Rediscovering the Limits of the Regulatory Review Authority of the Office of Management and Budget

17 ELR 10017 | Environmental Law Reporter | copyright © 1987 | All rights reserved


Rediscovering the Limits of the Regulatory Review Authority of the Office of Management and Budget

Robert V. Percival

Editors' Summary: Environmental statutes frequently leave important policy and implementation issues to subsequent rulemaking by the Environmental Protection Agency. In practice, however, the EPA does not have a free hand in promulgating regulations; it has often needed to convince the Office of Management and Budget (OMB) of the wisdom of its proposals. In this article, the author outlines the legal basis of OMB involvement and describes the strengths and weaknesses flowing from OMB's authority. He notes that although vigorous oversight in the political process will continue as a key check on OMB, recent litigation also suggests areas in which courts may be willing to intervene.

Mr. Percival is a Senior Attorney with the Environmental Defense Fund. He was lead counsel for the plaintiffs in Environmental Defense Fund v. Thomas, 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986), analyzed below.

[17 ELR 10017]

Under the Reagan Administration, the Office of Management and Budget (OMB) has become the most powerful player in the regulatory process. Two highly controversial executive orders issued by President Reagan give OMB broad authority to review rulemaking actions by executive agencies. Their ostensible purposes are to reduce regulatory burdens and to make regulatory decisions better-reasoned and more accountable to the President. While the executive orders purport to limit OMB's role to an advisory and consultative one, critics charge that OMB has abused the regulatory review process by usurping decisionmaking powers delegated by Congress to agency heads and by serving as an ex parte conduit for special interests seeking to weaken health, safety, and environmental regulations.1 OMB defends its actions by characterizing them as consistent with the limited "advisory and consultative" role envisioned by the executive orders, which it claims are valid exercises of the President's supervisory powers over executive agencies.2

OMB's actions have sparked a vigorous debate concerning the President's authority to control agency rulemaking.3 While this debate has focused on the ultimate contours of presidential authority, the executive orders authorizing OMB review reflect a considered attempt to avoid such questions by qualifying the authority granted to OMB. Even if these qualifications heretofore have been legal fiction, they may have important implications for policing OMB's behavior. Recent litigation against OMB indicates that although courts are reluctant to define the ultimate boundaries of presidential authority, they expect OMB not to exceed the authority granted by the executive orders. Court decisions acknowledging these limits, along with vigorous congressional oversight and broadened OMB disclosure policies, are useful steps toward ensuring that OMB does not exceed the limits of its authority.

The Regulatory Review Process Under the Executive Orders

OMB's regulatory review authority is derived from two executive orders:4 Executive Order 12291,5 promulgated on [17 ELR 10018] February 17, 1981, and Executive Order 12498,6 promulgated on January 4, 1985. The preamble to Executive Order 12291 sets forth its purpose "to reduce the burdens of existing and future regulations, increase agency accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and insure well-reasoned regulations." Executive Order 12291 requires executive agencies to submit proposed rulemaking and final rules to OMB for prepublication review. Major rules, which are defined as rules with an annual effect on the economy of $100 million or more, must be accompanied by a detailed cost-benefit analysis. The regulatory impact analysis and notice of proposed rulemaking are to be submitted to OMB at least 60 days prior to publication. For non-major rules, all notices of proposed rulemaking and final rules are to be submitted to OMB at least 10 days prior to publication.

OMB's review of regulatory actions is to be based on a set of substantive criteria outlined in the Executive Order. These criteria direct OMB "to maximize the net benefits to society" of regulatory action.7 In theory, OMB review under Executive Order 12291 is to occur shortly before publication of proposed and final rules and is to be completed expeditiously — within 10 days for non-major rules, 30 days for major final rules, and 60 days for major proposed rules. However, Executive Order 12291 provides that if OMB notifies an agency that it is extending its review beyond the normal 10-day or 60-day review period, the agency shall "refrain from publishing" the rule until OMB review is concluded.8

Executive Order 12498 establishes a regulatory planning process with OMB review inserted at a much earlier stage. Executive agencies are required annually to submit to OMB for review a "draft regulatory program" that describes all "significant regulatory actions" the agency intends to undertake during the next year. "Significant regulatory actions" are defined by OMB to include even actions taken to consider whether to initiate a rulemaking and actions to develop guidelines, policy proposals, or similar documents that may influence rulemaking at a later date.9 Under § 3 of the Executive Order, OMB is authorized to review each agency's regulatory program to determine if it is consistent "with the Administration's policies and priorities." Actions approved by OMB are incorporated into the Administration's annual "Regulatory Program," which has been described as "a regulatory budget without numbers."10 Agencies are prohibited from taking any significant regulatory action that is materially different from that contained in the "Regulatory Program" unless specific OMB approval is obtained.

