More Politics, Less Expertise: What OIRA has Wrought

As indicated by the 20^th anniversary of Executive Order 12866, which guides the workings of the Office of Information and Regulatory Affairs (OIRA) at OMB, OIRA has become a fixture of the regulatory landscape.  OIRA review of proposed rules is problematic, as other blogs in this series have indicated.   In the Obama administration, however, this is an additional problem. Other offices in the White House, besides OIRA, are more deeply involved in making regulatory decisions than in any other previous administration. This deeper involvement has made it more likely that regulatory decisions will reflect political considerations rather than policy considerations.   When this happens, OIRA’s regulatory review under E.O. 12866 can become a fig leaf covering up for the political decisions that are being made.

There is an old saying that in government “where you stand depends on where you sit.” That is, your view of the world is formed by the institutional arrangements in which you work. White House officials are sensitive to public policy arguments based on expertise, but they also more concerned than their agency counterparts with the political ramifications of such decisions. The White House may seek to control a regulatory outcome to obtain good public policy, but it may also seek to do so to curry favor with political donors or to forestall potential political attacks on the President. Since agency administrators are not running for office, they and their staffs do not share these political concerns (except indirectly in response to pressure from the White House or Congress.)

In writing about his stint as OIRA’s administrator, Cass Sunstein concedes that special interest politics may sometimes play a role in White House intervention, but he maintains that OIRA staff members are not political, they are bureaucrats, and that OIRA reviews are therefore technical, not political.   But this does not rebut the fact that other White House offices, more motivated by politics, appear to be deeply involved in overseeing rules. Based on what we know, when politics and expertise collide in the White House, the political considerations usually prevail.

Consider, for example, EPA’s Smog Rule. In 2011, the White House decided to postpone a proposed EPA rule that would have significantly reduced emissions of smog-causing chemicals on the grounds that it would have imposed too severe an economic burden on industry and local governments at a time of economic distress. News reports attributed the decision to heavy lobbying by industry interests and the White House’s political concerns that the proposed rule would harm the president’s re-election.

Another troubling example involves a proposed rule by the Department of Agriculture (USDA) to speed up the processing of chickens. The proposal was issued in response to an executive order by President Obama requiring agencies to review existing rules that might be outmoded, ineffective, or excessively burdensome. The order came at the time that he was gearing up for re-election, and it was part of an effort to convey to the electorate that the President was in agreement with regulatory critics’ concerns about unreasonable regulation. OIRA quickly approved publication of the proposed rule even though the agency had not completed the cost-benefit study that was required because it was an economically significant rule. Moreover, OIRA does not appear to have conducted any interagency review or even to have given notice to the Occupational Safety and Health Administration (OSHA) regarding the existence of the proposal, despite the serious worker safety implications of the rule.

If, as Sunstein claims, OIRA is uninvolved in politicized efforts to change proposed regulations, this means that the public cannot lay blame (or credit) at its doorstep when this occurs. If the review is technical and nonpartisan, OIRA takes credit. If there is a political motivation, then the blame lies elsewhere, although in terms of accountability, there is no way to know who is responsible. The result, as Lisa Heinzerling has noted,is that everyone is responsible for the shape and scope of regulatory policy, which means that no one is accountable. 

Supporters of greater White House control see it as improving electoral accountability, but it is doubtful that the President is really accountable to the voters for the way in which regulatory oversight is exercised. Even if voters are aware of White House oversight, it is almost impossible to know what has occurred because of a lack of transparency. This opens the door for the White House to be more responsive to some segments of the electorate that are in a position to furnish electoral support, particularly financial support. 

Since the advent of the regulatory state in the New Deal, there have been strong concerns about how agencies use the discretion that they have under legislative directives. We should be equally concerned about how the White House uses its discretion as the overseer of agency rulemaking.