Extending Regulatory Review Under Executive Order 12866 to Independent Regulatory Agencies ( 2019 )

(Slip Opinion)
Extending Regulatory Review Under Executive Order
12866 to Independent Regulatory Agencies
The President may direct independent regulatory agencies to comply with the centralized
regulatory review process prescribed by Executive Order 12866.
October 8, 2019
MEMORANDUM OPINION FOR THE COUNSEL TO THE PRESIDENT
You have asked whether the President may direct independent regulato-
ry agencies to comply with the centralized regulatory review process of
Executive Order 12866 of September 30, 1993, 3 C.F.R. 638 (1994) (“EO
12866”). EO 12866 requires all agencies to submit an annual regulatory
plan and agenda to the Office of Information and Regulatory Affairs
(“OIRA”) in the Office of Management and Budget (“OMB”). But it
exempts “independent regulatory agencies,” as defined in 44 U.S.C.
§ 3502, from the rest of the order, which requires agencies to submit
significant regulatory actions to OIRA for review. OMB has proposed that
the President eliminate that exemption and require independent regulatory
agencies to comply with all of EO 12866. 1
Article II of the Constitution vests “[t]he executive Power” in the Pres-
ident, who “shall take Care that the Laws be faithfully executed.” U.S.
Const. art. II, § 1, cl. 1; id. § 3. By vesting the executive power in the
President alone, the Constitution ensures that “a President chosen by the
entire Nation oversee[s] the execution of the laws.” Free Enter. Fund v.
Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 499 (2010). The Presi-
dent can hardly ensure that the laws are faithfully executed “if he cannot
oversee the faithfulness of the officers who execute them.” Id. at 484. The
President’s constitutional authority therefore extends to the supervision of
all agencies that execute federal law, including so-called “independent”
agencies.
Although the Supreme Court has held that Congress may insulate inde-
pendent agencies to some degree from presidential supervision, the pro-
1In preparing this opinion, we have solicited and considered the views of the Office of
Management and Budget. See Letter for Steven A. Engel, Assistant Attorney General,
Office of Legal Counsel, from Neomi Rao, Administrator, OIRA, and Mark Paoletta,
General Counsel, OMB (Mar. 7, 2018) (“OMB Letter”).
1
43 Op. O.L.C. __ (Oct. 8, 2019)
posed executive action would not test any statutory limits. Congress has
often provided that the heads of those agencies are removable only for
particular causes, such as “inefficiency, neglect of duty, or malfeasance in
office.” E.g., 15 U.S.C. § 41. But statutory restrictions on removal, stand-
ing alone, do not bar those agencies from complying with EO 12866;
indeed, the terms of such good-cause restrictions presuppose that the
President may supervise an agency head to ensure compliance with the
duties of office and with principles of good governance. Other structural
features associated with independent agencies, such as multi-member
governance, independent litigating authority, or open-meeting require-
ments, likewise do not preclude those agencies from complying with EO
12866. We therefore conclude that the President may direct independent
agencies to comply with EO 12866.
I.
Every President since Nixon has required systematic review of some
rulemakings to ensure that federal regulations “achieve legislative goals
effectively and efficiently” and do not “impose unnecessary burdens.”
Exec. Order No. 12044, 3 C.F.R. 152 (1979); see Curtis W. Copeland,
Cong. Research Serv., RL32397, Federal Rulemaking: The Role of the
Office of Information and Regulatory Affairs 5–6 (June 9, 2009) (“Role
of OIRA”) (describing Nixon, Ford, and Carter Administration pro-
grams); Harold Bruff, Presidential Management of Agency Rulemaking,
57 Geo. Wash. L. Rev. 533, 546–49 (1989) (same). In February 1981,
President Reagan took what is widely viewed as the decisive step in
establishing a “centralized mechanism for review of agency rule-
makings,” Elena Kagan, Presidential Administration, 114 Harv. L. Rev.
2245, 2277 (2001), by issuing Executive Order 12291, 3 C.F.R. 127
(1982) (“EO 12291”). EO 12291 required covered agencies to follow
general policies in issuing new regulations, “to the extent permitted by
law,” including that “[r]egulatory action shall not be undertaken unless
the potential benefits to society . . . outweigh the potential costs.” Id.
§ 2(b). The order further required agencies to submit to OMB an analysis
of the regulatory impact of any “major” rule, including its potential costs
and benefits. Id. § 3(a)–(c). In 1985, President Reagan also ordered
agencies to participate in an annual regulatory planning process. Exec.
Order No. 12498, 3 C.F.R. 323 (1986).
2
Extending Regulatory Review to Independent Regulatory Agencies
In September 1993, President Clinton issued EO 12866 “to reform and
make more efficient the regulatory process” and “to enhance planning and
coordination with respect to both new and existing regulations.” EO
12866, pmbl. Like its predecessor, EO 12866 directs covered agencies to
follow certain general principles, including cost-benefit principles, when
engaging in regulatory action, “unless a statute requires another regulato-
ry approach.” Id. § 1(a); see id. § 1(b)(6) (agencies should “adopt a regu-
lation only upon a reasoned determination that the benefits of the intended
regulation justify its costs”). Section 4 directs agencies to participate, “to
the extent permitted by law,” in an annual regulatory planning process.
Each agency, including “independent regulatory agencies,” must submit
to OIRA “an agenda of all regulations under development or review” and
an annual plan “of the most important significant regulatory actions that
the agency reasonably expects to issue in proposed or final form.” Id.
§ 4(b), (c). OIRA circulates each agency’s plan to other affected agencies;
if OIRA “believes that a planned regulatory action of an agency may be
inconsistent with the President’s priorities or the principles set forth in”
EO 12866, it must notify the agency and the President’s regulatory advis-
ers. Id. § 4(c)(3), (5).
Section 6 of EO 12866 requires each agency, other than “independent
regulatory agencies,” to submit to OIRA, before publication, a draft of
any proposed “significant regulatory action,” together with an “assess-
ment of the potential costs and benefits” of the proposed action and its
legal basis. Id. § 6(a)(3)(B)(ii).2 For any proposed regulatory action that is
expected to be “economically significant,” the agency must submit a more
detailed analysis of the potential costs and benefits and of reasonably
feasible potential alternatives. Id. § 6(a)(3)(C). Those requirements do not
apply if an agency is “obligated by law to act more quickly,” although an
agency must schedule its rulemakings to permit OIRA review “to the
extent practicable.” Id. § 6(a)(3)(D). OIRA must complete its review
within specified deadlines, id. § 6(b)(2), and an agency may not publish a
2 The order defines a “regulatory action” as “any substantive action by an agency . . .
that promulgates or is expected to lead to the promulgation of a final rule or regulation .”
EO 12866, § 3(e). A “rule” or “regulation,” in turn, is defined as any “agency statement of
general applicability and future effect, which the agency intends to have the force and
effect of law, that is designed to implement, interpret, or prescribe law or policy or to
describe the procedure or practice requirements of an agency,” subject to certain excep-
tions. Id. § 3(d).
3
43 Op. O.L.C. __ (Oct. 8, 2019)
proposed or final rule pending OIRA review, “[e]xcept to the extent
required by law,” id. § 8. During the review process, OIRA may circulate
the regulatory proposals to interested agencies and components of the
Executive Office of the President, such as the National Economic Coun-
cil. See Cass R. Sunstein, The Office of Information and Regulatory
Affairs: Myths and Realities, 126 Harv. L. Rev. 1838, 1854–59 (2013)
(“OIRA Myths and Realities”). If OIRA believes that an agency should
reconsider a proposed action, OIRA may return the action with “a written
explanation for [the] return setting forth the pertinent provision of [EO
12866] on which OIRA is relying,” and the agency may respond in writ-
ing if the agency disagrees. EO 12866, § 6(b)(3).
