The Trump administration issued new guidelines on Thursday that will expand White House and congressional oversight and review of federal agencies’ rule-making processes, including those for traditionally independent agencies such as the Federal Reserve.
The 15-page memo, issued by Office of Management and Budget acting Director Russell Vought, outlines how the OMB’s Office of Information and Regulatory Affairs will be granted further jurisdiction in the regulatory process for all agencies. The memo, which goes into effect next month, will require agencies to submit regulations and official guidance to the Office of Information and Regulatory Affairs in order to determine whether the proposed rules are “major” or “minor.”
If a regulation or guidance is deemed “major,” OMB now says, it will have to be submitted to Congress for review and to be voted on. Previously, Congress was able to vote only on regulations, not agencies’ guidance.
Though the memo doesn’t specifically name any agency or office that will be affected, the guidelines are expected to impact offices traditionally independent of executive branch oversight, such as the Federal Reserve, the Federal Election Commission, and the Securities and Exchange Commission, whose leaders do not report directly to the President.
Once the OMB guidelines go into effect, these independent agencies will have to submit all new regulatory guidelines and general statements of policy to the White House before issuing them to the public. These agencies already publicly issue proposals, guidelines and rules, says The Washington Post, which earlier reported on the OMB memo.
The memo says the law “specifically exempts” requiring the disclosure of rules concerning monetary policies devised by the Federal Reserve’s Board of Governors, as well as some other, legally protected regulations devised by independent agencies. These exemptions include the Federal Reserve’s actions on setting interest rates – a major target of President Donald Trump’s frustration with the Fed.
Vought tweeted that the new guidelines are “another promise kept by the Trump Administration to create a more open and transparent (government)!”
Further congressional oversight of federal regulations has been proposed by Republican members of Congress, including legislation sponsored by Sen. Rob Portman of Ohio and Rep. Jason Lewis of Minnesota.
But the memo’s new requirements could lead to a logjam or complete regulatory blockages for federal agencies seeking to issue guidance and regulations across the federal government.
“The agencies aren’t completely angels in this. They’ve messed up in the past,” Sean Moulton, a senior policy analyst at the Project on Government Oversight, told CNN, citing instances where agencies had issued guidance when they should have sought to make it rules. “But the idea that you take all of it and say Congress can cherry-pick (which guidance and regulations can go into effect) – it gets to the point where you really come into a separations of power issue.”
The Office of Information and Regulatory Affairs’ new designations process for “major” and “minor” rules “is really a foot in the door of political oversight of those agencies,” Moulton said.
He also pointed out that the office’s expansion of power means the office and agencies could end up with much larger workloads.
“It will be so much material that agencies would suddenly start submitting the potential analysis that they’re asking for for these major determinations – it’s very unclear whether it’s only proposed rules or if you’re doing guidance … which again would be a big expansion,” he said.
The guidance could face legal challenges, and if agencies fail to comply with OMB’s edict, Mouton said, OMB could respond by pulling funds from their budgets.