Starting This Week, Independent Regulatory Agencies Face White House Review Of Their Regulations
Old Executive Office Building, Washington, DC
GovernmentExecutive
As of Monday April 21, independent regulatory agencies, which have historically been exempt from White House oversight, must submit their draft regulations to the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) for review before publication. President Trump's Executive Order (EO) 14215, 'Ensuring Accountability for All Agencies,' said that 'these regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people.'
Since 1981, OIRA has reviewed the regulations of executive branch departments and agencies (such as the Department of Transportation and Environmental Protection Agency) to provide what President Obama called a 'dispassionate and analytical 'second opinion'' on their actions. It also serves to coordinate across the federal government and with the White House. President Clinton's EO 12866 (1993) continues in effect today but, like President Reagan's order before it, it excluded independent regulatory agencies (such as the Securities and Exchange Commission, the Consumer Product Safety Commission, and the Federal Energy Regulatory Commission) from its analytical requirements and interagency review. Trump's new order amends EO 12866 to cover independent agencies, except the Federal Reserve's monetary functions. (Other sections of EO 14215 require additional consultation with OMB and the White House on performance management, budget obligations, and strategic planning.)
On April 17, just before the deadline for submitting regulations, OIRA issued guidance to newly covered agencies for complying with the order. The guidance justifies the order with quotes from the writings of George Washington as well as the Supreme Court's opinion in Seila Law that 'the entire 'executive Power' belongs to the President alone.' It refers to the agencies as 'historically independent' and does not appear to offer much flexibility to account for the fact that Congress generally structured them differently than executive departments. Since independent regulatory agencies are usually bipartisan, multi-member commissions whose members hold overlapping terms, some questions may arise. How should these Senate-confirmed officials interact with OMB and the White House? Would OIRA review occur before or after the commission votes on a draft? Would a vote of the commission override recommendations from the interagency review? The guidance is not clear, although it does acknowledge that 'a meeting and vote may be necessary to adopt any changes to the regulatory action resulting from 12866 review.'
The 25-page guidance does provide an informative window into how OIRA review is conducted, though. People outside the government see OIRA as a black box, and the guidance offers a clearer picture than I have seen elsewhere on how the review process actually works. For example, it notes that agencies must identify a 'regulatory policy officer' (usually a high-level presidentially-appointed official) and a 'regulatory second' (a high-level career official) to serve as liaison with OIRA. The guidance explains the mechanics of how a regulation is submitted for review, the steps OIRA conducts to begin and facilitate the interagency process, and the types of regulatory impact analysis it expects.
In some cases, the speed at which the guidance was put together shows. For example, the list of covered independent regulatory agencies includes the Interstate Commerce Commission, which was abolished 30 years ago. It directs agencies to submit their guidance, as well as regulations, for review, referencing the authority of EO 13891 (2019), which President Biden revoked on his first day in office and President Trump has not reinstated. But overall, it is a useful document that should not only help independent regulatory agencies comply with EO 14215, but may also help the interested public understand how OIRA operates.
As of April 23, OIRA does not yet have any independent regulatory agency rules under review. It will take some time for agencies to conduct the supporting analysis to meet the analytical requirements of EO 12866, as research suggests that they generally perform less rigorous analysis of regulatory impacts than agencies subject to OIRA review. And agency staff will likely bristle at the time the review adds to issuing rules (up to 90 days and sometimes longer), as well as the need to justify their proposed actions to OIRA and interagency reviewers. Even so, presidents for more than 40 years have concluded that such review improves regulatory outcomes and makes them more accountable. As I explain in this Planet Money podcast, I expect that will be the case here.
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