In practice, such “return letters” are rare. OIRA appears to have issued
only seven during the period between 1994 and 2000, and only twenty-
eight since July 2001—periods in which OIRA reviewed thousands of
proposed agency actions. See OIRA, OMB, Executive Office of the Presi-
dent, OIRA Return Letters, www.reginfo.gov/public/do/eoReturnLetters
(last visited Oct. 8, 2019); Copeland, Role of OIRA at 19. More common-
ly, OIRA, the agency, and any other interested agencies discuss sugges-
tions in an iterative revision process, with any disagreements percolating
up through interagency committees of increasingly senior officials. Sec-
tion 7 of EO 12866 provides for the President, or the Vice President
acting at the request of the President, to resolve any remaining “disagree-
ments or conflicts between or among agency heads or between OMB and
any agency,” “[t]o the extent permitted by law.”
OIRA is a repository of valuable rulemaking expertise, and its views
carry significant weight. See Sunstein, OIRA Myths and Realities, 126
Harv. L. Rev. at 1854–55. A wide range of commentators has recognized
that OIRA’s regulatory review process, which draws on the expertise of
the entire government, has come to provide an “essential mechanism to
ensure unity and coherence in execution of the law.” OMB Letter at 4. 3
3 See, e.g., Letter for Ron Johnson, Chairman, and Thomas R. Carper, Ranking Mem-
ber, Senate Committee on Homeland Security and Governmental Affairs, from Thomas
Susman, Director, Governmental Affairs Office, American Bar Association (“ABA”), Re:
Support for S. 1067, the “Independent Agency Regulatory Analysis Act of 2015” at 2–3
(July 23, 2015) (centralized review ensures that “regulatory policy . . . is responsive to the
interests of the public as a whole”); Sunstein, OIRA Myths and Realities, 126 Harv. L.
Rev. at 1850 (centralized review allows “extremely important and valuable” interagency
coordination); Sally Katzen, OIRA at Thirty: Reflections and Recommendations, 63
4
Extending Regulatory Review to Independent Regulatory Agencies
An agency may not publish or proceed with a proposed action (unless
otherwise required to do so by law) without addressing the concerns
expressed by OIRA or others during the review process, or elevating any
disagreements to the President. See EO 12866, § 8. But EO 12866 does
not authorize OIRA “to ‘approve’ or ‘disapprove’ a draft rule.” Copeland,
Role of OIRA at 14. Section 9 provides that “[n]othing in this order shall
be construed as displacing the agencies’ authorities or responsibilities, as
authorized by law.” See also EO 12866, pmbl. (providing that the order
“reaffirm[s] the primacy of Federal agencies in the regulatory decision-
making process” and that regulatory review “shall be conducted so as to
meet applicable statutory requirements and with due regard to the discre-
tion that has been entrusted to the Federal agencies”). Therefore, the
OIRA review process, while mandatory, is also a consultative one, im-
proving regulatory outcomes while preserving an agency’s statutory
discretion.
In adopting EO 12291, the Reagan Administration considered applying
OIRA’s regulatory review process to “independent regulatory agenc[ies],”
as defined in 44 U.S.C. § 3502. At the time, this Office approved the
legality of such a direction. See Memorandum for David Stockman, Di-
rector, OMB, from Larry L. Simms, Acting Assistant Attorney General,
Office of Legal Counsel, Re: Proposed Executive Order on Federal
Regulation at 7 (Feb. 12, 1981) (“Simms Memorandum”), reprinted in
Role of OMB in Regulation: Hearing Before the Subcomm. on Oversight
& Investigations of the H. Comm. on Energy & Commerce, 97th Cong.
152, 158 (1981) (“Role of OMB Hearing”). Even if Congress sought to
limit “[p]residential supervision” of independent agencies “on matters of
substantive policy,” we advised that subjecting them to the proposed
regulatory review process would be consistent with their independent
Admin. L. Rev. 103, 110 (2011) (centralized review results in “better coordinated and
coherent regulatory actions, and ultimately better decisionmaking”); American Bar
Association Section of Administrative Law and Regulatory Practice, Twenty-First Centu-
ry Governance: Improving the Federal Administrative Process: A Report for the Presi-
dent-Elect of the United States, 52 Admin. L. Rev. 1099, 1104–05 (2000) (centralized
review fosters “efficient, coordinated, yet reasonably open administration” and “pro-
mote[s] good government”); Christopher C. DeMuth & Douglas H. Ginsburg, White
House Review of Agency Rulemaking, 99 Harv. L. Rev. 1075, 1081 (1986) (centralized
review “encourages policy coordination, greater political accountability, and more
balanced regulatory decisions”).
5
43 Op. O.L.C. __ (Oct. 8, 2019)
status, because the order would preserve the agencies’ “substantive dis-
cretion to decide particular . . . rulemaking matters.” Simms Memoran-
dum at 10, 11. Ultimately, however, the Reagan Administration deter-
mined, for “policy reasons,” not to include independent agencies, even
though the Administration believed the President had the constitutional
power to do so. Role of OMB Hearing at 93–94 (quoting C. Boyden Gray,
Counsel to the Vice President); see also Peter L. Strauss & Cass Sunstein,
The Role of the President and OMB in Informal Rulemaking, 38 Admin.
L. Rev. 181, 202 (1986) (same).
In EO 12866, President Clinton preserved the exemption for “inde-
pendent regulatory agencies” from the centralized regulatory review
process. EO 12866, § 3(b).4 He did, however, require independent agen-
cies to submit to OIRA annual regulatory agendas and plans, which sum-
marize expected regulatory actions during the upcoming fiscal year. Id.
§ 4(b), (c). Sally Katzen, who was then the OIRA Administrator, later
explained that the President’s legal advisers believed it would have been
lawful to apply the entirety of EO 12866 to independent agencies, but the
Administration ultimately chose not to do so. Sally Katzen, OIRA at
Thirty: Reflections and Recommendations, 63 Admin. L. Rev. 103, 109
(2011).5
EO 12866 thus continues to exempt independent regulatory agencies
from the centralized regulatory review process. In the statutory definition
incorporated into EO 12866, Congress has identified nineteen such inde-
pendent agencies and included a catch-all clause for “any other similar
agency designated by statute”:
4 EO 12291 and EO 12866 both cite 44 U.S.C. § 3502(10) for the definition of exclud-
ed independent regulatory agencies. EO 12291, § 1(d); EO 12866, §§ 3(b), 4(c). In 1995,
Congress moved the relevant definition to 44 U.S.C. § 3502(5). See Paperwork Reduction
Act of 1995, Pub. L. No. 104-13, sec. 2, 109 Stat. 163, 165.
5 President George W. Bush amended EO 12866 twice, principally to reduce the Vice
President’s role, to instruct agencies to identify the specific market failure that any new
regulations seek to remedy, and to expand OIRA’s review of agency guidance docu-
ments. See Exec. Order No. 13258, 3 C.F.R. 204 (2003); Exec. Order No. 13422,
3 C.F.R. 191 (2008). President Obama revoked those modifications, see Exec. Order No.
13497, 3 C.F.R. 218 (2010), although OIRA continued its practice, which predated
President Bush’s orders, of reviewing agency guidance documents under EO 12866. See
Memorandum for the Heads and Acting Heads of Executive Departments and Agencies,
from Peter R. Orszag, Director, OMB, M-09-13, Re: Guidance for Regulatory Review
(Mar. 4, 2009).
