This past Wednesday the U.S. Senate Committee on Homeland Security and Governmental Affairs held a hearing for three nominees including Professor Neomi Rao of George Mason’s Antonin Scalia Law School. As this blog has reported, Rao is the nominee to be Administrator of the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB). She has the support of a diverse group of constitutional and administrative law scholars.
During a week when much of Washington has been mesmerized by congressional investigations into Russia’s influence on the 2016 elections, one might have expected any congressional hearings on Executive Branch issues to be tinged with cynicism, at least by the minority party. Not so in the examination of Professor Rao.
Professor Rao received questions from Senators on a wide scope of regulatory-related issues, ranging from her views on the President’s one-in-two-out executive order to the propriety of cost-benefit analysis for deregulatory, as well as pro-regulatory, efforts. She appeared well-prepared to discuss each topic the Committee raised, which Senators from both parties seemed to appreciate.
Professor Rao’s testimony got off to a strong start with her narrative about her parents’ arrival to the U.S. as immigrants. They had little but worked hard to instill values like integrity and a commitment to service. Senator Heidi Heitkamp (ND) in particular seemed to connect with Professor Rao’s background and temperament. During her turn to question Rao, Senator Heitkamp referenced the women’s similar experiences in both having lost a parent at too young of an age and the Senator particularly took note of the overwhelming support Rao enjoys from her family.
During the substantive portion of her opening remarks, Professor Rao offered her view of OIRA’s mission. She described it as to “improve the quality of decision-making in administrative agencies through regulatory review and the coordination of information policy.” In addition, Rao believes that OIRA should “ensure that administrative agencies follow the law, base their decisions on the best possible economic and technical analysis, and fulfill presidential priorities.” Professor Rao noted she had been “struck by the consistency of the principles guiding the work of the Office across Administrations.”
Chairman Ron Johnson (WI) did not have many questions for Professor Rao. But he did inquire about her view of President Trump’s Executive Order requiring agencies to eliminate two regulations for each new significant regulation they promulgate. Chairman Johnson clearly supports the order, characterizing it as one of the few “subtractive” processes in a city he described as mostly “additive” due to regulations being layered on top of regulations being layered on top of statutes, etc . . . . You get the point.
Professor Rao agreed the order is an “important step” in reducing the “overall regulatory burden.” She described it as encouraging agencies to recommend the elimination of regulations that are ineffective or excessively burdensome. On this point Rao appeared to be like-minded with committee members from both parties. Ranking Member Claire McCaskill (MO) highlighted during her opening remarks her own efforts over the years to eliminate regulations that unduly hamper the work of American small businesses, farmers, and community banks.
One of the fieriest moments of the hearing came during Ranking Member McCaskill’s subsequent time for questions. Senator McCaskill asked nominees about the Department of Justice Office of Legal Counsel’s recent opinion addressing oversight requests for information by individual members of Congress. One nominee responded that he would answer such information requests only subject to the direction of his superior and under the advice of legal counsel. This response infuriated Sen. McCaskill and prompted concerned statements by multiple Senators throughout the remainder of the hearing.
Part of the contention over the OLC opinion may have been exacerbated by imprecision in various statements during the hearing about the exact content of the opinion. The nominee whose responses troubled the Senators indicated he had not read the opinion but nonetheless continued on to describe it as controlling guidance on how agencies should respond to oversight requests. Senator McCaskill at one point characterized the opinion as concluding that just because she is a Democrat she’s not entitled to conduct oversight of the Executive Branch. Neither characterization was quite right.
The OLC opinion concludes that no individual member of Congress has authority to make mandatory oversight requests of executive branch officials. Rather, only a house of Congress or a committee and its chairman may conduct mandatory oversight enforceable through contempt proceedings or subpoenas. Yet executive branch officials may use their discretion to comply with individual members’ information requests. Professor Rao highlighted this point when she responded to Senator McCaskill’s line of questioning about the OLC opinion. Further, Professor Rao committed that she would use her discretion to do her best to provide information to the Committee. The Senators appeared to find Professor Rao’s response satisfying; they declined to ask her any more questions about the matter.
During Senator Rob Portman’s (OH) questions, he turned attention to the bipartisan Regulatory Accountability Act (RAA), which the Committee reported out last month. Senator Portman asked Professor Rao whether she supported the Act’s requirement that independent agencies engage in more systematic cost-benefit analysis. Rao said, yes, in principle, she supports independent agencies engaging in the same type of cost-benefit analysis as executive agencies. In response to Senator Portman’s questions, Rao also acknowledged that the Act’s requirement of retrospective review of costly regulations is an important issue because pre-promulgation scoring of potential regulatory impact really is just predictive. Finally, she committed to working with the Committee on its efforts to get the RAA through the enactment process.
Of any Senator, by far Senator Heitkamp engaged in the most sustained discussion with Professor Rao about her nomination and her regulatory views. At the outset of her questions Senator Heitkamp expressed her belief that the one-in-two-out executive order was gimmicky and could pose problems where agencies are subject to outdated statutes requiring a certain number of regulations to remain on the books. She admonished Rao that the Committee believed it was OIRA’s job to come to it with a list of recommended statutory changes to reduce regulatory burdens—intimating that the real move toward deregulation must come from Congress through statutory enactments, not through an executive order.
Senator Heitkamp next attempted to clarify more details about Professor Rao’s views on the proper way to impose cost-benefit analysis on agencies. In sum, Professor Rao agreed that cost-benefit analysis for deregulatory efforts should receive the same level of scrutiny as the analysis for pro-regulatory efforts. Rao also confirmed that indirect costs and benefits and non-monetized and qualitative benefits could play a role in cost-benefit analysis. Professor Rao noted that the current Administration already has indicated its support for these principles.
Finally, Senator Heitkamp encouraged Rao to work on making sure OIRA has the budgetary and staff resources it needs to complete its mission. Senator Heitkamp has long believed OIRA is understaffed; Professor Rao committed to investigating this concern. In closing the Senator expressed excitement about the expertise that Professor Rao would bring to the job.
During the remainder of the hearing Professor Rao faced less extensive questioning than the other two nominees. Senator Maggie Hassan (NH) verified that Professor Rao would ensure OIRA approves rules efficiently enough that agencies can be “agile.” Senator Hassan’s concern was motivated by her support for tougher regulation of synthetic drugs based on New Hampshire’s current opioid crisis. Senator John Hoeven (ND) asked Professor Rao to ensure that OIRA and OMB consider cost savings from public-private partnerships when they score the costs of federal projects. And Senator Steve Daines (MT) wanted Professor Rao to work with him on supporting legislative efforts to streamline retractions of regulations.
No Senator expressed concern with any of Rao’s testimony. Based on this week’s hearing, I anticipate—or at least hope—that Professor Rao will win confirmation with a comfortable bipartisan margin.