The Congressional Review Act in an Election Year

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In 2017, Congress and the President used the Congressional Review Act to disapprove 14 agency rules issued at the end of the Obama administration. As we enter another presidential election year, the CRA may soon experience another resurgence. Our speakers will address recent CRA developments, including ongoing litigation and an OMB memo asserting CRA authority over agency guidance documents, as well as how the upcoming deadline for submitted rules for review by this Congress and President (rather than their successors) affects agency decision-making.

Featuring: 

Amit Narang, Regulatory Policy Advocate, Public Citizen Inc.

Jonathan Wood, Senior Attorney, Pacific Legal Foundation

Moderator: Paul J. Larkin Jr., Senior Legal Research Fellow, Meese Center for Legal and Judicial Studies, Institute for Constitutional Government, The Heritage Foundation

 

 

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Event Transcript

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Environmental Law & Property Rights Practice Group, was recorded on Tuesday, November 19, 2019, during a live teleforum conference call held exclusively for Federalist Society members.  

 

Wesley Hodges:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is "The Congressional Review Act in an Election Year." My name is Wesley Hodges, and I am the Associate Director of Practice Groups at The Federalist Society.

 

      As always, please note that all expressions of opinion are those of the experts on today's call.

 

      Today we are very fortunate to have with us an accomplished panel and our moderator for today is Mr. Paul Larkin, who is the Rumpel Senior Legal Research Fellow at the Meese Center for Legal and Judicial Studies and the Institute for Constitutional Government at The Heritage Foundation. He's also a member of our Administrative Law and Regulation Executive Committee here at The Federalist Society.

 

After our speakers give their remarks, we will have time for your questions, so please keep in mind what questions you have for Q&A at the end of this call.

 

Thank you very much for sharing with us today. Paul, the floor is yours.

 

Paul Larkin:  Thank you, Wesley. And let me thank The Federalist Society for inviting me to moderate. I'm honored to have this opportunity.

 

      Well, Capitol Hill and the media in Washington D.C. may be focused on impeachment, but the Federal Administrative agencies are not. They still have work to do. They must still attend to the work that Congress and the President assign them. Now, some of that work results in the issuance of agency rules, which come in a variety of forms.

 

Some rules are what we ordinarily think of as regulations. But rules come in a variety of other forms as well. Among them are opinion letters, policy statements, dear colleague letters, guidelines, staff instructions, manuals, questions and answers, bulletins, advisory circulars, and so forth.

 

      One way that Congress can keep track of those rules is through the Congressional Review Act. The CRA, which is the acronym I will use, works as follows: a federal agency must submit to Congress and the Comptroller General a copy of a new rule before the rule can take effect. The submission requirement enables the Comptroller General to review the rule for Congress and sets in motion an expedited process by which Congress can nullify the rule quickly by passing a joint resolution of disapproval, which Congress then presents to the President for his signature for veto.

 

      If the President signs the resolution or if Congress overrides the veto, the rule is nullified and the agency cannot readopt it for a "substantially similar rule," unless Congress passes new authorizing legislation.

 

      The Trump administration made frequent use of the CRA during its first two years in office, nullifying, I believe, 14 different agency rules. But we are no longer in the Trump administration's first two years, we are now heading toward the presidential election.

 

      The topic of today's teleforum is the Congressional Review Act in an Election Year. We have two distinguished experts to discuss that subject with us today. Jonathan Wood is our first speaker. Jonathan is a graduate of the University of Texas, the London School of Economics, and the New York University School of Law. Jonathan is now an Attorney at the D.C. Center of the Pacific Legal Foundation, where he litigates cases involving property and environmental issues. Jonathan is also Counsel of Record in three ongoing lawsuits involving the Congressional Review Act.

     

      Following Jonathan is Amit Narang, our second speaker. He is a graduate of the University of Pennsylvania and the Washington College of Law at the American University. In law school, Amit was the article's editor of The Administrative Law Review, a well-known journal focused on regulatory issues. He now is at Public Citizen where he is the Regulatory Policy Advocate for Public Citizen's Congress Watch Division. He has been involved in litigation against the Trump administration on regulatory policy, and he has testified before Congress on matters relating to the rule-making process.

 

      With that, Jonathan, let me turn it over to you.

 

Jonathan Wood:  Thank you, Paul. And thank you to The Federalist Society for hosting this teleforum. I think it's particularly well-timed because the next few years may prove to be a pivotal time for the Congressional Review Act, especially if it's going to serve as a nonpartisan tool for congressional accountability.

 

      The law is not without its critics, and bills have been introduced to repeal the CRA. But in the long run, I expect politicians of every political stripe will come to view the law the way the former senate majority leader Harry Reid did. On his farewell message to Congress, he cited the CRA as one of his main accomplishments, explaining that, "It was great when we had Republican presidents, not so great when we had Democratic presidents, but it was fair."