6
Extending Regulatory Review to Independent Regulatory Agencies
[T]he Board of Governors of the Federal Reserve System, the Com-
modity Futures Trading Commission, the Consumer Product Safety
Commission, the Federal Communications Commission, the Federal
Deposit Insurance Corporation, the Federal Energy Regulatory
Commission, the Federal Housing Finance Agency, the Federal Mar-
itime Commission, the Federal Trade Commission, the Interstate
Commerce Commission, the Mine Enforcement Safety and Health
Review Commission, the National Labor Relations Board, the Nu-
clear Regulatory Commission, the Occupational Safety and Health
Review Commission, the Postal Regulatory Commission, the Securi-
ties and Exchange Commission, the Bureau of Consumer Financial
Protection, the Office of Financial Research, [the] Office of the
Comptroller of the Currency, and any other similar agency designat-
ed by statute as a Federal independent regulatory agency or commis-
sion.
44 U.S.C. § 3502(5). 6 Consistent with the catch-all clause, Congress has
deemed the U.S. International Trade Commission “an independent regula-
tory agency for purposes of chapter 35 of Title 44,” which includes the
provision quoted above. 19 U.S.C. § 1330(f ). Congress has also identified
other agencies as “independent” in their organic statutes. See, e.g., 12
U.S.C. § 1752a(a) (National Credit Union Administration); id. § 2241
(Farm Credit Administration). We understand that some of those agencies
regard themselves as independent regulatory agencies under section
3502(5).
II.
Our review of the President’s authority to direct independent regulatory
agencies requires consideration of the scope of his authority to supervise
the Executive Branch. Before addressing independent agencies, we first
examine the President’s constitutional authority to direct the departments
6 The statute expressly provides that the Federal Election Commission and the Gov-
ernment Accountability Office shall not be considered “independent regulatory agencies”
even if otherwise covered by the catch-all clause. 44 U.S.C. § 3502(1)(A), (B). In 1995,
Congress abolished the Interstate Commerce Commission (“ICC”) and provided that
references to the ICC, like the one in 44 U.S.C. § 3502(5), shall be “deemed to refer” to
its successor, the Surface Transportation Board. ICC Termination Act of 1995, Pub. L.
No. 104-88, § 205, 109 Stat. 803, 943.
7
43 Op. O.L.C. __ (Oct. 8, 2019)
and agencies that are currently subject to centralized regulatory review.
The source of the President’s authority to supervise those departments and
agencies bears directly upon his authority to direct independent agencies,
which are also within the Executive Branch.
A.
The “Constitution divided the ‘powers of the new Federal Government
into three defined categories, Legislative, Executive, and Judicial.’” Free
Enter. Fund, 561 U.S. at 483 (quoting INS v. Chadha, 462 U.S. 919, 951
(1983)). Article II vests all of “[t]he executive Power” in the President
and charges him alone with the responsibility to “take Care that the Laws
be faithfully executed.” U.S. Const. art. II, § 1, cl. 1; id. § 3. In carrying
out that charge, the President must depend on “the assistance of subordi-
nates,” Myers v. United States, 272 U.S. 52, 117 (1926), and Article II
includes specific provisions illustrating the President’s supervisory au-
thority. Thus, the President may “require the Opinion, in writing, of the
principal Officer in each of the executive Departments, upon any Subject
relating to the Duties of their respective Offices,” U.S. Const. art. II, § 2,
cl. 1, and he appoints all “Officers of the United States” with the advice
and consent of the Senate, subject to Congress’s power to vest the authori-
ty to appoint inferior officers “in the President alone, in the Courts of
Law, or in the Heads of Departments,” id. art. II, § 2, cl. 2.
The Supreme Court has repeatedly explained that “Article II confers on
the President ‘the general administrative control of those executing the
laws.’” Free Enter. Fund, 561 U.S. at 492 (quoting Myers, 272 U.S. at
164). As the Chief Executive, the President “may properly supervise and
guide” subordinate officers in “their construction of the statutes under
which they act in order to secure that unitary and uniform execution of the
laws which Article II of the Constitution evidently contemplated in vest-
ing general executive power in the President alone.” Myers, 272 U.S. at
135. According to Alexander Hamilton, executive officers “ought to be
considered as the assistants or deputies of the chief magistrate; and, on
this account, they ought to derive their offices from his appointment, at
least from his nomination, and ought to be subject to his superintend-
ence.” The Federalist No. 72, at 487 (Jacob E. Cooke ed., 1961).
In providing for presidential control over the Executive Branch, the
Constitution ensures not only that executive officers remain accountable
8
Extending Regulatory Review to Independent Regulatory Agencies
to the President, but also that the President remains accountable to the
Nation. See Printz v. United States, 521 U.S. 898, 922 (1997) (“The
insistence of the Framers upon unity in the Federal Executive—to ensure
both vigor and accountability—is well known.”); In re Aiken County, 645
F.3d 428, 439 (D.C. Cir. 2011) (Kavanaugh, J., concurring) (“‘What
Article II did make emphatically clear from start to finish was that the
president would be personally responsible for his branch.’” (quoting Akhil
Reed Amar, America’s Constitution: A Biography 197 (2005)).7 Those
principles are not empty formalities. The purpose “of the separation and
equilibration of powers in general, and of the unitary Executive in particu-
lar, was not merely to assure effective government, but to preserve indi-
vidual freedom.” Morrison v. Olson, 487 U.S. 654, 727 (1988) (Scalia, J.,
dissenting); see also Bond v. United States, 564 U.S. 211, 222 (2011)
(“The structural principles secured by the separation of powers protect the
individual as well.”). The President’s supervision of the Executive Branch
guarantees the people’s right to select, and hold accountable, the one
person responsible for the execution of federal law.
B.
In 1981, this Office reviewed the proposed EO 12291 and confirmed
that the President may require agencies to participate in the OMB review
process. See Proposed Executive Order Entitled “Federal Regulation,”
5 Op. O.L.C. 59, 60 (1981) (“EO 12291 Opinion”). We explained that the
President has the “distinctive constitutional role” of supervising the exe-
cution of federal law, and he could not take care that the entire “mass of
legislation” is executed faithfully, in a consistent and uniform manner,
absent authority to guide and direct his subordinates. Id. at 60–61 (inter-
nal quotation marks omitted); see also Peter L. Strauss, The Place of
Agencies in Government: Separation of Powers and the Fourth Branch,
7 See also 1 Annals of Cong. 462 (1789) (Rep. James Madison) (“It is evidently the
intention of the Constitution, that the first Magistrate should be responsible for the
executive department; so far therefore as we do not make the officers who are to aid him
in the duties of that department responsible to him, he is not responsible to his country.”);
1 Collected Works of James Wilson 730 (Kermit L. Hall & Mark David Hall eds., 2007)
(“In the United States, our first executive magistrate is not obnubilated behind the myste-
rious obscurity of counsellors. . . . He is the dignified, but accountable magistrate of a free
and great people.”); 2 id. at 873 (“[I]n the executive department, the principle of unity is
adopted.”).
9
43 Op. O.L.C. __ (Oct. 8, 2019)
84 Colum. L. Rev. 573, 642 (1984) (“[T]he execution of not a single law
but many inevitably raises questions of priority, conflict, and coordina-
tion . . . . Attending to these conflicts seems an inevitable aspect of a chief
executive’s function.”). That is also true when agencies execute federal
law by promulgating rules. See, e.g., Sierra Club v. Costle, 657 F.2d 298,
405–06 (D.C. Cir. 1981) (recognizing that the President must be allowed
to “control and supervise” rulemakings). Thus, under his constitutional
authority to supervise the execution of federal law, the President may
establish both general principles for agencies to follow in rulemaking,
such as cost-benefit principles, see EO 12866, § 1(b), and administrative
mechanisms to effectuate those principles, such as centralized regulatory
review, see id. § 6.
