Academic journal article Harvard Law Review

OIRA Avoidance

Academic journal article Harvard Law Review

OIRA Avoidance

Article excerpt

The Office of Information and Regulatory Affairs (OIRA) is the most powerful federal agency that most people have never heard of. (1) Created by the Paperwork Reduction Act of 1980, (2) OIRA is tasked under Executive Order (E.O.) 12,866 (3) with coordinating the actions of the various federal agencies and with reviewing significant regulatory action (4) under [section] 553 of the Administrative Procedure Act. (5) OIRA and its review process thus serve as one of the principal means by which the President can exercise control over the administrative state. (6)

But there is a noticeable gap in academic analyses of OIRA and the efficacy of centralized review. The leading academic works on OIRA and presidential control of the administrative state have focused on the White House's (7) and agencies' (8) experiences of centralized review, drawing different conclusions about its success. (9) These accounts, however, have not evaluated the degree to which agencies attempt to avoid the OIRA review process entirely. It is axiomatic that imposing salient costs on an actor gives that actor an incentive to avoid those costs--and OIRA review is costly and time-consuming. (10) Agencies thus have an incentive to avoid OIRA review if possible, either by choosing to act via procedures not subject to review under E.O. 12,866 (11) or by acting strategically should they choose to engage in [section] 553 rulemaking.

This Note attempts to shed light on agencies' behavior before the review process begins. Its primary conclusion, after reviewing a sample of the empirical data and several interviews the author conducted with two former OIRA officials, is that agencies may seek to avoid OIRA review by understating the costs of rules, (12) a phenomenon this Note terms "OIRA avoidance." Though mainly descriptive, this Note also briefly comments on the desirability of agencies' avoiding OIRA review, and suggests how the President might limit such behavior.

Part I briefly provides background information on the theory and history of OIRA. It then describes E.O. 12,866 and the duties it imposes on executive agencies. Part II offers an introduction to the phenomenon of OIRA avoidance. It provides a qualitative account, principally with information gleaned from interviews with two former OIRA officials, Sally Katzen and Donald Arbuckle. This Part suggests that agencies may in some situations have an incentive to avoid centralized review of their action and that they may take action consistent with that goal. Part III describes the Note's empirical methodology, reviews the data gleaned from OIRA's website, and suggests that, consistent with the data, agencies may understate the costs of rules to avoid OIRA review. This Part also discusses a potential counter-hypothesis that could serve to explain the data, inspired by Professor Matthew Stephenson's theory of strategic substitution. (13) Part IV offers a normative discussion, and Part V concludes.

I. OIRA: THEORY, BACKGROUND, AND RESPONSIBILITIES

OIRA was created after 1970s-era discontent with regulation led to explicit presidential oversight of executive branch rulemaking. This responsibility was eventually delegated to the Office of Management and Budget (OMB) within the Executive Office of the President. (14) The goal of centralized review was to "ensure that regulations were consistent with each other and with administration policies and priorities." (15)

Professor Richard Pildes and Professor Cass Sunstein--now Administrator of OIRA--have argued that putative presidential control of the federal bureaucracy by way of OMB review, a step initially taken by Presidents Nixon and Carter but entrenched by President Reagan, "has become a permanent part of the institutional design of American government." (16) Centralized control, meant to further "interagency dialogue, coordination, and analytical precision, as well as [the reduction of] regulatory costs," (17) enables a President to further a variety of policy goals, including conformation to his or her administration's principles, the reduction of public and private costs, and the coordination of agency activity. …

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