Although the regulatory review process established by the executive orders can be viewed as an outgrowth of previous administrations' attempts to improve executive oversight of the regulatory process,11 the present structure is unprecedented in the scope of its centralized review power. It also differs from previous administrations' reform efforts because it was inspired primarily by an anti-regulatory philosophy, rather than by a concern for improving the quality of the regulatory process.12 In an effort to avoid potentially serious legal and constitutional difficulties, both executive orders include provisions to temper the expansive scope of the review authority granted OMB. Both executive orders provide that OMB is authorized to take action only "to the extent permitted by law,"13 and they exempt from OMB review and OMB-mandated reconsideration regulations for which such review or reconsideration would conflict with statutory or judicial deadlines.14 Executive Order 12291 also specifies that nothing in the order "shall be construed as displacing the agencies' responsibilities delegated by law."15

The drafters of the executive orders considered these limits on OMB's review powers to be crucial to the legality of the orders. In its opinion supporting the legality of a draft version of Executive Order 12291, the Department of Justice acknowledged that "the President's exercise of supervisory powers must conform to legislation enacted by Congress." Thus, it concluded that "[i]n issuing directives to govern the Executive Branch, the President may not, as a general proposition, require or permit agencies to transgress boundaries set by Congress."16 To avoid such conflicts, the executive orders are founded on the theory that OMB's regulatory review role is only an "advisory and consultative" one that does not include authority to reject an agency's ultimate judgments on matters delegated to it by law.17

Shortly after Executive Order 12291 was issued, OMB's Director James C. Miller III, who was then serving as Administrator of OMB's Office of Information and Regulatory Affairs, emphasized the legal importance of these limits on OMB's authority:

President Reagan's Executive order imposes requirements on the agencies only "to the extent permitted by law" and only to the extent that its terms would not "conflict with deadlines imposed by statute or by judicial order." The limited application of [Executive Order 12291] is a crucial point, one that ensures [its] legality and the legality of actions pursuant to it. If a statute expressly or by necessary implication prohibits the consideration of benefits or costs or alternatives by an agency during its rulemaking, then those provisions of Executive Order 12291 imposing them would not apply. If a statute or court order establishes a [17 ELR 10019] date for a rulemaking action, then Executive Order 12291 cannot delay that action. In other words, if Congress or the courts have spoken on the matter, then the Executive Order process will conform to that expression, not contradict it.18

The Limits of OMB's Authority

Despite the legal importance of limits on OMB's authority, the executive orders provide few effective checks on OMB's exercise of power. Both executive orders provide that their provisions are not enforceable at law by private parties.19 Because OMB review takes place in private and leaves little or no paper trail available to the public, it has been virtually impossible to hold OMB accountable for its actions. Thus, it is no surprise that OMB has been charged with abuses of its regulatory review powers.20 As charges of abuse have mounted, efforts to hold OMB accountable for its actions have intensified. Vigorous congressional oversight21 and litigation against OMB are now beginning to heighten recognition of limits on OMB's authority.

Statutory and Judicial Deadlines on Agency Action

The principal source of OMB's power under Executive Order 12291 is § 3(f)'s directive that agencies shall "refrain from publishing" notices of proposed rulemaking or final rules until OMB has concluded its review. This provision is designed to give OMB sufficient time to formulate its position concerning a rulemaking action and to communicate that position to the agency. Upon request by OMB, agencies are required to "consult" with OMB concerning OMB's review of notices of proposed rulemaking,22 and agencies must "respond" to OMB's views on final rules and incorporate those responses into the rulemaking record.23 But the Executive Order does not require agencies to adopt OMB's views.

OMB's ability to delay publication of rules is qualified by § 8(a)(2) of the Executive Order. This section expressly exempts from OMB review "[any] regulation for which consideration or reconsideration under the terms of [the Executive Order] would conflict with deadlines imposed by statute or by judicial order." Such regulations are to be reported to OMB and a statement published in the Federal Register describing "why it is impracticable for the agency to follow the procedures" of the Executive Order.

Because numerous rulemaking actions are subject to statutory deadlines, § 8(a)(2) can be a significant limitation on OMB's power by removing OMB's ability to delay rulemaking actions indefinitely. However, while OMB is acutely aware of the § 8(a)(2) exemption,24 it has not honored it in practice. OMB's efforts to block publication of a proposed EPA regulation beyond the date of a statutory deadline were the subject of a recent lawsuit against OMB and the Environmental Protection Agency (EPA).