The President may also require any agency to submit in writing an
analysis of proposed agency action under the Opinions Clause, which
authorizes the President to “require [an] Opinion, in writing,” from the
principal officers in the Executive Branch on “any Subject” relating to
“the duties of their . . . offices.” U.S. Const. art. II, § 2, cl. 1; see also EO
12291 Opinion, 5 Op. O.L.C. at 62. The Opinions Clause ensures that the
President may obtain the advice he needs to order the affairs of the Execu-
tive Branch, including the counsel necessary to direct the heads of agen-
cies in the exercise of their statutory functions. The Opinions Clause
therefore sets him up as “Chief Administrator of the Executive Bureau-
cracy” and confirms that “[e]xecutive departments are accountable to the
Chief Executive.” Akhil Reed Amar, Some Opinions on the Opinion Clause,
82 Va. L. Rev. 647, 652, 658 (1996).8 In the view of then-Professor Elena
Kagan, the Opinions Clause “supports OMB review of at least executive
agency (and perhaps independent agency) actions, so long as the ultimate
decisionmaking power resides in the hands of agency officials; the [regu-
latory] review system then operates as a channel through which the Presi-
dent can obtain information from and offer advice to the relevant adminis-
8
See also Amar, Some Opinions, 82 Va. L. Rev. at 661 (“[T]he Opinion Clause clearly
exemplifies the President’s supervisory power over the executive departments.”); Steven
G. Calabresi & Saikrishna B. Prakash, The President’s Power to Execute the Law, 104
Yale L. J. 541, 584 (1994) (“[T]he Opinions Clause empowers the President to obtain
information in writing on government matters precisely so he will be able to issue binding
orders to his subordinates.”); Geoffrey P. Miller, Independent Agencies, 1986 Sup. Ct.
Rev. 41, 62 (“The duty to report is meaningful only if the President retains a measure of
substantive authority over the doings of the agency.”).
10
Extending Regulatory Review to Independent Regulatory Agencies
trators.” Kagan, Presidential Administration, 114 Harv. L. Rev. at 2325.
By requiring his subordinates to provide their opinions on proposed
regulatory actions, the President may receive the advice he needs to
“properly supervise and guide the[] construction of the statutes” under
which his subordinates act, Myers, 272 U.S. at 135, and thereby “take
Care that the Laws be faithfully executed,” U.S. Const. art. II, § 3.
C.
While the President must supervise the faithful execution of the laws,
Congress has the authority to define the structure of the Executive Branch
and the responsibilities of its officers. In our published 1981 opinion, we
advised that “the President’s exercise of supervisory powers must con-
form to legislation enacted by Congress,” and “may not, as a general
proposition, require or permit agencies to transgress boundaries set by
Congress.” EO 12291 Opinion, 5 Op. O.L.C. at 61. 9 Yet it is equally true
that Congress may not “impede the President’s ability to perform his
constitutional duty” under the Take Care Clause. Morrison, 487 U.S. at
691; see also Statement on Signing a Bill Concerning the Protection of
9 Our 1981 opinion recognized that “[i]n certain circumstances, statutes could invade
or intrude impermissibly upon the President’s ‘inherent’ powers,” but concluded that “that
issue [did] not arise” because Congress had not forbidden presidential direction under EO
12291. EO 12291 Opinion, 5 Op. O.L.C. at 61 n.3. In a later memorandum to OMB, this
Office considered the scope of congressional authority to exempt independent agencies
from regulatory review. See Memorandum for Preeta D. Bansal, General Counsel and
Senior Policy Adviser, Office of Management and Budget, from David Barron, Acting
Assistant Attorney General, Office of Legal Counsel, Re: Regulatory Review and Coordi-
nation for Independent Agencies at 11–17 (Sept. 3, 2009). We advised that “we certainly
cannot rule out the possibility that precluding Presidential supervision in the context of a
particular statutory regime might transgress whatever minimum quantum of supervisory
authority is required under Morrison,” id. at 16–17, but we declined to “resolve defini-
tively the difficult and unsettled constitutional and statutory questions raised” by such a
proposal, id. at 18. The Barron Memorandum cautioned that directing independent
agencies under EO 12866 might be “legally controversial” and advised against any
“definitive conclusion” absent a concrete examination of a particular agency’s governing
statutes. Id. at 1. As discussed below in Part III, we do not believe that any of the features
generally associated with agency independence would restrict a presidential direction for
independent agencies to comply with EO 12866. But under the terms of EO 12866 itself,
if an agency (be it independent or otherwise) has a specific statutory provision that
conflicts with the general directives under EO 12866, then that specific statutory provi-
sion will control. See EO 12866, § 9; infra Part IV.
11
43 Op. O.L.C. __ (Oct. 8, 2019)
Marine Mammals (Oct. 9, 1981), 1 Pub. Papers of Pres. Ronald Reagan
914, 914 (1981) (noting that a statute exempting certain rulemakings from
EO 12291 “should not be read to infringe in any way on the President’s
constitutional responsibility to supervise the Secretary of Commerce and
the Secretary of the Interior in their execution of the law”).
EO 12866, however, conflicts with no statute. On the contrary, the or-
der directs that the regulatory review process “shall be conducted so as to
meet applicable statutory requirements.” EO 12866, pmbl. An agency
must follow the order’s overarching principles “unless a statute requires
another regulatory approach,” id. § 1(a), and several of its operative
provisions contain similar caveats. For instance, the agency need not
analyze and quantify potential economic costs where Congress has pro-
hibited such consideration, id. § 6(a)(3)(C), and the agency must measure
the rule against the President’s priorities only “to the extent permitted by
law,” id. § 6(a)(3)(B)(ii).
EO 12866 also preserves the statutory discretion vested in the agency.
In our 1981 opinion, we concluded that EO 12291 did “not purport wholly
to displace, but only to guide and limit, discretion which Congress has
allocated to a particular subordinate official.” EO 12291 Opinion, 5 Op.
O.L.C. at 61. So too, EO 12866 channels an agency’s discretion by requir-
ing the agency to follow the President’s regulatory principles and to
submit the proposed rule for OIRA’s review. However, nothing in the
order “shall be construed as displacing the agencies’ authority or respon-
sibilities, as authorized by law.” EO 12866, § 9. The order allows OIRA
to return a proposed regulatory action to an agency for reconsideration, id.
§ 6(b)(3), but the order does not authorize OIRA to veto a proposed
action. OIRA exercises only a “power of consultation”—a significant
power, to be sure, but not the “authority to reject an agency’s ultimate
judgment.” EO 12291 Opinion, 5 Op. O.L.C. at 64. Thus, subject to the
guidance set by the order, “the authority to make the ultimate decision
rests where Congress has placed it—in the relevant agency.” Strauss &
Sunstein, Role of the President, 38 Admin. L. Rev. at 191.
EO 12866 similarly confirms that it is the President, rather than OMB,
who exercises the final authority to direct agency action, with section 7
contemplating presidential resolution of any unresolved disputes. This is
consistent with the President’s constitutional supervisory authority under
Article II, which may not be delegated. See Centralizing Border Control
12
Extending Regulatory Review to Independent Regulatory Agencies
Policy Under the Supervision of the Attorney General, 26 Op. O.L.C. 22,
24–25 (2002); cf. Free Enter. Fund, 561 U.S. at 496–97 (“[T]he President
cannot delegate ultimate responsibility or the active obligation to super-
vise that goes with it, because Article II makes a single President respon-
sible for the actions of the Executive Branch.” (internal quotation marks
omitted)). At the same time, the President “may tap advisers within the
White House” (and within agencies) to assist him in implementing presi-
dential policies within the Executive Branch. Centralizing Border Control
Policy, 26 Op. O.L.C. at 26. EO 12866 designates OIRA to coordinate
and implement regulatory policy, while ensuring that agencies retain the
authority provided by the laws enacted by Congress, under the ultimate
supervision of the President.
