Improving OMB Regulatory Review

To date, the turn toward market-based regulatory tools in the environmental, health, and safety context has tended to focus on taxes, tradable permits, and information disclosure rules, With comparatively little attention devoted to environmental assurance bonds. This paper argues that environmental assurance bonding offers particularly attractive regulatory approach for contexts--such as the present state of nanoscale science and engineering--in which both the risk and the benefit sides of the regulatory equation are characterized by great uncertainty. Historical examples and existing scholarly analyses of environmental assurance bonding are reviewed, and the resulting lessons are situated within the larger debate over economic cost-benefit balancing and precautionary approaches to environmental law and policy. In particular, the paper argues that environmental assurance bonding displays the virtue of symmetric humility, paying due heed to the dynamism and complexity both of sociolegal systems such as markets and of biophysical systems such as aquatic ecosystems. ********** I. INTRODUCTION II. UNCERTAINTY AND COMPLEXITY IN THE ENVIRONMENT A. Sociolegal Systems B. Biophysical Systems III. UNCERTAINTY AND COMPLEXITY IN THE MIND A. Rationality in Social Choice B. Rationality in Individual Choice IV. THE PROMISE OF ENVIRONMENTAL ASSURANCE BONDING A. Environmental Assurance Bonding B. Symmetric Humility V. CONCLUSION I. INTRODUCTION Human history becomes more and more race between education and catastrophe. H.G. Wells, Outline of History (1920) On January 30, 2009, U.S. President Barack Obama issued memorandum to the heads of executive departments and agencies expressing an intention to study and revise the manner in which the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) conducts regulatory impact review, including economic cost-benefit analysis of proposed rules. He wrote: The fundamental principles and structures governing contemporary regulatory review were set out in Executive Order 12866 of September 30, 1993. A great deal has been since that time. Far more is now known about regulation--not only about when it is justified, but also about what works and what does not. Far more is also known about the uses of variety of regulatory tools such as warnings, disclosure requirements, public education, and economic incentives. Years of experience have also provided lessons about how to improve the process of regulatory review. In this time of fundamental transformation, that process--and the principles governing regulation in general--should be revisited. I therefore direct the Director of OMB, in consultation with representatives of regulatory agencies, as appropriate, to produce within 100 days set of recommendations for new Executive Order on Federal regulatory review. Among other things, the recommendations should offer suggestions for the relationship between OIRA and the agencies; provide guidance on disclosure and transparency; encourage public participation in agency regulatory processes; offer suggestions on the role of cost-benefit analysis; address the role of distributional considerations, fairness, and concern for the interests of future generations; identify methods of ensuring that regulatory review does not produce undue delay; clarify the role of the behavioral sciences in formulating regulatory policy; and identify the best tools for achieving public goals through the regulatory process. Under pressure from nongovernmental organizations such as the Center for Progressive Reform, (1) the Executive Order review process was opened up for broader public comment. The resulting input suggested that, despite the President's suggestion that a great deal has been learned about the design and impact of regulations, civil society remains deeply split regarding the desirability of regulatory cost-benefit analysis (CBA) as tool for evaluating proposed policies. …

Jim Tozzi has for several decades been among the most dedicated and perceptive commentators on the White House Office of Information and Regulatory Affairs (OIRA). Indeed, Tozzi is arguably better suited than anyone to be the keeper of the OIRA flame: from his position in charge of the Office of Regulatory and Information Policy, OIRA’s predecessor organization, Tozzi contributed to the development of Executive Order (EO) 12291 and then stepped in as OIRA’s first Deputy Administrator. Since that time, he has been a steadfast defender of OIRA’s critical role in bringing rigorous analysis, quality control, and policy discipline to Executive Branch regulation. I share Tozzi’s view, and indeed that of all former OIRA officials I have spoken with, of OIRA’s importance to the regulatory state. Preservation of the strength and independence of the office is to me the principal criterion by which policy proposals that effect OIRA should be judged.

The Office of Information and Regulatory Affairs (OIRA) is the nation's regulatory overseer. In Valuing Life, Cass R. Sunstein draws on his firsthand experience as the Administrator of OIRA from 2009 to 2012, to argue that we can humanize regulation - and save lives in the process. As OIRA Administrator, Sunstein oversaw regulation in a broad variety of areas, including national security, immigration, energy, environmental protection, and education. This background allows him to describe OIRA and how it works - and how it can work better - from an on-the-ground perspective. Using real-world examples, many of them drawn from today's headlines, Sunstein makes a compelling case for improving cost-benefit analysis, a longtime cornerstone of regulatory decision-making in this country, and for taking account of variables that are hard to quantify, such as dignity and privacy. He also shows how regulatory decisions about health, safety, and life itself can benefit from taking into account behavioral and psychological studies, including new findings about what scares us, and what does not. By better accounting for people's fallibility, Sunstein argues, we can create regulation that is simultaneously more human and more likely to achieve its goals. In this highly readable synthesis of insights from law, policy, economics, and psychology, Sunstein breaks down the intricacies of the regulatory system and offers a new way of thinking about regulation that incorporates human dignity.

