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Biden Without Rules Chief Aims to Rethink How Business Competes

July 22, 2021, 1:34 PM

Notably absent in President Joe Biden‘s sweeping mandate for a dozen agencies to write more than 70 regulations to crack down on monopolistic practices in agriculture, technology, pharmaceuticals, and other industries is a leader of his own regulations office to shepherd it all.

No president, let alone one as determined as Biden to create change through regulation, has taken this long to nominate someone to run the Office of Information and Regulatory Affairs since the position started requiring Senate confirmation in the late 1980s, according to Senate records. It’s one of the government’s most quietly powerful positions, charged with vetting rules penned by individual agencies and mediating disagreements between departments on how to implement the president’s wishes.

“Not having a confirmed head of an agency is not a good thing,” said Sally Katzen, who led the regulations office under President Bill Clinton. An acting leader “can be a great caretaker, but it is more difficult to be creative or an innovator if you’re in an acting capacity.”

But far from wounding his agenda, not nominating a regulations chief is also allowing Biden to avert sure battles with Republicans on Capitol Hill, who are quick to blast Biden’s ambitions to expand government involvement in the economy, and with powerful business lobbies who’ve panned the approach and would hold sway on a vote on an OIRA nominee.

The president has named the head of his National Economic Council, Brian Deese, to lead a team of representatives from the regulations office and eight agencies to advance the anti-monopoly efforts outlined in an executive order this month and to coordinate agency actions. As the president’s top economic aide, Deese works with Tim Wu, an advocate for aggressive antitrust enforcement against U.S. technology giants and a special assistant to the president for technology and competition. Wu’s ideas appear in the order.

Having that process led by senior White House staffers who aren’t subject to Senate confirmation gives Biden more direct influence over the work of independent agencies, like the Federal Trade Commission and Federal Communications Commission, that have been charged with roughly half the tasks in the executive order.

The council and the regulations office complement—not replace—each other, the White House press office said in a statement.

“The federal government is designed in a way so that we can function from administration to administration, even as individuals need to be nominated and confirmed,” said White House press secretary Jen Psaki when asked about the absence of a regulations chief. “And that is certainly the case in this regard as well.”

Less Transparency

On its surface, Biden is using a similar tactic as President George H.W. Bush to regulate the economy, albeit with very different goals.

Bush tasked Vice President Dan Quayle to lead a task force on regulation, known as the Competitiveness Council. The council developed free-market policies and oversaw the regulations office’s analysis of agency proposals, said David McIntosh, the council’s former director who now leads the conservative group Club for Growth. Bush, unlike Biden so far, nominated a director of the regulations office but his choice was never confirmed.

Critics at the time said the council allowed the administration to curb regulations it disliked, often out of public view. Like McIntosh’s group, Biden’s competition council isn’t necessarily required to tell the public what it is working on.

“In that regard, it is very similar to what H.W. Bush did,” McIntosh said.

These days, the White House regulations office creates more of a paper trail. It is required to publish a list of the regulations it is reviewing, plus any meetings with groups looking to influence its work. Under Biden, the office has vetted and approved more than 125 proposed and final regulations since Inauguration Day, including rules to protect workers from coronavirus, halt evictions during the pandemic, and reinstate penalties for accidentally killing birds.

The regulations office “will deliver on this presidential priority just as it has delivered on a number of other presidential priorities,” a spokesman for the office said in a statement.

Sharon Block, an Obama-era labor official, is the regulations office’s interim leader. Block can serve in the job until mid-November under federal vacancies law, though that could change if Biden appoints someone before then. She has the same formal authority as a Senate-confirmed administrator, though she may practically have “less sway” over agency officials, said Anne Joseph O’Connell, a Stanford University professor.

Independent Agencies

Biden’s order encourages, but doesn’t direct, independent agencies to write the regulations he wants. It asks the FTC to rein in non-compete clauses in employment and “unfair” data collection. It requests that the FCC ban “excessive” early termination fees and end arrangements that give renters only one option for an internet provider.

Those agencies’ responsibilities often overlap with departments that the president does directly control. The council sets up a way for those departments to “take charge” on topics where their responsibilities coincide, allowing the president to exert more control over agencies that are traditionally independent of his influence, said Jennifer Selin, a University of Missouri professor who researches regulation.

The Justice Department and FTC chair Lina Khan, for example, announced a joint “review of our merger guidelines,” the same day Biden signed the executive order. The president later announced that he’d nominate Alphabet Inc. foe Jonathan Kanter as the top antitrust attorney at the Justice Department, who would go on to manage that review if confirmed by the Senate.

The order also invites the top official at the five independent agencies named in the order to join the council, giving the White House more visibility into what those agencies are doing, said Susan Dudley, who led the regulations office under President George W. Bush. Independent agencies typically don’t have to get the regulations office’s approval to release a rule. A former Obama regulations official said that those agencies typically work with the office voluntarily.

All five independent agencies will join the council, the White House press office said. Leaders at independent agencies have already said they support the president’s order, including the acting chair of the communications regulator and chair of the board that decides railroad rate disputes.

“This may be a way around the fact that they didn’t have someone in OIRA who is at least official,” Dudley said.

To contact the reporter on this story: Courtney Rozen in Washington at crozen@bgov.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; Cheryl Saenz at csaenz@bloombergindustry.com

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