 

      Indeed, congressional democrats who strongly criticized the CRA when Republicans invoked it in 2016 and 2017 have since used it to introduce resolution to disapproval against Trump administration rules they opposed. Because the CRA has been invoked most often against so-called midnight rules issued at the end of a president's term and reviewed by a subsequent Congress and president, it makes sense to pay attention to the CRA in election years.

 

      I think three upcoming or recent developments will significantly affect agency behavior in the next year and help this Congress and future Congresses exercise their oversight authority. First, Congress's aggressive use of the CRA in 2017, during which, as Paul said, 14 joint resolutions of approval were enacted into law, makes it more likely, although not assured, that the CRA will be invoked after future congressional and presidential transitions.

 

      As Paul mentioned, the CRA provides that when Congress disapproves an agency rule, the effect is not limited to that rule but also any substantially similar rule the agency may wish to issue in the future. Therefore, agencies have a strong incentive to finalize any important rule that may be controversial with the next Congress prior to the deadline for review in this Congress alone. And this year, that deadline will likely be sometime in May. It can vary based on the schedule of House and the Senate, but typically, May of the election year is the deadline for review in only one Congress.

 

      After that point, a rule can be reviewed by this Congress and the next one, which is the way you get the midnight rule problem. A rule politically important to the President's party may backfire if issued too late because of the risk that a congressional resolution will block not only the current rule but any future president and agency from attempting to issue a substantially similar rule again in the future.

 

      So the consequences to the agency of that deadline can be significant depending on the outcome of the election. The upcoming theory deadline affects not only the agencies incentives but also Congress. Although the CRA does not provide for this, congressmen in 2017 asked the GAO for ruling on whether a CFP guidance document from 2012 was a rule covered by the CRA, to which the GAO responded yes. Because that rule had never been submitted to Congress when it was issued, Congress used this letter as the springboard for a joint resolution disapproving the rule which was enacted into law in 2018.

 

      With uncertainty about the makeup of the next Congress, will this Congress use the same technique to inflate unsubmitted rules it likes from later review or after May, will congressmen use this process to tee up controversial rules for possible disapproval by the next Congress?

 

      The second recent development is that the Office of Management and Budget issued a guidance early this year explaining that all guidance documents are covered by the CRA in directing all agencies, including independent agencies, to submit information to OMB necessary for it determine whether a rule is a major rule under the CRA.

 

      Although the memo CRA announced is sound, it is controversial for the extent to which it asserts OMB control over independent agencies. For instance, it directs independent agencies to submit rules for review prior to their publication at the Federal Register, including with cost-benefit analysis, possibly enabling White House interference in the substance of a rule rather than merely allowing major rule determination to occur after a rule has been finalized.

 

      Also this year, the President issued an order directing all agencies to review their existing guidance, determine what they wish to keep, and to publish the retained guidance on their website. This will make it easier for OMB and Congress to determine which guidance should have, but perhaps wasn't, submitted to Congress under the CRA. Therefore, it would be wise for agencies to proactively include congressional submission as part of their compliance with the President's order and to make sure that process happens before the deadline of May, unless they want the rules to be reviewed by the next Congress.

 

      Finally, several ongoing cases raise the question of whether agency violations of the CRA's rule submission requirement are subject to judicial review. Section 805 of the CRA is an apparently broad provision, listing review of determinations, findings, actions, omissions, and several other activities. It limited precedent on the effect of this provision on agency action as opposed to congressional and presidential election. The Supreme Court in a series of recent cases has adopted a very strong presumption of judicial review of agency action, which Congress can overcome but the cases require pretty clear indication that Congress wished to do so for an agency to overcome a presumption.

 

      The only circuit precedent that directly addresses this question comes from the D.C. Circuit. In an opinion authored by then-Judge Kavanaugh interpreting 805 to clearly foreclose judicial review; however, two other circuits have allowed judicial review without expressly addressing or interpreting 805. And there is a significant split of authority among the district court, some of which have said you get your review, others, that you don't.

 

And there are three cases going on right now which could affect this question and ultimately the incentive of agencies, Congress, and private parties going forward. The first of those is a case in the Ninth Circuit, brought by the Center for Biological University, arguing that an agency violated the CRA when it complied with a joint resolution disapproval, which they argued was itself illegal. The district court held that that was reviewable because it was targeting what the agency was doing rather than Congress.

 

Based on the oral argument in the Ninth Circuit, I expect that the plaintiff will ultimately lose, but it's not clear on what ground. The Court seemed more concerned with the merits of the argument rather than the 805 question.

 

The second case is a case out of the District of Idaho, where a rancher challenged a land management plan issued by the Bureau of Land Management and the Department of Agriculture. In that case, the district court also held the judicial review is available, reasoning that if 805 is given the broadest possible interpretation, it would not only frustrate the purpose of the Congressional Review Act by giving agencies no incentives to comply but will also render several other provisions ineffective.

