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Tuesday, January 30, 2007

Law - New Bush executive order gives the White House much greater control over the rules and guidance documents.

The NY Times today has in the prime spot on its from page a lengthy and important article by Robert Pear that needs careful reading to appreciate fully. Here are a few samples:

WASHINGTON, Jan. 29 — President Bush has signed a directive that gives the White House much greater control over the rules and policy statements that the government develops to protect public health, safety, the environment, civil rights and privacy.

In an executive order published last week in the Federal Register, Mr. Bush said that each agency must have a regulatory policy office run by a political appointee, to supervise the development of rules and documents providing guidance to regulated industries. The White House will thus have a gatekeeper in each agency to analyze the costs and the benefits of new rules and to make sure the agencies carry out the president’s priorities.

This strengthens the hand of the White House in shaping rules that have, in the past, often been generated by civil servants and scientific experts. It suggests that the administration still has ways to exert its power after the takeover of Congress by the Democrats. * * *

Typically, agencies issue regulations under authority granted to them in laws enacted by Congress. In many cases, the statute does not say precisely what agencies should do, giving them considerable latitude in interpreting the law and developing regulations. Here is OMB's Jan. 18th memo to agencies.

The directive issued by Mr. Bush says that, in deciding whether to issue regulations, federal agencies must identify “the specific market failure” or problem that justifies government intervention.

Besides placing political appointees in charge of rule making, Mr. Bush said agencies must give the White House an opportunity to review “any significant guidance documents” before they are issued.

The Office of Management and Budget already has an elaborate process for the review of proposed rules. But in recent years, many agencies have circumvented this process by issuing guidance documents, which explain how they will enforce federal laws and contractual requirements. * * *

Business groups have complained about the proliferation of guidance documents. David W. Beier, a senior vice president of Amgen, the biotechnology company, said Medicare officials had issued such documents “with little or no public input.”

Hugh M. O’Neill, a vice president of the pharmaceutical company Sanofi-Aventis, said guidance documents sometimes undermined or negated the effects of formal regulations.

In theory, guidance documents do not have the force of law. But the White House said the documents needed closer scrutiny because they “can have coercive effects” and “can impose significant costs” on the public. Many guidance documents are made available to regulated industries but not to the public. * * *

Under the new White House policy, any guidance document expected to have an economic effect of $100 million a year or more must be posted on the Internet, and agencies must invite public comment, except in emergencies in which the White House grants an exemption.

The White House told agencies that in writing guidance documents, they could not impose new legal obligations on anyone and could not use “mandatory language such as ‘shall,’ ‘must,’ ‘required’ or ‘requirement.’ ”

The executive order was issued as White House aides were preparing for a battle over the nomination of Susan E. Dudley to be administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget.

Here is more, from Cindy Skrzychi, who until recently wrote about regulation for the Washington Post and now apparently is working for Bloomberg. She begins:
Jan. 30 (Bloomberg) -- On Jan. 18, while the headlines in the U.S. focused on the war in Iraq, the new Democratic Congress, and actress Lindsay Lohan's alcohol problem, the Bush administration rewrote the book on federal regulation.

President George W. Bush issued an executive order curbing the power of agencies to regulate industry through ``guidance'' - - informal advice that falls short of official rules yet can still cost companies millions of dollars to comply with. The order, which also calls on agencies to project the cost of new rules, among other demands, gives the White House more power to review how they regulate corporate behavior.

This is followed by quite a long, detailed, and valuable discussion of guidance documents, that concludes with:
Congress should be paying attention to the president's action because he is usurping the authority the lawmakers gave the agencies to regulate, according to Peter Strauss, a professor at Columbia University law school.

``It's maybe not surprising that having lost control of the Congress, the president is doing what he can to increase control of the executive branch,'' Strauss said.

Here it is - the OMB's "Final Bulletin for Agency Good Guidance Practices," in the Jan 25, 2007 Federal Register, plus a companion memo to the agencies.

Posted by Marcia Oddi on January 30, 2007 06:35 PM
Posted to General Law Related