Exposing Loopholes: How Federal Regulatory Oversight Laws Are Being Ignored

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Passing new laws to reform and streamline the administrative state is important, and reformers consistently call for such oversight. But just as critical is ensuring that existing laws are followed.

We periodically note that no one knows exactly how many federal agencies exist. Now, a new report from the Government Accountability Office (GAO) reveals a similar lapse: we don’t know how many spending programs there are either, despite a law requiring an inventory.

Here’s GAO, in Federal Programs: OMB Needs a Structure to Govern and a Plan to Develop a Comprehensive Inventory: “Each year, the federal government spends trillions of dollars on federal programs that support the American people and address policy goals. However, it does not have a full inventory of these programs, despite requirements enacted in 2011 to develop and annually update one on a publicly available website.”

GAO offers recommendations for the Office of Management and Budget (OMB) to improve its inventory of spending programs, for which there is now a January 2025 deadline thanks to the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021.

Constructing an actual, reliable inventory increasingly important to do given that recent laws have not merely set up costly programs likely to slip into obscurity and non-oversight, but because those spending programs are also freighted with regulatory effect.

GAO is likely to revisit the inventory compliance in the coming year or so, but skepticism is warranted about OMB’ adherence to the law, especially since its watchdog role in the Biden era has been softened. OMB’s compliance with existing regulatory oversight laws and procedures has been poor, with many requirements disregarded or left to languish. Meanwhile, Congress seems largely uninterested in holding OMB accountable. Consider:

The Regulatory Right-to-Know Act: The annual Report to Congress on the Benefits and Costs of Federal Regulations required by the Regulatory Right-to-Know Act and covering significant and major rules is chronically overdue. The last to appear was a February composite report covering fiscal years 2020-22 (we’re now in fiscal year 2025).

In addition, the aggregate cost estimate mandated by the Regulatory Right-to-Know Act was abandoned in the early 2000s, replaced by a 10-year lookback, as though the entire 20th Century regulatory burden could be safely ignored. Now, even that default 10 year lookback is absent from the aforementioned composite edition, as well as the also tardy prior composite edition covering 2017-19.

The Paperwork Reduction Act: The Paperwork Reduction Act of 1980 established the Information Collection Budget (ICB), but this too has languished. In 2023, five laggard catch-up editions appeared. In July 2024 a new edition was released, but like its predecessor, the new ICB was packaged book-like as Tackling the Time Tax, wherein the emphasis is not reducing red tape and paperwork, but on increased access to taxpayer-provided benefits programs—of the very sort highlighted by GAO in its new report on the absence of a full inventory of federal programs.

The ICB has historically always included an annual “Paperwork Burden Accounting” roundup covering over 10 billion hours of paperwork (here’s one from 2022). In the new 2024 edition, alas, the burden accounting is not to be found.

The Regulatory Flexibility Act: Another disregarded law is the Regulatory Flexibility Act (RFA), meant to ease small business burdens. A 2024 report from the House Small Business Committee, led by Chairman Roger Williams (R-Texas), highlighted several issues with agency compliance under the RFA:

  • Agencies frequently misclassify rules as having no significant impact on small entities to bypass RFA analysis.
  • Agencies often underestimate costs, undercount affected small businesses, and neglect less burdensome alternatives, sometimes finalizing more harmful regulations without proper justification.
  • Agencies fail to assess whether new rules duplicate or conflict with existing regulations, resulting in overlapping burdens on small businesses.
  • Some agencies obstruct congressional oversight by withholding requested information, violating both the Constitution and the Administrative Procedure Act.

Congressional Review Act: The Congressional Review Act (CRA) is famous (or infamous) for giving Congress a 60-legislative-day window in which to review a major rule and pass a “resolution of disapproval.” Despite the issuance of thousands of rules since its enactment, fewer than two dozen rules have been overturned. Less recognized is that major rules are not always submitted to the GAO as required by the CRA. Worse, there is no easy way to verify that major rules have been submitted to both houses of Congress, which is arguably necessary for a rule’s validity.

There have been some positive developments despite these lapses. Two recent laws signed by Joe Biden offer hope for better regulatory clarity and oversight.

One was the Providing Accountability Through Transparency Act of 2023 (Public Law 118-9). This measure requires that agencies, “in providing notice of a rulemaking . . . include a link to a 100-word plain language summary of the proposed rule.” I’ve not conducted a thorough survey, but these summaries do appear to be a frequent feature now

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