The Economy Will Never Prosper Under Biden — Here’s Why

Voters who think that putting Republicans in control of the House and Senate will make a big difference for the economy are in for a rude awakening. President Joe Biden has unleashed the regulatory Leviathan. Lawmakers will be hard-pressed to stop the damage.

The Competitive Enterprise Institute (CEI) just this morning released its hugely valuable report called “10,000 Commandments,” which is a compendium of the regulatory state. In it, CEI Vice President for Policy Clyde Wayne Crews lays out the terrible truth about Biden’s regulatory zeal.

The first thing you have to understand about federal regulation is how massive it already is, with compliance costs that total more than $1.9 trillion a year.  

That’s bigger than Canada’s entire GDP. It’s bigger, in fact, than all but seven nations in the world. It works out to almost $15,000 per household.

And it is growing at a ferocious pace. From 1995 to last year, regulators issued a total of 114,821 new rules.

The cost of complying with this mountain of mandates is on top of the $6.3 trillion the feds spent this year, which means the true cost of government equals roughly a third of the nation’s economy.

Some Republican presidents have tried to whittle this down, but Democratic administrations always come into office well prepared to reinvigorate regulators.

Crews notes that Biden immediately started overturning Trump-era deregulatory directives, calling them “harmful policies and directives that threaten to frustrate the federal government’s ability to confront problems.”

Biden also issued an executive order that, as we pointed out on Jan. 29, 2021, was the worst of them all. It gutted the one minor speed bump in front of new regulations, namely that they had to be reviewed by the Office of Management and Budget and pass a basic cost-benefit analysis.   

Biden changed the review process to instead be “a tool to affirmatively promote regulations” and “to ensure swift and effective federal action” on everything from the pandemic, to the economy, to racial inequality, to the “undeniable reality and accelerating threat of climate change.”

Biden further revised it to “fully account … for regulatory benefits that are difficult or impossible to quantify, and [avoid] harmful anti-regulatory or deregulatory effects.” (Emphasis added)

Note that last line. Harmful anti-regulatory or deregulatory effects. This is the mindset of the Left these days. Deregulation is “harmful.”  

The White House has also promised to use “every lever at its disposal — including regulatory action — to deliver on the president’s priorities, including containing the pandemic, driving a durable economic recovery, advancing equity, and combating climate change.”

We are already seeing the fruits of Biden’s approach. A recession in the first half of the year. Sky-high inflation. Widespread despair.

What the left can’t seem to understand is that when government gets active, businesses get passive. They become more risk averse. Compliance costs weigh them down. Long-term investments become problematic if you don’t know what the rules will be down the road. This is one big reason why energy production has never recovered after the pandemic – the oil and gas industry has no idea what lies ahead.

So, as Biden’s regulators descend upon the land, the economy will – as it was throughout Barack Obama’s eight years – be on a long and dreary slog. Indeed, Biden’s regulatory zeal will probably ramp up if Republicans win big in November, since his legislative agenda will be caput.

What, then, can Republicans do?

Congress has over the past decades ceded so much authority to the executive branch that its options are limited. But it can stand resolute and use the power of the purse to block regulators from enforcing their mandates. Lawmakers can send sensible regulatory reform bills to Biden’s desk and force his veto. They can talk ceaselessly about how government red tape is choking the economy.

They could do all those things. But that would require a level of foresight and fortitude Republicans have rarely shown when they’re in power.

(You can read CEI’s latest “10,000 Commandments” report here.)

— Written by the I&I Editorial Board