Bidenomics and the Slippery Erosion of Economic Freedom

“The Biden Administration claims to promote economic growth and increase competitiveness while choking the economy with rules and regulations.” ~Nikolai Wenzel

President Biden signs 30 executive orders in the Oval Office in his first evening as President, January 20, 2021. (The White House / Public Domain)

Bidenomics is a moving target. 

The sheer numbers are staggering, as the regulatory factory on the Potomac spews negative externalities, polluting the economy. 2023 closed with 90,402 pages of rules and regulations published in the Federal Register — you read that right… more than ninety thousand pages of rules. The Biden administration finished the year with the second-longest collection of all time. President Obama holds the record at 95,894, and President Biden just displaced President Trump’s record of 86,356 pages in 2020. To achieve this feat, the Biden administration beat its own record of 79,856 pages in 2022. 

But the numbers are not the only challenge. Indeed, regulatory watchers find themselves playing whack-a-mole with the variety of rules and regulatory agencies. It is now a sadly quaint notion that Congress, and only Congress, makes the laws. The language of the Constitution is unambiguous, and it’s right there at the beginning, just after the Preamble, in Article 1, Section 1: “All legislative Powers herein granted shall be vested in a Congress of the United States” (emphasis added). Alas, this crystal-clear language, and the non-delegation doctrine which flows from it, are routinely ignored. Instead, we see an alphabet soup of rule-making agencies.

To be sure, Congress does occasionally break through the gridlock, and gives us some real doozies. In April 2021, following the example set by the Trump administration’s 2020 CARES Act, the Biden administration pushed through a COVID-19 relief bill that had little to do with COVID relief, and much to do with seizing the commanding heights of the economy. The Infrastructure Investment and Jobs Act of November 2021 and the Inflation Reduction Act of August 2022 continued the profligacy and increased government control of the economy. The Chips and Science Act (also passed in August 2022) continued the protectionist trend towards national industrial policy. 

Alas, legislation is just the tip of the iceberg. 

In addition, of course, are executive orders, which are “directives written by the president to officials within the executive branch requiring them to take or stop some action related to policy or management. They are numbered, published in the Federal Register, and cite the authority by which the president is making the order.” While they are formally an exercise for the executive to clarify its implementation of a law, in practice, executive orders permit the executive to make laws by decree, often by setting strategic priorities and enforcement targets for administrative agencies. 

Then, the administration can issue Memoranda. Presidential memoranda “also include instructions directed at executive officials, but they are neither numbered nor have the same publication requirements. The Office of Management and Budget is also not required to issue a budgetary impact statement on the subject of the memoranda.”

Finally, federal agencies issue rules, which are their interpretations of statutes passed by Congress. The 15 cabinet agencies, under the direct authority of the President, naturally reflect administration priorities. There is some debate about the actual independence of the 19 independent regulatory agencies, which are nominally independent from the executive, as well as (we can only say roughly) 400 executive agencies. But one thing is certain — they’re all issuing preliminary and final rules, and contributing to the tidal wave of backdoor legislation and regulation.

To this, we could add policy statements and guidance documents, which are “agency statement[s] of general applicability and future effect, other than a regulatory action, that [set] forth a policy on a statutory, regulatory, or technical issue, or an interpretation of a statute or regulation.”

Are you bewildered yet? Well, remember those 90,000+ pages of rules and proposed rules.

Over the holiday season, the Biden administration snuck in two particularly interesting rules.

On December 7, 2023, the National Institute of Standards and Technology (I bet you didn’t see that one coming!) issued draft guidance regarding the federal government’s exercise of “march-in” powers under the Bayh-Dole Act of 1980. The Act allows recipients of federal funding to retain patent rights on inventions developed with federal funding, and to commercialize them. The Act contains a clause granting the federal government “march-in” powers. In simple summary, this means that the federal government can force a business to commercialize a patent developed with federal funding, or impose certain conditions, if the relevant regulatory agency rules that the public interest is not being served. This can be broadly interpreted as prices that are “too high” or production that is “too low.” To date, march-in powers have never been invoked by the federal government. In the past few years, activist groups and state attorneys general have petitioned the federal government to force drug manufacturers to lower their prices through the march-in mechanism. As this is a proposed rule, we don’t yet know what will happen in the comment period. But the Biden administration is clearly signaling its intention to stick its regulatory nose into pharmaceutical markets, by attempting to invoke march-in powers for the first time in the 43 years of the Act’s existence. Beyond the general move towards national industrial policy, the chilling effect on investment is obvious. 

On January 10, 2024, the Labor Department issued a final rule on the classification of workers as employees versus independent contractors. The rule does not go as far as California’s gig-worker law, which classified gig workers as employees, rather than contractors. But it does seek to reclassify some independent contractors as employees, by strengthening the “economically dependent” test, which posits: “the ultimate inquiry is whether, as a matter of economic reality, the worker is economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor).” Because the rule seeks to strengthen the test, its results are still uncertain. A recent Mercatus Center working paper found that the California gig law reduced self-employment and overall employment. The Labor Department’s rule is thus likely to have negative effects on employment, while stifling the dynamic and innovative gig and platform sectors of the economy.

These are but two recent examples. Bidenomics continues its Janus-like war on economic freedom. The Biden Administration claims to promote economic growth and increase competitiveness while choking the economy with rules and regulations.

There are many steps the US could take to clean up the economy and the government chokehold on entrepreneurial activity. A return to the Constitution would be a good place to start. This would mean, first, that the US federal government returns to its original purpose and scope of limited and enumerated powers. This would also mean curbing the federal government’s extra-legislative regulatory activity. It’s hard enough for entrepreneurs to keep up with congressional shenanigans without the executive branch throwing monkey wrenches into the gears of commerce, 90,000 pages at a time.



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