CPR Scholars: ACUS' recommendations to OIRA fall short

Amy Sinden

Nov. 5, 2013

Since the Reagan Administration, federal agencies have been required by Executive Order to send their major rules to the White House’s Office of Information and Regulatory Affairs (OIRA) for review before releasing them to the public. OIRA review consists of, among other things, ensuring that agencies subject their rules to cost-benefit analysis to make sure the dollar value of their costs to industry exceeds the dollar value of the benefits they confer on the public.

It was no surprise under the Reagan administration – or more recently under the George W. Bush administration – that OIRA review served largely to delay and weaken rules. But you might be surprised to hear that the Obama administration’s record on OIRA delays has been significantly worse than the George W. Bush administration’s. A new report prepared by the Administrative Conference of the United States (ACUS) found that “in 2012, the average time for OIRA to complete reviews increased from 51 days to 79 days, and in the first half of 2013, the average review time was 140 days –nearly three times the average for the period from 1994 through 2011.” 

The report went on to note that the number of rules languishing at OIRA for 6 months or a year or more has risen dramatically in the Obama administration.   This is particularly disturbing, since Executive Order 12866, which governs OIRA review, sets a clear, mandatory 90 day deadline for review, with a one-time 30-day extension permitted in certain limited circumstances. 

According to the report:

From 1994 through 2011, an average of fewer than 10 completed reviews per year (less than 2%) took more than six months; however, in the first half of 2013, 63 reviews (nearly 30%) took more than six months, and 27 (nearly 13%) took more than one year. Further, these statistics may understate the extent of the delays. According to senior employees in 11 departments and agencies (who were interviewed for this report anonymously and without indication of agency affiliation), OIRA has increasingly used “informal reviews” of rules prior to their formal submission .

At CPR, we’re glad to see ACUS focus on the important problem of OIRA delay, which we’ve commented on in the past. But many of us at CPR were disappointed to see that the report misses important causes of delay at OIRA and that many of the recommendations might continue or expand OIRA’s interference in agency rulemakings in ways that were never authorized by Executive Order 12866.

Yesterday, CPR President Rena Steinzor, Member Scholars Tom McGarity, Wendy Wagner, Sid Shapiro and Senior Analyst James Goodwin and I submitted comments highlighting some of the problems at OIRA that ACUS should seek to address in its report and subsequent list of recommendations.

We note:

Even with respect to this narrow project, we urge the committee to ensure that all of its recommendations are consistent with the clear language of Executive Order 12866—and to reject any recommendations that are not consistent with this clear language.   The order very clearly states that regulatory reviews may not exceed 90 days in length with a limited, one-time extension of no more than 30 days permitted, regardless of whether such extensions comes at the request of OIRA or the submitting agency. If ACUS is unwilling to recommend formal changes to these clear deadline requirements, then it should advocate nothing short of strict adherence to them. In particular, this means that ACUS should not recommend that OIRA seek only to improve the timeliness of its reviews such that they “return to at least historic averages.”

Our recommendations for eliminating OIRA violations of regulatory reviews deadlines can be summarized as follows:

1.  OIRA should focus its resources on reviewing economically significant rulemakings, as it is directed to do by Executive Order 12866. OIRA appears to have sufficient resources to complete these reviews in a timely fashion;

2.  The interagency review process has become a significant source of additional delay and should be limited; and  

3.  OIRA’s “all you can meet” policy for meeting without outside groups should be eliminated.

Our recommendations also include the rejection of certain other recommendations for addressing OIRA delay, which include the following: increased use of “informal” review; “clock-stopping” and increased OIRA staffing. 

According to Executive Order 12866, OIRA should review rules that are “economically significant.” An economically significant rule is defined as imposing more than $100 million in annual compliance costs for affected industries. The order also allows OIRA to extend the scope of its review in very limited circumstances. As ACUS’ study notes, the vast majority of the rules that OIRA reviews—approximately 500 to 800 rules per year—are non-economically significant rules. Meanwhile, economically significant rules, which are intended to be the central focus of OIRA’s activity, make up only about 100 reviews per year. To prevent improper delays caused by the OIRA review process, OIRA should curtail its intrusive interference in agencies’ work. In particular, OIRA should eliminate its extensive review of non-economically significant matters and commit to re-focusing on economically significant rules that are supposed to be its highest priority under Executive Order 12866.

On the expansion of “informal review” our comments state:

Recommendation 3, which states in part that “communication between rulemaking agencies and OIRA before formal submission of a rule to OIRA for review should be encouraged,” flaunts the transparency requirements of Executive Order 12866. OIRA’s informal review has historically lacked any documentation whatsoever.. Under current OIRA practice, it is impossible to determine whether and to what extent OIRA has influenced the substance of agency rulemakings before the formal review. Affirmatively recommending still more of this nontransparent, upstream influence by OIRA directly contravenes both the text and the intent of Executive Order 12866, which creates a short, formal clearance role for OIRA. Executive Order 12866 also demands that OIRA’s influence during this pre-review period be completely and carefully documented and made available to the public. As long as OIRA is engaged in influencing agency projects at earlier, undefined stages, and this influence is completely unrecorded, it undermines the agency’s authority and the ability of the public to participate meaningfully in the rulemaking process. 

We also doubt that increased use of informal reviews will do much to address the problem of OIRA delay during the formal review—there is at least no evidence that it will have this effect given the fact that these informal reviews by OIRA are already occurring without any apparent limit. At the same time, this extended OIRA influence into earlier and earlier stages of agency rulemakings will further undermine the legitimacy and scientific integrity of the resulting rules. 

And on the issue of “clock-stopping” we note:

We oppose any recommendation that would allow OIRA to “stop the clock” on the review during the period in which it is waiting for any agency response to its feedback on a draft rule undergoing review.

Implementing this recommendation has no basis in Executive Order 12866 and may perversely lead to even more extensive and nontransparent interventions into agency rulemakings by OIRA. In particular, this recommendation might encourage OIRA to inundate agencies with even more comments and burdensome analysis requests than it does currently. Because the clock would be stopped while agencies are responding to these comments and requests, this tactic would enable OIRA to significantly increase review times.  The difficulty of responding to these comments and requests might also induce agencies to accept changes to their draft rules that they might not otherwise accept. 

ACUS’ unique mission enables it to be a highly critical voice in discussions about the efficiency and effectiveness of the rule-making process, vital to ensuring public protections.   We are pleased that ACUS is taking on the critical task of addressing the delays that OIRA review often introduces into the rulemaking process—delays that deny people and the environment adequate safeguards. But, we found many of the recommendations fell short, because they would not help reduce unwarranted delays and because they were inconsistent with the letter and spirit of Executive Order 12866. In our comments, we hope to map out a better path forward for reducing delays while ensuring that OIRA adheres to the modest clearance role that Executive Order 12866 sets out for it.

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