III.
The President’s constitutional authority to direct traditional executive
agencies under EO 12866 also extends to the “independent regulatory
agenc[ies]” identified in 44 U.S.C. § 3502(5). All of those agencies re-
main part of the Executive Branch and subject to his superintendence.
Although Congress has sought to limit the President’s authority to remove
the heads of some of those agencies, such limits on removal do not pre-
clude the President from requiring the agencies to comply with EO 12866.
Nor do the other hallmarks of agency “independence,” such as multi-
member governance, independent litigating authority, or open-meeting
requirements. The President has long required independent regulatory
agencies to submit an annual regulatory plan and agenda under section 4
of EO 12866. Congress has not otherwise sought to shield such agencies,
as a general matter, from complying with the order’s other requirements,
and we see no persuasive grounds to infer such an unstated limitation on
the President’s supervisory authority.
A.
We begin again with the text of the Constitution. The “executive Pow-
er” vested in the President and his constitutional duty to “take Care that
the Laws be faithfully executed,” U.S. Const. art. II, § 1, cl. 1; id. § 3, do
not vanish merely because the subordinate charged with executing the law
may enjoy tenure or other protections. The “Constitution requires that a
President chosen by the entire Nation oversee the execution of the laws.”
13
43 Op. O.L.C. __ (Oct. 8, 2019)
Free Enter. Fund, 561 U.S. at 499. Even when an officer heads an inde-
pendent agency, the President’s obligation to “take Care that the Laws be
faithfully executed” still requires that he “oversee the faithfulness of the
officers who execute them.” Id. at 484; see also id. at 492 (quoting James
Madison’s observation in the First Congress that “if any power whatsoev-
er is in its nature Executive, it is the power of appointing, overseeing, and
controlling those who execute the laws”); Morrison, 487 U.S. at 696(recognizing that the President must have “sufficient control” over all
officers who execute the law).
The Supreme Court has confirmed that the President must have some
constitutional authority to remove all those executive officers whom he
appoints, including the heads of independent agencies. See Free Enter.
Fund, 561 U.S. at 493 (“As we explained in Myers, the President . . . must
have some ‘power of removing those for whom he can not continue to be
responsible.’”). It is true that the Court has upheld some statutory limits
on those removal powers. See Wiener v. United States, 357 U.S. 349, 353
(1958); Humphrey’s Ex’r v. United States, 295 U.S. 602, 629 (1935). But
even the authority to remove an official for statutorily identified causes
“presupposes that the officer or body that has the removal power must
supervise the subordinate officer at least to the extent needed to determine
whether ‘cause’ for removal exists.” Applicability of Executive Order
12674 to Personnel of Regional Fishery Management Councils, 17 Op.
O.L.C. 150, 156 n.19 (1993); see also Morrison, 487 U.S. at 692–93
(stating that the power to terminate an independent counsel for good cause
allowed “ample authority to assure that the counsel is competently per-
forming his or her statutory responsibilities in a manner that comports
with the provisions of the Act”). The President could not fulfill this re-
sponsibility without the power to review the work of independent agen-
cies and, to some degree, to direct the faithful performance of their duties.
The Opinions Clause, likewise, supports presidential oversight of the
“principal Officer in each of the executive Departments,” including the
independent agencies. U.S. Const. art. II, § 2, cl. 1. In Free Enterprise
Fund, the Court had little trouble concluding that the Securities and
Exchange Commission (“SEC”)—whose members were assumed to have
tenure protection—“constitutes a ‘Departmen[t]’ for purposes of the
Appointments Clause.” 561 U.S. at 487, 511. In a footnote, the Court
“express[ed] no view on” whether the Commission should be considered
an “executive Departmen[t]” under the Opinions Clause. Id. at 511 n.11.
14
Extending Regulatory Review to Independent Regulatory Agencies
But the Court previously declared that the “word ‘department’” in the two
clauses “clearly means the same thing, and the principal officer in the one
case is the equivalent of the head of department in the other.” United
States v. Germaine, 99 U.S. (9 Otto) 508, 511 (1879); see also Freytag v.
Comm’r, 501 U.S. 868, 918 (1991) (Scalia, J., concurring in part and
concurring in the judgment) (finding it “quite likely that the ‘Depart-
ments’ referred to in the Opinions Clause . . . are the same as the ‘De-
partments’ in the Appointments Clause”).10 The President therefore may
“require” the heads of independent regulatory agencies to give an opinion
in writing on “any Subject relating to the duties of their respective Offic-
es,” U.S. Const. art. II, § 2, cl. 1, including opinions on the regulatory
impact of significant actions, as required by section 6 of EO 12866. As
discussed above, the Opinions Clause, consistent with the President’s
supervisory authority, further implies that the President may direct the
head of an independent regulatory agency to consult with the President
and his advisers prior to exercising the agency’s discretion in the rulemak-
ing process.
These principles led us to conclude in 1981 that President Reagan could
have applied EO 12291 to independent agencies. See Simms Memoran-
dum at 10–12; supra Part I. We acknowledged that Congress often “in-
tends the independent agencies to be free of Presidential supervision on
10 Indeed, that commonsense conclusion also follows from the Court’s recognition that
“[t]he object of the constitution was to establish three great departments of government;
the legislative, the executive, and the judicial departments.” Martin v. Hunter’s Lessee,
14 U.S. (1 Wheat.) 304, 329 (1816). During the Washington Administration, the Justices
of the Supreme Court embraced that same understanding, advising that th e Opinions
Clause “seems to have been purposely as well as expressly limited to executive Depart-
ments,” thereby implicitly excluding the judicial department. Letter from Justices of the
Supreme Court to George Washington (Aug. 8, 1793), reprinted in 6 The Documentary
History of the Supreme Court of the United States, 1787–1800, at 755 (Maeva Marcus ed.,
1998). With only three “great departments” to choose from, it is apparent that independent
agencies that execute federal law are part of the “executive Departments” and subject to
the Opinions Clause. We note that the ratification history of the Twenty-Fifth Amendment
may suggest a different reading for the “principal officers of the executive departments”
mentioned there, but the 1967 ratification of that amendment does not illuminate the
original meaning of Article II. See Freytag, 501 U.S. at 886–87 (citing pre-ratification
evidence that “the principal officers” under the Twenty-Fifth Amendment were limited to
members of the Cabinet); id. at 917 (Scalia, J., concurring in part and concurring in the
judgment) (distinguishing “the principal officers” in the Twenty-Fifth Amendment from
the similar language in the Opinions Clause).
15
43 Op. O.L.C. __ (Oct. 8, 2019)
matters of substantive policy,” but we viewed EO 12291 as consistent
with that legislative intent because the order preserved the agencies’
“substantive discretion to decide particular . . . rulemaking matters.”
Simms Memorandum at 10, 11. Considering costs and benefits, where
permitted by statute, and submitting proposed agency actions to OIRA
would not “displace the agencies’ ultimate discretion to decide what rule
best fulfills their statutory responsibilities.” Id. at 12.
