The role of the Office of Information and Regulatory Affairs in federal rulemaking.

• Author: Copeland, Curtis W.

INTRODUCTION

The Office of Information and Regulatory Affairs (OIRA) is one of several statutory offices within the Office of Management and Budget (OMB), (1) and can play a significant--if not determinative--role in the rulemaking process for most federal agencies. In addition to its many other responsibilities, OIRA reviews the substance of about 600 to 700 significant proposed and final rules each year before agencies publish them in the Federal Register, (2) and can clear the rules with or without change, return them to the agencies for "reconsideration," or encourage the agencies to withdraw the rules. About 100 of the rules that OIRA reviews each year are each considered "economically significant" or "major" (e.g., expected to have a $100 million impact on the economy). (3) OIRA was created by Congress and has a number of specific statutory responsibilities, but also helps ensure that agencies' rules reflect the president's policies and priorities.

OIRA's role in the federal rulemaking process has been highly controversial in all four of the presidential administrations in which it has been in existence, but the criticisms directed at the office have varied over time. In some administrations, OIRA has been accused of controlling the agenda of the rulemaking agencies too much, directing them to change substantive provisions in draft rules, or even stopping proposed regulatory actions that it believes are poorly crafted or unnecessary. (4) At other times, though, OIRA has been accused of exerting inadequate authority over the agencies' rules. (5) Other, more persistent criticisms have focused on the lack of transparency of OIRA's regulatory reviews to the public and the sometimes-unseen influence that regulated entities and other non-governmental organizations can have on agencies' rules through those reviews. (6)

This Article describes the process OIRA uses to review covered agencies' draft rules, OIRA's effects on the rules, and changes in OIRA's procedures and policies in recent years. Much of this discussion is drawn from a September 2003 report on OIRA that I helped develop when I was with the General Accounting Office (GAO, now the Government Accountability Office). (7) First, though, this Article provides a brief history of presidential regulatory review and describes how OIRA's review process was established. Finally, the Article describes several potential legislative issues regarding OIRA's regulatory review authority, and makes a few concluding observations both about OIRA's recent initiatives and its future.

THE ESTABLISHMENT OF REGULATORY REVIEW IN OIRA

OIRA was created within OMB by the Paperwork Reduction Act (PRA) of 1980. (8) The PRA provided that OIRA would be headed by an administrator who was designated the "principal advisor to the Director on Federal information policy." (9) The Act also provided that the director of OMB "shall delegate to the [OIRA] Administrator the authority to administer all functions under this chapter." (10) Specific areas of responsibility in the PRA that were assigned to the director, and later delegated to OIRA, included information policy, information collection request clearance and paperwork control, statistical policy and coordination, records management, privacy, and automatic data processing and telecommunications. (11) With regard to paperwork reduction, the Act generally prohibited agencies from conducting or sponsoring a collection of information until they had submitted their proposed information collection requests to OIRA and the office had approved those requests. The PRA's requirements cover rules issued by virtually all agencies, including Cabinet departments, independent agencies, and independent regulatory agencies and commissions. (12)

Although the PRA gave OIRA substantive responsibilities in many areas, the bulk of the office's day-to-day activities under the act were initially focused on reviewing and approving agencies' proposed information collection requests. OIRA had ninety staff members when the PRA took effect in 1981, about half of whom were involved in reviewing agencies' information collection requests. (13) That year, OIRA took nearly 5,000 paperwork review actions-approving new and revised collections, extending existing collections, and reinstating expired collections. The office's paperwork clearance workload since then has generally been between 4,000 and 6,000 actions each year, although the number of OIRA staff overall, and those reviewing proposed collections, has declined substantially. (14) Although many federal regulations have an information collection component, the PRA did not authorize OIRA to review or comment on the substance of those regulations, or on regulations without an information collection component. (15)