Environmental Defense Fund (EDF) v. Thomas25 challenged OMB's authority to delay publication of EPA's proposed permitting standards for underground tanks storing hazardous waste. Section 3004(w) of the Resource Conservation and Recovery Act (RCRA)26 required EPA to promulgate permitting standards for hazardous waste in underground tanks by March 1, 1985. Although the statutory deadline was expiring, OMB required EPA to submit its notice of proposed rulemaking to OMB on March 1, 1985, the date of the statutory deadline. Because OMB staff disagreed with several aspects of EPA's proposal, they refused to approve it for publication in the Federal Register. OMB notified EPA that it was invoking the extended review provisions of the Executive Order in order to prohibit EPA from publishing its proposal.

OMB did not clear the proposed regulations until after a lawsuit was filed by EDF against both OMB and EPA.27 EDF v. Thomas represented the first direct challenge to OMB's authority to delay regulations beyond statutory deadlines.28 EDF alleged that EPA had violated its nondiscretionary duty to promulgate the regulations by March 1, 1985, and that OMB had acted without authority to delay EPA's promulgation of the regulations. EDF asked the court to declare that OMB had no authority to delay promulgation of EPA regulations beyond the dates of statutory deadlines.29

Sensitive to the potentially broad implications of EDF's claim against OMB, the Justice Department took the unusual step of asking for summary judgment in the form [17 ELR 10020] of an order directing EPA to promulgate the final regulations by June 30, 1986. The court, however, rejected the government's attempt to short-circuit the litigation and allowed EDF to proceed with discovery despite the government's objections.30

Discovery revealed that OMB requires its prepublication approval for all EPA regulations, regardless of statutory or judicial deadlines, and that OMB often extends its review beyond the dates of such deadlines.31 OMB and EPA admitted that they have no policy for bypassing OMB review in order to comply with statutory deadlines. Neither OMB nor EPA was able to cite a single instance in which the procedures of § 8(a)(2), which require publication of a Federal Register notice describing the conflict between OMB review and a deadline, were followed. OMB's annual reports revealed that there had been only five instances — and none since 1983 — in which OMB had even acknowledged that its review of EPA regulations had been affected by a statutory or judicial deadline.32

The government was unable to articulate any source of authority that permits OMB to block publication of regulations after a statutory deadline has expired. It argued that Congress had acquiesced in OMB's actions,33 but EDF argued that this assertion was contradicted by express legislative history to the contrary.34

OMB attempted to defend its actions by reference to the "advisory and consultative" theory on which Executive Order 12291 is founded. OMB argued that the regulatory review process is voluntary and that nothing prohibits EPA from publishing regulations without OMB approval. This assertion was easily contradicted by the testimony of the EPA official responsible for the regulations. Noting the directive of § 3(f) of the Executive Order that agencies must "refrain from publishing" regulations after OMB has extended its review, the Director of EPA's Office of Solid Waste stated his belief that once OMB had notified him that it was extending review "I did not have the authority to cause the regulation to be promulgated until the review was completed."35 OMB also asserted that once a statutory deadline has expired, delays caused by OMB review do not conflict with the deadline.36

But OMB's primary defense was jurisdictional. OMB claimed that regardless of whether or not it had exceeded its authority, the court had no jurisdiction over it since Executive Order 12291 does not create any rights enforceable at law by private parties. Plaintiffs maintained that they were not attempting to enforce the Executive Order, but rather to prevent OMB from unlawfully interfering with EPA's performance of a nondiscretionary duty under RCRA § 3004(w).37 OMB also argued that any relief entered against it would raise serious constitutional questions because it would intrude upon the President's Article II powers to supervise executive agencies. Plaintiffs argued that the President had not authorized OMB's actions under the executive orders and, citing the Steel Seizure Case, Youngstown Sheet & Tube Co. v. Sawyer,38 that he could not do so without exceeding the limits of his Article II powers.

Rendering its decision on January 28, 1986, the district court rejected the government's jurisdictional argument. Noting that its jurisdiction over EPA was unquestioned, the court concluded that "[in] compelling EPA to perform nondiscretionary duties" it can "fashion equitable relief to ensure that such duties are performed without the interference of other officials acting outside the scope of their authority in contravention of federal law."39 The court found that OMB had delayed promulgation of the proposed permitting standards by insisting on substantive changes in them. Although noting that "[a] certain degree of deference must be given to the authority of the President to control and supervise executive policymaking," the court held that OMB's delay of regulations beyond the date of a statutory deadline "is incompatible with the will of Congress and cannot be sustained as a valid exercise of the President's Article II powers."40 While finding injunctive relief against OMB to be premature,41 the court issued the declaratory relief sought by plaintiffs. The court declared that:

OMB has no authority to use its regulatory review under EO 12291 to delay promulgation of EPA regulations arising from the 1984 Amendments of the RCRA beyond the date of a statutory deadline. Thus, if a deadline already has expired, OMB has no authority to delay regulations [17 ELR 10021] subject to the deadline in order to review them under the executive order. If the deadline is about to expire, OMB may review the regulations only until the time at which OMB review will result in the deadline being missed.42

Throughout the litigation, the government attempted to portray plaintiffs as seeking to prohibit communications between OMB and EPA. The court, however, accepted plaintiffs' argument that they sought only to prohibit delay and not communication. While the relief granted by the court did not bar OMB and EPA from conferring with one another, the opinion indicates quite clearly that if a deadline has expired or is about to expire no additional time can be allowed for OMB review. Although OMB sought to convince the court that its reviews never take any additional time because they are concurrent with EPA senior level review,43 the court rejected this as a transparent fiction. As the court noted, "Concurrent review does not eliminate delay, since any changes sought by OMB must then be reviewed by senior level EPA officials."44 Thus, as a practical matter, while OMB is free to give EPA its unsolicited advice, it cannot require EPA to a await OMB views if a deadline has passed.

Although the court's decision is based on an interpretation of OMB's authority under Executive Order 12291, it has significant implications for the question of the constitutional boundaries on presidential power. The court's decision establishes that the President has not attempted to authorize OMB to delay promulgation of EPA regulations beyond the date of statutory deadlines, but it also indicates that the President could not do so without exceeding the limits of his Article II powers.45 This implies that the § 8(a)(2) exemption is necessary for the Executive Order to pass constitutional muster.

Delegations of Decisionmaking Authority to Executive Agencies

The decision in EDF v. Thomas indicates that the President's Article II supervisory powers cannot be used to countermand express statutory directives. A more difficult question is whether OMB may dictate the substance of decisions delegated by Congress to executive agencies if the decisions dictated by OMB are consistent with statutory criteria. Although OMB has not claimed the authority to dictate agency decisions, critics charge that if regularly has done so. OMB concedes that it expects its "advice" to be heeded by executive agencies,46 but it is extremely difficult to demonstrate the impact of OMB review on the substance of agency decisionmaking.

The question whether OMB has unlawfully usurped decisionmaking authority delegated to executive agencies was raised in the context of OMB's review of Occupational Safety and Health Administration regulations in Public Citizen Health Research Group v. Tyson.47 In that case, Public Citizen challenged OSHA's last-minute deletion of a short-term exposure limit (STEL) from regulations controlling occupational exposures to ethylene oxide (EtO). OSHA had submitted to OMB an EtO standard that included a STEL 24 hours before a court-ordered deadline for publication. When OMB objected to the STEL, OSHA simply crossed out all references to it in the draft of the final regulation that was sent to the Federal Register for publication. The regulations were published without explanation of the reasons for deleting the STEL.

Public Citizen alleged that OSHA had unlawfully abdicated its decisionmaking responsibility to OMB by deleting the STEL solely to satisfy OMB's objections. The chairmen of five congressional committees supported Public Citizen's claim in an amicus brief that broadly challenged the legality of OMB review under the executive orders.48 Public Citizen also argued that OSHA's decision was contrary to the requirements of the Occupational Safety and Health Act49 and unsupported by substantial evidence. In response to these arguments, the government defended the legality of OMB review, again characterizing OMB's action as "advisory and consultative" and arguing that the ultimate decision to delete the STEL was made by OSHA and not OMB.

In its opinion, the Court of Appeals struck down OSHA's decision to delete the STEL as unsupported by the record. The court noted that "OMB's participation in the EtO rulemaking presents difficult constitutional questions concerning the executive's proper role in administrative proceedings and the appropriate scope of delegated power from Congress to certain executive agencies."50 However, the court found it unnecessary to reach this issue in light of its decision that deletion of the STEL was unsupported by the record.

The Public Citizen decision confirms that regardless of who is responsible for making an administrative decision, that decision must conform to applicable requirements of the underlying regulatory statute, as well as the Administrative Procedure Act, in order to withstand judicial review. Thus, agencies are not free to make decisions arbitrarily or capriciously or to base them on factors inconsistent with the requirements of the underlying regulatory statute even if OMB directs them to do so.51 If the primary reason for an administrative decision is to comply with a directive from OMB, that decision is less likely to withstand judicial scrutiny, particularly if it can be demonstrated that but for OMB's interference the agency would have adopted a different rule based on the administrative record.

