Poof! The Independent Agencies Are No Longer Independent

A Sea Change in US Government

Poof! All of a sudden, and as by magic, the independent agencies are not independent. (Because of a new executive order, recently signed by President Trump.) Is that lawful? Is it good? More on that below.

The United States has long had “independent” agencies - agencies that operate free from the policy control of the president. Here are some examples: the FCC, the FTC, the Nuclear Regulatory Commission, the Federal Reserve Board, the Consumer Product Safety Commission, the SEC, and the NLRB.

Sure, the heads of those agencies are appointed by the president. But the general understanding has long been that they are special, in the sense that they are “independent” of the Commander-in-Chief.

In practice, the independence of the independent agencies has meant two things. First, the president cannot fire their heads except for cause, which frequently is defined, by statute, as malfeasance, neglect of duty, or inefficiency (with all of these narrowly defined).

Second, the White House, and in particular the Office of Information and Regulatory Affairs (OIRA), cannot oversee or influence or direct their decisions, which means in turn that they issue regulations free from WH or OIRA control.

Let’s focus on the latter point, which is fundamental.

Since the early 1980s, OIRA has overseen rulemaking from executive agencies (not the independents). The full story is very complicated, but here’s the basic idea. Before rules are issued, agencies (EPA, HHS, DHS, State, USDA, many others) submit them to OIRA for assessment and clearance. Expensive rules have to come with a “regulatory impact analysis,” which is essentially a cost-benefit analysis.

When rules are submitted, OIRA in turn circulates them to relevant WH offices and other agencies, obtaining comments and suggestions. (See reginfo.gov for a ton of information.)

As a result of that process, rules are often changed significantly — perhaps because (say) USDA had comments on an EPA rule, or because the Domestic Policy Council (DPC) had comments on an HHS rule, or perhaps because OIRA itself had comments on a DHS rule. Some rules (not a lot, but some) never see the light of day, perhaps because there is too much opposition (perhaps from other agencies, perhaps from DPC, perhaps from the president personally).

Because of the OIRA process, agencies and OIRA are in frequent touch, and sometimes agencies do not submit rules at all, because they know that they would encounter a lot of opposition. (Here’s a detailed account: https://harvardlawreview.org/print/vol-126/the-office-of-information-and-regulatory-affairs-myths-and-realities/)

I was Administrator of OIRA (a Senate-confirmed position) from 2009 to 2012, and like every other OIRA Administrator, Republican or Democratic, I was impressed by the professionalism and excellence of OIRA”s staff and by the integrity with which they did their work. They are really good.

In my experience, by the way, the OIRA process was substantive rather than political, A key question was: Would the agency’s regulation benefit the American people? If a regulation would cost a lot (say, $500 million), how much good would it do? Is the economic analysis sound? Is it based on adequate science?

When something like politics played a role, it often involved presidential priorities: Is the agency focusing its attention on something that the president was prioritizing? That was usually not a decisive question, but it could be relevant.

The law always was central. OIRA would ask its own questions about the law, especially about legal questions relating to the rulemaking process, and on such questions, it would often work closely with OMB’s General Counsel, White House counsel, and DOJ.

What about the independent agencies?

There’s a long history there. As it happens: Way back in 1981, I was an Attorney-Advisor at the Office of Legal Counsel in the Department of Justice. I happened to be the staff lawyer who worked on the executive order (12291, as it happens) that originally gave OIRA its current authorities.

I can report that back then, there was extensive discussion of whether to include the independent agencies within the OIRA process. After lengthy discussion, the Office of Legal Counsel concluded that the president could do that if he wanted. (I am informed that over the years, OLC/DOJ has not always reached that conclusion.)

But President Reagan chose not to do so. I was told, at the time, that the White House was concerned about congressional pushback on both law and policy. At the time, Congress, or at least many members, really wanted the independent agencies to be independent of the president.