By Cornelius Kerwin
Rulemaking is now, and has been for some time, the most important source of detailed law and public policy in America. Rules outnumber statutes by many multiples. No statute of any significance can be implemented without the further refinement, tailoring and specificity supplied by rulemaking. In the process, rulemaking provides us – individuals, firms and organizations of all sorts – more precise statements of our rights and obligations under the law than we will receive from a legislative process. For a number of reasons Congress fails to supply the details so essential to the implementation of the policies and programs authorized and funded in their statutes. There are reasons for the gridlock that stymied recent attempts by Congress and presidents to make law in the manner established in Article 1, Section 1 of the Constitution. These reasons are important but not our focus here. Instead, we accept these as givens and reflect on why they compel a new President to make the management of rulemaking a priority of their administration.
The term “rule” (used interchangeably with “regulation”) is defined in the Administrative Procedure Act (APA): “Rule means the whole or part of an agency statement of general or particular applicability and future effect designed to interpret, implement or prescribe law or policy.” The source of rules is identified as an “agency” and not Congress. The power to write them is not limited to mere restatement or clarification but “prescription,” properly understood as creating new authority than that is found in existing “law or policy.”
As remarkable as they are, these now long-standing definitions do not convey the enormous cumulative effect that rules have on the quality of our lives. A President will confront a rulemaking process vastly different from that designed by the authors of the APA in 1946.
“Notice and comment” rulemaking, established in Sec. 553 of the APA, was once described by Kenneth Culp Davis, a prominent scholar of administrative law as “… one of the greatest inventions of modern government.” Such praise has not been forthcoming recently. Today, that simple design consisting of a notice of proposed rulemaking and an opportunity for the public to express their views has evolved into a rulemaking process that has been characterized as “ossified” by decades of statutes, executive orders and judicial decisions that impose both procedural and information requirements on those writing rules. These complicating factors can be viewed in a number of ways, but, whatever else, they are compelling evidence of the importance of rulemaking to the constitutional branches of government and the public
The Rulemaking Opportunity
With or without gridlock, with or without a hostile Congress, modern Presidents have always found rulemaking to be both inevitable and indispensable. As President Obama so clearly stated when confronted with opposition to his immigration reform efforts, “I have a pen and a phone” meaning that with the power to direct his executive branch to write rules and exercise other forms of administrative action he was able to pursue a policy agenda without Congress. He was not the first to discover this nor will he be the last to appreciate what it provides.
Presidents write no rules themselves but each since Jimmy Carter has taken a systematic approach to ensuring influence over rulemaking. All have used another unilateral power of the presidency – the executive order – to articulate the general principles they expect to be observed during the writing of regulations. They also establish or reaffirm systems to ensure their policy priorities will be reflected in the rulemaking work of the agencies under their direct managerial control. The most prominent structure of presidential control is the Office of Information and Regulatory Affairs (OIRA) in OMB. Over the years OIRA has been led by prominent thought leaders. This should remain the case for the new and future administrations but the management of rulemaking involves other key elements that are discussed briefly below.
The Rulemaking Challenge
Before turning to the mechanics of rulemaking management it is important to review the major obstacles that confront one attempting to ensure rulemaking is responsive and effective. The range of rulemaking across the federal government is vast. Presidents will be confronted with thousands of rules under development at any one time. The President must pick those sufficiently important to merit special attention by the administration. The efforts of previous Presidents have helped in this regard, but choices, both systemic and at the level of individual rules, must still be made.
Rulemaking is much criticized. The new President will hear that it is exceedingly complex and cumbersome, resulting in it being slow, unable to keep pace with rapidly changing conditions in the economy and larger society and creating incentives for agencies to avoid its use. Some find it too frequently characterized by poor quality or incomplete information. Others argue those writing rules fail to embrace true consultation with the public or that they are dominated by powerful, well-resourced interests. A President’s program for rulemaking management will not solve all these problems. They are inherent to contemporary rulemaking attempts to fix – one leads to inevitable negative impacts on another. These issues are, instead, a part of the landscape that a president and his staff must take into account when fashioning their approach to rulemaking.