A more difficult question would arise if the administrative record and application or the appropriate statutory criteria would support either the decision favored by the agency or the decision favored by OMB. Dictum in Sierra Club v. Costle52 suggests that a decision directed [17 ELR 10022] by the President might be upheld in these circumstances even if it differs from that which the agency would have reached independent of presidential input. But as the Public Citizen court recognized, this "presents difficult constitutional questions,"53 which remain unresolved.

As the Public Citizen case illustrates, rarely will it ever by possible to demonstrate that an otherwise legally unobjectionable decision would not have occurred but for the intervention of OMB. Because agency heads value good relations with OMB, it is extremely difficult to demonstrate the impact of OMB review on the substance of an administrative decision. Only in cases of really egregious interference, such as in OSHA's deletion of the STEL, will OMB's tracks be sufficiently clear to demonstrate its impact. Yet it is often these decisions that are likely to be the most vulnerable to judicial scrutiny because they are unsupported by the administrative record or inconsistent with proper application of the statutory criteria, thus making it unnecessary to reach the question of the legality of OMB's action.

Even if the President has the constitutional authority to dictate agency decisions, the executive orders have not delegated this power to OMB. The President instead has sought to avoid the question of the ultimate bounds of his authority by basing the executive orders on the theory that OMB is performing an "advisory and consultative" role. The President having eschewed an overt attempt to dictate the substance of agency decisionmaking, OMB should not be permitted to do what the President has not chosen to authorize it to do.

Holding OMB Accountable

Regardless of one's views on the constitutionality of the executive orders, OMB should not perform its regulatory review function in a manner that exceeds the bounds of its authority under the executive orders. Until now, political, rather than legal, pressure has been the most effective check on OMB's behavior. Vigorous congressional oversight has been virtually the only effective means for disclosing instances in which OMB has overstepped the bounds of its authority.54

The decision in EDF v. Thomas suggests one avenue for preventing OMB from overstepping its authority. A major source of OMB's ability to exceed the "advisory and consultative" role contemplated by the executive orders has been its ability to block publication of regulations until the agency agrees to adopt OMB's views. The court's decision clearly confirms that OMB does not have the authority to block publication of regulations beyond the dates of statutory deadlines. Thus OMB cannot legally use indefinite delay as a device to dictate the substance of agency decisions subject to deadlines. Although it is difficult to prove that OMB has dictated the substance of an administrative decision, it is easy to determine whether OMB has delayed a decision beyond the date of a statutory deadline. As EDF v. Thomas indicates, "[from] its tracking system, EPA can determine when further delay due to OMB review will result in a deadline being missed."55 Thus, EPA can determine when no more time legally can be allotted for OMB review of regulations subject to statutory or judicial deadlines. While OMB argues that this may encourage agencies to circumvent its review by waiting for a deadline to expire, the Executive Order 12498 process provides a vehicle for OMB to encourage more expeditious action by EPA.

While OMB also argues that it is unfair to deprive it of an opportunity to review and comment on proposed regulations after EPA has missed a deadline, a clear alternative procedure exists that OMB has simply refused to follow. When EPA misses a deadline, it should publish proposed regulations without awaiting OMB review. The proposed regulations can be submitted to OMB at the time of publication for comment during the normal course of the EPA rulemaking.

For regulations not subject to deadlines, lengthy delays to accommodate OMB review should be suspect. If OMB's review is truly to be "advisory and consultative" and not to displace agency decisionmaking, there is no reason for OMB review to extend beyond the time necessary for OMB to formulate its views and to communicate them to the agency whose regulations are at issue. Once OMB has communicated its views to the agency, the agency should be free to accept or reject them. OMB should not be able to refuse to "clear" regulations indefinitely until the agency has amended them to adopt OMB's views.

Greater public disclosure of the nature and timing of OMB reviews can be helpful toward ensuring that OMB does not overstep its authority. On June 13, 1986, OMB announced a new disclosure policy that will make available to the public, after publication of proposed or final regulations, the drafts of the regulations that were sent to OMB for review.56 Under the new policy OMB also will release information on the dates it commenced and completed review of proposed and final regulations. While this policy will be helpful for scrutinizing the length of OMB reviews and the nature of changes made during the review process, it provides no information on regulations blocked by OMB. OMB also refuses to disclose the date when regulations [17 ELR 10023] are submitted to it for review until after it has completed review. Although this information has been held to be subject to disclosure under the Freedom of Information Act,57 OMB is appealing this decision.

Conclusion

Although vigorous congressional oversight will continue to be the principal check on OMB's behavior,58 the decision in EDF v. Thomas establishes that litigation can be a useful tool for rediscovering the bounds of OMB's authority.

