Strategic Interactions Between Administrative Agencies and the White House: A Welcome Look into the Black Box of the Executive Branch

Jennifer Nou, Agency Self-Insulation under Presidential Review, ___ Harv. L. Rev. ___ (forthcoming 2013), available at SSRN.

Perhaps the hottest topic in administrative law of late is the propriety of presidential influence on agency action.  To its credit, that literature distinguishes between the agencies and the White House as two distinct institutions that may not agree on particular regulatory outcomes.  But, the literature does not go much beyond this simple distinction in its picture of the executive branch, treating both White House and agencies as black boxes, each of which acts with a consistent purpose. At the same time, scholarship has focused on agencies as strategic actors vis-à-vis the judiciary, choosing methods of policymaking to minimize the potential for courts to interfere with that endeavor.  In “Self-Insulation under Presidential Review,” Jennifer Nou investigates the extent to which agencies might act strategically amidst resource constraints as a means of minimizing White House influence on their policymaking discretion.  In so doing, Nou considers the internal structure and decisionmaking processes of both agencies and the “institutional presidency” to paint a sophisticated picture of their interaction.  The result is an article that provides insight into the decisionmaking of both these institutions, and provokes much thought about how their interaction might affect administrative law.

Nou explicitly limits her investigation of White House influence to its formal review of agency rules, as mandated by various executive orders, which she dubs “presidential review.”  She makes clear that while the Office of Information and Regulatory Affairs (OIRA) coordinates such review, it can involve many entities, including those within the Executive Office of the President (EOP) and other agencies.  She begins by explaining why agency staff and in many cases agency heads can disagree with the preferences of the institutional President on many regulatory policy issues.  She next explains that, from an agency’s perspective, presidential review poses constraints similar to judicial review in that, generally, both require the agency to invest precious resources to avoid reversal of its decision.  But, she notes that presidential review is also costly for the executive branch reviewers; this cost allows agencies some strategic latitude to minimize its chances of policy reversal by increasing the White House’s costs of review, rather than by investing in more comprehensive and higher quality decision-making.  For example, agencies can avoid review altogether by simply abandoning a policy change, by making policy through adjudication and perhaps even by guidance document.1 They may be able to avoid review or minimize the level of scrutiny to which a rule is exposed by designating the rule as not economically significant or not significant at all, or by providing only opaque and general information about costs and benefits.  Finally, they may be able to parlay statutory deadlines or the end of a President’s term effectively to shorten the period for OIRA review, thereby decreasing the level of scrutiny.

Nou’s article becomes even more informative when she considers how agencies can use the structure and timing of White House oversight to help run the gauntlet of presidential review.  She provides perhaps one of the clearest and most detailed descriptions in the legal literature of how OIRA forwards rules to other agencies and offices in the Executive Office of the President (EOP), and the dynamics of resulting consideration as part of presidential review.  This description is not only valuable as support for her assertion that agencies can form coalitions with various entities within the Office of Management and Budget, EOP, and other agencies, but perhaps even more for those who write about the ability of the President to control White House influence on rulemaking and the extent to which the influence represents the President’s own policy preferences.  Nou uses this description to evaluate the extent to which such agency choices as midnight rulemaking and poor quality CBAs might reflect agency self-insulation from presidential review.

Despite Nou’s interest in focusing administrative law scholarship on constraints other than judicial review, for those like me who focus their writing on this traditional administrative law constraint, the most interesting part of Nou’s paper may well be her discussion of the implications of agency self-insulation for judicial review.   If one believes that courts should calibrate their level of scrutiny under hard look review to correspond with presidential influence, this paper identifies some interesting complexities in how courts might do so.   For example, Nou notes that agency attempts at self-insulation may reflect efforts to prevent the President from dictating policy outcomes that cannot be justified under statutorily relevant criteria.  I would add that it might also reflect agency reaction to the White House attempting to use the agency rulemaking as a means of obfuscating impacts that might generate a negative public reaction to a “raw” political choice by the President.  Contrary to the recent recommendation by Kathryn Watts,2 Nou’s recognition that self-insulation might signal inappropriate presidential influence suggests that courts should actually increase their level of scrutiny in the face of failed attempts by the agency to insulate a rule from significant White House influence.

All in all, “Agency Self-Insulation under Presidential Review” is a well-executed piece of scholarship that provides a bounty of information as well as both insightful and inciteful ideas about presidential influence on agency policymaking and agency reactions to such influence.

  1. Although current executive orders do not explicitly mention review of guidance documents, Nou cites a memo from OMB Director Peter Orszag indicating that “significant policy and guidance documents,” are subject to OIRA review. She notes, however, that review of such documents has been “much more limited and non-systematic in practice.” Jennifer Nou, Agency Self-Insulation under Presidential Review, ___ Harv. L. Rev. ___ (forthcoming 2013) (manuscript of 01-07-2013 at page 28). []
  2. Kathryn A. Watts, Proposing a Place for Politics in Arbitrary and Capricious Review, 119 Yale L.J. 2 (2009). []