Ex-Regulatory Chief Disturbed by Trump Team’s Failure to Cooperate With Watchdogs

The latest in the ongoing clash over the Trump administration’s habit of ignoring queries from oversight watchdogs unfolded at a cordial Senate subcommittee hearing on Tuesday held to discuss two coming bipartisan regulatory reform bills.

Sen. Tom Carper, D-Del., elicited negative reactions toward the current White House Office of Information and Regulatory Affairs from a previous leader of that office, who agreed that it was likely “unprecedented” for this office to fail to respond to requests for documents and explanations from a legitimate oversight authority.

The dispute emerged last week, Carper said at a hearing of a Homeland Security and Governmental Affairs panel, when the acting inspector general for the Environmental Protection Agency, Charles Sheehan, made a rare complaint in a letter to Office of Management and Budget Director Mick Mulvaney. The IG said OIRA had been unresponsive to his questions on EPA and OIRA’s handling since 2017 of a rollback of air pollution emission control rules on so-called “glider trucks.” The watchdog cited his auditors’ access rights under the 1978 Inspector General Act and called OMB’s argument that the materials were of “deliberative character” unacceptable.

Carper, blasting OIRA for failing to conduct a new cost-benefit analysis before replacing the truck rule and other environmental regulations, asked the two ex-chief regulators if either witness could recall a time when OIRA refused to cooperate with an agency inspector general or the Governmental Accountability Office.

Susan Dudley, who ran OIRA for two years under President George W. Bush and is now teaching at The George Washington University, answered Carper by saying it was unprecedented for an IG from another agency to ask questions of OMB. She later explained to Government Executive that OMB, regardless of administration, is protective of deliberative discussions. 

Co-witness Sally Katzen, who ran OIRA during the Clinton administration and now teaches law at New York University, called the situation unprecedented, adding that she has heard “disturbing stories” coming out of the current OIRA. However, “when I was in government, I read stories that were not quite right,” she qualified. But if such an action had occurred, she “would have fought hard to live up to what I thought was what the office stood for—good analysis, good data and the kind of outreach that pushes good decision making.”

Dudley cautioned that OIRA—which is currently being run on an acting basis by Paul Ray—“wears several hats.” It coordinates and approves rules written by regulatory agencies, executes Executive Order 12886 to review significant regulatory actions and “is part of the White House, which are sort of in conflict,” she said. “Sometimes we held our nose and said, all right, but do an analysis before you get to a final decision.”

Asked for comment by Government Executive, a senior administration official said, “As made clear by testimony of former OIRA administrators, agency IGs in the past did not need information from OMB to conduct their reviews. OMB has already provided all appropriate information to the EPA IG. OIRA continues to ensure appropriate analysis is performed for agency rulemakings.”

Both the OIRA former chiefs blessed the legislation that was the main agenda of the hearing of the Regulatory Affairs and Federal Management Subcommittee. They are the soon-to-be introduced bills from subcommittee Chairman James Lankford, R-Okla., and ranking member Kyrsten Sinema, D-Ariz., to prompt agencies to provide more advance public engagement in rulemakings and to require agencies to more formally look back on the efficacy of older regulations.

The currently-in-draft Early Participation in Rulemaking Act (a version of which Langford introduced in the last Congress) would direct agencies to issue advanced notices for rules costing more than $100 million annually. The Setting Manageable Analysis Requirements in Text (SMART) Act would require agencies to set and use metrics for how a rule will be measured for success in the future and to review the rule within 10 years.

 “Federal regulations should be well planned and well executed, and we should be able to determine if they achieved the intended result,” Lankford said. “There is a great need to be careful, because it affects a lot of lives, and we should make sure of everyone’s input in the process,” he added, calling for listening to small business. “Washington doesn’t have all the answers,” he said. “Less burden is not less effective.”

“Today we continue the work of advocating for commonsense regulatory reforms,” added Sinema. “By requiring agencies to plan for reviews through the SMART Act, the reviews will be more thorough and accurate and less expensive and time-consuming.” Too often, Sinema said, businesses in Arizona feel that rulemakings are “opportunities for show rather than for substance, and the agencies have already selected their course of action.”

Dudley, noting the traditionally bipartisan approach to regulation, said, “Opportunities for public engagement can often come after the agency has made key decisions,” which “motivates agencies to circle the wagons and narrow the circle of options before the public,” she said. Requiring agencies to announce rulemakings earlier “will provide valuable input that ends up streamlining the process.” And building in requirements for regulatory review after a decade “is program evaluation that has a long tradition in the private sector,” she said, stressing that currently there is a lack of incentives and data. “It could create an evaluation mindset” and improve future draft regulations. Such reviews receive little attention in government even though “every president since Jimmy Carter has asked” for such a process.

Katzen noted that she has “been generally skeptical if not critical of attempts to rewrite the Administrative Procedure Act, which have been highly partisan” efforts that seemed designed to “convert the regulatory roadmap into an obstacles course, with delays.”

But she said the current committee effort “is different,” using a “surgical” approach to “discrete problems.” She agreed that agencies sometimes “get locked into a proposal” once they’ve performed the required analysis and are “less open” to later-arriving proposals for change, which makes rulemaking “inconsistent and less productive.”

She warned, however, that requiring more notice and retrospective lookbacks “may just add unproductive, time-consuming steps” and eventually yield “diminishing returns.” From the Reagan administration to the Obama administration, Katzen said, “we searched but didn’t eliminate many rules” given that, since 1980, no rules have been issued without a cost-benefit analysis.

In most instances, however, Katzen said, formal regulatory review would be salutary. The notice would “send a message that early communication is important and will be received by the agency and understood.”

But advance notice and lookbacks “require resources, and budgets have been decreasing or straightened,” she said, noting that current rule-making is the higher priority. If more data should be complied, Katzen added, it should address the extent to which industry complied with the rules. “There’s not a cop on every corner, and if we don’t have compliance data, we’re not grappling with one of the key conditions.”

Dudley said she sees value in expanding public engagement with rule-making. “It’s not just businesses but a lot of others with ideas that may be relevant, who bring other creative new insights [and] can get involved,” she said.

Lankford, who, with Carper, joked about the sparse attendance and media coverage of the wonky topic of regulatory reform, said at the start that he likes “getting to ask former administrators questions they can actually answer.” The current officials, he noted, “simply refer you to their legislative offices to get back to you.”