1. See, e.g., Brief of Amici Representatives John D. Dingell, et al., Public Citizen Health Research Group v. Tyson, 796 F.2d 1479, 17 ELR 20056 (D.C. Cir. July 25, 1986) (Nos. 84-1252-1392, 85-1014); Olson, The Quiet Shift of Power: Office of Management & Budget Supervision of Environmental Protection Agency Rulemaking under Executive Order 12291, 4 VA. J. NAT. RESOURCES L. 1 (1984).

2. See Testimony of James C. Miller III before the Subcomm. on Intergovernmental Relations of the Senate Governmental Affairs Committee (Jan. 28, 1986).

3. See, e.g., Demuth & Ginsburg, White House Review of Agency Rulemaking, 99 HARV. L. REV. 1975 (1986); Morrison, OMB Interference with Agency Rulemaking: The Wrong Way to Write a Regulation, 99 HARV. L. REV. 1059 (1986); Rosenberg, Beyond the Limits of Executive Power: Presidential Control of Agency Rulemaking under Executive Order 12291, 80 MICH. L. REV. 193 (1981); Strauss & Sunstein, The Role of the President and OMB in Informal Rulemaking, 38 ADMIN. L. REV. 181 (1986).

4. Under the Paperwork Reduction Act of 1980, 44 U.S.C. § 35, OMB also has authority to review all proposed information collection requests by executive agencies. This article deals only with OMB's authority over agency rulemaking actions under executive orders 12291 and 12498.

5. 3 C.F.R. 127 (1982), ELR REG. 45035, reprinted in 5 U.S.C. § 601 note (1982). The background of theExecutive Order is described in Comment, Reagan Orders Cost-Benefit Analysis of Regulations, Confers Broad Powers on OMB, 11 ELR 10044 (1981).

6. 3 C.F.R. 323 (1985).

7. Executive Order 12291, § 2(c), ELR REG. 45035.

8. Executive Order 12291, § 3(f), ELR REG. 45036. On limits to OMB's authority to order delay, see text accompanying notes 13-23, infra.

9. OMB Bulletin 86-4, at 3 (Dec. 23, 1985).

10. Fix & Eads, The Prospects for Regulatory Reform: The Legacy of Reagan's First Term, 2 YALE J. REG. 293, 312 (1985).

11. President Nixon established a "Quality of Life" review for certain regulations. Memorandum from George P. Shultz, Agency Regulations, Standards, and Guidelines Pertaining to Environmental Quality, Consumer Protection, and Occupational and Public Health and Safety, (Oct. 5, 1971). President Ford required agencies to prepare "inflation impact statements." Executive Order 11821, 3A C.F.R. 203 (1974). President Carter required agencies to prepare a "Regulatory Analysis" for major regulations. Executive Order 12044, 3 C.F.R. 152 (1979).

12. Fix & Eads, supra note 9, at 299.

13. Executive Order 12291, §§ 2, 3(a), 6(a), 7(e), ELR REG. 45035-45037; Executive Order 12498, § 4.

14. Executive Order 12291, § 8(a)(2), ELR REG. 45037; Executive Order 12498, § 3(c).

15. Executive Order 12291, § 3(f)(3), ELR REG. 45036.

16. Memorandum from U.S. Department of Justice, Office of Legal Counsel, Proposed Executive Order Entitled "Federal Regulation" (Feb. 13, 1981), reprinted in Role of OMB in Regulation, Hearings before the Subcomm. on Oversight & Investigations of the House Comm. on Energy & Commerce, 97th Cong., 1st Sess. 486 (1981).

17. Id.

18. Role of OMB in Regulation, Hearing before Subcomm. on Oversight and Investigation of House Comm. on Energy & Commerce, 97th Cong., 1st Sess. 46 (1981) (testimony of James C. Miller III).

19. Executive Order 12291, § 9, ELR REG. 45037; Executive Order 12498, § 5.

20. See, e.g., Office of Management and Budget Control of OSHA Rulemaking, Hearings before a Subcomm. of House Government Operations Comm., 97th Cong., 2d Sess. (1982); SUBCOMM. ON OVERSIGHT & INVESTIGATIONS, HOUSE COMM. ON ENERGY & COMMERCE, 99TH CONG., 1ST SESS., EPA'S ASBESTOS REGULATIONS: REPORT ON A CASE STUDY OF OMB INTERFERENCE IN AGENCY RULEMAKING (1985); OMB Review of EPA Regulations, Hearings before the Subcomm. on Oversight and Investigations of the House Energy and Commerce Comm., 99th Cong., 2d Sess. (1986).

