Biden pledged to establish a police watchdog within the first 100 days of his presidency last June, in the wake of the death of African-American citizen George Floyd while being arrested by a white police officer. The incident sparked mass protests against racially-motivated police brutality.
"Based on close, respectful consultation with partners in the civil rights community, the administration made the considered judgement that a police commission, at this time, would not be the most effective way to deliver on our top priority in this area, which is to sign the George Floyd Justice in Policing Act into law," Rice said in a statement late on Sunday.
The authorities held consultations with police unions as well and concluded that an oversight commission would likely be redundant.
The George Floyd bill, drafted by the Democrats, includes measures aimed at improving police practices in the United States, such as a ban on choke-holds. It also envisages the creation of a national database on police abuse and challenges so-called qualified immunity, a legal doctrine that protects police officers from claims of abuse de facto.
Last month, the US House of Representatives passed the Biden-backed legislation, which is now set to be discussed in the Senate.