The management of rulemaking is a formidable task but so too are the available tools.
Selected Elements of Effective Rulemaking Management
For the President seeking to successfully direct the rulemaking of their administration, there are four management functions deserving of special attention.
1. Coherent, Consistent Leadership
Oversight of the Administration’s rulemaking management program is housed in OMB’s Office of Information and Regulatory Affairs. OIRA works with agencies to determine which rules under development are sufficiently important to merit the attention of their leadership and staff; review those rules in draft and final form for consistency with the president’s policies; and work to promote consistency in rules across the agencies of government.
The Director of OIRA and its relatively small staff will be the central locus of direction and oversight for the President. Consequently, the President will undoubtedly follow the clear pattern of naming persons expert in both the substance and process of regulation to lead OIRA. The stature and expertise resident in OIRA is essential but they must also be supported by a coterie of leaders in the major departments and agencies, as well as their subordinate organization who have rulemaking management as their primary responsibility. In most agencies such positions exist and are occupied by experienced, senior personnel. The President must do all they can to ensure that the linkages between these leaders and the White House are strong and they are pursuing the priorities of the administration.
2. Disciplined Priority Setting
The leadership team will have multiple responsibilities for the management of rulemaking but prominent among them will be determining which rules in
their respective areas of supervision will be given the highest priority for completion. Priority setting not only identifies and communicates the regulatory program of the President but it provides the foundation for routing the appropriate resources, both financial and human, to those rules deemed to do the most good.
The development of the annual Regulatory Plan and the Semi-Annual Regulatory Agenda of the federal government are two long established devices to collect and report on the current priorities for rulemaking. Ultimate responsibility for these resides with the Office of Information and Regulatory Affairs but their raw material is supplied by the many departments and agencies that report to the president and independent regulatory bodies who comply with the Plan and Agenda voluntarily. Since the Clinton Administration, OIRA has worked with departments and agencies to determine which rules under development it will select for close analysis and input. Given the overall size of the government-wide rulemaking workload it is unlikely this practice will change.
Presidents are well advised to ensure that priority setting at the department and agency levels are disciplined and rigorous. There are a number of examples of such systems. The Nuclear Regulatory Commission has used an elaborate scoring system consisting of four factors identified as A-D: (A) Support for NRC’s strategic plan goal of ensuring the safe and secure use of radioactive materials, (B) support for NRC’s strategic plan cross-cutting strategies for enhancing regulatory effectiveness and/or openness in the conduct of regulatory activities, (C) the relative interest of the NRC, Congress or other governmental bodies in the rule and (D) the relative interest in the rulemaking activity to members of the public, non-governmental organizations and the nuclear industry. Each factor is scored according to the following scales: 0-20 (A); 0-10 (B); 0-10 (C) and 0-5 (D). According to the NRC, the priority order for their entire rulemaking agenda is set by tabulating the aggregate score for each prospective rule. High priority rules receive scores from 31 to 45, medium priority rules receive scores from 16-30 and the rest are considered lower priority. (Nuclear Regulatory Commission)
The Environmental Protection Agency also has a sophisticated priority setting system. While it does not have the quantitative precision of the NRC’s, it does reveal other dimensions of what agencies consider when assigning effort to a given rule. EPA has termed the rulemaking program the “Action Development Process” and it starts with assigning a prospective rule into one of three “tiers.” Tier 1 consists of rules that because of characteristics such as extensive “cross media” implications, potential for precedent setting implementation issues, major economic impact and potential controversy requires substantial engagement by the most senior levels of the Agency. Tier 2 may also have cross media implications and other Tier 1 characteristics but not sufficient to require major engagement by the highest levels of the agency. Tier 3 rules have relevance to a single media office and are not likely to present new or particularly difficult implementation issues or conflict with external stakeholders. (Environmental Protection Agency, 2011)
The Department of Justice, admittedly not usually thought of as a rulemaking agency, provides a third, comparatively simple approach. They simply list the top priority rules by subject area in each of the major divisions. For example, for the year 2015 DOJ Civil Rights Division listed rules related to implementation of various protections against discrimination based on disability, including access to web information and state and local government services. (Reg. Gov, Department of Justice 2015)
It is important to note that priorities are subject to change, sometimes suddenly. True emergency and urgent situations arise in virtually every area of public policy. Work underway on otherwise important situations must give way to attention to such matters. However, the very existence of a disciplined rulemaking management system, consisting of strong, coherent leadership and systems to route resources to priority rules, increase the likelihood that emergency and urgent situations will be properly and promptly handled.
