Much more will be written, no doubt, on the Biden administration’s approach to centralized review of regulatory actions though the Office of Information and Regulatory Affairs (OIRA), including President Biden’s Modernizing Regulatory Review Executive Order.

But Jim Tozzi has some fascinating initial takes, especially his #14 bottom line. I’ve cross-posted below his full post from over at The Center for Regulatory Effectiveness (CRE):

1. A Possible Launch of a Proactive Mission for OIRA

(a) Will the launch occur without suppressing OIRA’s traditional role of reviewing regulations?

(b) Will the Administration take the appropriate steps to ensure that OIRA’s Proactive Mission is implemented only if the constraints identified herein are adopted and enforced?

2. Chain of Command

OIRA Front Office: Political Appointees 3; Career Employees 1 Throughout OIRA’s forty year life span there have been a number of positions in the “front office” including Administrator, Deputy Administrator, Acting Administrator, Associate Administrator, Counsel, Senior Counselor and Chief of Staff. What is the chain of command in the Biden Administration? Subsequent to the aforementioned post and now on 02/03/2021 the Biden Administration has appointed three political appointees who report directly to the Administrator in lieu of the ranking career official, the Deputy Administrator. Of course what’s new? How many political appointees reported directly to the Administrator in the Trump Administration? Of note in the formative years of OIRA the only political appointee in the organization was the Administrator; during that period OIRA had its peak number of its employees, nearly one hundred; presently is has 50+.

3. Personnel Increase

Over the past forty years the OIRA personnel level has been reduced by nearly 50%. During the same time OIRA’s assigned duties have increased substantially. Are there plans to obtain a personnel increase either in the current fiscal year or the next? The adage that federal agencies exist because some powerful constituency made it happen most certainly does not apply to OIRA. Past attempts, however minimal, to raise the thought of a national constituency for OIRA failed. Traditionally the Deputy Administrator who has first-hand daily contact with the agencies has been in the best position to determine the skill set for new employees as a result of a personnel increase.

4. Educational Background of Staff

When a new personnel slot becomes available, either because of a departure or the attainment of a new position, what is the educational background of highest priority for filling the position? To what degree, if any, are the entrepreneurial skills of a candidate considered? Here is a list of universities which offer courses in social entrepreneurship. It just happens that a number of the same universities have law schools that are among the most highly rated in the world. Presently OIRA has considerably more attorneys than it has PhD level economists.

5. A Success Registry

When a new management team arrives often it is advantageous to maintain a Success Registry. The Success Registry, in the instance of OIRA, would (1) document procedural changes made in the centralized regulatory review process and (2) substantiate the items in (1) by publishing critiques by credentialed parties as is done by organizations working in the private sector.

6. Management of the Administrative State

Will the Biden Administration address a historical and growing weakness in its OIRA oversight responsibilities, namely the management of the administrative state? By the term “management” of the administrative state we refer to the types of issues delineated herein and identified as Option 3 in this post. Rest assured neither the economic or legal professions have a monopoly on the requisite experience to address them and the political science profession appears to wish to address them in the literature, not the battlefield. Possibly a new emphasis should be given to examining the entrepreneurial skills of potential OIRA managers, a skill set which could be a necessity if OIRA is to be in a position to cope with the ever increasingly complex and interrelated administrative state.

7. Establishing New Offices in OMB

Establishing a new office in OMB has a number of disrupting consequences including reducing personnel levels from other parts of the organization. Is this office really needed or does it establish the precedent that it is open season for exploiting the pet project of the day?

8. Public Inquiry: Is President Biden Going to Terminate the Benefit-Cost Analyses of Regulations?

The Administration stated it is going to explore broadening the scope of the analyses applicable to proposed rules subsequent to its receiving input from the public. We must await the outcome of that process. That said, benefit-cost analysis is a very important component of the regulatory process but is not without warts. The current decision rule states that any proposed rule whose net national efficiency benefits exceed its costs may be promulgated as a final rule. If a range of positive impacts of a proposed rule other than the traditional quantifiable national efficiency gains are brought into the calculus, then what replaces the aforementioned decision rule? More specifically each agency will have piles of rules with a new benefit-cost analysis; where is the cut off point for which rules are sent to OIRA and those which are not? Does each agency set its own cutoff or does OMB establish a “cutoff”? If so what is the cutoff? 

