OIRA the Angel; OIRA the Devil

October 08, 2021

Originally published by the Yale Journal on Regulation


*This is the fourth post in a series on Michael Livermore and Richard Revesz’s new book, Reviving Rationality: Saving Cost-Benefit Analysis for the Sake of the Environment and Our Health.

In their most recent book, Reviving Rationality, Mike Livermore and Ricky Revesz build on their record of support for the use of analytical tools, particularly cost-benefit analysis, to evaluate rules prior to their issuance. This is a sequel of sorts to Retaking Rationality (2008), in which the authors encouraged using cost-benefit analysis to advocate in support of rules. Reviving Rationality finds us in the aftermath of the Trump administration. It’s one of many post-Trump books with a picking-through-the-rubble quality, as authors try to figure out which institutions and processes are merely damaged and which are broken beyond repair.

Among a host of other ideas, which I’m sure others in this symposium will explore, Reviving Rationality would like to wake OIRA from its Trump-induced coma. I have to say, one of the strangest aspects of being in academia after over 10 years as a civil servant in OIRA is seeing how others perceive the institution that was my professional home for so long. I’ve grown weary, for example, of the caricature of OIRA as obscure but powerful. It’s a small office that doesn’t set out to have much of a public persona, sure, but it is well-placed to fulfill its mission, the most prominent aspect of which is to review draft regulations. (There are people in OIRA who focus on other matters entirely: statistical and privacy policy are just two examples.) I guess it’s the uncaveated “powerful” part that trips me up.

I understand the stakes, given the importance of regulations in the modern presidency. Whoever you perceive to be “holding up” a regulation you want out is going to draw your scrutiny. Whoever you think “ensures” minimum quality standards is going to have some explaining to do when you think the quality falls short. Are either of these scenarios things that OIRA does alone? It doesn’t depend on who you ask. The answer is no.

Writing in 2011, Stuart Shapiro described the common characterizations of OIRA: “OIRA as powerful decisionmaker, OIRA as antiregulation, and OIRA as analytical haven.” This contrasted with his experience working in OIRA, as it does my own. From what I have seen, perceptions of OIRA tend towards either of two extremes: OIRA as angel, OIRA as devil.

Turns out this is not the most healthy dynamic.

In Reviving Rationality, OIRA is an angel fallen from grace, a keeper of guardrails badly damaged by the Trump administration. Even worse: “Under Trump, OIRA has largely lost either the desire or ability to effectively perform its oversight role, and cost-benefit analysis has been subject to flagrant manipulation” (p.28). The related footnote acknowledges that it’s hard to know what happened—perhaps OIRA did improve rules, “[b]ut given the poor quality of analysis in the proposed and final rules that have been published, OIRA has not ensured a minimum quality standard” (p.28 n.48). Later, the authors describe OIRA as “under siege,” with recovery uncertain (p.99), relegated to “lowly status” (p.102), “fallen” (p.103), and “diminished” (p.179).

I can appreciate the concerns the authors lay out in Part II of the book, which lines up a series of regulatory “charades” that they find to be beyond the pale. The choices about what to include in regulatory analyses are important, and Livermore & Revesz are right to be attentive to them. I’ll leave to others an assessment of these particular examples and how they compare to the regulatory choices made in other administrations.

What troubles me is the suggestion that OIRA, an institution of roughly 50 people, the vast majority of whom are civil servants, could or should stand alone to thwart the political will of the president and his senior advisors when it comes to discretionary choices about regulations. This is not aligned with my experience. We have a whole phrase for it: getting rolled. This is what happens when political or other value judgments overcome technocratic or operational concerns. I’m not sure this is terrible; I don’t tend to think that any one set of interests or considerations should always carry the day, and E.O. 12,866 doesn’t demand that, either. And the fact is that they don’t. Judgment calls in the modern regulatory state are vast. What matters the most is who we elect to oversee them.

The worst misunderstanding I’ve seen since leaving OIRA in June 2018—and I do not find this in Livermore & Revesz’s work—is the suggestion that OIRA makes these judgment calls solo; that it’s done at the hands of civil servants operating independently of their political leadership; that in doing so OIRA draws from its own unique and bottomless well of political strength. While Livermore & Revesz recognize that OIRA is not omnipotent, particularly under Trump-imposed strain, they seem to rue the loss of its perceived power.

I’m not sure this is healthy, either.

My main concern is that this perspective–of OIRA the Powerful–implies that OIRA’s rightful place is, and has historically been, at the top of the regulatory food chain. Regulatory shot-caller. Cockpit of the regulatory state. OIRA’s administrator as the regulatory czar. When I was younger I suppose I thrilled to these descriptions; they were flattering to my ego even if they left me somewhat puzzled. And there was clearly an early era of OIRA in which it developed a problematic reputation. But we’re about 30 years out from that now; those old stories are not what I saw in the day-to-day.

I’m also not one to deny the relative power that OIRA possesses by virtue of coordinating regulatory review across the federal government in line with the policy direction of E.O. 12,866. But claims that imply supremacy are misleading descriptions of OIRA as a factual matter and they’re also a rhetorical mistake.

In the end, I think that the regulatory choices of the Trump administration were exactly that. The Biden administration will make different choices. Look no further than the yawning gap between Trump’s two-for-1 & regulatory budget E.O. and Biden’s memo on modernizing regulatory review for an illustration of how differently presidents can approach OIRA and regulatory review.

In either approach OIRA review does not – cannot, should not – supplant political review. Instead, the OIRA review process creates space for multi-faceted political review to intermingle with different sets of analytical information, input from other agencies, legal review, and other inputs into the policy process. It’s at times raucous, often straightforward, and as at least two former administrators (Katzen & Dudley) have said: if it didn’t exist you’d have to create it. Overstating the nature and extent of OIRA’s power drives people to extremes: either OIRA review is captured by economics-obsessed ideologues who single-handedly determine the fate of draft regulations, or OIRA somehow cleanses the regulatory process of its political elements and reduces regulatory choices to a purely technocratic exercise. Neither is true. And neither should be.

If I could revive some rationality, at least as it relates to the way we think about OIRA, it would be for us to drop the overly strong assertions of OIRA’s dominion. OIRA is one institution among many in the regulatory state. How it shows up is a reflection of how the president wants it to show up. So choose your presidents carefully. I’m all for discussions about how OIRA and regulatory review need to adapt, and Livermore & Revesz have consistently offered very good ideas in this regard. If we can ground those ideas in a reasonable conception of the limits of OIRA’s power, I think it will help these ideas have a better chance of success.