Shining a Light on Office of Management and Budget Rule Review Abuse
by Ronald White, 12/16/2013
While anecdotes about the manipulation of the federal regulatory review process by the White House Office of Management and Budget have circulated for years, a recent Washington Post article on the delay of potentially controversial rules by the OMB’s Office of Information and Regulatory Affairs (OIRA) prior to the 2012 elections is truly shocking. The Washington Post article, citing interviews with seven current and former administration officials, highlights the politically motivated delays of up to one year in important health and safety rules including key components of the Affordable Care Act, decisions on protection of lakes and streams, pollution controls on industrial sources, and protecting workers from hazardous silica exposure.
The article expands on a report prepared by the Administrative Conference of the United States (ACUS), an independent federal agency comprised of current and former federal officials and experts from both the private sector and academia whose mission is to improve the U.S. administrative process. The report finds that in 2012, the average time for OIRA to complete reviews was 79 days, which increased in the first half of 2013 to 140 days – nearly three times the 51-day average for the period from 1994 through 2011. Of particular concern is the large increase in the number of rules that exceeded OIRA’s 90-day review limit, which doubled from 68 in 2010 to 133 in 2012 and reached 93 for just the first half of 2013.
To investigate the causes of these more recent delays, the report’s author interviewed senior federal officials from 11 different federal agencies and departments (who were provided anonymity to encourage frank sharing of information without fear of retaliation). The ACUS report found that a key factor contributing to regulatory delays is the increased use of extensive, informal OIRA reviews of rules that often last many months or even years. Though informal discussions between agency and OIRA staff to coordinate rule review schedules have been part of the federal regulatory review process since the early 1980s, accounts in the report suggest that these informal reviews have become longer in recent years and have also resulted in substantial interference with the development of these rules.
As noted above, OIRA is required to complete its review of rules within 90 days (with a possible 30-day extension) but the regulatory "clock" doesn’t officially start ticking until an agency formally submits a proposed rule, so lengthy informal reviews distort the amount of time that a proposed rule is actually under scrutiny by this White House office. Some agency representatives reported that OIRA permission was required before a rule could be submitted for review and that in some cases its permission was contingent on inclusion of all of the changes OIRA requested. Delays of months were common and, in one example, extended more than a year, and occurred even for rules under statutory or court-ordered deadlines.
The ACUS report also identifies examples of important, economically significant rules that were submitted and approved by OIRA within a day or two, indicating that extensive informal review had occurred before formal submission. Of particular concern is the fact that changes to rules that occur during this informal process don’t have to be publicly disclosed, meaning that these revisions are made behind a veil of secrecy– i.e. Congress and the public cannot see how the White House may be influencing the judgments made by agency experts. Because of this lack of transparency, some agency officials report that their leadership has refused to engage with OIRA in informal reviews.
Though acknowledging improvements by OIRA in recent months in reducing rule review delays, the ACUS report highlights a number of other problematic issues related to the rules development process and delays in the review of rules that go beyond the politically motivated rule delays highlighted in the Washington Post article. These issues include decisions about which rules should be deemed “significant” (which automatically subjects them to OIRA review), the extent and timing of reviews by other federal agencies in the interagency review process, and requests by OIRA for extensive amounts of additional data and analysis. The report also recommends that OIRA publicly release “return letters” or “review letters” when a review has passed the 120-day limit and that the letters clearly describe OIRA’s reasons for not releasing the delayed rule.
The Washington Post article and ACUS report provides valuable insights into the problem of persistent delays and lack of transparency in the rules development process, but the more fundamental problem is that a small White House office – staffed primarily by economists and lawyers – has the power to delay, challenge, and revise what are often highly technical rules and standards prepared by agency experts based on years of analysis. While recent improvements at OIRA in reducing rule delays are laudable, it is essential that the types of regulatory process abuses illuminated in the Washington Post story and the ACUS report don’t continue in the future. Clearly, more comprehensive reforms are needed to address what has become a dysfunctional process for developing the rules that are intended to provide the public with essential protections.