President Biden issued three presidential actions on January 20 to address regulatory issues. One memorandum called for a freeze and review of regulatory actions, while another called for modernizing regulatory reviews. Additionally, President Biden signed an executive order (EO) revoking six Trump Administration EOs.
President Biden directed his chief of staff, Ronald Klain, to issue a memorandum entitled “Regulatory Freeze Pending Review” to the heads of all federal executive departments and agencies, calling on them to freeze regulatory actions and review them before taking action. The memorandum explains that the purpose of the freeze is to ensure that the president’s appointees or designees have the opportunity to review any new or pending rules. Mr. Klain asks department heads to take several immediate steps.
The memorandum asks departments not to propose or issue a rule in any manner, including by sending a rule to the Office of the Federal Register (OFR), until a department or agency head appointed or designated by the president after noon on January 20, 2021 reviews and approves a rule. The department or agency head may delegate this power of review and approval to any other person appointed or designated by the president.
Regarding rules that have been sent to the OFR but not published in the Federal Register, departments are asked to withdraw them immediately from the OFR for review and approval.
Regarding rules that have been published in the Federal Register or rules that have been issued but have not taken effect, departments are asked to consider postponing a rule’s effective date for 60 days from January 20. During the 60-day period, department heads are asked to consider opening a 30-day comment period to allow interested parties the opportunity to provide comments about issues of fact, law, and policy raised by a rule, and to consider pending petitions for reconsideration involving a rule. If more time is needed to review a rule, department heads are asked to consider further delaying or publishing for notice and comment proposed rules beyond the 60-day period.
Following a 60-day delay in effective date, department heads are asked to allow a rule to proceed if there are no substantial questions of fact, law, or policy. However, for rules that do raise substantial questions, agencies should notify the Office of Management and Budget (OMB) Director and take further appropriate action in consultation with the OMB Director.
The memorandum exempts from regulatory review, emergency situations or other urgent circumstances relating to health, safety, environmental, financial, or national security matters.
President Biden’s “Modernizing Regulatory Review” memorandum directs the director of OMB, in consultation with representatives of executive departments and agencies, to begin develop a set of recommendations for improving and modernizing regulatory review. These recommendations should be informed by public engagement with relevant stakeholders. In part, the memorandum is designed to ensure that the review process promotes policies that reflect new developments in scientific and economic understanding, fully accounts for regulatory benefits that are difficult or impossible to quantify and does not have harmful anti-regulatory or deregulatory effects. Recommendations should include procedures that take into account the distributional consequences of regulations, including as part of any quantitative or qualitative analysis of the costs and benefits of regulations, to ensure that regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities.
Further, President Biden issued an “Executive Order on Revocation of Certain Executive Orders Concerning Federal Regulation” on January 20. This order revokes harmful policies and directives that threaten to frustrate the federal government’s ability to confront national problems and empowers agencies to use appropriate regulatory tools to achieve the president’s goals. The EO revokes six Trump administration EOs, including EO 13771, EO 13777, and EO 13891.
EO 13771 required federal agencies to repeal at least two existing regulations for each new proposed regulation and to calculate the incremental cost of all new regulations and repealed regulations so that there was no net cost due to regulatory action during a given year (see Memo, 2/6/17). EO13777 required federal agencies such as HUD to establish a Regulatory Reform Task Force and designate a Regulatory Reform Officer (RRO) to oversee the Task Force. The RRO and Task Force must carry out EO 13771.
EO 13891 required each non-regulation guidance document issued by a federal agency to state clearly that the document did not have the force or effect of law, and that for “significant guidance” documents, a federal agency must seek public participation in the development of the significant guidance and provide 30 days for public comment. Agencies were required to make guidance documents available on a single, searchable, and indexed public website. Any member of the public could petition the agency to have a guidance document withdrawn, and the agency had to respond within 90 days. HUD published an interim final rule on November 10, 2020 implementing EO 13891, evading the Administrative Procedures Act (see Memo, 11/16/20).
The Biden EO directs the director of the OMB and the heads of agencies to promptly take steps to rescind any orders, rules, regulations, guidelines, or policies, or portions thereof, implementing or enforcing the executive orders identified in section 2 of the EO, as appropriate and consistent with applicable law, including the Administrative Procedure Act.
“Regulatory Freeze Pending Review” is at: https://bit.ly/2NjUgn0
“Executive Order on Revocation of Certain Executive Orders Concerning Federal Regulation” is at: https://bit.ly/3c9peJ9
“Modernizing Regulatory Review” is at: https://bit.ly/3c235Mx