Industry groups concerned about potential regulatory changes under the Biden administration fear that these changes could impede economic growth.
Business and Industry Groups Concerned About Biden Administration’s Regulatory Changes
Business and industry groups are expressing their concerns over a key change made by the Biden administration to federal agency calculations of regulatory costs. This change, outlined in an executive order issued by President Joe Biden in April, raises the threshold for what is considered a “significant regulatory action” from a $100 million annual economic cost to $200 million.
The significance of this change lies in the fact that regulations falling into the “significant” category are subject to cost-benefit analysis requirements. These requirements can pose challenges if the benefits do not outweigh the drawbacks and costs.
“What that does in the real world is that it takes a major chunk of regulations out of the more rigorous analysis that is applicable to major federal regulations — you’re immediately taking a chunk of regulations out of that balancing act,”
Even under the previous $100 million threshold, the Biden administration has already released numerous “economically significant” rules. According to an analysis by the Competitive Enterprise Institute, the administration has nearly 300 such regulations in the pipeline, averaging 97 per year. This is significantly higher than the numbers under former Presidents Barack Obama and George W. Bush.
Another change in the White House Office of Management and Budget guidance allows for the consideration of the ”global effects of the regulation” when weighing costs and benefits, not just the domestic effects. This change has raised concerns about shifting the regulatory burden to other countries.
“What you’re effectively doing is allowing agencies to shift the impacts of the regulatory burden to other countries… that seems inconsistent with the role of the federal government.”
The National Federation of Independent Business has also voiced its opposition to some of these changes, stating that considering costs and benefits to non-U.S. citizens residing outside the U.S. should be limited to specific circumstances.
Cost-benefit analysis has evolved over time, with President Jimmy Carter first requiring it and subsequent presidents making adjustments. However, critics argue that the recent changes made by President Biden have shifted the role of the Office of Management and Budget from a regulator watchdog to a promoter of regulation.
While there have been positive legislative developments for the manufacturing sector, such as the bipartisan infrastructure law, the industry is still burdened by a multitude of federal regulations. The National Association of Manufacturers reports that their members are spending significant time and resources to comply with these regulations.
With hopes that Congress will intervene, industry groups are actively engaging with federal agencies and the White House to express their concerns and advocate for a more balanced approach to regulatory analysis.
The clock is ticking, as the Office of Management and Budget is expected to issue an updated circular by April of next year.
Overall, the business and industry sectors are united in their efforts to address the regulatory burden and ensure a fair and effective regulatory process.
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