Manchin and the Supreme Court told Biden to modernize regulatory review — will he listen?

The Biden administration’s path forward on climate change  as the widely deployed metaphor goes — has become more difficult with the U.S. Supreme Court’s recent decision in West Virginia vs. Environmental Protection Agency (EPA) and Sen. Joe Manchin’s (D-W.Va.) apparent veto of a reconciliation package that contains climate measures. If the Biden administration is to successfully navigate that path — and it must if we are to avert the worst consequences of the climate crisis — the president will need to abandon the “compass” that his predecessors have relied on for decades to guide their policy agenda: Executive Order 12866: Regulatory Planning and Review.

First issued in 1994, the executive order empowers a small White House bureau called the Office of Information and Regulatory Affairs (OIRA) to review and approve agencies’ biggest or most controversial rules. The order further requires OIRA to evaluate those rules using a methodology called “cost-benefit analysis,” which is highly biased against protective safeguards and provides convenient cover for politicized interference in agency decision-making.

Fortunately, President Joe Biden seemed to recognize early on that Executive Order 12866 presented an unnecessary obstacle to the realization of his administration’s policy goals. On the first day of his administration, Biden also issued a memo on “Modernizing Regulatory Review,” which called for changes that would make regulatory review and analysis supportive of stronger safeguards. The memo also acknowledged the need to depoliticize the review process and make regulatory analysis more attentive to social justice.

But in the 18 months since, the Biden administration has not taken any steps to implement these changes. The recent setbacks to the administration’s climate agenda from the Supreme Court and Manchin should force a rethink on this neglect. Crucially, progressive reforms to the regulatory process would directly answer the core challenges those setbacks present.

In West Virginia vs. EPA, the Supreme Court’s six conservative members invoked the newly minted “major questions doctrine” in striking down an Obama administration-era rule to limit greenhouse gas emissions from fossil-fueled plants. This doctrine holds that if an agency wishes to undertake a novel approach to policymaking that might have significant economic or political implications, then it must be prepared to point to clear and specific legislative authority supporting that action. As such, it would seem to cast a dark shadow over the Biden administration’s use of regulations to address climate change.

Significantly, the rule that was struck down — President Obama’s Clean Power Plan — was exactly the kind of rule that Executive Order 12866 sought to promote. It pushed agencies to stretch their statutory authorities to find the most “economically efficient” (though not the most effective) regulatory solutions. In contrast, a modernized approach to regulatory review would eschew the order’s efficiency straitjacket, empowering the Biden administration to take a more direct and effective approach to regulating greenhouse gas emissions under the Clean Air Act, even if that approach is more costly than other options.

For instance, Executive Order 12866 is likely what discouraged the Obama administration from considering using that law’s National Ambient Air Quality Standards program, which would have been more effective and on more solid legal ground.

Meanwhile, Manchin all but sounded the death knell for a meaningful legislative solution to the climate crisis when he pulled the plug on negotiations over the Democrats’ reconciliation package. Faced with the stark reality that the current Congress has abdicated its constitutional duty to address the single greatest threat to “the general Welfare” and to “secure the Blessings of Liberty to ourselves and our posterity” by failing to enact new climate legislation, the Biden administration must now step up and do the best it can with the legal authorities that earlier, more functional Congresses saw fit to provide.

In short, the administration must dedicate the next two years to advancing as much climate policy through executive action as it possibly can. The current regulatory review process has nothing of value to offer to a strategy built on the pillars of urgency and decisiveness. A modernized approach, however, would be designed to promote effective action and build public support for it in the face of a reactionary federal judiciary.

As a candidate, Biden championed a strong climate agenda, recognizing that realizing that agenda’s ambitious goals would never be easy, even under ideal circumstances. The circumstances the administration now finds itself in are far from ideal. As it seeks to chart a new path ahead on these goals, the administration must seek out all available opportunities to rebuild our system of governance so that it works for it rather than against it — and critically, that includes the imperative of modernized regulatory review.

James Goodwin is a senior policy analyst at the Center for Progressive Reform and a widely known expert in regulatory reform.