 

The CRA says that if an agency tries to issue a rule that is substantially similar to a previously disapproved rule, that rule cannot be given any effect. And according to the District of Idaho, that provision can't work unless private parties can fight the fact that a rule is substantially similar to a disapproved rule as it offends in an enforcement action. Congress's rule on the CRA in no way depends on a rule being substantially similar to a prior rule, so it has no role in enforcing that provision.

 

And in the third case, which is now on appeal to the Third Circuit actually came out the other way. A county group sued the U.S. Fish and Wildlife Service over a conservation policy that they supported but had never been submitted so they could not rely on its benefits. The district court held there's no judicial review in a pretty short opinion.

 

Most of the opinion have been pretty short and don't give much analysis to these questions but saying that 805 is incredibly capacious and bars review of pretty much anything. And as that is currently on appeal to the Tenth Circuit where the government continues to argue that judicial review is unavailable but, conceivably, it could result in a split with the D.C. Circuit and ultimately get the issue before the Supreme Court.

 

Given the track record of agencies attempting to block judicial review in the Supreme Court in recent years, I think there is a significant likelihood that the Court would hold judicial review as available. In Sackett, Hawkes, and Weyerhaeuser, three recent Supreme Court cases on this question, decisions were ultimately unanimous in rejecting the agency's argument.

 

And the reason for that was that the Supreme Court recognizes a very strong presumption favoring judicial review, and unless Congress goes out of its way to make clear that it intends to block review of agency actions that violate the APA, the courts are not going to interpret statute to have that effect.

 

And here, Section 805 doesn't speak to agencies; it doesn't reference agency action unlike other statutes where agency courts have found judicial review is unavailable. So there's at least a reasonable probability, especially when you incorporate the concerns about the purpose of the statute and whether this interpretation renders the statute ineffective, then courts will ultimately hold that review is available.

 

And the reason why that's important is that that gives private parties a means to take an agency to court with an APA claim to force submission to Congress so that private parties can now have an influence on when rules go to Congress for review, and that might be parties that want review under this Congress so that a rule can go into effect. It might be groups that oppose the President and want to see a rule submitted by -- reviewed by a later Congress. And they might bring a case after May to achieve that effect.

 

So, again, I think it's largely a bipartisan issue. Everyone could stand to benefit from the judicial review. But it will affect the incentives of agencies and Congress by affecting the timing by which rules are submitted.

 

And with that, I will turn it back over to Paul.

 

Paul Larkin:  Well, Jonathan, thank you very much. Amit, it's your turn now.

 

Amit Narang:  Okay, great. Thank you, Paul, and thanks Jonathan. Thanks to The Federalist Society for including me today. Definitely agree that this is a timing topic as we enter another election cycle here ahead of 2020. And I certainly agree with Jonathan that compared to the past, I think it's certainly a fair expectation to have agencies' behavior being far more shaped by the CRA than it has in the past.

 

And that's partly due to the CRA being largely dormant until the beginning of the Trump administration and the beginning of last Congress when the numerous CRA resolutions were passed, that kind of reawakening of the CRA where agencies had essentially been assuming that it was not a law that they really needed to consider or plan around, I think that certainly has changed agency thinking.

 

I think that there are some variables that will mitigate the effect of agencies being sensitive to having their issuing rules on a particular timeline that is responsive to the CRA window. As Jonathan pointed out, it's true that probably around May of next year, rules that are issued after that will likely carry over under the carryover provisions of the CRA to next Congress.

 

It's a similar situation as we saw in 2017 after that presidential election. Similar situation arises where we have, I think, what's probably best described as alignment of the stars, meaning essentially unified government control of Congress and the presidency by one party.

 

The CRA can be an effective tool because it will allow for passage of CRAs without having to deal with the filibuster on the Senate side, which of course changes everything. That said, though, it's been fairly rare for the stars to align over the years, and so that is certainly a necessary precondition that's impossible really to predict back when the CRA window opens. But agencies may feel pressure to try to avoid issuing rules after the CRA window has kicked in, thereby pressuring agencies to move faster to issue rules and get them published as well in the Federal Register by roughly May-June of this upcoming year.

 

But even in the instance when the CRA may not be available after a change in administration in this upcoming election, there will be other ways in which that incoming administration can take certain actions to block or suspend rules that have been issued late enough in the previous administration's term to allow the new administration to potentially impact those rules.

 

And those are similar to what the Trump administration employed and many administrations before have employed when they come in to address rules that, most recently in the Trump administration, were not CRA'd, and that essentially has involved both suspension or delays of compliance dates that have not taken effect for rules that have been issued in the previous administration. And then also, potentially, blocking or suspending rules that are undergoing pending litigation, that are being challenged where the rulemaking challenges have not been resolved in the courts. The Trump administration, in many instances, decided to not pursue litigation defending rules that were being issued by the previous administration. So those are other avenues, but I do think that the CRA, certainly compared to the past, will be something that agencies will feel more pressure to consider given the recent history.