21. See, e.g., OMB Review of EPA Regulations, Hearing before a Subcomm. on Oversight & Investigations of the House Comm. on Energy & Commerce, 99th Cong., 2d Sess. (1986).

22. Executive Order 12291, § 3(f)(1).

23. Executive Order 12291, § 3(f)(2).

24. From the time of its first report on implementation of the Executive Order, OMB acknowledged that regulations subject to statutory deadlines were exempt from review. OMB, THE FIRST 100 DAYS OF E.O. 12291 'FEDERAL REGULATION' 316 (1981). OMB's Form 83, which accompanies all agency submissions to OMB, contains a box marked "Statutory or Judicial Deadline" which is to be checked by the agency to inform OMB that the rulemaking action is subject to a deadline. OMB's own Regulatory Docket Worksheets also contain this feature.

25. 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986). EPA is an executive agency for purposes of Executive Order 12291, § 1(d).

26. 42 U.S.C. § 6924(w), ELR STAT. 42017.

27. The lawsuit was filed on May 30, 1985. OMB completed its review of the proposed permitting standards on June 12, 1985, and they were published in the Federal Register on June 26, 1985. 50 Fed. Reg. 26444.

28. In two prior deadline cases brought against EPA, courts had refused to allow time for OMB review of regulations after deadlines had expired, noting in dicta that such regulations were exempt from OMB review under the Executive Order. Natural Resources Defense Council v. Gorsuch, Nos. 2153-73 et al. (D.D.C. Aug. 25, 1982) (the regulations "appear in any event to be exempted from the strictures of Executive Order 12291. See Executive Order 12291, Section 8(a)(2), 46 Fed. Reg. 13193, 13198 (Feb. 19, 1981) (E.O. 12291 procedures in-applicable if application of same would conflict with statutory or judicial deadlines)."); NRDC v. Ruckelshaus, 14 ELR 20817, 20819 (D.D.C. Sept. 14, 1984) ("OMB review is not only unnecessary, but in contravention to applicable law. See Exec. Order 12291, Sec. 8(a)(2)").

29. ELR PEND. LIT. 65863. This was not the first time OMB had delayed regulations beyond a statutory deadline. See Olson, note 1, supra, at 67-69.

30. ELR PEND. LIT. 65872.

31. In response to a discovery request, EPA identified a partial list of 169 proposed or final EPA regulations subject to statutory or judicial deadlines which EPA had been required to submit to OMB for prepublication review under Executive Order 12291. EPA Response to Plaintiffs' Interrogatory #10, EDF v. Thomas, 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986) (No. 85-1747). On 86 occasions OMB extended its review of these regulations beyond the time periods outlined in the Executive Order. In many cases OMB review extended EPA's promulgation of the regulations beyond the date of a statutory or judicial deadline either because the regulations were submitted to OMB after the deadline had expired or because OMB extended its review beyond the deadline or vetoed the regulations.

32. In at least one of these instances, OMB sought to block publication of regulations required by a court order. See EPA: Investigation of Superfund and Agency Abuses, Hearings before Subcomm. on Oversight & Investigations, House Energy & Commerce Comm., 98th Cong., 1st Sess. 7-8 (1983) (testimony of John E. Daniel).

33. OMB argued that Congress had approved its actions implicitly because "Congress was aware of the President's program under Executive Order 12291 when it passed the 1984 RCRA Amendments" that contained the statutory deadline for promulgating the tank standards. Government's Memorandum of December 12, 1985, at 9, EDF v. Thomas, 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986) (No. 85-1747).

34. The House Committee report on the 1984 RCRA Amendments specified that EPA's ability to meet "all deadlines in this bill, shall not be impaired in any way whatsoever by Executive Order 12291." HOUSE COMM. ON ENERGY & COMMERCE, 98TH CONG., 1ST SESS., HAZARDOUS WASTE CONTROL AND ENFORCEMENT ACT 35 (1984).

35. Deposition of John Skinner at 111, EDF v. Thomas, 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986) (No. 85-1747).

36. Government's Memorandum of December 12, 1985, at 39-41, EDF v. Thomas, 627 F. Supp. 566, 16 ELR 20250 (D.D.C. 1986) (No. 85-1747).

37. Plaintiffs alleged that EPA and OMB had violated both § 3004(w) of RCRA and the Administrative Procedure Act (APA), 5 U.S.C. § 706; that they had a private right of action to assert these claims pursuant to § 7002(a)(2) of RCRA, 42 U.S.C. § 6972(a), ELR STAT. 42034, and the APA, 5 U.S.C. § 702, ELR STAT. 41005; and that the court had jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and 28 U.S.C. § 1361 (mandamus).

