BIDEN ADMINISTRATION PROPOSES NEW CHANGES TO THE REGULATORY REVIEW PROCESS
May 15, 2023
On April 7, 2023, the Biden administration announced new changes related to the regulatory review process used by U.S. executive branch agencies like DOT and the Environmental Protection Agency to institute new rulemakings and regulatory actions. The changes re-classify what will be considered a “significant regulatory action” by raising the threshold that determines which federal regulations will be required to undergo the more thorough review process required for significant regulatory actions. As an example, under the old review process guidelines, significant regulatory actions must be reviewed by the Office of Information and Regulatory Affairs (“OIRA”, which is housed within the White House Office of Management and Budget (“OMB”)) and have a cost-benefit analysis done to determine whether the action’s benefits justify its costs. Previously, “significant regulatory actions” were also considered to be any action likely to result in a rule that would have an annual effect on the U.S. economy of $100 million or more or otherwise adversely affect the economy, that could create a serious inconsistency or interfere with an action of another agency, or that could raise legal or policy issues, among other things. Under the changes however, an action or rulemaking would only be designated a “significant regulatory action,” and therefore have to undergo the more thorough review process detailed above, if the action or rulemaking is considered to have an annual effect on the economy of at least $200 million, instead of $100 million currently required. Further, if a rulemaking or regulatory action does not require a rigorous cost-benefit analysis, does not create a serious inconsistency with other agency actions, and/or does not have material budgetary impacts, the action would only have to undergo interagency review. In addition to the changes to “improve” the effectiveness of the regulatory review process, the Biden administration is also encouraging greater public participation in the process, and urging OIRA to discourage meeting requests that are “duplicative of earlier meetings” and that involve the same regulatory action by the same parties. Therefore, the new changes can be considered significant, as they are likely to be detrimental to regulated entities by effectively giving more expansive power to the U.S. government and its agencies to regulate without having to go through the more thorough review process.
Following the announcement, OIRA issued several memos and other documents to further explain how agencies will be instructed to conduct the rulemaking process and produce regulatory analyses like a cost-benefit analysis. The OMB also issued three notices including: (1) its proposed revisions to the guidelines for the process through which the public may request a meeting with OIRA, (2) its proposed revisions to Circular A-94 on agency cost-benefit analysis and cost-effectiveness analysis of federal spending, and (3) its proposed revisions to Circular A-4, which instructs agencies on the regulatory review process generally.
The OMB is seeking comments on all three notices until June 6, 2023.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665.
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