioned to adequately answer this question about their regulatory priorities. Properly staffed and directed, OIRA can make sure that every regulation makes the best effort possible to advance this urgent priority.”
The selection of Block, combined with the day one order, has progressives hopeful that Biden and his administration understand how essential an overhaul of the regulatory process is to Biden’s promises to confront the crises of climate change, racial injustice, the coronavirus and an economic slowdown.
“This could finally get us back on track after 40 years,” said Goodwin. “The progressive agenda not only could benefit from winning this process war, it absolutely depends on winning this process war.”