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The Office of Management and Budget (OMB) may not get as much attention as other Cabinet-level agencies like the Departments of Defense and the Treasury, but that doesn’t mean OMB is any less important.  In fact, OMB plays a critical role in managing the operations of the federal government and the budget process.  More so, OMB is responsible for reviewing regulations that shape Americans’ daily lives.  So, how does OMB do this?

The History of OMB

OMB’s origins date back to 1921, when the Budget and Accounting Act of 2021 established the Bureau of the Budget at the Department of the Treasury.  The bureau was eventually moved to the Executive office of the President in 1939, where it was reorganized into the Office of Management and Budget in 1970.

OMB Today

Comprised of nearly 500 career staff, The mission of OMB is to “assist the President in meeting policy, budget, management, and regulatory objectives and to fulfill the agency’s statutory responsibilities.”  OMB mainly carries out this mission through 5 main functions:

1. Preparing a budget proposal to Congress;
2. Supervising executive branch agencies;
3. Reviewing all rulemaking and regulatory actions;
4. Reviewing agency testimony, legislative proposals, and other communications with Congress; and
5. Clearing Presidential Executive Orders.

Current Leadership

The organization is led by three-Senate confirmed positions: Director, the Deputy Director, the Deputy Director for Management.  The current Acting Director of OMB is Shalanda Young, who was confirmed as Deputy Director in March 2021.  The Biden Administration’s latest nominee for OMB Director is Kiran Ahuja, who previously served as Chief of Staff of the Office of Personnel Management and Executive Director of the White House Initiative on Asian Americans and Pacific Islanders during the Obama Administration.   While Ahuja, was favorably reported by the Senate Homeland Security and Governmental Affairs Committee, the Senate has yet to schedule a floor vote to consider her nomination.

Extension of the President with Congress

OMB play 3 key roles for the President as the Administration interacts with Congress:  the budget, statements on legislation, and the Congressional Review Act. 

Budget.  While the Presidential budget submission to Congress typically happens around February each year, OMB is active long before the annual tome hits the streets.  OMB works on average six months prior by sending budget instructions to agencies and later reviewing and analyzing agencies’ formal budget proposals.  Additionally and throughout the year, OMB provides guidance on a range of budgetary topics, including government shutdowns, continuing resolutions, and agencies use of discretion with mandatory spending.

SAPs.   OMB prepares Statements of Administration Policy (SAPs) on any pending legislative proposals that are not related to appropriations that communicate the President’s position on the affected legislation.  SAPs typically serve as a strong indicator of whether the President will veto or sign a bill into law.  OMB also reviews and clears congressional testimony, congressional correspondence, and draft bills from the agencies to ensure the documents are aligned with the Administration’s agenda.

Congressional Review Act.  The Congressional Review Act (CRA) is an oversight tool Congress can use to overturn a rule by a federal agency or department.  OMB is tasked with determining whether a rule is considered a “major rule” under the CRA.  In the case of major rules, Congress can pass a joint resolution of disapproval, which would veto the rule if signed into law by the President or approved by two-thirds of both chambers of Congress.

Role in Rulemaking

OMB plays a pivotal role in rulemaking, primarily through the Office of Information and Regulatory Affairs (OIRA).  Like its parent agency, OIRA is currently without a permanent leader; former National Labor Relations Board member Sharon Block has been serving as OIRA’s Acting Administrator since April 2021.  Under the current framework, OIRA is charged with reviewing all regulatory actions and determining whether the regulations are “significant” or “economically significant,” meaning they have an annual effect on the economy of $100 million or more.  For rules deemed significant and economically significant, however, agencies must submit several documents, including the draft text of the rule, an explanation of how the rulemaking will address a particular need, the potential costs and benefits of the rule, and in the case of rules considered economically significant, a regulatory impact analysis.

After receiving all necessary documents from agencies on significant rules, OIRA has 90 calendar days to review, with the option of extending the review period for one time by up to 30 days.  OIRA then proceeds to review the agency’s documents and return the rule to the agency in one of three ways:

1. Consistent without change.  This means OIRA did not alter the proposed rule.
2. Consistent with change.  This means OIRA generally agrees with the intent of the rule but made some substantive changes. This is the most common type of action OIRA takes.
3. Returned.  This means OIRA has serious concerns with the agency’s proposed rule and does not approve the publication of a Notice of Proposed Rulemaking (NPRM). Returned rules are always accompanied by a return letter which is posted on OIRA’s online docket.   An example of a returned letter is a 2002 letter to the Office of Personnel Management rejecting proposed changes to the Federal Employee Health Benefits Program due to concerns over cost measurement and accounting principles.

