On April 11th, the U.S. Office of Management and Budget (OMB) issued new guidance on agency compliance with the Congressional Review Act (CRA). The CRA allows Congress to review and to disapprove agency regulatory actions under expedited procedures. The Act requires the Office of Information and Regulatory Affairs (OIRA) to determine whether a rule is “major” and thus subject to Congressional review before becoming effective.
A “major” rule under the CRA is one that has, or is likely to have:
- An annual effect on the economy of $100 million or more;
- A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
- Significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
Under the CRA, a “rule” includes not only notice-and-comment regulation, but also guidance documents, policy statements of general effect, and interpretive rules. The CRA applies to both Executive branch agencies as well as independent agencies.
OMB issued the memo to improve agency compliance with the CRA. Agencies now must notify OIRA of upcoming rules that meet the CRA scope. OIRA then has ten days to determine whether an action is “major” under the CRA. This process mirrors OIRA’s determination process as to whether a regulatory action is “significant” under Executive Order 12866 and thus subject to OMB-led interagency review.
If OIRA determines an action is “major,” agencies must delay the effective date for at least 60 days and submit its cost and impact estimates to Congress through the Government Accountability Office. The CRA sets out expedited procedures for the House and Senate to consider a motion to prevent the final rule.
OMB’s memo gives companies and organizations several opportunities to enhance their regulatory advocacy:
- Inform OMB of pending non-rule actions that are likely major actions. OMB staff are often unaware of non-rule regulatory actions like guidance documents or agency policy changes that have substantial economic impact. Organizations can alert and provide screening-level estimates of economic impact to OMB of upcoming actions covered by the CRA.
- Link a “major” designation to an agency’s E.O. 13771 regulatory allocation. Under E.O. 13771, agencies must ensure that their regulatory actions do not impose more costs than OMB-assigned regulatory allocation for that year. If OMB designates a guidance document or policy statement as major, the agency must include its costs in its calculation of regulatory burden and must give public advanced notice of its timing in the Regulatory Agenda. By securing an OMB designation of an action as major, organizations then can argue agencies must follow E.O. 13771 for the action.
- Inform OMB and agencies about an action’s disproportionate increase in costs and prices on a sector. Many policies and guidance documents have a concentrated effect on an industry. If OMB agrees with the disproportionate impact, agencies may be more willing to consider more cost-effective policy alternatives.
With 50 years of accumulative OMB experience, PNG is ready to take on the opportunity to enhance companies’ regulatory advocacy!