Dean Emeritus Richard Revesz, currently on public service leave from NYU Law while serving as the administrator of the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA), would probably be among the first to describe his government role as wonky. When Revesz returned to Washington Square for an October 4 event, hosted by NYU Law's Institute for Corporate Governance & Finance (ICGF), to speak about his activities since starting at OIRA in January, he referred with a laugh to a May 2023 New York Times profile of him that noted the Biden administration had just proposed or implemented eight major environmental regulations, including the nation’s most stringent climate rule.
“Piloting all of that,” the Times wrote, “is a man most Americans have never heard of, running an agency that is even less well known.”
While neither OIRA nor Revesz is a household name, his office has the broad-ranging mandate to review economically significant draft rules from federal agencies and to guide the implementation of various policies across the federal government. Revesz, an authority on environmental and regulatory law and policy, heads OIRA at a time when the Biden administration has made it a priority to update the agency’s regulatory review process, which subjects draft rules to cost-benefit analysis.
Pursuant to Biden’s recent executive order “Modernizing Regulatory Review,” OIRA has undertaken a revision of the Office of Management and Budget’s Circular A-4, a document dating back two decades that provides federal agencies with guidance on appropriate regulatory analysis. Shifts in economics and financial markets, Revesz says, have made the existing document obsolete.
Revesz also spotlighted two other components of the modernizing effort. The first, increasing the public participation of disadvantaged and underserved communities in the regulatory process, acknowledges that the arcane nature of OIRA review has been a barrier to participation by less-advantaged grassroots actors.
A second priority, Revesz said, is ensuring that regulatory analysis pays more attention to distributional consequences that fall more heavily on some stakeholders than others. He suggested that agencies have generally focused in their analysis on aggregate costs and benefits of regulation, failing to take the distribution issue seriously.
OIRA’s regulatory review extends only to executive branch agencies and not to independent agencies such as the US Securities and Exchange Commission (SEC) and the Environmental Protection Agency. Nevertheless, Revesz said, OIRA helps set the tone for regulatory impact analysis. After the SEC lost a number of significant cases related to Dodd–Frank financial regulations on the basis of insufficient analysis during the 1990s and 2000s, the agency issued regulatory analysis guidance in 2009 heavily influenced by Circular A-4, Revesz noted.
“Once Circular A-4 is revised,” he said, “my guess is that…what we do will be seen as best practices for doing this work in federal government, and while we will not review the regulations of independent agencies…the courts will review them.”
A Q&A session with Edward Rock, Martin Lipton Professor of Law and co-director of the ICGF, and Emiliano Catan LLM ’10, Catherine A. Rein Professor of Law, followed Revesz’s prepared remarks. Asked by Rock what problem OIRA was created to solve, Revesz answered that, apart from its regulatory analysis work, OIRA also manages a valuable interagency process in the course of its review.
“OIRA is the mechanism by which all of these different executive branch components, both in the Executive Office of the President and in the agencies outside of that, can basically make their views known, and someone has to adjudicate all of these things,” said Revesz. “If OIRA didn’t exist, and cost-benefit analysis was suddenly abolished or prohibited by statute, this kind of work would [still] have to happen.”
Catan raised the issue of Washington’s ever-increasing polarization, noting that one administration can reverse the previous one’s regulatory policies. Acknowledging that possibility, Revesz said that sound regulatory review makes regulations better able to withstand judicial review.
“If you actually do a good job, you’ll make your policies more likely to survive into the future, and if you don’t do a good job, it’s less likely, and we’re trying to do a good job,” said Revesz. “Again, no guarantees, and the way I see it is you just change the probabilities.”
Posted October 20, 2023