 

Regarding the OMB memo on CRA compliance and specifically with respect to guidance, that April memo was quite a big change in terms of what and how agencies submit their regulatory actions to OIRA. Currently -- or prior to the memo, essentially OIRA was only reviewing Executive Branch rulemakings, and the memo scope expands OIRA to review to now non-notice-and-comment rulemakings from Executive Branch agencies but then also rulemakings and then guidance and non-notice-and-comment rulemakings just to simplify from independent agencies as Jonathan noted.

 

My take on the memo is that it's unwarranted and unnecessary. The reasons are because OMB is basing its authority to expand its scope of review in that fashion entirely on one provision in the CRA that allows OMB to essentially help agencies determine whether their rules are major, for purposes of the CRA. Major rules, as many on this call may know, are a small category of the most important rules that agencies' issue likely to impact the economy in annual effect of above $100 million.

 

So there are not that many of those rules, but, of course, they are the most consequential ones. What's interesting about major rule category as applied to guidance is that there have not been, to my knowledge, any examples of major or economically significant—economically significant being a term that is highly over lapsed with major in terms of determining a rule status—there have not been any instances publishing the Federal Register of major economically significant guidance.

 

Professor Cary Coglianese at the University of Pennsylvania Law School surveyed the Federal Register from 2007 on. That was when the "Good Guidance" bulletin was issued by OMB and was unable to find in a report that he wrote for ACUS any instances of economically significant or major guidance.

 

If that's true, then it seems empirically that an assumption that agencies are issuing economically significant or major guidance is unfounded. And, thus basing OMB review authority on determining whether or not agency actions are major really shouldn't apply to guidance, so I do think OMB here is stretching its role under CRA past the breaking point with respect to guidance.

 

And, essentially, they're trying to couch their CRA role as replacing what GAO, as Jonathan noted, has been doing with respect to making determinations as to whether a guidance document or interpretive rule or policy statement is a rule for purposes of the Congressional Review Act. And GAO has been doing this far more often in the past due to congressional requests. Their determinations have been interesting and, in some cases, in my opinion, somewhat questionable and inconsistent with respect to other determinations GAO has made in the past.

 

Just to highlight one, Senator Markey was interested in asking GAO whether the DHS's zero tolerance policy that essentially changed the enforcement discretion at DHS with respect to immigrants crossing the border, whether that policy was a rule under the CRA. The concern there was that this policy was leading to family separations at the border. GAO, despite the controversial high-profile nature of this policy, had determined that it was not a rule claiming no substantial impacts on third-party rights, even though, of course, there was quite a bit of reporting and controversy around the family separations that were occurring.

 

And then, certainly, there are serious concerns about independent agencies essentially for the first time sending rules for OIRA to review where they are, by the express terms of the executive order, excluded from the regulatory review under Executive Order 12866.

 

Certainly, we don't know right now what guidance OIRA's reviewing, what rules from independent agencies OIRA's reviewing under the terms of the memo. And that lack of transparency is concerning since we, of course, do have that transparency with respect to the reviews that occur under Executive Order 12866.

 

And then, finally, with respect to the litigation regarding noncompliance to the CRA, I do think that the balance of jurisprudence remains tilted against judicial review. The language is fairly strong and clear, certainly with respect to other regulatory process related statues that are generally applicable. And I even -- the Regulatory Flexibility Act, say, has a stronger judicial review provision, even though it doesn't allow courts to vacate rules than the CRA.

 

To the extent that there are claims that the lack of the ability for courts to enforce the CRA by having essentially third parties through something that could be described as akin to a private right of action bring cases that then allow courts to enforce noncompliance with the CRA. That is simply potentially a flaw within the CRA itself, given the judicial review language.

 

Certainly, the CRA gives the impression that any kind of enforcement and oversight of the compliance with the CRA rests with Congress itself. Congress can seek to, as Jonathan was touching on, can seek to revisit rules that are promulgated in the wake of successful CRA challenges on prior versions of those rules.

 

So it's unclear here whether courts should be, essentially, allowing for private rights of actions given that certainly there is not a very clear enforcement mechanism within the law itself. And I do have serious concerns with courts essentially voiding non-submitted agency actions under the CRA. Both that it in terms of replacing Congress's role, but non-submission under the CRA should be just that.

 

The remedy should be submission to Congress, and then Congress potentially taking an action if it so desires to avoid the agency action. Having a court, essentially, say we are going to not allow something that's not submitted under the CRA to take effect is almost replacing and obviating Congress's role in avoiding the rule itself. So I'll leave it there.

 

Paul Larkin:  Thank you, Amit. Jonathan, before I ask any questions, I just want to give you a chance to respond to what Amit has said.

