The White House is a major player in agency rulemakings, affecting both the content of regulations and the length of time needed to complete them, according to a recent Government Accountability Office (GAO) report. The report comes as advisors to President Barack Obama consider reforms to the regulatory process.

GAO examined the speed and transparency of agency rulemaking activity, as well as the role of the Office of Information and Regulatory Affairs (OIRA). Under Executive Order 12866, Regulatory Planning and Review, agencies seek the approval of OIRA before proposing or finalizing major regulations.

GAO examined 12 rules reviewed by OIRA and published between January 2006 and May 2008. The examination found that OIRA made "significant changes" to four of the rules, including changes to the actual text of regulations. In four other cases, OIRA made less significant changes to the regulations' explanatory preambles.

GAO found that agencies generally document the outcome of OIRA reviews, including changes made at OIRA's behest, but the quality of documentation and methods for public disclosure vary. The report says that internal documents could be difficult to put into context, noting, "[A]gencies did not always clearly attribute changes made at the suggestion of OIRA, and agencies’ interpretations were not necessarily consistent regarding what constitutes a substantive change." GAO also cited difficulties using the government's online rulemaking docket, Regulations.gov, to find relevant documents.

GAO notes, "Executive Order 12866 does not specify how agencies should document the changes made to draft rules after their submission to OIRA, nor is there any governmentwide guidance that directs agencies on how to do so."

To improve transparency, GAO said both agencies and OIRA should begin "better identification of when agencies made substantive changes to their rules as a result of the OIRA review process, attributing the sources of changes made during the review period, and clarifying the definition of substantive changes."

GAO's critiques could alter political and policy calculations in an ongoing effort to revise the way rules are written and approved at the federal level. White House officials, tasked with developing ideas for reform, are likely to seriously consider the comments and recommendations from GAO, whose reports are widely considered to be fair and accurate audits of government activity.

In a Jan. 30 memo, Obama asked the White House Office of Management and Budget (OMB), OIRA's parent agency, to consult with rulemaking agencies and develop recommendations that could serve as the basis for an executive order replacing Executive Order 12866. OMB later asked the public for its ideas and posted public comments online.

In its comments, OMB Watch called for OIRA to play a different role in agency rulemakings. OIRA should be less of an editor and gatekeeper and instead focus on assisting agencies in identifying priorities and areas where new regulations could benefit the public. OMB Watch also called for greater transparency at all stages of the rulemaking process.

Obama instructed OMB to gather the thoughts of rulemaking agencies and develop recommendations within 100 days. Since the deadline, May 10, the Obama administration has given no indication as to whether recommendations have been sent to Obama or when next steps should be expected. The administration has not released the comments federal agencies submitted to OMB.

Cass Sunstein, the lead advisor to Obama and OMB Director Peter Orszag on regulatory issues and the presumptive OIRA administrator, has yet to be confirmed by the Senate. He currently serves as a senior advisor to Orszag. Sunstein appeared May 12 before the Senate Homeland Security and Governmental Affairs Committee (see related article). Sunstein will be largely responsible for implementing any reforms to the process, especially changes to the relationship between OIRA and agencies.

The GAO report addresses issues outside of the OIRA-agency relationship, including the analytic requirements imposed on agencies and their effect on the length of rulemakings. GAO identified 22 different laws and executive orders that require agencies to assess a regulation's potential impact on different economic and social sectors or subpopulations.

In addition to the Administrative Procedure Act, which outlines the basic steps for the rulemaking process, including public notice and opportunity for comment, GAO found that agencies most commonly had to address requirements set by Executive Order 12866, the Paperwork Reduction Act (PRA), and the Regulatory Flexibility Act (RFA). The PRA requires agencies to seek OMB approval when attempting to collect information from ten or more people, among other things. The RFA requires agencies to assess the potential impact of a regulation on small businesses and to consider lower-impact alternatives.

The requirements in the numerous other laws and orders were seldom triggered in the rules GAO studied.

OIRA is also a factor in the time it takes for an agency to complete a rulemaking. In addition to OIRA's formal review – which typically lasts 60 days but may last 120 days or longer – agencies take additional steps to preemptively stem White House critiques. According to GAO, "[R]ules that require OIRA and interagency review typically need additional time for the external review process and, according to some agency officials, trigger additional internal scrutiny."

Agencies spent an average of approximately four years developing the rules GAO examined. One Food and Drug Administration rulemaking lasted 13 years, the report says.

The report also recommended agencies improve methods for keeping track of the amount of time and resources spent on rulemaking. "Agency officials were unable to identify the staffing or other resources (such as contracting costs associated with preparing expert analyses or convening public meetings) for regulatory development," according to GAO. The lack of information can make it more difficult for managers to identify slow points in the process.

GAO released the report May 11, though it is dated April 2009. GAO prepared the report in response to a 2007 request from then-Chairman of the House Oversight and Government Reform Committee Henry Waxman (D-CA). The report, titled, Federal Rulemaking: Improvements Needed to Monitoring and Evaluation of Rules Development as Well as to the Transparency of OMB Regulatory Reviews, is available online at www.gao.gov/new.items/d09205.pdf.