OMB's Problematic Circular A-4 Rewrite: How Congress and OMB can 'Futureproof Regulatory Review'

Abstract

Proposed changes to the conduct of Administrative State like those embodied in the changes proposed by the Office of Management and Budget to "Circular A-4" guidance on Regulatory Review accentuate a conflict of visions over the size and scope of government and its role in society; over separation of powers; over executive overreach; and over the fundamental relation of the individual to the state.

Many of the changes proposed in the Draft Circular are highly problematic. Some of the proposals are good ones, but the changes on the whole are united in their affirmation of a more powerful central regulatory apparatus, disregard for measurement and disclosure, minimal concern for political failure, and indifference to the duty to extend institutions such as property rights into the governance of complex emerging frontier sectors.

The Draft Circular A-4 represents a deterioration from the already inadequate 2003 version. Rather than seeing regulation as a costly last resort, the pursuit of centralized planning, the displacement of the private sector, and politicized net benefits are seen as good things. This is not “Modernizing Regulatory Review,” it is effectively doing away with much of it, and as such should be rejected. Prerequisites for reformatting Regulatory Review include:

• Discard the pro-regulatory bias of the federal government
• Restore regulatory streamlining prior to Circular A-4 rewrite
• Restore the $100 million threshold for regulation deemed “significant”
• Comply with existing law on regulatory oversight first
• Grapple with political failure
• Replace “net benefit” analysis with cost "budgeting"
• Restore an aggregate regulatory cost estimate
• Reckon with “harm of regulation”
• Restore the “presumption against economic regulation”
• Pay attention to co-costs, not solely co-benefits
• Recognize differential effects of rules on businesses
• Reaffirm federalism, here and abroad
• Address federal monopoly power
• Incorporate guidance document disclosure protocols
• OMB should not encourage regulating beyond statutory authority
• Enough with nudges

Keywords: Office of Management and Budget, Circular A-4, Administrative law, regulation, agency, public administration, transparency, disclosure, guidance documents, regulatory review,

JEL Classification: A1, K2, k21, k23, k32, H10, H12, H13, H4, H50, H60, L1, L12, L4, L5, L50, L51, L52, O3, O4, O43