 

Jonathan Wood:  Sure, and I'll be quick and pick up on that last point because I think Amit and I agree quite a lot on the judicial review question. Particularly if the CRA is interpreted to bar judicial review, I think that would be a major flaw in the statute.

 

      One of the ironies is that there's a reference to the Regulatory Flexibility Act. Previously, that law explicitly forbade judicial review of agency actions in compliance or in violation of that law. In the same legislation that created the Congressional Review Act, Congress changed that provision recognizing that if agencies aren't subject to judicial review, they have no incentive to comply with the law and, in fact, hadn't.

 

And we have the exact same concern here in the Congressional Review Act, this uncertainty about whether we get to judicial review has meant that agencies have consistently failed in their obligations under the CRA. So I think there's a reasonable argument to make that when it enacted the CRA in the immediate wake of this Regulatory Flexibility Act concern, if Congress wished to exclude judicial review of agency action to essentially nullify the purpose of the CRA, it would've said so more explicitly.

 

It would have referenced agency action as it had in the Regulatory Flexibility Act. The fact that it didn't and that all of the legislative history for the bill makes clear that Congress expected judicial review of agency actions makes for a powerful case for judicial review.

 

      With that said, the remedy question is an important one, and I'm glad that Amit brought it up. I agree that if you're bringing in an affirmative -- using the theory as a support in an affirmative case, challenging the agency under the APA for not submitting the rule, the remedy is an order that the agency has to submit the rule. It’s not an order enjoining enforcement of the rule. That is typically the remedy for an agency action and reasonable delay, and I think that logic applies perfectly here.

 

      And in two of the three cases I had mentioned, that's the remedy sought: an order directing submission. Now, it's different where an agency is enforcing an unsubmitted rule against a private party, and the CRA is brought up as a defense. There, I think the defendant has a due process right to say under the CRA, this rule is not lawfully in effect, and therefore, I can't be punished under it.

 

So in that narrow circumstance, I think enjoining enforcement at least to that person is appropriate until it's submitted. But as a general matter, the remedy should be the rule has to be submitted and Congress gets to decide what to do with it.

 

Paul Larkin:  Well, let me throw out two questions, and either or both of you can answer them. One is why has the CRA become relevant now only after 20-plus years of what seems to be dormancy? I know, Amit, you mentioned that it was dormant. And Jonathan, I'm sure you're aware that the Trump administration used it 14 times where it's only been used once before. Why is it all of a sudden now become a big issue?

 

Jonathan Wood:  Briefly, my two cents, I think Amit already touched on it that the stars kind of aligned in 2017. You had both houses in Congress and the president controlled by the same party, so you had an agreement on what types of rules to be reviewed. But the other big thing is that the CRA creates an expedited process for reviewing rules.

 

So there are limits in the amount of time for debate in both houses, as well as a bar on the use of a filibuster in the Senate. And so it makes the CRA an effective tool to quickly pass resolutions against rules rather than go through the ordinary legislative process. So once the stars align, I think it can be an effective tool given the other political dynamics and the rule of the filibuster.

 

Amit Narang:  Yeah, so I totally agree with that. Very quickly, using the CRA in theory and in practice certainly can be done at any time and has been done in moments where it was fairly clear that the CRA challenge was not going to be successful, so probably a good description for some of the recent CRA challenges that the Democrats have employed in the Senate.

 

So in practice, it's only going to be successful when the stars align, and that generally will be in the immediate aftermath of an election or change of administration that also results in, as I said, unified government that allows for quick passage of the CRAs through both houses of Congress and then signature by the president. So they'll really only be in those short windows that we'll see in practice successful CRAs. Whereas CRA challenges can be done in theory and in practice at any time.

 

Paul Larkin:  Yeah, I want to let the audience ask some questions, but I have one more first I'd like to ask and that's this. One of the responses some people have had to the impeachment process we have ongoing now is that it seems like it's a very Washington-oriented sort of issue that doesn't affect their daily lives.

 

Why is the CRA of importance to people who are not lawyers, particularly people who are just working in business somewhere? How and why is this a big issue for the average person who is not a policy wonk but who may have potentially be effected by this?

 

Jonathan Wood:  This is Jonathan. I think the primary answer is Democratic accountability. If you are an average person or a small business owner, the only way you're going to really influence the rules that are enacted is if you're electing members of Congress who take seriously the obligation to review what agencies are doing and to keep them in check.

 

      That's something that Congress, frankly, hasn't always been that great about, but the CRA shows that there are tools that Congress could use and you get a lot more Democratic accountability when Congress is ultimately responsible for the rule that either disapproves or chooses not to disapprove and if accountability ends at the administration agency level.

 

Amit Narang:  So I'll have a different perspective in the sense that in terms of the attention that the CRA garnered after having been reinvigorated, used quite a bit in the 115th Congress, I think it made the public some folks realize also that it's a very powerful weapon that on substance can allow for regulations that are supported by the public and certainly regulations that are supported by certain groups and organizations to be rolled back in a way that is very different than the ritual process obviously under the APA and one that allows for a type of congressional procedure that is fast tracked and some have criticized as being overly politicized, which has shades of the debate around whether we should be allowing Congress to engage in the details of regulatory matters versus delegating those to the experts at the agencies.