Once OIRA has completed its review process, the proposed rule is published in the Federal Register in the form of a NPRM. The rule is opened to a public comment period generally lasting 60 days.  When the public comment period concludes, the agency makes any changes to the rule and resubmits it to OIRA for another round of review. Again, OIRA has 90 days to conducts its review process. When OIRA completes its final review, the agency may set a date for promulgation of the rule and publish the final rule in the Federal Register.  Members of the public can track rules under the review of OIRA at www.reginfo.gov.

Does OMB Matter?

Absolutely.  Even if OMB may not be mentioned as frequently as other agencies, its power cannot be understated.  OMB oversees a number of multi-trillion-dollar budgets that impact every aspect of American life, and OMB’s role in supervising federal agencies means it’s more or less in charge of 4.3 million federal employees.  Based on the goals of the Administration, OMB is an important partner with Congresson how much will be spent on health, defense, housing, and other key areas.

Furthermore, OMB’s role in coordinating and reviewing regulatory action makes it a key player in the day-to-day actions in government.  Whether it pertains to Medicare reimbursement, FDA user fees, price transparency, or otherwise, all rulemaking and regulatory action is subject to OMB’s review.  Despite a lack of attention, OMB’s impact is far-reaching.

Did You Know?

Did you know that you can meet with OMB?  OIRA has an open door policy, which means the office takes meetings with outside stakeholders on regulations under review.  Meeting participants and materials are publicly disclosed and provide an interesting window into additional input the agency receives beyond formal written comments on the rule.  This month’s hot topic appears to be the physician fee schedule, among other health care related ruled.

A hallmark of President Joe Biden’s first 100 days in office were 52 executive orders aimed at reversing the previous Administration’s actions and addressing the COVID-19 pandemic.   In comparison, Donald Trump had issued 39 executive orders in his first 100 days, while Barack Obama and George W. Bush respectively clocked in at 34 and 13.  Given this trend for new Administrations to issue more and more executive orders, it’s no surprise why people are asking just what executive orders are and why they matter.

What Is an Executive Order?

An executive order is an official, legally binding mandate passed down from the President to agencies under the executive branch that gives agencies instructions on how to interpret and carry out federal law.  Executive orders are printed and numbered consecutively in the Federal Register, alongside other federal regulatory actions.  Additionally, executive orders have the force and effective of law, so as long as the order is based on power vested in the President by the US Constitution or delegated to the President by Congress.

While the Constitution does not contain the term “executive order,” it does provide broad authority for the President to issue executive directives.  This authority derives from the “vesting clause” of the Constitution, which grants the President “executive power,” which has come to refer to the administrative actions of running the federal government.

Notably, executive orders are not legislation, and they do not require approval from Congress.  However, Congress may pass legislation that might make it difficult, or even impossible, to carry out the order, such as removing funding necessary to implement the order.  Congress can also pass legislation to override an executive order, although this legislation would be subject to a presidential veto.  Only a sitting US President has the authority to overturn an existing executive order by issuing another executive order.

Important Examples of Executive Orders

Many impactful executive orders have been issued of the years – here are a handful of them:

• Abraham Lincoln suspended the writ of habeas corpus during the Civil War via executive order in 1861.  Lincoln cited his authority to issue the executive order under the powers under the Constitution’s Suspension Clause, which states, “the privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion and invasion the public safety may require it.”  Later, Lincoln issued two executive orders that comprised the Emancipation Proclamation, which he justified under wartime powers.
• Franklin Roosevelt established internment camps during World War II via an executive order.  He also used an executive order to create the Works Progress Administration.
• Harry Truman signed an executive order in 1948 to end segregation in the armed forces.
• Dwight Eisenhower used an executive order to put the Arkansas National Guard under federal control and to enforce desegregation in Little Rock, Arkansas in 1957.

Biden’s Executive Orders on Health Care to Date

President Biden’s executive orders so far have focused on the COVID-19 pandemic, including creating a response coordinator and requiring masks in airports.  Additionally, he established an additional special enrollment period via healthcare.gov, and set up a health equity task force to address the needs of communities of colors and underserved populations.

So, Do Executive Orders Really Matter?