3. Information Management
Information is the lifeblood of rulemaking management at every level, from the White House to the drafting of an individual rule. Some types of information, notably that related to paperwork, small business, environmental impact and data quality, are the subject of general statutes that apply to specific types of rulemaking efforts. Previous research has considered these and other types and established seven general type categories of information that must be mastered and included in any comprehensive rulemaking management system: (Kerwin and Furlong, 2011)
· Legal information includes what is required or allowed by statutes, executive orders, and court decisions;
· Policy information includes guidance on the priorities and approaches preferred by the current administration;
· Content information consists of the technical or scientific requirements or guidance being established or revised in the rule;
· Impact information provides insights to the effects of the regulation on both regulated parties and intended beneficiaries;
· Political information contains the views and positions of the internal and external interests affected by the rule under development. In many instances political information may not be easily distinguishable from policy impact or technical information, and is frequently presented as critiques of a particular approach or of certain supporting data, or with regard to the negative effect the rule could have on existing programs or conditions. Consequently, what is essentially a political reaction to a proposed rule is couched in policy or technical terms;
· Implementation and compliance information details how new requirements will be communicated and enforced; and
· Management information is knowledge of the agency’s internal management system and the requirements it imposes on their particular rulemaking.
Space does not allow a full exploration of how each of these general categories of information affect management by the White House, departments and agencies and at the level of the individual rule. For the president and the leadership team, particularly for those rules of high priority to their administration legal, policy, impact, political and implementation information will be key. High quality legal information will enhance the likelihood that the rule will survive challenge in court. Policy information will ensure consistency with the administration’s program. Impact and political information are often intimately related and will provide some advance indications of the support and opposition the rule will experience. Finally, implementation information will provide a road map to demonstrate how the promise contained in the rule will be transformed into an operating program.
The success of any administration in using information to advance a policy agenda and produce quality rules depends in large part on their ability to manage another central element of rulemaking.
4. Outreach and Engagement of Stakeholders
Cass Sunstein, President Obama’s first Director of the Office of Information and Regulatory Affairs and a highly regarded scholar in the field is quoted as saying “One of the things I learned – I didn’t expect this at OIRA, but once I learned it, boy did I take it as a fundamental part of my job – is that the rulemaking process depends critically, or even urgently, on information provided the public by people outside of government.” (RegBlog, 2013) The information Sunstein finds so critical is only possible if outreach to and participation by those members of the public with vital information works effectively. But, it is not only those in the private sector whose participation is essential.
Participation by the public in rulemaking was noted in early research on the development of regulations. In addition to its instrumental purposes public participation is vital to the very legitimacy of rulemaking. The Administrative Procedure Act affirmed its importance when it required agencies to solicit comments from the public on rules under development. Participation is a substitute for the ballot box that links elected representatives who conduct the other forms of legislating. More recent research has established that participation in rulemaking does occur, arguably not as often as the drafters of the APA may have contemplated, and the standards agencies are held to when it is used have become more stringent over time. But, it is also that case that research has noted bias in patterns of participation, with well-resourced interests participating more often and more effectively than those less well endowed. The president would do well to ensure those who otherwise are likely to be disenfranchised in rulemaking be given avenues to participation since their information and perspectives can not only be valuable but their involvement adds to the perceived fairness of the process. Recently, Sen. Elizabeth Warren has suggested five steps to offset “capture” of rulemaking by powerful interests, including greater transparency, better funding for agencies to make them less reliant on information provided by others and offices of public advocate. (RegBlog, 2016)
We also know from available research and commentary that early engagement with the public is beneficial to those looking to influence the process. Logic dictates that properly managed within the existing standards of ex parte contact, input from the public at the earliest stages of regulation development provides important information at the formative stages of a new rule. The advance notice of proposed rulemaking was developed specifically to obtain early public engagement on proposed rules and there are variations that can be employed, as well.