 

      I think all of that has led to, among the critics and opponents of the CRA, question and the suspicion around whether -- why in the first place is there the ability to use this fast track process -- the existence of this fast track congressional process with respect to one particular type of government actions, that's regulations. Of course, that's a big part of the actions that government agencies take, but not with respect to other types of government actions. Say, the type of permit approvals that we see that have been highly controversial like the Keystone Pipeline potentially or even merger approvals.

 

There are certainly distinctions between those types of government actions and regulations, but congressional review, democratic accountability, as Jonathan was talking about, could be just as needed in those instances as they are with respect to regulations. And I think that one thing that his raised concerns is why do we have this privileged ability for Congress to weigh in and impact regulations versus other types of regulatory action -- or, I'm sorry, government actions.

 

Paul Larkin:  I know, Amit, you talked about the question of whether OMB and OIRA had authority to review independent agencies' actions adopting rules. Let me ask you, what is the authority that OMB and OIRA has to review agency guidance documents for Executive Branch agencies? And then, is that the same authority or is there different authority to review the agencies' issuance of guidance documents for independent agencies?

 

Amit Narang:  Right. So I guess we should talk about the most recent executive orders on guidance, I'm talking about -- I think 13891 is the number for one of them, and maybe the other one is one of the numbers around that, I actually forgot. But, essentially, those do create a requirement for Executive Branch agencies to submit what those agencies are designating as significant guidance documents to OIRA for review and then also publish for notice and comment.

 

      Interestingly, there are not any time limits on that OIRA review for guidance under the new executive order as there are with Executive Order 12866. In the past, there have been attempts. The one I mentioned was the good -- the OMB bulletin on good guidance practices in 2007. That was repealed by Obama in 2009, although there was a memo issued by OMB Director Orszag that said a potential agencies could still submit.

 

The authority has been, up until the issuance of this recent executive order, the authority has been there on a temporary basis between 2007 and 2009. But it's not within the scope of the authorizing executive order for regulatory review, which is generally perceived to be 12866. So the authority is not clear would be my take. Although, it has been clarified certainly under this most recent executive order.

 

That executive order does not apply -- the most recent one does not apply to independent agencies. Although, some independent agencies have indicated they will voluntarily comply with it, which is interesting that presents interesting issues with respect to independent agencies subjecting their significant guidance documents -- significant guidance documents, potentially, to OIRA for review.

 

But in the absence of all of that, it really was the OMB CRA memo that OMB was cleaning as authority to allow for the review of independent agencies, both regulations and guidance. As I laid out, I think that's problematic for guidance and the assumption that there is economically significant -- or major guidance is unfounded given the empirics. I think that's certainly controversial anew for the regulations from independent agencies to be submitted and reviewed by OIRA. We don't know to what degree that is currently happening, as I mentioned.

 

Jonathan Wood:  This is Jon. And I'll add to that. The theory itself does give OIRA or give effect to executive orders that authorize OIRA review. Section 801 requires that whenever agencies submit rules to Congress, they have to include any information required by any relevant executive order, and there's no limitation on that. So that would seem to give legal effect to an executive order that might otherwise be difficult to enforce.

 

      And, as Amit has mentioned, the CRA also defines major rule in a way that authorizes and in fact requires OIRA to make major rule determinations and doesn't limit the definition of rule to notice-and-comment regulations issued by executive agencies. It's defined far more broadly to include things like guidance documents or rules from independent agencies.

 

So the logical conclusion from that provision is that agencies have to provide at least enough information -- all agencies7 have to provide at least enough information to OIRA to allow it to do that job. That is the question about whether the memo from OIRA includes more information than is required, but at a minimum, independent agencies and all agencies have to submit something to enable OIRA to fulfill its role under the CRA.

 

Amit Narang:  This is another way in which OMB is trying to supplant GAO, essentially, as the arbiter of what is major. Now, GAO didn't have a role in terms of determining what was major but did, of course, list independent agencies designation determined by the agencies themselves as to whether the rule is major.

 

I think that -- it's interesting to see, there's been quite a bit of controversy under extending Executive Order 12866 to independent agencies. I'm not sure that that is going to go away if this administration attempts to do that just because there are claims being made that major rule status authority under the CRA allows OIRA to look at this determination that independent agencies are making.

 

Paul Larkin:  Guys, let me ask you this question. Given the fact that every president, whether the president is a Republican or Democrat, likes to have as much authority as he or she can, isn't this something that even if we saw the White House change hands and a Democrat get elected, the new president might say, "Oh, I like the idea that I now have greater control over independent agencies." So is this really a Republican versus Democrat issue or is it more a president versus Congress issue?