OIRA AND THE REAGAN EXECUTIVE ORDERS ON REGULATORY REVIEW

In 1980, Ronald Reagan was elected President on a platform critical of government's role in society in general, and of federal regulations in particular. (16) Shortly after taking office, he established a "Presidential Task Force on Regulatory Relief," headed by Vice President George H. W. Bush, and composed of Cabinet officers (although the bulk of the task force's work was reportedly performed by OMB staff). The task force's responsibilities included: (1) monitoring the establishment of OMB's responsibility to coordinate and review new rules, (2) the development of legislative changes to regulatory statutes, and (3) the revision of existing regulations.17 With respect to this last responsibility, the task force ultimately identified a total of 119 rules for alteration or cancellation by the issuing agencies, nearly half of which had been issued by the Department of Transportation (DOT) or the Environmental Protection Agency (EPA). (18) Although the task force found that the implementation of recommended changes would save more than $150 billion over the next ten years, critics charged that this estimate ignored the benefits associated with the rules on what they referred to as the administration's regulatory "hit list." (19) The task force's legislative efforts were less successful, and failed to prompt Congress to enact revisions to clean air and water laws, or to enact broad regulatory reform legislation that would have limited agencies' rulemaking powers. (20)

In February 1981--less than one month after taking office--President Reagan issued Executive Order 12,291, which greatly increased both the scope and importance of OIRA's responsibilities. (21) The executive order generally required covered agencies (Cabinet departments and independent agencies, but not independent regulatory agencies) to:

* Refrain from taking regulatory action "unless the potential benefits to society for the regulation outweigh the potential costs to society," to select regulatory objectives to maximize net benefits to society, and to select the regulatory alternative that involves the lowest net cost to society; (22)

* Prepare a "regulatory impact analysis" for each "major" rule, (23) which was defined as any regulation likely to result in (among other things) an annual effect on the economy of $100 million. (24) Those analyses were required to contain a description of the potential benefits and costs of the rule, a description of alternative approaches that could achieve the regulatory goal at lower cost (and a list of reasons why they were not selected), and a determination of the net benefits of the rule. (25) The issuing agency was to make the initial determination of whether a rule was "major," but the executive order gave OMB the authority to require a rule to be considered major; (26) and

* Send a copy of each draft proposed and final rule to OMB before publication in the Federal Register. (27) The order authorized OMB to review "any preliminary or final regulatory impact analysis, notice of proposed rulemaking, or final rule based on the requirements of this Order." (28) Non-major rules were required to be submitted to OMB at least ten days before publication, but major rules had to be submitted as much as sixty days in advance. (29)

Executive Order 12,291 indicated that OMB's review of rules and impact analyses should be completed within sixty days, but it allowed the director to extend that period whenever necessary. (30) It also authorized the director to exempt classes of regulations from any or all of the order's requirements, and generally required agencies to "refrain" from publishing any final rules until they had responded to OMB's comments. (31) The executive order made OMB's authority to review agencies' draft rules subject to the overall direction of the presidential task force on regulatory relief. (32)

Although the Executive Order did not specifically mention OIRA, shortly after it was issued the Reagan Administration decided to integrate OMB's regulatory review responsibilities under the executive order with the responsibilities given to OMB (and ultimately to OIRA) by the PRA. (33) As a result, OIRA's responsibilities for substantive review of rules under the executive order were added to the office's substantial responsibilities under the PRA. In 1981, OIRA reviewed the substance of nearly 2,800 rules under Executive Order 12,291--in addition to the nearly 5,000 paperwork review actions it took that year. (34)

In 1985, President Reagan extended OIRA's influence over rulemaking even further by issuing Executive Order 12,498, which required Cabinet departments and independent agencies (but not independent regulatory agencies) to submit a "regulatory program" to OMB for review each year that covered all of their significant regulatory actions that were underway or planned. (35) Previously, Executive Order 12,291 had required each of those agencies to publish semiannual "regulatory agendas" of proposed regulations that the agency "has issued or expects to issue," and any existing rule that was under review. (36) These agendas...