Performance of the U.S. Office of Management and Budget's Revised Race and Ethnicity Categories in Asian Populations*

We cannot afford decades of waiting to recognize that America's children are the nation's future and a national responsibility, Ms. Hufstedler points out. While the whole village may be all that is needed to rear a single child, the whole nation is needed to educate all our children. WHEN I WAS appointed the nation's first secretary of education by President Carter, I did not know what would be entailed by my moving from the cloister of the federal appellate court to the maelstrom of Washington, D.C. I quickly found out. The immediate tasks were formidable. Despite chronic shortages of office space in the District, room for the department had to be found. More than a hundred educational programs had to be moved from other departments and agencies, together with some of the program staff members. Fewer employees were to be transferred to the new department than had managed the programs in their original homes, and, because a federal hiring freeze was in place, intense negotiations were required to obtain existing employee vacancies from other departments and agencies. Those vacancies were necessary to staff the essential offices for any Cabinet-level department. Simultaneously, potential candidates for Presidential appointments had to be identified and interviewed for each of the offices and program areas established by the legislation that created the department. Every nominee had to be first-rate; collectively, the nominees had to reflect the diversity of America as far as practicable. It was necessary to call upon the good offices of seasoned public servants to assist in the transition. The department received help from the personnel office of the White House and from temporary staff members from other departments. But we needed even more assistance, so I turned to those outside of Washington who had long experience with the federal government and a deep commitment to public service. Former secretaries of the Department of Health, Education, and Welfare (HEW) and former commissioners of education gave very helpful information and suggestions. They also described a number of the pitfalls -- pit by pit. Richard Beattie, former general counsel for HEW, was persuaded to return to Washington from New York to be a key leader in the transition process, despite disruptions to his family life and his career. Richard Gilman, president of Occidental College, took a leave of absence to become my interim special assistant. Liz Carpenter, formerly Lady Bird Johnson's press secretary and a 30-year veteran of the Washington press corps, left the Johnson library and returned to Washington to take on the public affairs tasks for the department. (Thereafter she received a Presidential appointment to undertake those and other broader duties for the department.) Even while the department was being formed, all the education programs and the other tasks allotted to it still had to be managed, even before the nominees for Presidential appointments had been confirmed and before personnel from other departments could be transferred. The budgetary issues had to be addressed immediately because the organization of the department had occurred at the pass back, i.e., the time in the federal budget cycle when the Office of Management and Budget (OMB) gives each department and agency the budget targets that OMB recommends to the President. Those budget recommendations were very detailed, encompassing each program and office under the department's jurisdiction. If a department head wanted to change some of the recommended targets, he or she had to appeal through the OMB hierarchy to revise the targets. Any subsequent dissatisfaction with the outcome of the appeals to OMB had to be addressed by further appeals to the President and Vice President. Because the department was still being formed, it was incumbent on me to carry those appeals through OMB and to the President and Vice President. …

Public management scholars often claim that agency competition provides an effective institutional check on monopoly authority, and hence, leads to improvement of administrative performance in public sector agencies. This logic was central for creating the Congressional Budget Office (CBO) in 975 to challenge the policy information provided by the Office of Management and Budget (OMB). We challenge this conventional wisdom by demonstrating that CBO has failed to enhance the quality of U.S. fiscal policy analysis on its own terms; nor has it spurred improvements in OMB’s performance. Our empirical results indicate that the quality of OMB’s fiscal projections has often deteriorated since the establishment of CBO as a rival bureau. We also show that both public and private information is being shared by these agencies to produce a similar caliber of task outputs. The broader implications of our study indicate that although politicians face incentives to employ agency competition in governmental settings, this type of bureaucratic strategy does not necessarily enhance the quality of administrative performance.

