Small Businesses

How does Biden’s Modernizing Regulatory Review initiative affect your business?

  • 3 min Read
  • December 6, 2021

Author

Escalon

Table of Contents

Just hours after being sworn into office, U.S. President Joe Biden signed a presidential memorandum called Modernizing Regulatory Review that aims to change how the White House reviews regulations. The modernizing memo calls for the director of the Office of Management and Budget to work with federal agencies for developing recommendations for changing how OMB’s Office of Information and Regulatory Affairs reviews regulations from executive agencies.


Biden’s memo first affirms the principles from former President Bill Clinton’s Executive Order 12866, which has been in place since 1993. It sets out principles of regulation, asks agencies to put their regulatory proposals through various analytical steps including cost-benefit analysis and tasks OIRA with regulatory review of draft agency rules. 


The memo also affirms former President Barack Obama’s Executive Order 13563, which sought to modernize the regulatory process by encouraging interagency coordination of regulatory activities and requiring consideration of anticipated costs as well as benefits — including those difficult to quantify, such as human dignity — of proposed rulemakings using best available methods supported by objective data. 


The modernizing memo seeks to ensure that “the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations” by directing OMB to develop a list of recommendations to improve the process.


It prioritizes four major challenges: “a massive global pandemic; a major economic downturn; systemic racial inequality; and the undeniable reality and accelerating threat of climate change.” 


For businesses it means considering adjusting their risk assessments to factor in this integrated approach. According to the memo, it is no longer enough to barely track compliance. As agency cooperation escalates, compliance obligations could originate with new sources that have not traditionally been on an industry’s radar.


The conservative take on the memorandum



Biden’s Modernizing Regulatory Review changes OMB’s regulatory analysis guidelines to ensure that the regulatory review process “fully accounts for regulatory benefits that are difficult or impossible to quantify, and does not have harmful anti-regulatory or deregulatory effects.” However, critics believe that this EO has the potential to make it easier to add regulations. 


The memo’s net effects could be even more labor, environmental, safety and health regulations, which will further burden small businesses and possibly boost consumer prices and increase lay-offs. And while deregulation usually encourages entrepreneurship and innovation, it is sound actions that can protect employees and the environment and revamp some economic sectors.


According to The Brookings Institution, “The disproportionately high compliance costs faced by small businesses can put them at a competitive disadvantage to their larger competitors. Over time, this could have the effect of increasing market concentration in heavily regulated industries, driving out smaller competitors and reducing the number of market participants.”

Talk to our team today to learn how Escalon can help take your company to the next level.

  • Expertise you can trust

    Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.

  • Quality and consistency

    Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.

  • Scalability and Flexibility

    Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.

Contact Us Today!

Tap into the latest insights from experts in your industry

People Management & HR

Benefits Administration, What Small Business Need to Know

Benefits administration can be a game-changer for small businesses aiming to attract and retain top talent. While salaries remain an...

Read More
Accounting & Finance

AAP vs. Cash Accounting: Which Method Is Best for Your Growing Business? 

Choosing the right accounting method can significantly impact how you track financial performance, manage taxes, and plan growth. Two common...

Read More
Accounting & Finance

Beyond Bootstrapping: Advanced Cash Flow Management for Scaling Companies 

Bootstrapping—financing growth through internal cash flow—is a hallmark of many successful startups. But as businesses mature past their initial stage,...

Read More
Technology & Security

Building a Scalable Tech Stack: How to Choose the Right Tools for Growth 

In today’s business landscape, technology is more than a convenience—it’s a strategic asset that can supercharge growth. But as you...

Read More
Accounting & Finance

How to Reduce Month-End Close Time Without Sacrificing Accuracy 

The month-end close can feel like a perpetual scramble—collecting invoices, reconciling accounts, fixing last-minute errors. A drawn-out close not only...

Read More
uncategorized

How to Reduce Overhead Costs Without Impacting Productivity 

Overhead costs—from utilities and rent to administrative staffing—can quietly swell until they erode profit margins and slow your ability to...

Read More
Accounting & Finance

How to Structure Your Finance Team as Your Business Scales

Growth triggers a tidal wave of financial complexity, multi-entity operations, new product lines, overseas expansion, or investor relations. If your...

Read More
Accounting & Finance

M&A Readiness: How to Prepare Your Financials for a Successful Acquisition or Sale 

Mergers and acquisitions (M&A) can dramatically alter a company’s trajectory—unlocking new markets, technologies, or customer bases. Yet, many deals stumble...

Read More
Accounting & Finance

Optimizing Working Capital: Strategies to Maximize Liquidity Without Raising Funds 

Working capital: The difference between your current assets and your current liabilities. It’s a key barometer of financial health.  While...

Read More