On April 11, 2019, Russell Vought, acting director of the Office of Management and Budget, issued a memo that could eventually result in the executive review of independent agency actions—or merely serve as a footnote to President Trump’s regulatory legacy.

The memo uses the Congressional Review Act (CRA) as a way to compel independent agencies to submit proposed “major” rules to OIRA. Section 804 of the CRA defines a major rule as any measure that OIRA determines could result in an economic effect of $100 million or more, cause a major increase in prices to consumers, or have significant adverse effects on competition.

It is far too early to tell what effects the memo will have on independent agency actions. Since the regulatory output is historically low under the Trump administration, the dearth of new rules provides an obstacle to discerning the effects of the Vought memo.

The CRA and independent agencies / Since the advent of the CRA in 1996, the Government Accountability Office has recorded 1,576 major rules. Only 457 major rules were generated by independent agencies (29% of the total), but 40% of those have come since 2010, owing largely to the implementation of the 2010 Dodd–Frank Act. Some scholars believe that it is not uncommon for independent agencies to put their finger on the scale and fail to certify formal rules or regulatory guidance that should properly be certified as “major” and thus subject to review.

Despite the large number of major independent agency actions, Congress has only invalidated four of those regulations: two rules from the Consumer Financial Protection Bureau, one from the SEC, and one from the FCC.

Although the language of the CRA appears to give OIRA the power to determine whether a rule is major, independent agencies rarely rely on OIRA to make that determination. As a result, there are, in our estimation, an untold number of “major” rules published in the Federal Register lacking such a designation and that went into effect immediately, as opposed to the statutory 60-day delay that is standard for major rules.

The CRA as a sword / Rather than issue a new executive order or memo to enable OIRA review of independent agency actions, the Trump administration opted to use the CRA as the vehicle. Legally, this seems to be the safest approach because both the Paperwork Reduction Act and the CRA contemplate some interaction between independent agencies and the executive branch—for example, independent agencies must also submit paperwork collection requests for OIRA review. The administration opted to, in effect, use the CRA to appropriate a bit more authority over the rest of the administrative state.

The Vought memo lays out a series of procedures for independent agencies to follow, not unlike the formal strictures of an executive order that would have ushered in a formal review of all agency actions. The requirements for independent agencies are:

• Agencies must notify OIRA of pending rulemakings, likely through submitting notification of planned rules.
• OIRA will inform the agency within 10 days if it agrees with the determination that a rule is not major.
• For major rules, the agency must submit a CRA determination for review by OIRA at least 30 days before publication in the Federal Register.
• Agencies must include a regulatory analysis with each rule, consistent with OMB Circular A‑4. (It’s notable that many independent agencies do not typically follow A‑4 precisely.) Failure to conduct a rigorous analysis may delay OIRA’s determination and ultimately block the rule.
• OIRA is to make a judgment under Section 804 of the CRA.
• After any designation, the agency can send the rule to the GAO, but if it is major the agency must delay the effective date by 60 days to satisfy the CRA.

There is little doubt that the regulatory analysis requirement is the most consequential for independent agencies. Previously, many agency actions not subject to review contained sparse analyses or omitted them altogether, but the Vought memo effectively demands that all agencies in the federal government follow Circular A‑4. The memo’s utility is that it relies on the CRA to demand a thorough benefit–cost analysis rather than a separate executive order that some agencies could fight in court. The Vought memo has yet to be challenged in court, and because of the dictates of Section 804 of the CRA, any legal challenge will likely face an uphill climb.

Beyond rules both major and minor, the Vought memo also applies to guidance documents, statements of general policy, and interpretive rules. There are countless guidance documents that agencies have never submitted through the formal CRA process that will now undergo review by both the agency and OIRA, while also giving Congress a chance to scrutinize major guidance under the CRA.

What’s next? / The key to determining the efficacy of the Vought memo will be to observe if there is an increase in independent agency actions sent to Congress and the GAO, and if the regulatory analyses at agencies prove to be more rigorous. However, given the paucity of regulatory output from the Trump administration, a verdict will take some time. Nonetheless, during the next few months we should be able to examine major actions from independent agencies to determine if they are actually following the memo.

The bigger question is whether the Vought memo will fundamentally change independent agency behavior or the relationship between the executive branch and the agencies. The spirit of the memo certainly contemplates a sea change, even if it does not explicitly demand strict performance through a formal executive order.

It is also possible that this memo could engender a showdown between independent agencies and OIRA. Under this administration, it is easy to imagine a scenario where an agency decides it needs to fast-track a rule; if OIRA takes issue with the agency’s benefit–cost analysis and objects, what would occur? Or what would happen should OIRA hold a rule pending a more formal analysis, but the agency objects? What recourse would OIRA have if an agency decides to bypass OIRA review altogether and submit a rule for formal publication? Could OIRA demand the Government Printing Office refuse to publish the rule?

Given that President Trump has installed many of his allies to run independent agencies, such scenarios are not near-term certainties, but there is nothing stopping agency heads from ignoring the Vought memo or attempting to bend the rules to avoid real scrutiny. Since this administration has previously claimed it has always had the authority to review independent agency actions, perhaps agency heads should be grateful this process is guided more by the CRA than by a formal review process under Executive Order 12866, which can easily scuttle rulemakings in perpetuity.

Thus far, there has been no notable uptick in the number of independent agency actions arriving at the GAO. Then again, there appears to be no public way to track review of independent agency actions. By contrast, all notable executive branch rules under review are listed on OIRA’s website, including meeting notices with outside parties lobbying on the rulemaking. It is worth noting that since the Vought memo became effective, the GAO reports no independent agency actions have been submitted under CRA review—including major rules.

Conclusion / For years, myriad regulatory policy scholars have urged OIRA to rein in independent agency actions under executive review, reasoning that it makes little sense to have one set of regulatory standards for one part of the government and a far more lax set of procedures for the other. When the Trump administration arrived, many expected an executive order that would have claimed authority over independent agency actions. By using the CRA as a statutory vehicle, OIRA has been able to provide some level of oversight to independent agency actions.