OIRA looking beyond ‘low-hanging fruit’ under 2-for-1 regulation rollback

Early in his administration, President Donald Trump put the Office of Information and Regulatory Affairs in the spotlight.

Only 10 days into his administration, Trump signed an executive order that put OIRA in charge of making sure agencies cut two outdated regulations to offset the costs of any new rule they proposed.

But more than two years after executive order, acting OIRA Administrator Paul Ray told members of the Senate Homeland Security and Governmental Affairs Committee that OIRA has seen “tremendous success” with the so-called “two-for-one” executive order.

If confirmed as the administration’s permanent OIRA administrator, Ray said he would help agencies move beyond what Committee Chairman Ron Johnson (R-Wis.) called the “low-hanging fruit” of outdated federal regulations.

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“Agencies are working on, to use your analogy, fruits a little higher up the tree — and there may be fewer of those regulations — but often the benefit of those reforms are actually larger,” Ray said during his confirmation hearing Wednesday.

Within the first year of the rule going into effect, agencies had repealed as many as 22 outdated regulations for every new rule. While the rate of deregulation has slowed in recent years, Ray said OIRA will soon release governmentwide statistics for fiscal 2019 that show the “numbers are very, very good.”

But beyond the administration’s deregulatory agenda, Ray said one of his top priorities is to ensure that a proposed rule at one agency doesn’t infringe on an existing rule elsewhere in the government.

“I think the role of OIRA is to ensure a process that results in regulations for which costs and benefits are accurately and transparently accounted for, that contain full and adequate legal rationales explaining the agency action, and that are the result of a single executive voice, of a robust interagency process that ensures that the right hand knows what the left hand is doing,” Ray said.

While agencies propose and issue regulations, OIRA reviews them before they go into effect. During that review, OIRA runs through a cost-benefit analysis to make sure that each proposed rule does what it’s supposed to do.

As acting administrator, Ray said he encouraged agencies to quantify the full range of costs and benefits anticipated from any regulation whenever possible.

“What an agency should achieve in cost-benefit analysis is really two goals: One is to ensure that the regulation is net-beneficial, and two is full transparency with the public. And so while it may be enough for the first goal, just to show the benefits exceed costs, it’s not enough for the second,” he said.

Sen. Gary Peters (D-Mich.), the committee’s ranking member, said OIRA may not be a household name, but its central role in the federal rulemaking process has a major impact across the country.

“Not many people outside of Washington have heard of this agency, but individuals across the country know that government regulations can have a dramatic impact on their families, on businesses and communities,” Peters said.

But Democrats on the committee claim the Office of Management and Budget has withheld documents needed to vet Ray.

In a letter to acting OMB director Russ Vought, members wrote that the agency’s Office of Legal Counsel, claiming executive privilege, had withheld documents that are “not only directly relevant, but also necessary” to assess Ray’s performance as acting administrator since June 2018.

“I have very serious concerns on how this critical agency will comply with this committee’s request,” Peters said.

Sen. Tom Carper (D-Del.) said Ray has asserted executive privilege 19 times during his pre-hearing questionnaire, more than any previous nominee to appear before the committee.

“Your general approach of non-response with the committee vetting process, we believe, sets a concerning precedent both for future nominees and subsequent oversight efforts to hold the executive branch accountable,” Carper said.

Under the Regulatory Right to Know Act, OIRA must publish an annual report on the benefits and costs of federal regulations for the previous year. But the agency hasn’t published any of these mandated reports since fiscal 2017.

Ray said the “tardy status” of those reports dates back at least to the Obama administration but said past-due reports for FY 2017, 2018 and 2019 will be ready before Christmas.

For other work on its docket, Sen. Maggie Hassan (D-N.H.) has asked the OIRA to slow down, and use due diligence in vetting major agency regulations.

Under the tenure of Neomi Rao, the president’s first OIRA administrator, the agency only took a week to review an EPA rule that would significantly impact the scope of research the agency could use for future rulemaking.

That rapid turnaround raised concerns from Hassan that the OIRA review process has been “shortchanged.”

“One of the reasons we have regulations, one of the reasons we have OIRA, is to make sure that the politics that sometimes swing us back and forth don’t have too much sway on things that are critically important to the American people. And so sometimes the people who come here and say they’ll stand up to political pressure don’t always follow through on that,” Hassan said.

However, Republicans on the committee expressed enthusiasm for OIRA’s role in rolling back outdated agency regulations.

“Nobody ever goes back and says, ‘You know, this doesn’t make any sense anymore,’” Sen. Rick Scott (R-Fla.) told Ray.

Sen. James Lankford (R-Okla.) asked Ray whether OIRA will set its sights on expanding its role to review regulations from independent agencies.

“I have been one of those folks that’s said independent agencies are not independent of everyone. All of us have oversight at some level, and for an independent agency to say, ‘No, we’re fine, we don’t want you to check our homework,’ I think is inconsistent with just agencies having basic oversight infrastructure,” Lankford said.

Ray said the Trump administration hasn’t advocated a position for widening the OIRA purview, but said “there’s a compelling case to be made” for that change.

Sen. Marsha Blackburn (R-Tenn.), in introducing Ray to the committee, said that under his leadership “we can expect that OIRA will rigorously apply cost-benefit analysis to every single rule, something that is not done in Washington, D.C. often enough as we look at regulation.”

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