Most of us face a choice: do a few things reasonably well or many things poorly. The same goes for federal regulators. And that’s why each regulatory agency was created with a focus — on environmental quality, education goals, health policy, and so on. But now the Biden administration has upended that focus, directing agencies to take a ”whole-of-government” approach to make every policy comply with goals on climate change and social justice — regardless of the relevance or downsides.
First, the whole-of-government approach sets regulators up for failure. It distracts agencies from their missions and piles on additional duties outside of their expertise. We’ve seen this happen before. The Federal Reserve, for example, could easily keep inflation low if that was its only mission. But in 1977, during Carter-era stagflation, it was given a second mission: to keep unemployment low. That prompts the Fed to sometimes undermine its inflation goals in favor of its employment goals. Namely, it raises inflation during downturns—which contradicts its low-inflation mandate.
And that dual mandate is why the Fed went into stimulus overkill when COVID-19 hit. It grew the money supply by 40 percent over two years, which caused most of today’s rapid inflation. Now the Fed will be cleaning up its mess well into next year, with all of us paying the price through high inflation and a possible recession anyway. Better to stick to one job.
Now, whole-of-government policymaking might make future inflation risks even worse. There have been pushes for the Fed to incorporate climate and inequality into its monetary policy decisions. The Fed’s existing dual mandate is incoherent. A triple or quadruple mandate will prove unworkable.
Another example is the Centers for Disease Control and Prevention. The CDC bungled its COVID response partly because it focused on lifestyle issues like vaping instead of its core mission of controlling infectious diseases. Adding climate and social justice issues to the agency’s already-full plate will harm its readiness against future outbreaks.
The Federal Emergency Management Administration (FEMA), the agency that’s supposed to respond to natural disasters, issued a strategic plan that “will take a people first approach to increase climate literacy, develop tools, and allocate resources informed by future risk estimates to target investments to create a more equitable and resilient nation.” Hurricane victim may be forgiven for having more immediate concerns.
Under a regulation passed last year, a directive to “minimize the risk of climate change” affects roughly $500 billion of annual federal contracts. Another rule requires the military to treat climate as a national security threat, taking valuable eyes off of Russia and China.
Recent spending and infrastructure bills contain detailed procedures for selecting contractors based on race, gender, and nationality, rather than lowering government-created licensing and permit barriers that disproportionately harm them. The result will be more delays and cost overruns and less infrastructure being built.
What can be done to fix this looming disaster? The 2022 edition of the Competitive Enterprise Institute’s Ten Thousand Commandments report has some proposals.
One of the Trump administration’s few bright spots were its early regulatory reforms: directing agencies to eliminate two regulations every new one, and requiring regulatory agencies to set up a searchable database of their guidance documents, which are often de facto regulations, and hidden from public view. Trump’s trade wars and antitrust activism increased regulation elsewhere. Biden promptly scrapped those rather modest reforms and kept Trump’s illiberal trade and antitrust policies.
The best way to stop a future administration from hijacking regulatory agencies as Biden has done is for Congress to do its job and impose some limits.
We need a regulatory cleanup commission to give Congress a repeal list of outdated or overly burdensome rules that are slowing economic recovery and raising consumer prices. Congress should be required to vote on new major rules to ensure that agencies are doing what congressional legislation directs them to do. Agencies should issue annual report cards that, similar to what Ten Thousand Commandments does,lists their regulations, how much they cost, and explains how they advance the agency’s mission.
If there is a place for a whole-of-government campaign, it is for one aimed at liberalization, freeing the economy, businesses, and people to succeed, build wealth and achieve their dreams.
Clyde Wayne Crews, Jr. is vice president for policy at the Competitive Enterprise Institute (CEI) and the author of the Ten Thousand Commandments report, which tallies regulatory costs and examines problems created by regulatory policies. Ryan Young is a senior fellow at CEI.