On his first day in office, President Biden signed nine executive orders, beginning with a tone-setting declaration that federal agencies should advance racial equity and support underserved communities. Urban Institute experts offer rigorous data tools and analysis strategies that can help advance the goals of this executive order.

The administration has taken another important step to advance its racial equity priorities through an executive order on federal regulation and a memorandum on modernizing regulatory review that, together, reestablish sound principles of cost-benefit analysis in regulatory review and provide the tools to begin dismantling structural racism using the federal rulemaking process.

Regulatory review is a complex federal process with the power to transform lives. It examines the likely effects of rules, regulations, and policies; estimates their economic costs and benefits; and helps policymakers determine whether regulations should stay in place, be modified, or be repealed. These policies shape every aspect of our lives, from the government’s response to the COVID-19 pandemic, to economic recovery, and more.

Structural racism permeates the policies and practices encoded in federal regulation, just as it does other public and private institutions, and the rulemaking process should take racial equity considerations into account.

For example, if the rulemaking process had accounted for racial equity in 2019, it could have prevented the “public charge rule,” which made it easier to deny green cards and visas to immigrants if it was “more likely than not” that they would become recipients of public benefits. The cost-benefit analysis conducted for this rule cited billions of dollars in benefits to the government from reduced public benefits expenditures for immigrants and their families. But evidence shows that despite passing a cost-benefit test, the rule created immense hardship for immigrants and their families and negatively affected millions of families’ well-being.

Cost-benefit analysis on its own does not tell us which regulations most effectively advance racial equity and justice. Two regulations that would produce the same net benefits to society could impose higher costs or bestow lower benefits on Black people. Cost-benefit analysis alone would not differentiate between them, although one may be clearly preferable from a racial equity perspective.

Many regulatory initiatives that technically pass a cost-benefit test disproportionately burden underresourced communities and people of color. The administration’s new directives provide an opportunity to not only incorporate but also center racial equity in regulatory review.

Read the full article about regulatory review by Daniel Kuehn at Urban Institute.