Regulatory Review by the Executive Office of the President: An Overview and Policy Analysis of Current Issues
62 Pages Posted: 5 Aug 2017
Date Written: August 2, 2017
After about twenty years of political and intellectual Sturm und Drang on the issue of centralized presidential regulatory review - about its desirability, its legality, and the methods of its implementation -, it appears that we are all (or nearly all) Unitarians now.
This is not a statement about religion, although some of the intellectual combatants regarding centralized regulatory review through the Executive Office of the President (EOP) (via the Office of Management and Budget [OMB] and its Office of Information and Regulatory Affairs [OIRA]) have addressed the issue with something like religious zeal. Nor is it a statement of constitutional interpretation. Some unitarians derive their position from Article II, under which the president embodies the executive powers of the federal government. Other Unitarians, however, arrive at their unitarianism not from the Constitution but prudentially, as a matter of policy-driven statutory construction. Whatever the justification, the much-maligned institutionalized process of centralized presidential regulatory review, adopted during the early days of the Reagan administration, has survived and even thrived under a successor Republican administration and two terms of a Democratic administration, which one might have expected to dismantle it (given the hostility to OIRA and to regulatory review generally evidenced by Democratic constituencies during the Reagan-Bush era).
The Clinton administration’s retention of Reagan-era institutions of centralized presidential regulatory review has been described as “a dramatic and in many ways quite surprising step” that both “maintains the basic process [of OMB regulatory review] inaugurated by President Reagan … [and] also maintains much of the substantive focus of the Reagan orders, including the emphasis on cost-benefit analysis as the basic foundation of decision.” The Clinton administration’s Executive Order No. 12,866 actually and explicitly expanded the scope of centralized presidential regulatory review by including independent regulatory agencies in the agency planning process. And the Clinton administration’s executive order makes explicit what had been left implicit in the Reagan and Bush executive orders - that centralized presidential regulatory review is aimed at making agency regulations “consistent with … the President’s priorities.” The emphasis on imposing the primacy of the president’s priorities in agency decision-making permeates Executive Order 12,866; the phrase “the President’s priorities” appears in at least seven places. In 1995, Professors Richard Pildes and Cass Sunstein observed that “[f]rom recent evidence, it seems clear that presidential oversight of the regulatory process, though relatively new, has become a permanent part of the institutional design of American government.” Six years later, at the conclusion of the second Clinton term, Professor Elena Kagan, formerly a senior member of President Clinton’s White House domestic policy staff, asserted flatly that “[w]e live today in an era of presidential administration,” an “assertion” that, she acknowledged, might be “jarring” or “puzzling” to some because of its reaffirmation of controversial policies that had had their origin in the Reagan years. According to Professor Kagan, “presidential control of administration, in critical respects, expanded dramatically during the Clinton years, making the regulatory activity of the executive branch agencies more and more an extension of the President’s own policy and political agenda.” Evident from the terms of Executive Order 12,866 itself, this was a “self-conscious and central object of the White House,” which “in large measure set the administrative agenda for key agencies.” Early evidence indicates that the George W. Bush administration will continue the policy of centralized presidential regulatory review. On September 20, 2001, John D. Graham, Administrator of OIRA, issued a memorandum to the President’s Management Council calling attention to the Clinton administration’s executive order and noting that the president’s chief of staff directed that Graham “work with the agencies to implement vigorously the principles and procedures in E.O. 12866 until modified or [a] new Executive [O]rder is issued.” From controversial fringe to mainstream in twenty years, centralized presidential regulatory review has now taken center stage as an institutionalized part of the modern American presidency. The Clinton administration, without fanfare, helped institutionalize fundamental policies and values of the Reagan administration, normalizing many of President Reagan’s ideas and reforms much as the Eisenhower administration - the first post–New Deal Republican administration - normalized the New Deal values and structural reforms of President Franklin Roosevelt.
In this Essay, I will argue that centralized presidential review of agency regulatory activity is an understandable and salutary development.
At the outset, I will offer a brief historical and personal note about the implementation of centralized presidential regulatory review through the issuance of an executive order during the Reagan administration. That personal experience provides some of the basis for what follows. It also contributes two important insights. First, in something of a flashback, it will show how President Reagan’s executive order successfully dealt with the built-in inertia of an existing bureaucracy by implementing centralized presidential regulatory review before opponents had an opportunity to mobilize in opposition, but that success came at a price - the controversy and resistance the regulatory review process engendered, which remained a fact of life even nine years later when I was nominated to head up the agency charged with administering the regulatory review process. Second, the personal perspective will attest to the importance that the proponents of centralized presidential regulatory review assigned to the unitary executive principle - the principle that the Executive Office of the President should either control or influence (based on the president’s policy goals and agenda) the exercise of agency discretion, other than independent agencies. Intensive negotiations about the scope of disclosure of executive-branch decision-making delayed my confirmation for months, and that delay eventually led to the nomination’s demise on other grounds20. The result was that the Bush administration refused to nominate anyone else to fill the position of administrator of OIRA, which vacancy went unfilled for the remainder of the Bush administration. This transferred substantial authority to the Office of the Vice President, which (through the Competitiveness Council) took on additional responsibility for overseeing the centralized presidential regulatory review process.
In Part III I will set forth the essential provisions of the centralized presidential regulatory review executive orders that were adopted during the Reagan administration, followed during the Bush administration, and adhered to, albeit in modified form, by the Clinton administration.
Part IV will focus on centralized presidential regulatory review, concluding that such review is warranted on policy grounds and, while it is and should be legally authorized, that the core issues are political rather than legal in nature. Section A will ask whether the often sharp debate about the legal and policy aspects of centralized presidential regulatory review should be taken seriously analytically, or whether it is merely a smokescreen for underlying political arguments dressed up in structural garb. I will conclude that, while the political agendas may often trump principled arguments regarding the proper extent of executive review, the issue is nevertheless worthy of being taken seriously on its own structural terms. Section B will note that a remarkable (if not uniform) consensus has emerged on a form of the unitary executive principle. That consensus draws a bright-line distinction between the role of presidential oversight of regulatory decisions with respect to independent agencies (where the president must respect their regulatory autonomy) and other executive-branch agencies (where the president can exercise greater influence on agency regulatory policymaking). Section C.1 will contend that critics of centralized presidential regulatory review acknowledge the technocratic claims for such review - that such review can appropriately improve government-wide rulemaking in the traditional (noncontroversial) technocratic sense. But, as Section C.2 explains, consensus has traditionally broken down with regard to the policy-based claims for centralized presidential regulatory review. I will contend that important values are served by centralized presidential regulatory review, and that those values are consistent with our traditional understanding of how the agency rulemaking process works both in theory and in practice. Traditional constraints on centralized presidential regulatory review - for instance, that no exercise of discretion by the executive branch can violate the terms of a statute, and an agency’s decision must be supported by the rulemaking record - limit an excessive politicization of agency rulemaking. Finally, in Part V, I will consider implementation issues that can affect the degree of receptivity or hostility to centralized presidential regulatory review as an institutional adaptation.
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