We reached a similar conclusion in 1995, when we advised the White
House that EO 12866 could be applied to the Social Security Administra-
tion (“SSA”), even though Congress had recently given the Commissioner
a six-year term in office and statutory protection from removal. See 42
U.S.C. § 902(a)(3); see also 42 U.S.C. § 904(b)(1)(A) (requiring that the
SSA’s budget “be submitted by the President to the Congress without
revision”). Our file memorandum recording this informal advice noted
that the removal restriction, if valid, might limit the extent to which the
President could “order[] the [SSA Commissioner] to take a particular
substantive policy position” in a proposed action submitted for review
under section 6 of EO 12866. Memorandum for the Files, Re: OMB Re-
view of Regulations of the Social Security Administration at 5 (Aug. 7,
1995). But the President could nonetheless “tell the SSA to submit the
proposed rule to OIRA, because that [directive] . . . would not displace the
SSA’s ultimate discretion to promulgate regulations it considers appropri-
ate.” Id. at 7. We noted that permitting at least that degree of supervision
“may in fact be constitutionally compelled” under Article II. Id. Con-
sistent with this Office’s advice, EO 12866 continued to apply to the SSA,
which we understand has participated in the regulatory review process in
the years since. That history confirms that the presidential supervision
under EO 12866 is consistent with statutory tenure protection. See also
supra p. 6 (noting that President Clinton’s legal advisers concluded that
EO 12866 could be applied to independent regulatory agencies).
Thus, in the past, we have advised that both EO 12291 and EO 12866
could have been applied to independent agencies. Such advice is con-
sistent with our long-standing view that the President “may exercise a
certain amount of managerial authority” over independent agencies and
“under penalty of removal ‘may exact reasonable efficiency and absolute
integrity’” from independent agencies. Applicability of Executive Privi-
lege to Independent Regulatory Agencies, 1 Op. O.L.C. Supp. 170, 172,
190 (Nov. 5, 1957) (quoting Robert E. Cushman, The Independent Regu-
16
Extending Regulatory Review to Independent Regulatory Agencies
latory Commissions 464 (1941)).11 The President may “‘force an inde-
pendent regulatory commission to comply with executive orders of gen-
eral application unless Congress clearly indicates that such orders should
not apply.’” Id. at 190 (quoting Cushman, Independent Regulatory Com-
missions at 465). The President’s supervisory authority extends to all
officers charged with executing the laws of the United States, and we will
not lightly presume that Congress has sought to displace it.
B.
EO 12866 does not seek to displace any statutory mandate. To the con-
trary, the order itself is limited so that it requires agencies to follow its
principles and procedures “unless a statute requires another regulatory
approach,” EO 12866, § 1(a), and only “to the extent permitted by law,”
id. § 6(a)(3)(B)(ii). To address how the order applies to independent
agencies, we thus must consider whether the common statutory hallmarks
of independence themselves would conflict with the kind of presidential
supervision required by EO 12866’s regulatory review process.
In doing so, we are guided by the principle that “a clear statement of
congressional intent” is ordinarily required before a statute will be read in
a manner that raises separation of powers concerns. Administrative As-
sessment of Civil Penalties Against Federal Agencies Under the Clean Air
Act, 21 Op. O.L.C. 109, 112 (1997); see also, e.g., Franklin v. Massachu-
setts, 505 U.S. 788, 800–01 (1992) (“We would require an express state-
ment by Congress before assuming it intended the President’s perfor-
mance of his statutory duties to be reviewed for abuse of discretion.”);
Armstrong v. Bush, 924 F.2d 282, 289 (D.C. Cir. 1991) (“When Congress
decides purposefully to enact legislation restricting or regulating presiden-
11 In 1977, our Office also concluded that the President could issue an executive order
that would require independent agencies to “perform [their quasi-legislative and judicial]
functions efficiently and without undue delay” and “take into account the economic
impact of their decisions,” although we suggested that the President “probab ly cannot
dictate the precise effect the agencies are to give to that impact,” in view of what we
called then, in a nod to Humphrey’s Executor, “the agencies’ quasi-legislative autonomy.”
Memorandum for Simon Lazarus, Associate Director, Domestic Council, from John M.
Harmon, Assistant Attorney General, Office of Legal Counsel, Re: President’s Authority
to Impose Procedural Reforms on the Independent Regulatory Agencies at 2, 3 (July 22,
1977). In view of subsequent decisions of the Supreme Court, as well as opinions of this
Office, we do not read Humphrey’s Executor so broadly. See infra pp. 20–23.
17
43 Op. O.L.C. __ (Oct. 8, 2019)
tial action, it must make its intent clear.”); Applicability of Executive
Privilege to Independent Regulatory Agencies, 1 Op. O.L.C. Supp. at 190
(stating that Congress must “‘clearly indicate[]’” that executive orders of
general applicability do not apply to independent agencies if it seeks to
impose such a limitation). We think it clear that any effort by Congress to
insulate an executive officer from presidential supervision would raise
such separation of powers concerns. See, e.g., Free Enter. Fund, 561 U.S.
at 499; Morrison, 487 U.S. at 691. That principle has particular force here
because, on occasion, Congress has expressly sought to preclude OIRA
review of some rulemakings. See supra Part II.C (citing President
Reagan’s 1981 signing statement regarding a bill that precluded the appli-
cation of EO 12291); see also Consolidated Appropriations Act, 2012,
Pub. L. No. 112-74, div. C, tit. II, 125 Stat. 786, 894 (2011) (appropriat-
ing funds to OMB provided that “none of the funds . . . may be used for
the purpose of reviewing any agricultural marketing orders or any . . .
regulations under the provisions of the Agricultural Marketing Agreement
Act of 1937”); Copeland, Role of OIRA at 25 (discussing these examples).
Absent such a clear statement, we will not presume that Congress sought
to limit the President’s supervisory authority.
C.
We proceed to examine the distinctive statutory features commonly
thought to define agency independence. Chief among those is tenure
protection, which is often described as “[t]he distinguishing characteris-
tic” that makes an agency “independent.” Simms Memorandum at 8.
Many independent agencies are headed by officials covered by such a
provision. See, e.g., 15 U.S.C. § 41 (members of the Federal Trade Com-
mission “may be removed by the President for inefficiency, neglect of
duty, or malfeasance in office”); id. § 2053(a) (members of the Consumer
Product Safety Commission “may be removed by the President for neglect
of duty or malfeasance in office but for no other cause”); 42 U.S.C.
§ 7171(b)(1) (members of the Federal Energy Regulatory Commission
“may be removed by the President only for inefficiency, neglect of duty,
or malfeasance in office”). 12 But the statutory limits on the President’s
12 Several independent regulatory agencies are headed by officers who do not enjoy
any express protection against removal without cause: the Commodity Futures Trading
18
Extending Regulatory Review to Independent Regulatory Agencies
authority to remove the head of an agency do not preclude the President
from requiring independent agencies to comply with EO 12866, much less
do so clearly. Requiring an agency to comply with EO 12866 would not
conflict with those statutes, which do not preclude, and indeed presume,
ongoing presidential supervision of the agency.
The Supreme Court’s decision in Humphrey’s Executor serves as the
foundation for any argument to the contrary. In Humphrey’s Executor,
the Court addressed whether Congress could prohibit the removal without
cause of members of the Federal Trade Commission (“FTC”). In contrast
with a “purely executive” officer, such as the postmaster whose job was at
issue in Myers, Humphrey’s Executor concluded that the FTC exercised
what it described as “quasi-legislative” and “quasi-judicial” functions,
295 U.S. at 629, and the Constitution did not grant the President an “illim-
itable power of removal” over such officers. Id.; see also Wiener, 357
U.S. at 353–54 (interpreting a statute to provide tenure protection to
members of the War Claims Commission, an agency with adjudicative
functions).