There are multiple tools and venues for the president and their leadership team to consider with developing the public participation component of their rulemaking management strategy. Written comments, face to face meetings, public hearing of various sorts, standing committee of outside experts for all or categories of rulemaking within a given department or agency, advisory committees for particular rules, simple electronic communication, more advanced social media, and negotiated rulemaking are available for use and tailoring to specific circumstances. For example, President Obama, departing from past practice, solicited public comment and input on his executive order outlining the principles that would guide his administration’s management of rulemaking. The next president’s participation program should consider all these instrumentalities in the effort to produce quality and equity in rulemaking effort.
Finally, it is important to note that engagement of parties external to government cannot be the sole focus of participation management in rulemaking. Information, insight and experience must also be drawn, where appropriate, from agencies and departments other than the one writing the rule and from within the agency itself. OIRA, of course, provides substantive input. One of the key functions of OIRA in rulemaking management is to ensure consistency across departments and agencies of the federal government through coordination of efforts. Within a department or agency there are three types of participation – vertical, horizontal and field. Vertical participation is involvement by the pertinent management chain and the political leadership of the agency. Horizontal is participation by the various offices of the department or agency, other than the office writing the regulation, with an interest in or expertise related to the rule. Field participation can be especially valuable since it engages staff in regional offices and, for some department and agencies, as well as state and government partners. These personnel have considerable expertise implementing rules, including communication of the new requirements and possible obstacles to compliance by beneficiaries and regulated parties, as well as enforcement. Ensuring a seat at the table for this type of expertise can enhance the long-term success of administration programs created or changed by rules.
There are sufficient tools available to a president seeking to proactively and aggressively manage the rulemaking process. In fashioning the program, the new administration should take full advantage of scholarly research, studies by the Government Accountability Office, the Congressional Research Service and recommendations issued by the Rulemaking Committee of the Administrative Conference of the United States. Above all else the president is well advised to treat rulemaking management as one would a major policy initiative, devoting the time and effort needed to fashion, implement and sustain a program to consistently produce rules that are responsive to the administration’s priorities and, hopefully, advances the public good.
Kerwin, C. & Furlong, S. (2011). Rulemaking: How government agencies write law and make policy, 4th edition. Washington, D.C.: CQ Press, pp. [152-153]
Warren, E. (2016). "Corporate capture of the rulemaking process." RegBlog (blog). Accessed October 11, 2016. http://www.regblog.org/2016/06/14/warren-corporate-capture-of-the-rulemaking-process/.
Sunstein, C. R. (2013)."The big ideas behind OIRA." RegBlog (blog). Accessed October 11, 2016. http://www.regblog.org/2013/09/09/09-sunstein-big-ideas-oira/.
United States Nuclear Regulatory Commission. (2016). "Rulemaking priorities.” Accessed October 10, 2016. http://www.nrc.gov/reading-rm/doc-collections/rulemaking-ruleforum/rule-priorities.html.
Office of Policy. (2011). "EPA's action development process: Guidance for EPA staff on developing quality actions." OP Action Development Series. Accessed October 10, 2016. https://yosemite.epa.gov/sab/SABPRODUCT.NSF/5088B3878A90053E8525788E005EC8D8/$File/adp03-00-11.pdf.
Department of Justice. (2015). Accessed October 10, 2016. http://www.reginfo.gov/public/jsp/eAgenda/StaticContent/201510/Statement_1100.html.