Regulatory Accountability in Crisis-How GAO’s Findings and the Biden Administration’s Failures Demand a Bold Realignment of Federal Rulemaking

Today, GAO’s released a report, “Regulatory Flexibility Act: Improved Policies for Analysis and Training Could Enhance Compliance” (GAO-25-106950) which reveals a troubling reality: federal agencies are routinely neglecting their statutory obligations under the Regulatory Flexibility Act (RFA). While the Government Accountability Office deserves commendation for its rigorous oversight and analysis, this report also underscores a broader regulatory failure—one that has only worsened under the Biden Administration.

From 2021 to 2025, the cost of federal regulation ballooned from $2.25 trillion to nearly $4 trillion, as documented by Dan Goldbeck at the American Action Forum. That $1.8 trillion surge has imposed unprecedented burdens on America’s job creators, especially small businesses—the very entities the RFA and the Small Business Regulatory Enforcement Fairness Act (SBREFA) were designed to protect.

This post not only summarizes the critical insights of GAO’s investigation but also examines how the Biden Administration’s disregard for statutory mandates has undermined regulatory accountability. It outlines urgent reforms, including our recommendation to dramatically increase resources and authority for the SBA’s Office of the National Ombudsman, which is uniquely positioned to restore compliance and transparency across federal agencies.

Part I: GAO's Wake-Up Call on Regulatory Flexibility Act Compliance

The GAO’s April 2025 report is both thorough and damning. It evaluated 195 significant final rules issued between FY2022 and FY2023. Alarmingly, 73% of these rules were certified as not having a significant economic impact on a substantial number of small entities—bypassing the need for in-depth analysis entirely. This procedural shortcut circumvents Congress’s intent in passing the RFA in 1980 and amending it through SBREFA in 1996.

GAO’s review of agencies such as HHS’s Centers for Medicare & Medicaid Services (CMS), the Department of Energy (DOE), the Environmental Protection Agency (EPA), and the Small Business Administration (SBA) revealed a pattern of neglect:

• Missing Analytic Standards: Agencies often failed to articulate why rules were certified, omitted key metrics such as thresholds of “significant economic impact,” and disregarded indirect or cumulative effects.

• Training Deficiencies: 87 of 181 federal rulemaking agencies have not received RFA compliance training since 2003. Among 41 agencies identified with deficiencies between 2019 and 2023, 26 received no training at all.

  
  

GAO’s six recommendations include developing more rigorous certification procedures, updating analytic guidelines, and expanding RFA compliance training. These are critical, but they are just the beginning.

Part II: Regulatory Costs Under Biden—A Historic Expansion

Beyond procedural failings, the Biden Administration’s approach to regulation has actively undermined the goals of the RFA. By prioritizing ideological objectives—such as DEI mandates, climate policy, and expansive healthcare reinterpretations—over rigorous cost-benefit analysis, the administration has unleashed an avalanche of new mandates with little regard for their economic toll.

Dan Goldbeck of the American Action Forum quantified this surge: regulatory costs rose from $2.25 trillion to nearly $4 trillion over four years. That’s more than a 75% increase—an unprecedented expansion in peacetime. The Biden-era rulemaking agenda has included:

• Aggressive reinterpretations of civil rights law under Title IX and the Affordable Care Act;

• Arbitrary climate-related financial regulations with no meaningful metrics;

• Expanded OSHA oversight and a $655 million budget hike without a performance audit;

• Disregard for cost-benefit protocols in major EPA and SEC rulemakings.

This is not simply regulatory activism—it is regulatory dereliction. And it threatens to calcify an economy already weighed down by inflation, capital scarcity, and global instability.

Part III: The Cost to Small Businesses and the American Consumer

The small business sector has suffered disproportionately. According to SBA data, small businesses account for 99.9% of all U.S. businesses and employ nearly half of the nation’s private workforce. Yet under the Biden Administration, they have faced rising compliance costs, increased paperwork, and arbitrary enforcement.

Key drivers of this trend include:

• The administration's inflation of the definition of a “major rule” from $100 million to $200 million annually—effectively masking regulatory impacts from public review;

• The undermining of cost transparency by eliminating consistent terminology for "economically significant" rules;

• The absence of regular SBA “Impact of Regulation on the U.S. Economy” assessments, which previously served as an essential accountability tool.

The RFA was designed to serve as a safeguard for small businesses—to ensure they are not blindsided by mandates crafted without proper economic analysis. That safeguard is now broken.

Part IV: GAO’s Recommendations Are a Floor, Not a Ceiling

GAO’s report concludes with six clear and sensible recommendations to improve RFA compliance. We support each of them:

1. Policy Reforms at SBA, HHS, DOE, and EPA to enhance analytical rigor;

2. Updated training programs and implementation goals within the SBA’s Office of Advocacy.

However, the deeper issue is institutional culture. For too many agencies, RFA compliance is a check-the-box exercise—an afterthought. To truly change that, we must shift the accountability structure itself.

Part V: The Case for Elevating the Office of the National Ombudsman

The CPAC Foundation’s Center for Regulatory Freedom has long argued that small business advocacy cannot be confined to rulemaking oversight alone. It must extend to post-regulation enforcement, where regulatory burdens are most acutely felt.

That is why we have recommended a robust expansion and realignment of the Office of the National Ombudsman (ONO) within the SBA. As detailed in our accompanying strategic document, we urge the following reforms:

• Empower ONO to grade federal agencies annually on their compliance with RFA and SBREFA;

• Fund a dedicated training and technical assistance arm within ONO to support small entities navigating complex compliance obligations;

• Direct ONO to conduct investigations into regulatory enforcement abuses, akin to an Inspector General model.

By elevating ONO’s profile and authority, we can create a true “regulatory ombudsman” for small businesses—one that does not merely mediate complaints, but enforces accountability.

Part VI: A Path Forward—Restoring Balance and Transparency

The path forward is clear, if politically difficult. The following actions must form the cornerstone of any serious effort to rein in the administrative state and realign it with constitutional governance and economic freedom:

1. Continue the unprecedented deregulatory inquiries, mandating ten deregulatory actions for each new regulation;

2. Restore Circular A-4’s pre-2023 cost-benefit protocols, emphasizing Comparative Risk Assessment;

3. Reinstate annual OMB reports on regulatory cost, with publicly accessible data on opportunity costs and paperwork burdens;

4. Standardize definitions for “major” and “economically significant” rules, and reduce the threshold back to $100 million/year;

5. Create a centralized public tracker on Regulations.gov that quantifies the cost of each proposed rule;

6. Mandate peer-reviewed, five-year SBA studies on the economic impact of regulation.

Failure to act will embed these Biden-era cost increases into the regulatory baseline for years to come—creating a new normal of bureaucratic sprawl, economic drag, and declining small business formation.

The Time for Action is Now

The GAO’s report should be a call to arms—not just for regulatory reformers, but for anyone who believes in accountable government and a thriving, opportunity-rich economy. The RFA was meant to protect the little guy. Under the Biden Administration, that mission has been hollowed out.

But there is a path back. The tools exist. The data is clear. What is needed now is the political will to restore integrity to the regulatory process.

We commend the GAO for shining a light on these failings. Now it falls to Congress, the White House, and the American people to ensure that light is not ignored.