The Biden administration is rushing to finalize a slate of new rules before the end of May. The regulations would limit oil and gas exploration, make it nearly impossible to fire civil servants, impose sweeping environmental regulations and accomplish a host of other liberal priorities.
If officials miss that May deadline, an in-coming Republican-dominated Congress could use a federal statute, the “Congressional Review Act,” to quickly overturn those rules come January.
Some administration officials are clearly worried they won’t finish their rulemaking in time — which, by design, involves an enormous amount of procedural red-tape and box-checking.
So, they’re embracing an alternative strategy to shield some of their liberal proposals from conservative reversals. In effect, the administration is claiming some of the new rules aren’t actually rules at all. They’re just “guidance.” It’s like when politicians raise taxes but call them “fees,” hoping to avoid an anti-tax backlash from voters.
Technically, guidance is just a suggestion for how government agencies should behave. But since it comes from this White House, it is treated as compulsory. It’s a backdoor way for presidents to make policy while bypassing a vote in Congress.
A prime example of this regulation-by-guidance is the administration’s attempt to effectively rewrite the Bayh-Dole Act. That 1980 law has facilitated countless breakthroughs in science and technology by allowing university-based researchers to patent their inventions made with the help of federal grants. The researchers can then license those patented discoveries to private-sector companies that will develop and produce the products and market them to the public.
The Bayh-Dole Act is credited with a host of advances, from gene editing technologies like CRISPR and breakthrough cancer medicines to many of the technologies inside our phones. Indeed, in 2002 The Economist magazine described Bayh-Dole as “innovation’s golden goose,” and called it “perhaps the most inspired piece of legislation to be enacted in America over the past half-century.”
The law permits the government to “march in” and seize patents, but only under certain conditions — primarily, if the researchers who licensed a patent haven’t made a good-faith effort to develop it and get it to market, a common practice before Bayh-Dole.
For years, though, activists have urged policymakers to use the march-in provision as a hammer to lower drug prices. The idea being if drug manufacturers didn’t drop their prices — or didn’t drop them enough to please the activists — the government could simply relicense those patents to generic drugmakers.
The problem with this patent-grab is the authors of the Bayh-Dole Act, former Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.), took to the pages of the Washington Post in 2002 to detail why the omission of price was intentional. The law “did not intend that government set prices on resulting products … the primary purpose of the act was to entice the private sector to seek public-private research collaboration.” And that’s exactly what’s happened.
Every administration — Democratic and Republican alike — has agreed that Bayh-Dole excluded price-setting provisions, despite activists’ pleas.
Yet in December, the Biden White House issued guidance that would allow agencies to consider price when determining if they should march-in under Bayh-Dole. If adopted, every invention backed by federal research dollars would be at risk. The result is that few investors would be willing to back a nascent technology of any kind if, at any moment, a bureaucrat could seize its patents because progressives object to a product’s price.
Ironically, many green-tech inventions began in universities and research institutions with at least some federal funding. Could progressives pushing march-in rights undermine the inventions needed to embrace the carbon-free economy?
Additional examples of shadowy guidance abound. Last fall, the Justice Department and Federal Trade Commission issued 13 guidelines to discourage merger-and-acquisition activity, a step that former Treasury Secretary Larry Summers likened to “a war on business.” In October, several agencies issued guidance on how large financial institutions should manage climate-related financial risks.
Regulation by guidance is anti-democratic. President Biden has encouraged government-by-rulemaking because he knows he cannot get the majority of his policies through Congress.
The Biden White House constantly warns that “democracy” is on the ballot this fall. Given the administration’s fondness for rulemaking-by-guidance, and its desire to ignore accountability and the normal legislative process, the administration itself may be the biggest threat to democracy.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on X @MerrillMatthews.
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