38. 343 U.S. 579 (1952).

39. 627 F. Supp. at 568, 16 ELR at 20251. The government subsequently repeated its jurisdictional arguments in a motion to reconsider, which the court denied on March 6, 1986.

40. 627 F. Supp. at 570, 16 ELR at 20252.

41. Although it declined to issue injunctive relief against OMB, the court indicated that it had no doubt concerning its authority to enjoin OMB. 627 F. Supp. at 568, 16 ELR at 20251.

42. 627 F. Supp. at 571, 16 ELR at 20252.

43. See Defendants' Motion for Summary Judgment and for Stay of Discovery, ELR PEND. LIT. 65872 (D.D.C. 1985) (No. 85-1747).

44. 627 F. Supp. at 571, 16 ELR at 20252. The court also noted that "such concurrent review of the proposed regulations in the spring of 1985 resulted in considerable delay." Id.

45. 627 F. Supp. at 570, 16 ELR at 20252.

46. See Olson, supra note 1, at 43-44.

47. 796 F.2d 1479 (D.C. Cir. 1986).

48. See supra note 1.

49. 29 U.S.C. §§ 651-678.

50. 796 F.2d at 1507.

51. See also Center for Science in the Public Interest v. Department of the Treasury, 573 F. Supp. 1168, 1175 (D.D.C. 1983), reversed on other grounds, 797 F.2d 995 (D.C. Cir. 1986) ("the broad thrust of Executive Order No. 12,291 provides an insufficient basis for the defendants to disregard their statutory duties").

52. 657 F.2d 298, 408, 11 ELR 20455 (D.C. Cir. 1981). This case involved review of new source performance standards adopted under the Clean Air Act. One of the issues in the case was the impact of a meeting between EPA and White House officials after the close of the public comment period. In discussing the extent to which such meetings need to be docketed in the rulemaking record, the court observed in dictum:

Of course it is always possible that undisclosed presidential prodding may direct an outcome that is factually based on the record, but different from the outcome that would have obtained in the absence of Presidential involvement. In such a case it would be true that the political process did affect the outcome in a way the courts could not police. But we do not believe that Congress intended that the courts convert informal rulemaking into a rarified technocratic process, unaffected by political considerations or the presence of Presidential power."

53. 796 F.2d at 1507.

54. For example, shortly after a congressional investigation documenting OMB interference, SUBCOMM. ON OVERSIGHT & INVESTIGATIONS, HOUSE COMM. ON ENERGY & COMMERCE, 99TH CONG., 1ST SESS., EPA'S ASBESTOS REGULATIONS: REPORT ON A CASE STUDY OF OMB INTERFERENCE IN AGENCY RULEMAKING (1985), EPA released a proposal, over OMB's objections, to phase out all remaining uses of asbestos under § 6 of the Toxic Substances Control Act, 15 U.S.C. § 2605, ELR STAT. 41341. This proposal had been blocked by OMB for nearly two years.

55. 627 F. Supp. at 571, 16 ELR at 20252.

56. Memorandum from Wendy L. Gramm, Additional Procedures Concerning OIRA Reviews under Executive Order Nos. 12291 and 12498 (June 13, 1986). This policy was amended on August 8, 1986, to indicate that it applied only to regulations for which OMB completed review subsequent to June 13, 1986. Memorandum from Wendy L. Gramm, Revised June 13, 1986, Memorandum on Certain New Procedures of the Office of Information and Regulatory Affairs (Aug. 8, 1986).

57. Wolfe v. Department of Health and Human Services, 630 F. Supp. 546 (D.D.C. 1985), appeal filed, No. 86-5017 (D.C. Cir. Jan. 13, 1986). The Freedom of Information Act is codified at 5 U.S.C. § 552.

58. OMB's new disclosure policy was adopted in the face of a congressional threat to eliminate funds for OIRA, the office within OMB presently implementing OMB's regulatory review program under the executive orders. Although Congress did not eliminate OIRA's appropriation, it did specify that funds appropriated for OIRA may be used for "the review of a rule or regulation … only to the extent that such review is for the sole purpose of reviewing an information collection request contained in, or derived from such rule or regulation." 44 U.S.C. § 3520, as amended by P.L. 99-500, Title VIII, § 820, reprinted in H.R. REP. 1005, 99th Cong., 2d Sess., Title VIII, § 820, 132 CONG. REC. H10599, H10700 (daily ed. Oct. 15, 1986). OIRA apparently plans to continue to perform Executive Order 12291 reviews by using funds from other sources, following an internal reorganization.


17 ELR 10017 | Environmental Law Reporter | copyright © 1987 | All rights reserved