OIRA's Role in the Obama Administration Examined

A panel of regulatory policy experts discussed how the White House Office of Information and Regulatory Affairs has been functioning during the Obama administration and how reforms could benefit the public. The discussion came as the White House prepares to issue a new executive order that could alter the way regulations are written.

The American Bar Association's Administrative Law and Regulatory Practice Section held the discussion June 10. Michael Fitzpatrick, associate administrator of the White House Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA), gave an insider's account of OIRA's role in the Obama administration.

Rulemaking agencies submit to OIRA drafts of proposed and final regulations before publishing those regulations for the public to see. OIRA comments on, and sometimes edits, agency regulations. OIRA also shares draft rules with other agencies for their comment. The office also checks the cost-benefit analyses agencies prepare in support of their regulations. For the most part, OIRA has maintained this role during the Obama administration, Fitzpatrick said.

Fitzpatrick said that since Jan. 21, the first full day of the Obama administration, OIRA has completed reviews of 136 regulations. Thirty-eight of those regulations are considered by the administration to be "economically significant," imposing an economic impact of $100 million or more, either through compliance costs or improved social welfare. Fitzpatrick's statistics covered regulations approved by OIRA through June 5.

Of the 136 regulations, 37 were withdrawn from OIRA review. On Jan. 21, White House Chief of Staff Rahm Emanuel instructed rulemaking agencies to halt their work on all regulations under development during the Bush administration, including those that had been sent to OIRA. Fitzpatrick cited Emanuel's memo as the reason for the withdrawals.

The remaining 99 regulations were approved by OIRA, in some cases after the agency agreed to make changes.

Fitzpatrick said the average length of the review periods was 32 days for the 38 economically significant regulations and 28 days for all other regulations. He called the pace "expeditious," citing longer review times during the first few months of the Bush administration. Fitzpatrick said, under President Bush's OIRA, the average length was 52 days for economically significant regulations and 64 days for all other regulations approved from Jan. 21, 2001, to June 5, 2001.

However, an OMB Watch analysis of the data shows faster paces for both administrations. In his analysis, Fitzpatrick included regulations submitted to OIRA during the Bush administration and, when analyzing the Bush years, regulations submitted during the Clinton administration. In both cases, most of these holdover regulations were withdrawn. Many of these regulations had languished at OIRA for months during the presidential transitions.

OMB Watch chose to include only those regulations submitted to and approved by OIRA after each administration began (Jan. 21, 2001, and Jan. 21, 2009, respectively). According to OMB Watch, under President Obama's OIRA, the average length was 21-22 days for economically significant regulations and 20-21 days for all other regulations. Under President Bush's OIRA, the average length was 14-15 days for economically significant regulations and 25-26 days for all other regulations. (Times are presented as ranges due to rounding.)

Under the Obama administration, OIRA has quickly approved several high-profile regulations, including a U.S. Department of Agriculture rule barring downer cows from entering the food supply (reviewed in seven days), a Department of Transportation regulation requiring stronger vehicle roofs in order to protect passengers during accidents (reviewed in 22 days), and a U.S. Environmental Protection Agency finding that declares greenhouse gases a threat to public health and welfare (reviewed in 24 days).

Statistical analyses do not paint a complete picture of OIRA's role in rulemaking, panel member and OMB Watch Executive Director Gary D. Bass noted. The small but powerful office can have a great impact on the substance of the regulations that effect Americans' everyday lives. Bass called on the Obama administration to improve the regulatory process by reducing the time it takes to complete rules, ensuring that agencies are allowed to produce regulations in an environment of limited political interference, requiring more transparency, stimulating public participation, and providing agencies with the means to enforce rules in effect.

Another panel member, former OIRA Administrator Susan Dudley, disagreed, saying that little, if any, change is needed in the way OIRA operates. Dudley, who worked at OIRA from 2007 to 2009, said the office plays a salutary role and its powers should be preserved. She also supported the use of cost-benefit analysis in rulemaking but has urged improvements. In the Summer 2009 issue of the journal Regulation, Dudley lamented, “Although analytical tools for estimating benefits and costs are getting more and more sophisticated, our analysis doesn’t seem to be getting better at predicting actual outcomes.” Dudley also identified “Engaging the public to be more aware of the actual effects of regulation” as an upcoming challenge.

Sid Shapiro, an administrative law expert at the Wake Forest University School of Law, also focused on cost-benefit analysis. Shapiro said current methods of cost-benefit analysis – which focus on assigning dollar values to regulatory benefits, such as injuries reduced or lives saved, and then compare those benefits to compliance costs – do not help the government or the public make informed decisions. Shapiro said the government should do a better job of accounting for benefits that are difficult or impossible to "monetize."

OIRA is still operating under Executive Order 12866, Regulatory Planning and Review. President Clinton signed E.O. 12866 in September 1993, and President Bush continued using it throughout his administration.

President Obama has indicated his intent to replace E.O. 12866 with a new order governing the regulatory process. On Jan. 30, Obama called on OMB Director Peter Orszag, as well as the federal agencies responsible for writing rules, to present him with recommendations on a new executive order within 100 days.

OIRA solicited public comment on the existing state of the regulatory process and published the comments online – an unprecedented action in the development of executive orders. Fitzpatrick said the most common topic covered in comments was the role of cost-benefit analysis. The second most common topic was the role of OIRA, specifically, its relationship with rulemaking agencies.

Although the deadline for the OMB and agency recommendations has passed, the administration has given no indication of its plans. The administration has not released OMB or agency comments.

The process may be moving slowly because Obama's nominee to lead OIRA has yet to be confirmed. Obama nominated Harvard Law Professor Cass Sunstein in April. His nomination was approved by the Senate Homeland Security and Governmental Affairs Committee on May 20, but the full Senate has yet to schedule a vote.

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