Furthermore how do you establish a cutoff point which divides proposed rules into pass or fail categories when some of its components(benefits) are either non-additive or not quantifiable? In other words what is the decision rule that replaces the existing one that states any rule whose net benefits are positive may be promulgated as a final rule? The determination of the appropriate decision rule should accompany any work on “benefit expansion”. A hands on favorite for the emergence of a new decision rule is the invocation of a regulatory budget as presented herein; or in the alternative a regulatory budget without numbers as noted in Option # 3 in this post.

9. Public Inquiry: Does CRE Have a Preference(s) for the Administrator of OIRA?

CRE does not take a position on the appointment to the position of Administrator. That said, the Editor is a creature of the Executive Branch whose DNA is programmed to support the recommendation of the President on this particular matter; it should be emphasized however that this deference does not necessarily extend to the resultant programs developed to manage the Administrative State.

10. The Amazing Stability of Centralized Regulatory Review!

October 1971 will mark the fiftieth year of continuous centralized regulatory review. During this time period we have witnessed the issuance of a series of landmark Executive Orders including EO 12291, EO 12886, EO 13528, EO 13563 and EO 13371. Each of the aforementioned Executive Orders are based on the two key provisions of the original mandate for centralized regulatory review promulgated in October 1971 which stated:

(1) Proposed and final regulations…should be submitted to the Office of Management and Budget.

(2) The regulations should be accompanied by a summary description indicating a comparison of the expected benefits or accomplishments and the costs (Federal and non-Federal) associated with the alternatives considered.

The two aforementioned provisions are contained in a October 5, 1971 memorandum from the Director of OMB to the Executive Branch Departments and Agencies commonly referred to as the “Quality of Life Review” which throughout the years was shepherded by a number of parties.

11. A Note to Pro-Regulators: Elections Matter

With the seating of the Biden Administration pro-regulatory voices are being heard in the halls of OIRA as a result of three recent political appointments therein. Elections matter because President Biden took the helm of the presidency which includes OIRA. President Obama, as is the case with President Biden, had a number of regulatory priorities, in particular healthcare. As a result, in part, of OIRA’s emphasis on economically sound regulations as personified by the use of benefit-cost analyses, the majority of President’s healthcare regulations are still in existence. For this reason the constant criticism of Professor Sunstein for acting in concert with the wishes of his President are not only inconsistent with the recognized concept of Elections Matter but is also not commensurate with the accomplishments to date of the pro-regulators.

12. Public Inquiry: Please Provide Three Papers Which Best Summarize CRE’s Work on the Biden Presidency and OIRA

1. OIRA: Alternative Mission Statements
2. A Strategy for Enabling a Proactive OIRA
3.  OIRA Critiques
4.  Team Biden Scorecard

13. OIRA Appointment of a Scientist

The most recent buzz on OIRA is that the Biden Administration has appointed a scientist to OIRA. It is a rare event but it has occurred in the past. There is some questioning of the appointment from those who believe that a “modernization” of OIRA should reduce OIRA’s reach not increase it by employing a scientist knowledgeable of climate change. The point that some are missing is whether the appointed position is that of a desk officer or a person who works in the “front office”. If it is the latter, the said scientist might be engaged in a “proactive” role as described in # 12 above.

14. Kudos When Kudos Are Due: The Biden Team Is On Top of Their Game

If there is one comment that we hear repeatedly it is that whether one agrees or disagrees with the Biden regulatory actions the team in charge is shrewd and well informed. We agree! Those that share this assessment have a wide range of particulars that led them to this conclusion. In our mind, Team Biden is mindful of history, which is a rarity in the super connective world of tweets. To this end Team Biden not only recognizes the importance of centralized regulatory review but is well aware of its history and is fully cognizant of its inherent flexibilities which allows one to address emerging issues in a forceful, informed and creative manner.