In the course of upholding the lawfulness of such a restriction, the
Court in Humphrey’s Executor spoke in sweeping terms about the con-
gressional intent underlying the FTC Act:
Commission, the Federal Communications Commission, the Office of Financial Research,
and the SEC. But cf. Free Enter. Fund, 561 U.S. at 487 (assuming that SEC members can
be removed only for cause); SEC v. Blinder, Robinson & Co., 855 F.2d 677, 681 (10th
Cir. 1988) (same). The President may remove the Comptroller of the Currency only “upon
reasons to be communicated by him to the Senate,” 12 U.S.C. § 2, but no statute purports
to limit the permissible reasons for removal. And no statute expressly limits the Presi-
dent’s authority to remove the three appointed (i.e., non-ex-officio) members of the
Federal Deposit Insurance Corporation. In Wiener, the Supreme Court held that the
President could remove members of the War Claims Commission only for cause even
though Congress concededly “said nothing about it.” 357 U.S. at 356. But we have
questioned that conclusion and advised that “the executive branch should resist any
further application” of Wiener outside the context of purely adjudicatory bodies. The
Constitutional Separation of Powers Between the President and Congress, 20 Op. O.L.C.
124, 170 (1996) (“Separation of Powers”); see also Holdover and Removal of Members of
Amtrak’s Reform Board, 27 Op. O.L.C. 163, 166 (2003) (“Because the removal power is a
principal means by which the President carries out the executive power and takes care that
the laws be faithfully executed, we do not believe that any restrictions on the President’s
removal power should be inferred.”).
19
43 Op. O.L.C. __ (Oct. 8, 2019)
[T]he language of the [FTC Act], the legislative reports, and the
general purposes of the legislation as reflected by the debates, all
combine to demonstrate the Congressional intent to create a body of
experts who shall gain experience by length of service—a body
which shall be independent of executive authority, except in its se-
lection, and free to exercise its judgment without the leave or hin-
drance of any other official or any department of the government. To
the accomplishment of these purposes, it is clear that Congress was
of opinion that length and certainty of tenure would vitally contrib-
ute. And to hold that, nevertheless, the members of the commission
continue in office at the mere will of the President, might be to
thwart, in large measure, the very ends which Congress sought to re-
alize by definitely fixing the term of office.
295 U.S. at 625–26 (emphasis omitted); see also id. at 628 (stating that
the FTC’s duties “are performed without executive leave and, in the
contemplation of the statute, must be free from executive control”). If
this view were “taken at face value, the President’s constitutional power
to supervise” the “body of experts” at the independent agencies would be
“limited to his power of appointment,” Simms Memorandum at 9, and he
could no more supervise their “quasi-judicial” and “quasi-legislative”
work than he could the judgments of his appointees to the Article III
courts. This view would not only preclude the President from requiring
agencies to submit proposed regulations to OIRA, but it would also bar
any presidential directives at all, including the well-established require-
ment that independent agencies submit an annual regulatory plan and
agenda under section 4 of EO 12866.
We cannot read Humphrey’s Executor so broadly. To begin with, the
quoted passage is dictum. As then-Professor Kagan explained, the “ques-
tion actually decided in the case was much narrower” than its reasoning,
and “the Court did not hold that Congress could cut off agencies in all
respects from the President.” Kagan, Presidential Administration, 114
Harv. L. Rev. at 2325 n.311. The Court held only that Congress had
validly limited the President’s grounds for removing the Commissioner to
“inefficiency, neglect of duty, or malfeasance in office,” 295 U.S. at 623,and that the President had violated the statute by removing him without
citing any of those grounds.
20
Extending Regulatory Review to Independent Regulatory Agencies
Subsequent decisions confirm that independent agencies execute feder-
al law and are part of the Executive Branch—not a “headless ‘fourth
branch’ of the Government.” President’s Committee on Administrative
Management, Administrative Management in the Government of the
United States 36 (Jan. 1937); see, e.g., City of Arlington v. FCC, 569 U.S.
290, 304 n.4 (2013) (“Agencies make rules . . . and conduct adjudica-
tions,” but those activities “are exercises of—indeed under our constitu-
tional structure they must be exercises of—the ‘executive Power.’”); Free
Enter. Fund, 561 U.S. at 510–11 (holding that the SEC is an executive
“Department[]” under the Appointments Clause); Morrison, 487 U.S. at
690 n.28 (“[I]t is hard to dispute that the powers of the FTC at the time of
Humphrey’s Executor would at the present time be considered ‘execu-
tive,’ at least to some degree.”); INS v. Chadha, 462 U.S. 919, 953 n.16
(1983) (recognizing that agency rulemaking is an executive function, not
a legislative function); Buckley v. Valeo, 424 U.S. 1, 125–28 (1976) (per
curiam) (holding that members of the Federal Election Commission are
executive officers, not officers of Congress); Separation of Powers, 20
Op. O.L.C. at 168 n.116 (“We do not think that the ‘independent’ regula-
tory agencies could be viewed today as within the legislative or judicial
branches.” (citing Mistretta v. United States, 488 U.S. 361, 387 n.14
(1989))); Applicability of Executive Privilege to Independent Regulatory
Agencies, 1 Op. O.L.C. Supp. at 171–72 (“[Humphrey’s Executor] cannot
be invoked as a complete charter of independence of the regulatory com-
missions from executive control.”). While Humphrey’s Executor spoke of
the “quasi-legislative” and “quasi-judicial” functions of independent
agencies, 295 U.S. at 628–29, there can now be no doubt that independent
agencies are part of the Executive Branch.
In addition, the dictum of Humphrey’s Executor conflicts not only with
subsequent decisions, but also with the very statute at issue in that case.
The Court’s claim that the FTC “shall be independent of executive author-
ity, except in its selection,” 295 U.S. at 625, is demonstrably incorrect.
Congress gave the President authority to remove FTC Commissioners for
“inefficiency, neglect of duty, or malfeasance in office,” id. at 619, terms
that presuppose presidential supervision of the actions of those whom he
may remove. Thus, the President’s authority over the officers of the FTC
continues well beyond the time of selection. The same is true of any
independent agency whose head or heads are removable by the President
for cause.
21
43 Op. O.L.C. __ (Oct. 8, 2019)
Humphrey’s Executor also rested on an “outmoded view” of independ-
ent agencies as apolitical experts. Simms Memorandum at 10. “[I]nde-
pendent agencies . . . have to make a slew of non-scientific legal and
policy judgments—such as how to interpret governing statutes, how to
exercise policy discretion under those statutes, and whom to charge for
violations of the law.” Aiken County, 645 F.3d at 442 n.2 (Kavanaugh, J.,
concurring). Indeed, “[i]t is now recognized that rulemaking may legiti-
mately reflect political influences of certain kinds from a number of
sources, including Congress and the affected public.” Simms Memoran-
dum at 10. It thus makes little sense to presume that Congress intended to
divorce such agencies entirely from presidential supervision.
In the decades since Humphrey’s Executor, Congress itself has ensured
that independent agencies are not “independent of executive authority.”
295 U.S. at 625. Under the Paperwork Reduction Act, Congress has
required independent agencies to submit proposed information requests
to OIRA for review. 44 U.S.C. §§ 3502(1), 3507(a), (f ). Under the Con-
gressional Review Act, independent agencies must submit “major rules”
to Congress before the rules “can take effect.” 5 U.S.C. §§ 801(a)(1)(A),
804(1). Consistent with EO 12866, the statute requires OIRA to review
these regulations and determine whether they are “major” under the
statute. Id. § 804(2). Congress has also required independent agencies to
comply with the Regulatory Flexibility Act, see id. § 601(1), and the
Data Quality Act, see Pub. L. No. 106-554, div. C, § 515, 114 Stat. 2763,
2763A-153 to -154 (2000)—the latter of which charged OMB with issu-
ing guidelines to all agencies to ensure data quality and integrity. Ac-
cordingly, over the past 80 years, Congress has repeatedly confirmed that
independent agencies are part of the Executive Branch and subject to
“executive authority.”
