New rule exposes the regulatory watchdog that wasn’t
In April, the Office of Management and Budget made waves when it issued a memo ordering so-called “independent” agencies to subject their regulatory actions to more oversight from OMB. The memo was controversial because historically, these agencies have enjoyed a high degree of insulation from the president, and it could signal an end to that independence.
As background, since the early 1980s, presidents have required “executive branch” agencies like the Environmental Protection Agency or Department of Health and Human Services — those whose directors serve at the pleasure of the president — to conduct cost-benefit analysis for their largest regulations. A small office within OMB, known as the Office of Information and Regulatory Affairs, or OIRA for short, reviews those rules and their accompanying analysis for quality control purposes.
To date, presidents have been unwilling to subject other, “independent” agencies like the Securities and Exchange Commission or the Federal Reserve — those whose heads can only be fired by the president for “cause” — to the same requirements as executive agencies. But the new OMB memo may change that; independent agencies are now being asked to conduct some analysis for major regulatory actions and then to submit rules to OIRA so it can confirm the economic impacts laid out in those analyses.