With the 2024 presidential election drawing near, many Americans are reflecting on the potential outcomes and their implications for the future of the regulatory landscape in the United States. Regardless of which party prevails, it is increasingly clear that the issue of regulatory transparency and accountability requires legislative action to ensure that Americans' rights are upheld in the regulatory process. In recent years, we’ve witnessed a fluctuating approach to regulatory governance depending on the sitting president’s policy preferences, a reality that highlights the urgent need for a more permanent solution.
Under President Trump, Executive Orders (EO) 13771 and 13777 introduced significant reforms aimed at increasing regulatory accountability and transparency. These orders intended to curtail excessive regulation, address what Wayne Crews from the Competitive Enterprise Institute famously referred to as “regulatory dark matter” (unofficial regulatory actions), and subject all regulatory processes to a more structured review. However, within weeks of taking office, President Biden rescinded these orders, pivoting to a framework that has notably relied on guidance documents and regulatory interpretation letters, largely sidestepping the public “notice and comment” process required by the Administrative Procedure Act (APA). This pattern underscores the need to consider legislative reforms to expand the APA, making regulatory transparency and accountability impervious to political shifts in the White House.
What Is the APA, and Why Is It Falling Short?
The Administrative Procedure Act (APA), enacted in 1946, established the “notice and comment” process as a vital mechanism for public participation in federal rulemaking. Under this process, agencies must notify the public of proposed regulations, allowing time for individuals, businesses, and other stakeholders to submit comments that the agency must consider before finalizing the rule. This requirement was designed to ensure that regulatory agencies operate in an accountable, transparent, and fair manner, balancing the need for regulation with democratic principles.
However, as time has passed, agencies have increasingly circumvented the APA’s requirements by issuing guidance documents, policy statements, and interpretive letters. Unlike formal regulations, these forms of “regulatory dark matter” do not require notice and comment and are therefore not subject to the same level of scrutiny or public input. This bypassing of formal rulemaking allows agencies to implement policies quickly but at the cost of transparency and accountability. President Trump attempted to address this issue through EOs 13771 and 13777, yet these were undone by President Biden soon after he took office. This pendulum swing highlights the fragility of relying on executive orders alone to maintain a transparent regulatory framework.
EO 13771 and 13777: What They Attempted to Accomplish
President Trump’s Executive Order 13771, often referred to as the “Two Out, One In” rule, aimed to eliminate regulatory excess by mandating that for every new regulation introduced, two existing regulations had to be rescinded. This directive was intended to prevent the regulatory code from expanding uncontrollably and to reduce the burden on businesses and individuals subjected to federal oversight. The goal was not merely to halt overregulation but to promote a balanced, thoughtful approach to federal rulemaking.
Executive Order 13777, meanwhile, established regulatory reform task forces within each federal agency. These task forces were tasked with identifying regulations that could be repealed or modified, particularly those deemed obsolete, unnecessarily burdensome, or conflicting with other agency rules. Both orders were efforts to bring a level of restraint to the federal government’s regulatory apparatus, to limit the unchecked influence of unelected bureaucrats, and to ensure that rulemaking remained accountable and tethered to public input.
These executive orders effectively underscored a philosophy of “less is more” when it came to government interference. However, they were ephemeral by nature, susceptible to being rescinded at the whims of the next administration. The reversal of Trump’s regulatory reforms under the Biden administration illustrates this inherent instability and the urgent need to codify certain transparency and accountability measures directly into the APA.
The Resurgence of Regulatory Dark Matter Under Biden
President Biden’s administration has seen a resurgence of regulatory dark matter through increased reliance on guidance documents and interpretive letters. By circumventing formal rulemaking, agencies have been able to swiftly implement significant policy changes without enduring the notice and comment process. Although this approach allows agencies to act with speed and flexibility, it also bypasses the essential checks and balances that protect public participation and fair regulatory practices.
Examples of regulatory dark matter have been prominent in areas ranging from environmental policy to labor rights and healthcare. For instance, guidance documents have influenced substantial policy decisions, including interpretations of workplace safety during the COVID-19 pandemic, which directly impacted businesses’ operational capacities but were issued without adequate public input. Such policies, while aimed at public protection, often carry significant economic implications and may set precedents that restrict freedom for individuals and businesses. Because they sidestep the formal regulatory framework, they carry the risk of regulatory overreach, allowing agencies to wield outsized influence over Americans’ lives without the safeguard of public accountability.
Similarly, the continuing attempt by the Biden-Harris administration to seize drug patents in the name of "price controls", under the "March In" provisions of the 1980 Bayh-Dole Act were being proposed as guidance, not under a formal rulemaking. Such a wholesale upending of the foundations of American innovation need a much greater scrutiny--not the sidestepping the Biden and Harris apparently wanted.
Legislative Expansion of the APA: A Necessary Path Forward
The crux of the issue lies in the APA’s limited jurisdiction over regulatory dark matter. The act was conceived during an era when guidance documents and interpretive letters were not the primary vehicles for regulatory action. Today, however, these unofficial regulatory measures have become a common practice, undermining the spirit of transparency and accountability that the APA was intended to promote.
To address this gap, Congress should consider amending the APA to cover a broader scope of regulatory actions, ensuring that guidance documents, policy statements, and interpretive letters are subject to notice and comment or similar review processes. Such an amendment would safeguard the rights of Americans to participate in the rulemaking process, regardless of which party controls the White House. By codifying requirements for transparency and public input, we can prevent future administrations from issuing sweeping regulatory changes without democratic accountability.
Possible Reforms to Bolster the APA
Expanding the APA to include regulatory dark matter would require clear guidelines on which types of documents warrant public scrutiny. Potential reforms could include:
Mandatory Notice and Comment for All Major Guidance Documents: Any guidance that could reasonably affect stakeholders should be subject to the APA’s notice and comment requirements, allowing the public to provide input on significant agency actions.
Congressional Oversight of Interpretive Rules: For interpretive rules with significant policy impact, Congress could require agencies to submit reports or justifications for public record, ensuring legislative oversight of these quasi-regulatory actions.
Judicial Review for Non-APA-Compliant Guidance: Courts should have the authority to review and invalidate guidance documents or interpretive letters that attempt to exert regulatory power without following APA procedures.
Regardless of who emerges victorious in the 2024 presidential election, it is essential that Americans' rights within the regulatory process be protected. Our regulatory framework, as it stands, is at the mercy of executive orders that can be easily nullified by incoming administrations, leading to inconsistent regulatory practices. The current reliance on guidance documents and interpretive letters circumvents the transparency and accountability that should be fundamental in government rulemaking.
The APA was intended to establish a structured, just approach to federal regulation, but it has not evolved to address today’s regulatory realities. To safeguard transparency and ensure that all regulatory actions are subject to public scrutiny, Congress should consider expanding the APA’s reach. By doing so, we can create a resilient regulatory process that upholds Americans’ rights, irrespective of changing political winds.
