The wonky but incredibly important changes Biden just made to regulatory policy

In this episode, Sabeel Rahman, former acting administrator of the federal Office of Information and Regulatory Affairs, discusses updates to regulatory policy that reflect a positive new approach to how climate (and other) regulations will be assessed and crafted.

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Text transcript:

David Roberts

When President Biden first took office, his administration released a series of "Day One executive actions." Among them was reforming the way federal regulations are developed and evaluated. This is not exactly something the public was clamoring for, or even aware of, but it is foundational to the administration's ability to achieve its other goals.

The agency in charge of reviewing proposed federal regulations is called the Office of Information and Regulatory Affairs, or OIRA, which sits inside the Office of Management and Budget (OMB). It is a fairly obscure corner of the federal bureaucracy that doesn't come in for much public scrutiny, but as the gateway through which all federal regulations must pass, it is immensely powerful in shaping the space of possibilities for any administration.

A few weeks ago, OIRA answered Biden's call by issuing updated versions of two crucial documents: circular A4 and circular A94. The former contains guidance for agencies on how OIRA will evaluate regulations; the latter contains guidance for how it will evaluate public investments.

These guidance documents have not been updated in more than 20 years, so this development is long overdue. The new circulars contain some fairly technical updates to the way OIRA does cost-benefit analysis — and the goals toward which it deploys cost-benefit analysis — but they are incredibly important, evidence of a generational philosophical shift.

To unpack these changes, I talked with Sabeel Rahman of Brooklyn Law School, who served as acting administrator of OIRA last year while its current leader was being confirmed by the Senate. Rahman was intimately involved in designing the updated guidance, so I was eager to talk to him about the new approach, how it was developed, how it reflects Biden's priorities, and what it means for the future of climate and other regulations.

I know this sounds wonky, but it is worth your time. I promise you will come out of it excited about cost-benefit analysis.

With no further ado, Sabeel Rahman, welcome to Volts. Thank you so much for coming.

Sabeel Rahman

Thanks so much for having me.

David Roberts

This is awesome. I'm so excited to talk about this.

Sabeel Rahman

It is wonky, but it is awesome ...

David Roberts

Wonky and awesome. I've had sort of a side obsession with these issues for a long, long time, and this is really a perfect opportunity to jump into them. But before we jump into too many wonky details, I want to do some scene setting just so people know, kind of have a sense of what we're talking about in general. So when Biden came in, he issued this sort of list of "Day One," what they call "Day One priorities." And one of those was to update regulatory policy, basically how regulations get assessed and crafted. This is not something I think the public is beating down the door demanding this.

This is something that has a behind the scenes air about it, but it's also clearly a political priority. So maybe just to start with, let's just talk about what is the Office of Management and Budget, OMB, what is OIRA, which is the Office of Information and Regulatory Affairs?

Sabeel Rahman

Yes, absolutely.

David Roberts

First try.

Sabeel Rahman

There we go.

David Roberts

What, OIRA is within it, and why what they do seems to have such political presence in the administration that it made its way to the top of this Day One priority list just to sort of set the scene.

Sabeel Rahman

Yeah, absolutely. That's great. And thanks so much, David. And you're exactly right. This is very much kind of behind the scenes type of sets of issues, but really, really important for all the day-to-day stuff that government needs to do, and especially in this moment when we're thinking about the climate crisis or we're thinking about trying to address systemic inequality. So the fact that this was part of the Day One suite of actions from the present is, I think, pretty indicative. So there was the headline stuff, the new climate regulations, the Equity Executive Order, responding to COVID right there's, all of that headline stuff.

And then this regulatory review piece was also there because that's actually part of the back-end to make all those other policies work. So we're used to thinking about the President comes in, president can make all kinds of sweeping policy decisions or kind of really important policy decisions. The day to day of how that happens involves the federal agencies. And the agencies, they can make enforcement actions, they can spend money or they can write rules. And it's that rule writing part that goes through the Office of Information and Regulatory Affairs. And so this office that you talked about, OMB, the Office of Management and Budget, builds the President's budget every year.

They handle the budget side, but they also do a lot of really important work in terms of management. So how do agencies manage their personnel, operate strategically, have the highest impact for the resources they have. And then there's OIRA, which is the regulatory part, sort of the third pillar of OMB. OIRA works with the agencies will review under executive order going back to Clinton era and a practice actually dating even further behind that, OIRA will review major federal regulations, in part for the policy, in part for legal issues, but also, most importantly, to make sure they're consistent with the President's vision.

And that makes it a really important nexus for all of this stuff, which is also partly why it can come in the crosshairs at times.

David Roberts

Right? And a question about that, OIRA, what sort of police powers does it have? If an agency develops a regulation, sends it to OIRA for review, and OIRA finds a problem, can OIRA just say, "No, you got to go back and try again"? Or is it suggestions? What power does it have?

Sabeel Rahman

Right, so it's quite a powerful office, and I should say, obviously spent the first years of the Biden administration in OIRA and was acting head of the office until the confirmed administrator came in a few months ago. But the powers under the original Clinton Executive Order, which continues to be in effect to this day, reall