High-ranking White House officials have approved an Office of Management and Budget proposal to increase OMB's control over government policy-making by screening agencies' regulatory proposals before the rules are drafted the same way OMB now screens their budgets, Reagan administration officials confirmed yesterday.
OMB officials familiar with the plan expect President Reagan to approve it quickly, adding new weight to OMB's authority by allowing it to look over the shoulders of executive-branch officials as they plan and draft regulations, many of which are mandated by Congress or the courts.
Since 1981, a Reagan executive order has given the budget agency the power to review and request changes in proposed and final regulations from all agencies except the independent regulatory commissions.
The new policy would expand that role, giving OMB another crack at a proposed rule -- before an agency even begins drafting it -- and expanding the universe of rules under OMB's control to include those "likely to establish an important new policy or legal precedent or . . . of unusual interest to the agency head, other federal agencies, the director of OMB or the public," according to a paper prepared in connection with the proposal, which was discussed by the Cabinet Council on Economic Affairs last week.
A knowledgeable OMB official said he expects a formal announcement of the new procedures before Christmas.
OMB now receives formal semiannual "regulatory calendars" in which each agency lists its planned rules, but these documents have little, if any, binding effect on the agencies. The new proposal would give OMB a role in approving these documents, and make the documents as binding as agency budgets are now.
Before the Reagan administration took office, regulations by executive-branch agencies would be drafted within the agency, then published in the Federal Register as "proposed rules" on which the public could comment.
In 1981, OMB was inserted into this process, reviewing proposed and final rules before they were published under the authority of Reagan's executive order and legislation passed in the last year of the Carter administration.
All Cabinet agencies except the Defense Department would be subject to the new policy; most DOD regulations are related to military procurement and as such would be exempt, an OMB official said. The policy would also apply to the Environmental Protection Agency, the Equal Employment Opportunity Commission, the General Services Administration, the Office of Personnel Management and the Veterans Administration.
It would still not apply to independent regulatory agencies, such as the Federal Communications Commission and the Federal Trade Commission.
The 1981 executive order exempted rules from review if the OMB review would conflict with judicial or statutory deadlines; the new proposal, according to the "talking points" paper, singles out rules with such deadlines as "priority regulatory actions" subject to early review by OMB.
According to the paper, "Under this Bulletin, the principal executive branch agencies will describe their proposed priority regulatory activities, including pre-rulemaking activities. These proposals will be reviewed like agency budget submissions, and will be compiled for publication in April as the Administration's Regulatory Program for the coming year."
"The purpose of this is for this administration this year and subsequent administrations . . . to say what they're all about and what purposes, objectives and priorities they have in rulemaking," said the OMB official. "The purpose is not for the administration to say it to itself but to Congress and the public."
However, Shannon Ferguson, technical director of OMB Watch, a private group that monitors OMB's actions, said the proposal would "obviate the need for public comment on a rule . . . . "