Objectives. To evaluate racial disparities when examining race at a more granular level than the broader 1997 Office of Management and Budget (OMB) categories. Methods. We examined HIV diagnoses in Hawaii during 2010 to 2022 by OMB race/ethnicity categories and an 18-category granular race/ethnicity variable that included the 10 most frequent Asian and Native Hawaiian/other Pacific Islander groups. We used multivariable logistic regression, adjusting for potential confounders. Results. During 2015 to 2022, using OMB race/ethnicity data and White people as the comparison group, we found that Asians were the only group at increased odds (adjusted odds ratio [AOR] = 3.69; 95% confidence interval [CI] = 1.86, 7.33) for late-stage HIV diagnosis. Using granular race/ethnicity and with White people as the comparison group, we found that Filipinos (AOR = 5.42; 95% CI = 2.27, 13.0), Asians with no ethnicity data (AOR = 8.21; 95% CI = 3.20, 21.06), and Pacific Islanders other than Native Hawaiians (AOR = 4.02; 95% CI = 1.10, 14.63) were at increased odds. Conclusions. Disaggregating racial/ethnicity data revealed important disparities in late-stage HIV diagnosis that would otherwise be obscured. Public Health Implications. Identification of racial disparities using granular data enables more targeted interventions to reduce late-stage HIV diagnoses and to improve health outcomes. (Am J Public Health. 2025;115(10):1671-1680. https://doi.org/10.2105/AJPH.2025.308192).

Although Congress has just completed action on spending bills for fiscal year 1990, which started two months ago, federal agencies are finishing the budget submission for FY 1991 that President Bush sends to Congress in January. Making this complicated process even more difficult is a new system devised by the Office of Management and Budget (OMB) that is apparently causing many federal agencies to rethink their budgeting strategy.About a year and a half before the start of a new fiscal year OMB and federal agencies start preparing the budget—a multivolume report setting the future course and identifying the priorities for the administration. OMB, a part of the Executive Office of the President, is crucial in determining spending priorities. It is difficult to overemphasize the importance of OMB, yet it is an agency which maintains a very low profile (often refusing to testify before congressional committees).

Geotechnical engineers can no longer ignore the benefits of performing risk assessments. Engineers from both the government and private sectors encounter the need to perform or review risk assessments for constructed facilities with increasing frequency. In the United States, the federal government is unlikely to appropriate funds for major infrastructure projects unless a risk assessment has been performed. Similarly, any major dam rehabilitation for a federal agency requires a thorough examination using risk assessment tools and techniques. In fact, the U.S. Office of Management and Budget (OMB, 2013) states:Project managers when developing the cost, schedule, and performance goals on developmental projects with significant risk must, therefore, provide the agency Executive Review Committee (ERC) with risk-adjusted and most likely cost, schedule, and performance goals. Without the knowledge of the risks involved managers at all levelsagency, Office of Management and Budget (OMB) and the Congress-cannot make the best decisions for the allocation of resources among the competing investments.

The Centre for Medicines Research (CMR) in the UK has produced a publication based on its 17th workshop that dealt with quality in the regulatory process [1], which was a logical sequel to the 16th workshop on the clinical dossier [2]. In some ways, it is a companion piece to the recent EMEA/IFAPP conference [3]. As stated in the foreword, the quality of the review process is inseparable from the quality of the submitted dossier and, in turn, the latter depends on the quality of the work performed. However, this simplistic linkage fails to differentiate between the factual basis of the work and of the dossier, on the one hand, and the opinions expressed by experts and the decision-making process in the regulatory review, on the other. After all, the same dossier is reviewed by different regulatory agencies, and the fact that each may identify and/or focus on one or two different issues from the others surprises people in the industry, who have seen this scenario many times. Possible reasons for any divergence was illustrated by the first contribution describing the findings of a CMR International Study. In 1999, the CMR sent a questionnaire to ten major regulatory authorities, of which nine responded. While most agencies provided training for their reviewers and collaborate with each other in training, there was a marked difference in training for external experts and advisory committee members, who make the decisions. Only one agency provided such training. Another difference in practice between authorities was the fact that, in half the cases, Advisory Committees reviewed only selected dossiers, while in the rest all were reviewed. In six authorities, the reviews only covered the assessment reports and only in one was the complete dossier reviewed. Five agencies have extensive contact with sponsors during development and four during the review process. One agency has no contact with the sponsor during development and another has no contact during the review process. A second paper presented an analysis of the outcomes of the European Union Centralized Procedure between 1995 and 1999. The main findings were the rise in the number of negative outcomes, primarily due to withdrawals of the submissions when the applicant received the list of questions, peaking in 1998 (41%) and falling slightly in 1999 (31%). The major negative decisions were based on clinical efficacy, mainly due to their design and the doubtful the robustness of pivotal data, and on clinical safety, where increased mortality and other serious adverse events activated those decisions. There was a positive concordance between the Food and Drug Administration (FDA) and the EMEA on positive decisions, but additionally the FDA approved 35% of applications that had a negative EMEA outcome. The FDA’s recent actions were presented in another paper that described the enhanced performance goals and the Good Review Practice (GRP) initiative. The latter was launched in 1994 and it has examined clinical holds and refusals to file and is setting guidelines in order to achieve consistency and uniformity. It has provided training for Advisory Committee members, although it is not mandatory. The syndicate groups and the workshop discussion addressed the differences in quality assurance methods employed by various national authorities and the impact of them. It also looked at the quality of the dossier on the quality of the review process. The key recommendations included global standards, clarification of questions during the review process, and regulators using review templates. The industry should check the quality of the dossier, provide a ‘road map’ in dossiers to orientate reviewers, and provide early label proposals and supporting studies for them.

