In my two previous posts, I picked apart Sen. Elizabeth Warren’s allegation that notice and comment rulemakings are unfairly tilted in the favor of regulated entities. In this post, I discuss the only area of agreement between Sen. Warren and myself (on the subject of rulemakings). We both think that White House review of regulations should be transparent.
After agencies draft a major regulation, it is sent to the White House for a final review. This process is conducted by the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget. OIRA was created by the Congress with the enactment of the Paperwork Reduction Act in 1980. OIRA’s broad mandate is to alleviate the paperwork burdens imposed by the federal regulatory state on American businesses and private individuals. In 1981, President Ronald Reagan substantially increased OIRA’s authority with the promulgation of Executive Order 12291, which required that federal agencies submit their proposed and final regulations to OIRA for review. Thus, OIRA became a primary means by which the President could affect regulatory policy.
The exact authority exerted by OIRA’s regulatory review is cloaked in secrecy. OIRA’s mandate, according to its authorizing executive order, is to review “significant” agency regulations, in order to ensure that they are consistent with the “applicable law” and “the President’s priorities.” The Office’s power is limited to returning flawed regulations to agencies, which must then reformulate the measures, presumably to better comport with “applicable law” and “the President’s priorities.” Yet Congress delegates regulatory authority to specific agencies, not to a certain agency AND the Office of Information and Regulatory Affairs. A Congressional delegation of rule-making authority is not akin to a “plus one” party invitation that affords the White House the opportunity to add a second rule-maker to an existing regulatory regime. It follows that if OIRA’s input were to alter the substance of a regulation, which it almost certainly does, such influence would likely be an impermissible encroachment on the exclusive regulatory power delegated to the agency in question.
To be sure, if OIRA were prudent and consistently checked bad agency rules, then I’d be less concerned. But that’s not the case, and OIRA review can cut both ways. Last year, for example, InsideEPA reported that OIRA review became a forum for White House officials to push for a stricter ozone standard than the Environmental Protection Agency itself had proposed. In light of OIRA’s power and unreliability, I am disconcerted by the fact that the agency works in secrecy. Rare is the instance when OIRA’s draft comments during regulatory review are leaked to the public. Even in the case when OIRA’s input becomes public knowledge, it’s still extremely difficult, if not impossible, to prove that OIRA has unduly influenced the rule. A regulatory agency must be afforded the discretion to speak for itself; so as long as the agency head does what the White House asks, there’s no way to prove that OIRA was the cause of any aspect of a final rule.
Like me, Sen. Warren is concerned by OIRA’s influence and secrecy, albeit for different reasons. She’s concerned that it “ossifies” rulemakings by making them more cumbersome. I think the ossification thesis is belied by what my eyes see—the leviathan of the administrative state; rather, I’m suspicious of OIRA’s authority from a rule of law perspective. From what I can tell, Congress never intended for there to be a regulatory overlord. That the office operates in secrecy only compounds my suspicion.