By Clyde Wayne Crews, Competitive Enterprise Institute
The Senate Homeland Security and Government Affairs Committee recently held a hearing on the nomination of Richard L. Revesz to be Administrator of the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA), which is often characterized as one of the most important agency nobody’s heard of.
On several occasions in response to questions, Revesz referred to his commitment to ensuring that regulations’ benefits “justify” (not exceed) costs and “maximize net benefits.” In an opening question, Sen. James Lankford (R-OK) asked him about the prospect of having OIRA require for all guidance documents be placed in a “central clearinghouse” that currently “does not exist.”
Revesz answered that he is a “strong believer in transparency” and that guidance documents “play a role” (I tend to look at them differently) and allowed that it’s important for guidance to be made available somewhere in a user friendly way. He recognized that having documents available on websites of agencies “might not be as useful as having one central repository,” but was noncommittal about enforcing one on regulations.gov or some other venue. Even individual agency portals are in jeopardy, given President Biden’s revocation of the Trump executive order setting them up, which was not mentioned at the hearing. Revesz would commit only to saying he looked forward to working with OIRA staff and the committee to “see what may be done,” and offered that, if a central repository is the best way to go (it is, along with sharply restricting the use of guidance documents via emergency legislation), he looked forward to learning how best to accomplish that.
The hearing went on to address the anticipated update of a problematic OMB directive called “Circular A-4” on agencies’ embrace of cost-benefit analyses and preparation of regulatory impact analyses. Under today’s “whole-of-government” campaign to expand regulation, any rewrite of Circular A-4 would make regulatory overreach worse. Today’s Washington is seemingly incapable of dialing anything back. OMB’s Circular A-4 omits most of the regulatory “Costberg” already, and a progressive rewrite will not help address that.
Deeper dives into the state of regulatory oversight are needed. Given the clock ticking on the 117th Congress, those deeper dives will be jobs for the upcoming 118thCongress, should it choose to take up the challenge. Below are some matters Congress should delve into, from the simple to the more philosophical.
- The last time the perpetually tardy “annual” Report to Congress on regulatory costs and benefits appeared, it only covered through fiscal year 2019. Can the periodical issuing of this report be put back on track?
- The regulatory state and its hidden taxes are even less disciplined than fiscal policy. The federal government spends $6 trillion annually, and is $30 trillion in debt. What is the overall, aggregate cost of the regulatory state?
- OIRA won’t know the answer to the aggregate cost question and most likely will downplay its significance. That should prompt Congress to assert that the Regulatory Right to Know Act requires an assessment of aggregate regulatory costs, which hasn’t been seen since 2002. Even the 10-year lookbacks OIRA defaulted to have vanished. Congress should ask OIRA to affirm that global assessments will be reestablished, especially in light of “whole-of-government” regulatory campaigns that preclude the possibility of limited government (“Equity,” “Climate Crisis,” “Competition Policy”) and that cut across agencies. It is no longer possible for agencies to assess their benefits and costs in isolation.
- Even as it ramps up antitrust policy against the private economy, the federal government is engaged in contradictory expansions of its own economic steering power. The administration boasts of the government being the “largest purchaser on Earth,” as it deploys those spending, procurement, and contracting powers to advance various agendas. How will OIRA incorporate this development into regulatory review and its deliberations on Circular A-4?
- Related to that, in the wake of unprecedented legislation costing in the trillions, Washington is pushing public-private partnerships (PPPs) with extensive but unacknowledged regulatory and inflationary effect. When government merges with the private sector, its actions are rarely recognized as the regulatory interventions they are, and are largely undetectable in the Federal Register. Is it appropriate to see everything from local tap water to outer space commercialization as a public-private partnership? How will Circular A-4 reflect the displacement and regulatory costs that these pursuits entail?
- Prior to the Trump administration, one could only point to a few thousand “guidance documents” of the untold number that exist. During the Trump Administration, resistant agencies were able to reluctantly cough up 13,000 [that was the 2018 OGR Shining Light on Regulatory Dark Matter report). After Trump’s portals, one can now point to 107,000. Biden, however, has removed these reporting requirements. What can OIRA do to reaffirm and maximize guidance disclosure?
- In what way is OIRA still capable of fundamental regulatory oversight? In several ways, Biden has obliterated disclosure norms. Regulatory oversight has gone from Executive Order 12291’s requiring that benefits “outweigh” costs to the 12866 iteration that benefits “justify” costs (as referenced by Revesz) to the Biden “Modernizing Regulatory Review” executive order that effectively replaces 12866 with the drafting of OIRA into advancing “net benefits” as progressives see them. How can OIRA serve as a brake on the rest of the administrative state?
- OIRA and the regulatory apparatus generally invoke the notion of “market failure” as justification for intervention. Can OIRA affirm that it will actively monitor political failure and make active cases for rollbacks as appropriate, especially as advancing technologies reduce the saliency of arguments that markets “fail”? Relatedly, in updating OMB Circular A-4 on prepping regulatory impact analyses, can Congress be assured that these will henceforth more thoroughly incorporate political failure rather than market failure as the primary risk? This process can be undermined by regulation that in fact undermines genuine regulation. All tainted meat, if you will, was approved by the USDA.
- The administration has been unresponsive to Senate inquiries regarding the removal of the guidance document portals. What major steps can OIRA take to improve guidance disclosure and accountability? What are OIRA’s thoughts on the Guidance out of Darkness (GOOD) Act and similar measures to track guidance? As a California Senator, the current vice president supported the GOOD Act.
- The Congressional Review Act requires for rules, including guidance, to be submitted to Congress and to the Government Accountability Office. Whether or not this requirement is obeyed is close to impossible for outside observers to assess, and it even brings into question the legality of rules. Inflicting invalid rules is good for bureaucracy, but not so good for the bound public. Can OIRA commit to implementing a mappable disclosure process such that covered rules and guidance are reported to both Congress and the GAO, and that the public can easily verify and locate?
- Under Trump, a “Deregulatory” designation for rules appeared as a component of the Unified Agenda landing page’s advanced search functions. Biden’s revocation order removed Trump’s one-in, two-out directive and in turn the new classification. Is it too much to reincorporate in the Unified Regulatory Agenda database the radio button that was there until recently, so that the public might ascertain that Washington might be doing something deregulatory rather than regulatory?
Given the reach of the modern administrative state, there is plenty more to assess.
Wayne Crews is vice president for policy and a senior fellow at the Competitive Enterprise Institute.