 

Amit Narang:  I can jump in. So far, it has not been a Republican versus Democrat issue. As you know, Paul, the OIRA review framework and authority has been preserved across administrations. That said, I don't think it fair to presume that will necessarily continue in the future. There have been controversies over OIRA review under this administration and the past administration in quite different ways.

 

      In my opinion, the past administration, there were strong concerns about unprecedented delays at OIRA, essentially OIRA reviewing rules far longer than they're allowed to under the terms of 12866. That has not been the case under this administration. We have not seen those types of lengthy reviews, to the extent that that creates perception that OIRA is asymmetrically acting with respect to Democratic and Republican administrations.

 

That might be a cause for concern. A Democratic president that wants to get through a policy agenda that's largely based on regulation if they see the track record of OIRA delaying significantly rules under the Obama administration, it certainly may make them think twice about whether the control that they can exert through OIRA over the regulatory agencies is worth it.

 

Jonathan Wood:  I agree with all of that. I think the president's general incentive is to maximize authority over the agencies, and that's one of the reasons why cost-benefit analysis, which I believe started as a Reagan Executive Order, has always been maintained but expanded by subsequent presidents, including Democratic presidents.

 

      That said, I think Amit is also right that the way some of the executive orders might change could depend on whether the president is for more regulation or for less regulation. They might be focused more on streamlining the OIRA process under administrations that are looking to have more regulations enacted. Whereas, in administrations that are averse to regulation, maybe the process becomes a bit more cumbersome.

 

      But overall, I doubt you'll see a complete retreat from the idea that the White House should have some role in overseeing what agencies are doing.

 

Paul Larkin:  Let me ask, this seems like it's an important issue for people who are very interested in regulatory policy. But if you're not interested in regulatory policy, you're just a person who's out there in the world who's trying to run a business. Does this effect you? Can you give some example of the number of rules, for instance, that agencies adopt and how far they reach?

 

Amit Narang:  I think on a yearly basis, if you take a mix of the Federal Register, what's published in the Federal Register and also what's listed on the biannual Unified Regulatory Agenda that's put out by OMB, you get roughly -- and actually this is fairly consistent across administrations. There's some variation up and down, but you get roughly somewhere in the range of about 3-4000 or so agency actions that probably could be broadly termed as regulations or guidance that are published in the Federal Register slash listed on the Unified Agenda.

 

      I think that's actually something that I would point to in terms of demonstrating the massive expansion of scope that the OMB CRA memo gives to OIRA in terms of their review. Presumably, in theory, they would be now reviewing essentially everything that is listed in a Unified Agenda or published in the Federal Register. That is -- I can't calculate how many fold that is in increase of what OIRA currently reviews. But it is really, really a massive increase.

 

      Currently, I would say OIRA reviews maybe 100-150 rules a year. So it would be -- it's unclear exactly how OIRA, which is obviously is not going to increase its staffing significantly to meet that additional workload, how they're going to be able to review that much more agency actions.

 

Jonathan Wood:  I would say for the average person, the effects are probably even broader than that because the theory isn't limited to just those regulations and guidance that are published in the Federal Register, but it comes to all guidance and rules that effect third parties. And we have some pretty good evidence that thousands of guidances have been issued since the CRA was enacted, and the numbers submitted to Congress's approval has a count of something like 140.

 

      So it's a tiny fraction of the rules that effectively govern people's behavior day to day are not being subject to Democratic oversight, but some of the rule changes and the developments we've been talking about will make that less likely going forward so that more and more of the rules that govern you, that you might not have very strong incentives or ability to find out about until it's too late, will at least have to go through some version of Democratic oversight by Congress.

 

Paul Larkin:  Jonathan, I know you have brought or been involved in several pieces of litigation involving the application of the CRA. Can you tell us a little bit about the sorts of factual patterns that have arisen where the CRA becomes an issue?

 

Jonathan Wood:  Sure. So as I hinted in one of my earlier answers, there's a divide between cases bringing CRA claims under the APA prospectively about rules that haven't been submitted but a party wants to be submitted, either because they want Congress to strike the rule down or because they like the rule and want to see it go lawfully into effect. And I've been involved in both of those sorts of cases.

 

      And in one case, we were presented a POF. A rancher who was regulated by federal land use management plans to protect the Greater Sage-Grouse that had some controversial elements and ultimately have been reversed by the administration. But at the time that we filed, he was facing restrictions on his activities based on a rule that was controversial that Congress had expressed concern about but never been given an opportunity to review under the CRA. And he went to court demanding that the courts order agencies to submit the rule so that review could finally happen.

 

      In another case, we represented essentially the other side of that coin. We represented a county organization that had a conservation plan to protect the lesser prairie chicken, a species being considered for protection under the Endangered Species Protection Act. And critical to their plan was a federal rule that encouraged state, local, and private conservation efforts for candidate species. But that rule, too, had never been submitted.

