With President Biden’s first 100 days well under way, the Trump administration’s regulatory reform agenda might seem like a distant memory. But one rule, known as Securing Updated and Necessary Statutory Evaluations Timely (SUNSET), finalized by the Department of Health and Human Services on the previous administration’s last full day in office, is worthy of note — even as the Biden administration begins pursuing its agenda.
The purpose of SUNSET — scheduled to take effect on March 22 — is to implement and ensure agency compliance with a little known but important procedural statute: the Regulatory Flexibility Act (RFA).
In recognition that federal regulations can disproportionately burden small businesses — which often lack the resources of their larger competitors to navigate complex regulatory schemes — Congress passed the RFA in 1980. The RFA is specifically designed to minimize the unnecessary impacts of federal regulations on small businesses.
The RFA requires that each federal agency implement a plan to review existing rules at least once every 10 years. The purpose of this requirement is to ensure that agency rules are not imposing excessive burdens on small businesses and have not become outdated in the preceding decade. If, after retrospective review, the agency determines that the rule is not achieving its purpose or that a less burdensome approach could better achieve its goal, the RFA requires the agency to amend or rescind the rule.
As Congress recognized in passing the RFA, retrospective review serves many important functions. It requires agencies to analyze the real-world impacts of rules, rather than relying solely on predictions about costs and benefits at the proposal stage. When coupled with a mechanism for repeal, it avoids ineffective or overly burdensome rules remaining in place indefinitely due to regulatory inertia.
The RFA is not a toothless procedural statute — having been amended in 1996 to provide for judicial review of agency violations. Unfortunately, agencies are rarely held accountable for failure to perform the required retrospective review. As a result, many federal agencies minimize or ignore their statutory duties under the RFA. Indeed, as noted in the preamble to SUNSET, 85 percent of HHS regulations created before 1990 have not been edited.
SUNSET combats agency inaction by strengthening and incentivizing agency compliance with the RFA by conditioning retention of regulations beyond 10 years on the outcome of a retrospective review. In other words, an agency rule will automatically sunset after 10 years unless it is assessed and reviewed in accordance with the RFA. For rules already in effect, SUNSET provides for expiration either after five years from the effective date of SUNSET or 10 years from the date of the most recent retrospective review (in the unlikely event one has been performed).
SUNSET is a laudable plan that takes seriously HHS’s statutory duty to perform periodic review under the RFA. It will increase agency accountability and ensure that outdated HHS regulations do not unnecessarily burden the American public through sheer inertia. Adherence to all of the RFA’s requirements is of great importance for strengthening agency accountability and meeting Congress’s goal that agencies directly confront the costs they impose on the American people.
Unfortunately, with the possibility of a regulatory freeze pending review of certain actions that are not yet effective, and opposition from the current nominee for HHS secretary, Xavier Becerra, SUNSET may not take shape. However, the RFA will remain binding on every federal agency. Unless HHS enacts a substantially similar replacement, which ensures a plan for timely retrospective review, it will again find itself in regular violation of the RFA.
This op-ed was originally published by The Hill on February 22, 2021.