The answer is…it depends.  Historically, most executive orders have been for administrative purposes, such as requesting reports or forming task forces.  Beyond that, the impact of an executive order is limited to both the power of the President and the law.  For instance, President Donald Trump’s executive order to construct a border wall along the US southern border was technically meaningless because only Congress has the power to appropriate funds for border wall construction.

In practice, however, the impact of executive orders can be profound.  Even if executive orders do not change federal law, they serve as indicators of how the Executive Branch can be reshaped to carry out federal law in a way that reflects an Administration’s priorities.  While the Trump Administration’s executive order on the border wall did not immediately spark new construction on the southern border, it did represent a shift in how the executive branch carries out immigration law that Biden Administration has had a tough time reversing.  For instance, many federal agencies began to view legal immigration as something to restrict, contributing to a slowdown in legal immigration and changes personnel policies within relevant agencies.

Biden Makes Sweeping Health Care Proclamations in Address to Congress

President Biden declared “health care should be a right, not a privilege” in his April 28 address to Congress, where he formally unveiled the American Families Plan.  This proposal would make $2 trillion in investments to education, childcare, and paid leave, as well as make permanent the American Rescue Plan’s two-year increase in Affordable Care Act (ACA) premium tax credits.  During the address, the President also voiced a commitment to allow Medicare to directly negotiate with drug manufacturers on prices, which is not included in the American Families Plan.  Biden said the savings accrued by empowering Medicare to negotiate on drug prices could be used to strengthen the ACA and expand Medicare coverage, hinting at previous calls to lower the Medicare eligibility age to 60 and create a public option.

CDC Loosens Guidance on Wearing Masks Outdoors

On April 27, the CDC updated its guidance to say vaccinated Americans do not need to wear masks when outdoors, except when in large crowds.  Masks are still recommended for vaccinated people in indoor public spaces, however.  The updated guidance comes after the US reached a milestone of 50% of adults at least partially vaccinated on April 18 as well as calls from public health experts to remove outdoor mask mandates.  On April 28, National Institute of Allergy and Infectious Diseases Director Anthony Fauci said “more liberal guidelines” could be down the pike as vaccinations continue and infection levels drop.

CMS Proposes FY22 IPPS, Boost Residency Slots

CMS proposed a 2.8% rate increase in the agency’s Fiscal Year 2022 Inpatient Prospective Payment System (IPPS) rule on April 27.  The proposal would also add 1,000 physician residency slots in accordance with last year’s Consolidated Appropriations Act.  To advance health equity, the proposal seeks comment on ways CMS can improve reporting of health disparities and develop a health equity score measure.  Hospital stakeholders including the American Hospital Association reacted positively to a provision that would strike a requirement for hospitals to report their median payer-specific charges negotiated with Medicare Advantage plans.

GOP Lawmakers Come Together for Vaccine Ad

A group of Republican members of Congress who are also health care practitioners released a video on April 27 urging the public to get vaccinated against COVID-19.   Among the 10 Republicans featured in the video are Sen. John Barrasso (WY), a physician, Rep. Buddy Carter (GA), a pharmacist, and Rep. Brian Babin (TX), a dentist.  In the video, the lawmakers emphasized the vaccines’ safety and effectiveness, and they framed vaccinations as a step towards returning to normal life.  The video’s release follows numerous reports of high levels vaccine hesitancy among Republican men, which some public health officials fear could be a major obstacle to achieving herd immunity.

New Census Data Give GOP Upper Hand in Redrawing Districts

The latest data from the US Census Bureau shows a continuation in migration patterns towards the South and the West.  States in the Northeast and Midwest including New York, Pennsylvania, Ohio, Michigan, and Illinois, will each lost one House seat, while Oregon, Colorado, Montana, North Carolina, and Florida will each gain one seat.  The census data comes as many states across the country prepare to draw new congressional districts.  Many of the states that have gained a House seat are under Republican control, meaning the GOP will determine the redrawing of a plurality of new congressional districts.

ICYMI: DC Has a New Underground Tunnel

It’s not just the US Capitol Complex and Metrorail system that have underground tunnels in the Washington, DC.  DC Water just completed work on a 5-mile long, 23-foot-wide tunnel under the city that will help prevent sewage overflows in the Anacostia River and stop flooding that has plagued neighborhoods like Bloomingdale and Le Droit Park in recent years.  The tunnel was constructed by an over 360-foot boring machine called “Chris.”  DC Water hopes the tunnel will help make the Anacostia River open to swimming and fishing in the future. (michaelpalance.com)