 

      So all of the grantees made to property owners as an incentive to do conversation couldn’t do a light on because the moment the decision was made, it could sued on CRA grounds. So they brought a perspective suit saying, "Submit this rule to Congress. We know it's not going to be overruled, it's a popular, popular rule, but that's a necessary step to ensure that we can rely on the rule and our plan can go into effect."

 

Paul Larkin:  A criticism that's often raised about deregulatory programs is that they're going to put the public health and safety at risk. Is the CRA subject to that type of criticism? And this is for both you guys.

 

Amit Narang:  I'll say a couple different things. One is that in theory, the CRA is certainly a neutral tool that can be used by all parties, right? And, actually, I think that it does matter if we do get into a situation where we have a change in administration and we have a Democratic Congress, if there is widespread use of the CRA, I don't think you can see that any way but putting a bipartisan stamp on the CRA.

 

      For now, though, obviously, it's certainly favored one party more than the other. And I think the question, I think it relates back to a point I made earlier, which is why is it that there is a privileged ability for Congress to repeal—which is the way in which it's been used for now; I'm talking about the CRA—repeal rules that the supporters of those rules—certainly under the beginning of the Trump administration—supporters of those rules were claiming would be critical to protecting public health and safety?

 

They'll have actually, at Public Citizen, a list of the rules on a website called rulesatrisk.org that goes through how the rules would benefit the public. So the public beneficiaries of these rules certainly have a view on the CRA being not only unhelpful but being strategically deployed, essentially, to repeal rules that would've provided public health and safety benefits.

 

If it continues to be used in that fashion, I'm talking here about the CRA, to simply just repeal rules that are intended to benefit public health and safety, I think that perception will persist.

 

Jonathan Wood:  And I concur that there's nothing inherent in the CRA that creates this problem. There certainly has been this question raised that's primarily about the particular instances where it's been used. A future administration could absolutely use the CRA to reverse prior deregulatory actions and in doing so not only block that deregulation but make it impossible to do a substantially similar deregulation.

 

      The statute on its face in neutral on that question, but in practice, when it's been used, it's been used to reduce regulation. So I think the question would be is it going to become that bipartisan tool where whichever party is in power looks at it in a way to subject rules to congressional oversight.

 

      One example, if the Congress and the White House change in the next election, as there's an upcoming rule to define the reach of the Clean Water Act, which is expected to be a deregulatory action. If Congress CRAs that, it would not only block the rule, but it would prevent future administrations from narrowly cabining their reach of that statute in a similar way.

 

      So I think the statue itself definitely has tools that should make it a bipartisan tool to use, and ultimately what matters is if the CRA becomes something that Congress routinely uses to exercise this oversight authority, voters will hopefully also respond so that one of the factors that people will consider with who they vote for is how will you analyze these regulatory or deregulatory decisions under the CRA. And I think that will bring up a better politics and a better discussion of how the CRA should work.

 

Paul Larkin:  Well, there's only a couple minutes left. Let me give each of you the chance just to close out your remarks. Amit, you didn’t go first last time, and you can go first now.

 

Amit Narang:  Well, I really enjoyed this discussion. One point I'll make, maybe this is a good closing point, is that we have seen this framing of the CRA as a partisan tool reinforced by some of the supporters of the use of the CRA in the beginning of the Trump administration. There was an attempt to challenge using the CRA the repeal of the net neutrality rule, and there were commentators claiming that using the CRA on that type of deregulatory action was a misuse of the CRA and does not track with the intent of the CRA.

 

So those kinds of statements certainly do reinforce the partisan framing. It's possible that the CRA could get to a place where it's viewed as a less partisan tool, but I wouldn't necessarily bid on it. I'd like to be more cheery with my last words, but I don't see it in the cards just yet.

 

Paul Larkin:  Jonathan?

 

Jonathan Wood:  Yeah, and the only thing I'll add is that perhaps that's right, but I think we should use the long view. The CRA went dormant for two decades. It's possible it will experience periods of dormancy in the future, but as long as it remains on the books, it is a tool that can be used in this bipartisan manner and agencies, Congress, and the voters should be aware of and consider it as part of their decision-making.

 

And some of the things we've talked about about how the White House can be more proactive with how agencies should consider rules and how the public generally through litigation can be more involved, I think, will strengthen it in that role.

 

Paul Larkin:  Wesley, it's back to you.

 

Wesley Hodges:  Thank you so much, Paul, and thank you to our panelists. On behalf of The Federalist Society, I would like to thank everyone for the benefit of their valuable time and expertise today. We welcome all listener feedback by email at info@fedsoc.org. Thank you all for joining us for the call. We are now adjourned.

 

Operator:  Thank you for listening. We hope you enjoyed this practice group podcast. For materials related to this podcast and other Federalist Society multimedia, please visit The Federalist Society's website at fedsoc.org/multimedia.