Thomas A. Scully became the administrator of the Centers for Medicare and Medicaid Services (CMS; previously the Health Care Financing Administration) in 2001. Before that, he was the president and chief executive officer of the Federation of American Hospitals, the trade association representing the nation's 1,700 privately owned and managed community hospitals and health systems. Before joining the federation, Mr. Scully was a partner in the Washington, DC, law firm of Patton Boggs, LLP, where his practice focused on regulatory and legislative work in healthcare. Before joining the law firm, Mr. Scully worked at the White House as deputy assistant to the President and counselor to the director of the Office of Management and Budget (OMB) and as associate director of OMB for Human Resources, Veterans and Labor. In these positions, he oversaw the fiscal policy and regulatory review of the Departments of Health and Human Services, Education, Labor, and Veterans Affairs. He also advised former President Bush on healthcare policy and Medicare and Medicaid payment reform. Mr. Scully has served on the board of directors of Oxford Health Plans and of DaVita Corporation, two of the nation's largest healthcare service providers. Mr. Scully holds a Juris Doctor from Catholic University of America and a bachelor's degree from the University of Virginia.

Both Republican and Democratic administrations make regulatory and funding decisions with close reference to benefit–cost analysis (BCA). With respect to regulation, there has been a great deal of academic discussion of BCA and its limits, but almost no attention has been paid to the role of BCA in government funding. That is a serious gap, not least in connection with climate-related risks, such as wildfire, drought, extreme heat, and flooding. Office of Management and Budget (OMB) Circular A-94 sets out guidelines for the BCA required when people are applying to many federal discretionary grant programs. Through Circular A-94, OMB has long required applicants to demonstrate that the benefits of their projects would exceed the costs. But under Circular A-94 as it stood for many years, efficiency-based BCA could produce results that fail to maximize welfare and that are also highly inequitable. The 2023 revision of Circular A-94 focuses more directly on welfare and equity, which are now – not uncontroversially – being brought directly into policy. At the same time, the new Circular A-94 raises fresh questions about how best to promote welfare, and to consider equity, in practice. This article explains the economic foundations for promoting welfare through distributional weighting – and how the old BCA guidance fell short. It then offers recommendations on how to operationalize distributional weighting on the ground specifically for government spending programs – and for BCA more broadly.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) was established to jumpstart the U.S. economy, create or save millions of jobs, spur technological advances in health and science, and invest in the Nation's energy future. The Department of Energy (Department) will receive an unprecedented $37 billion in Recovery Act funding to support a variety of science, energy, and environmental initiatives. The majority of the funding received by the Department will be allocated to various recipients through grants, cooperative agreements, contracts, and other financial instruments. To ensure transparency and accountability, the Office of Management and Budget (OMB) requires that recipients report on their receipt and use of Recovery Act funds on a quarterly basis to FederalReporting.gov. OMB also specifies that Federal agencies should develop and implement formal procedures to help ensure the quality of recipient reported information. Data that must be reported by recipients includes total funding received; funds expended or obligated; projects or activities for which funds were obligated or expended; and the number of jobs created and/or retained. OMB requires that Federal agencies perform limited data quality reviews of recipient data to identify material omissions and/or significant reporting errors and notify the recipients of the need to make appropriate and timely changes to erroneous reports. As part of a larger audit of recipient Recovery Act reporting and performance measurement and in support of a Government-wide review sponsored by the Recovery Accountability and Transparency Board, we completed an interim review to determine whether the Department had established a process to ensure the quality and accuracy of recipient reports. Our review revealed that the Department had developed a quality assurance process to facilitate the quarterly reviews of recipient data. The process included procedures to compare existing information from the Department's financial information systems with that reported to FederalReporting.gov by recipients. In addition, plans were in place to notify recipients of anomalies and/or errors exposed by the quality assurance process. While the Department has made a good deal of progress in this area, we did, however, identify several issues which could, if not addressed, impact the effectiveness of the quality assurance process.

Slowly but surely behavioral economics is changing both the way we understand the world and the way the world works, especially the world of business. In recent years, some of the most tangible changes have been emanating from the work of the Office of Information and Regulatory Affairs (OIRA), a US government agency, and the Behavioral Insights Team (BIT), a branch of the UK government. Both bodies are charged with applying ideas from behavioral economics to public policy. But, behavioral ideas apply to business as well as public policy. This chapter describes some of the foundation concepts in behavioral economics, and their application to business decision making and to business education, as well as to public policy.

Health Systems Need to Transform Data Collection to Advance Health Equity.