Office of Management and Budget (OMB) review
Office of Management and Budget (OMB) Review
What is the OMB Review Process?
The Office of Management and Budget (OMB) is part of the Executive Office of the President.
One of OMB’s key functions is to oversee and coordinate federal agency rulemaking through the Office of Information and Regulatory Affairs (OIRA).
OIRA reviews significant federal regulations to ensure consistency with:
Presidential priorities.
Regulatory policies.
Cost-benefit analysis.
This process is designed to improve regulation quality, reduce unnecessary burdens, and coordinate regulatory policy across agencies.
OMB review is authorized primarily by Executive Orders, notably Executive Order 12866 (1993, as amended).
Agencies submit their proposed and final rules to OMB before publication in the Federal Register.
OMB has 90 days to review, and can recommend changes or request withdrawal/revision of rules.
While OMB cannot legally veto rules, its influence is substantial.
Why OMB Review Matters
OMB review centralizes regulatory oversight.
It ensures interagency coordination.
It brings economic expertise and cost-benefit analysis to rulemaking.
It subjects agency rules to presidential policy preferences.
Courts have wrestled with the legality and scope of OMB review and its impact on agency discretion and transparency.
Key Cases Involving OMB Review
1. Whitman v. American Trucking Associations, Inc. (2001)
Facts: EPA established National Ambient Air Quality Standards (NAAQS).
Issue: Whether EPA was required to conduct cost-benefit analysis before setting standards.
Relevance: The case indirectly touches on OMB’s role, as OMB promotes cost-benefit analysis under EO 12866.
Holding: The Court held EPA cannot consider costs in setting standards under the Clean Air Act.
Significance: Demonstrated limits on agency discretion despite OMB’s emphasis on cost-benefit analysis, showing OMB review cannot override statutory mandates.
2. Center for Biological Diversity v. Office of Management and Budget (2013)
Facts: Environmental groups sued OMB and agencies alleging failures to disclose OMB's review of climate-related rules.
Issue: Whether OMB’s review process is subject to the Freedom of Information Act (FOIA) and how transparent it must be.
Holding: Courts have found OMB review documents can be subject to disclosure.
Significance: Highlighted transparency concerns regarding OMB’s often secretive review process.
3. Public Citizen v. U.S. Department of Health and Human Services (1995)
Facts: OMB reviewed FDA regulations.
Issue: Whether OMB review violated procedural requirements or agency rulemaking.
Holding: Courts recognized OMB’s review authority but emphasized agencies retain ultimate rulemaking authority.
Significance: Affirmed OMB’s coordinating role but clarified it cannot substitute its judgment for agencies.
4. NRDC v. Abraham (2002)
Facts: Challenges to OMB’s review of EPA’s emission standards.
Issue: Whether OMB's interference unlawfully delayed or altered rulemaking.
Holding: Courts acknowledged OMB’s role but underscored agencies must comply with statutory deadlines.
Significance: Reinforced that OMB review must not usurp agency’s statutory responsibilities or cause unreasonable delays.
5. National Association of Manufacturers v. Taylor (1992)
Facts: Challenge to OSHA rules undergoing OMB review.
Issue: Whether OMB’s review process was subject to judicial scrutiny.
Holding: Courts typically defer to executive branch processes but have authority to ensure no procedural violations.
Significance: Showed judicial deference to OMB’s role but also recognized limits.
6. Luminant Generation Co. v. EPA (2016)
Facts: EPA’s Clean Power Plan underwent OMB review.
Issue: Whether OMB’s role compromised EPA’s independent judgment.
Holding: Courts noted OMB’s review role but held EPA retained final authority.
Significance: Reinforced the balance between OMB oversight and agency autonomy.
Summary: Role and Limits of OMB Review
OMB review coordinates regulatory policy and reviews cost-benefit analysis.
It is authorized by Executive Orders, not statute.
OMB review is influential but does not legally replace agency rulemaking authority.
Agencies must comply with statutory mandates even if OMB recommends otherwise.
Courts generally defer to OMB’s role but ensure it does not infringe on agency discretion or due process.
Transparency around OMB review remains a contentious issue.
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