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Employers in the United States added 147,000 workers to their payrolls in June, the Department of Labor said Thursday, and the unemployment rate declined to 4.1 percent, defying predictions of labor market sluggishness following the implementation of President Trump’s tariffs.

Additional Thoughts: Why Rescinding Biden’s Circular A-4 Was a Victory for Accountability, Economic Growth, and Regulatory Sanity

  • Writer: Andrew Langer
    Andrew Langer
  • Jun 27
  • 5 min read

Last week, we celebrated a pivotal victory in the fight for sound economic policy and regulatory transparency: the Trump Administration’s Office of Management and Budget (OMB) formally rescinded the Biden-era revisions to Circular A-4, the foundational guidance governing how federal agencies evaluate the costs and benefits of regulations. This action marks a return to objectivity, a rejection of opaque ideological frameworks, and a reaffirmation of the American economic engine’s potential.


But what does this mean in practice, and why was this so necessary?


To answer that, we must look at three pillars: (1) a careful comparison of the draft and final Biden Circular A-4 and how it ignored public feedback; (2) the warnings issued by our own Center for Regulatory Freedom (CRF) and the Institute for Regulatory Analysis and Engagement (IRAE); and (3) the independent economic analysis of regulatory costs by respected scholars like Patrick McLaughlin, formerly of the Mercatus Center, now with the Hoover Institution.


I. Ignored Warnings: What the Biden OMB Did (and Didn’t) Do

George Washington University’s Regulatory Studies Center (RSC) released a careful analysis comparing the proposed and final Biden-era Circular A-4. The conclusion? Almost nothing changed. Despite a flood of comments, including extensive critiques by CRF and IRAE, the final guidance “adopted the vast majority of the changes proposed in the draft,” according to the RSC report.


The final Circular:

  • Cemented subjective “distributional weights,” applying demographic value judgments to costs and benefits.

  • Shifted emphasis away from economic efficiency and toward social equity goals (especially under ESG frameworks).

  • Continued to downplay or ignore indirect and opportunity costs.

  • Maintained the inclusion of global benefits when evaluating regulations with domestic costs.

  • Added methods to justify controversial rules (e.g., “risk-risk tradeoffs”) while stripping away previous language warning of their speculative nature.


As the RSC authors stated plainly, the final Circular failed to incorporate major public criticisms. The Biden OMB not only ignored input from academic experts and the regulated public, but it also doubled down on politicized, activist accounting masquerading as economic analysis.


II. The Center for Regulatory Freedom and IRAE: Our Unheeded Critiques

In a detailed petition to OMB filed on January 28, 2025, CRF urged the reopening of the Circular A-4 reform process. We argued that the 2023 revisions replaced objectivity with ideological bias.


Four major criticisms stood out:

  1. Abandoning Objective Analysis – The Circular introduced ESG-style metrics, prioritizing political distributional goals over empirical cost-benefit balance.

  2. Omitting Opportunity Costs – Despite extensive literature, the Circular refused to account for the innovation lost when resources are diverted from productive uses to compliance.

  3. Burdening Small Business – The revised analysis process violated the spirit of the Regulatory Flexibility Act (RFA) and SBREFA, ignoring the compounding harm of regulatory accumulation on small firms.

  4. Internationalizing Costs – By including “global benefits” in its calculus, the Circular violated core principles of national sovereignty, essentially taxing U.S. workers to fund international goals.


The Institute for Regulatory Analysis and Engagement (IRAE - CRF Director Andrew Langer's previous regulatory project) had issued detailed public comments in June 2023 highlighting the same concerns. In particular, IRAE warned that:


  • The Circular’s vague “distributional weighting” system was an implicit Trojan horse for ESG mandates.

  • The revisions misrepresented the precision and utility of cost estimates derived from demographic-adjusted models.

  • By omitting opportunity cost and the economic distortions caused by compliance burdens, the new Circular severely undercounted the true cost of regulation.


IRAE and CRF both cited the foundational work of economists John Dawson and John Seater, who demonstrated that for every $1 in direct regulatory cost, there is an astonishing $19 in indirect opportunity cost lost to reduced innovation, slower productivity growth, and lower investment.


The Biden-era Circular dismissed these insights entirely.


III. Patrick McLaughlin’s Research: Regulation Costs Are Far Worse Than Acknowledged

This opportunity cost problem is not just theoretical; it has now been confirmed and expanded upon by Dr. Patrick McLaughlin, formerly of the Mercatus Center and now a fellow at the Hoover Institution. In February 2025, testimony before the House Judiciary Subcommittee on the Administrative State, McLaughlin reiterated what he has warned for years: regulatory accumulation is dragging down the American economy.


Highlights from McLaughlin’s findings include:

  • Over 1.1 million regulatory restrictions now exist in the Code of Federal Regulations.

  • Regulatory accumulation slows GDP growth by 0.8 to 1.0 percentage points annually.

  • The U.S. economy in 2012 was $4 trillion smaller than it would have been without regulatory accumulation.

  • The real income loss from regulatory drag is about $13,000 per American, in 2012 dollars.

  • A 10% increase in regulation increases consumer prices by 1%, disproportionately hurting low-income households.


McLaughlin, more importantly, reinforced what Dawson and Seater first quantified: that opportunity costs, what entrepreneurs and investors don’t do because they’re busy complying with federal rules, are the most devastating and least measured economic impact.

The Biden Circular A-4 dismissed this entire body of evidence. The Trump OMB, by contrast, has now acknowledged it by rescinding the Circular altogether.


IV. Why the Trump Rescission Matters: A Victory for Regulatory Accountability

Let’s be clear: the Biden Administration’s Circular A-4 revisions were not about modernization or technical accuracy. They were a strategic attempt to institutionalize regulatory activism, smuggling ESG values into the very algorithms used to justify new rules. The goal was simple: make regulation easier to impose and harder to oppose, especially under the veneer of “equity.”


The Trump Administration’s action to rescind this revision was necessary and decisive. It sends a message that America’s regulatory system must be transparent, empirical, and grounded in national economic interests.


By restoring the older, objective A-4 framework, the Trump OMB reaffirmed:

  • That economic efficiency must remain the primary lens of cost-benefit analysis.

  • That opportunity costs and regulatory accumulation matter.

  • That regulatory decisions must prioritize American businesses and workers, not global virtue signals.

  • That rigorous analysis beats ideological crusades.


Conclusion: A Call for Long-Term Reform

While rescinding Biden’s Circular A-4 is a crucial step, more work remains. The CPAC Foundation’s Center for Regulatory Freedom has laid out more than 100 Executive Branch reform measures for the first 100 days of any administration committed to restoring constitutional governance. These include:


  • Mandatory annual cost estimates for all federal agencies.

  • Clear metrics for identifying outdated and duplicative rules.

  • Codification of opportunity cost analysis in all rulemaking.

  • Strict enforcement of the RFA and SBREFA to shield small businesses from regulatory overreach.


The regulatory state should serve the American people, not entrench the power of unelected bureaucrats. As we move forward, the fight for regulatory freedom must remain a central focus of our movement.


We salute the Trump OMB for correcting course. Now, let’s make sure it stays corrected.

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