For these reasons, we do not believe that the vision of independence
suggested by Humphrey’s Executor accurately describes the current state
of the law. At the same time, we acknowledge that the Court has suggest-
ed on occasion that removal restrictions provide an agency head with
some measure of independence from the President. See Free Enter. Fund,
561 U.S. at 502 (suggesting that “simple disagreement with . . . policies
or priorities” may not constitute cause for removal); Fox Television
Stations, 556 U.S. at 523 (recognizing that “independent agencies” have
been “sheltered . . . from the President”); Mistretta, 488 U.S. at 410–11
(describing for-cause limitations on removal as “specifically crafted to
22
Extending Regulatory Review to Independent Regulatory Agencies
prevent the President from exercising ‘coercive influence’ over inde-
pendent agencies”). 13 And even some independent regulatory agencies
without express tenure protection for their heads, such as the SEC, have
historically enjoyed a broader degree of political independence than other
executive agencies. See Free Enter. Fund, 561 U.S. at 547 (Breyer, J.,
dissenting) (noting the “political environment” protecting the independ-
ence of some agencies).
We believe, however, that those decisions are consistent with EO
12866, which “does not purport wholly to displace, but only to guide and
limit, discretion which Congress has allocated to a particular subordinate
official.” EO 12291 Opinion, 5 Op. O.L.C. at 61. EO 12866 does not
supplant an independent agency’s discretion any more than it does for a
“non-independent” agency. To the contrary, the order “reaffirm[s] the
primacy of Federal agencies in the regulatory decision-making process”
and directs that regulatory review “be conducted so as to meet applicable
statutory requirements and with due regard to the discretion that has been
entrusted to the Federal agencies.” EO 12866, pmbl. Regardless of wheth-
er an agency is “independent,” the President’s authority to supervise all
those who execute federal law must permit him, at the least, to require
that agencies consult with his senior advisers to ensure that the agencies
adhere to principles of sound governance and law. We therefore conclude
that a for-cause limitation on removal does not preclude the President
13 Other decisions of the Supreme Court have suggested a broader concept of what
constitutes “cause” for removal under particular statutes. See Morrison, 487 U.S. at 692(describing the power to remove for cause as conferring “ample authority to assure” that a
subordinate “is competently performing his or her statutory responsibilities”); Bowsher,
478 U.S. at 729 (stating that the terms in a for-cause removal provision “are very broad
and, as interpreted by Congress, could sustain removal of a Comptroller General for any
number of actual or perceived transgressions of the legislative will”). Our Office too has
favored the broader understanding, in large part to avoid constitutional concerns. See,
e.g., Separation of Powers, 20 Op. O.L.C. at 169 n.117 (“[A] generous reading of the
President’s . . . power to remove an inferior officer may be essential to the constitutionali-
ty of removal restrictions.”); Memorandum for Roger Pauley, Director, Office of Legisla-
tion, Criminal Division, from Richard L. Shiffrin, Deputy Assistant Attorney General,
Office of Legal Counsel, Re: S. 101, Lobbying Disclosure Act at 1 (July 17, 1995) (legis-
lation proposing “for cause” removal protection for an executive officer “might well be
. . . unconstitutional” if it “were interpreted to bar the President from discharging the
[officer] for failure to carry out the Administration’s policies”). We have no occasion here
to consider whether the refusal of an agency head to comply with a presidential directive
under EO 12866 would constitute cause for removal.
23
43 Op. O.L.C. __ (Oct. 8, 2019)
from applying the OIRA review process under EO 12866 to an independ-
ent agency.
D.
Congress has adopted other statutory mechanisms to provide independ-
ent regulatory agencies with a degree of insulation within the Executive
Branch. Those mechanisms include fixed terms in office for the agency
head, distinct from the President’s term; composition as a multi-member
bipartisan board with staggered terms of office; the authority to submit
testimony or proposed budgets to Congress without OMB review; and
independent litigating authority. See Marshall J. Breger & Gary J. Edles,
Independent Agencies in the United States 93–95, 163–175 (2015); Kirti
Datla & Richard L. Revesz, Deconstructing Independent Agencies (and
Executive Agencies), 98 Cornell L. Rev. 769, 789–808 (2013); David E.
Lewis & Jennifer L. Selin, Sourcebook of United States Executive Agen-
cies 88–106 (2d ed. Oct. 2018). Those features are not universally shared
by all the independent regulatory agencies in 44 U.S.C. § 3502(5), nor are
they unique to those agencies. But they are common enough that we
consider here whether any would conflict with the centralized review
process of EO 12866. We conclude that they do not.
1. Multi-member, Bipartisan Agency Governance. The statutes struc-
turing some independent regulatory agencies as multi-member boards,
with staggered terms and bipartisan membership, do not limit the Presi-
dent’s authority to require those agencies to comply with EO 12866. See,
e.g., 7 U.S.C. § 2(a)(2)(A) (establishing the Commodity Futures Trading
Commission as “an independent agency of the United States Govern-
ment” composed of “five Commissioners,” “[n]ot more than three of
[whom] shall be members of the same political party,” each serving “a
term of five years” expiring at staggered one-year intervals); 15 U.S.C.
§ 78d(a) (similar provisions for the SEC). Requiring an independent
regulatory agency to submit its proposed rules to OIRA for review is
consistent with those structural features. The SEC, for example, will
continue to be headed by a five-member, bipartisan board as required by
statute, whether or not the President directs the Commission to comply
with EO 12866.
One might argue that Congress chose to delegate rulemaking authority
to an agency headed by a multi-member, bipartisan board “to minimize
24
Extending Regulatory Review to Independent Regulatory Agencies
presidential interference.” EO 12291 Opinion, 5 O.L.C. Op. at 61. But we
would not overstate the degree of insulation. In most instances, the Presi-
dent retains the statutory authority to select the board’s chair, ensuring
that he may put his stamp on the agency’s policymaking agenda. 14 In
addition, EO 12866 preserves an agency’s ultimate discretion and thus
respects Congress’s judgment to entrust particular rulemakings to a com-
mission rather than a traditional executive agency. Subject to appropriate
consultation, the commission still makes the final decision under EO
12866. We see no persuasive grounds to infer from the multi-member
structure of an independent regulatory agency any additional limits on
presidential supervision that would bar the application of EO 12866 to the
agency.
2. Independent Litigating Authority. For similar reasons, EO 12866
would not conflict with the authority of an agency to litigate independent-
ly of the Department of Justice when the agency has been given such
authority. See, e.g., 12 U.S.C. § 5564 (Bureau of Consumer Financial
Protection (“CFPB”)). Such authority does not imply that there are any
statutory limits upon presidential supervision of agency rulemaking. EO
12866’s centralized review process applies only to regulatory actions that
promulgate or are expected to lead to the promulgation of “a final rule or
regulation.” EO 12866, § 3(e); supra note 2. Thus, the order does not
cover agency litigation decisions or decisions to seek judicial enforce-
14 See, e.g., 29 U.S.C. § 153(a) (“The President shall designate one member [of the
National Labor Relations Board] to serve as Chairman of the Board.”); 42 U.S.C.
§ 5841(a)(1) (“The President shall designate one member of the [Nuclear Regulatory]
Commission as Chairman thereof to serve as such during the pleasure of the President. ”);
42 U.S.C. § 7171(b)(1) (“One of the members [of the Federal Energy Regulatory Com-
mission] shall be designated by the President as Chairman.”); 46 U.S.C. § 301(c)(1) (“The
President shall designate one of the Commissioners [of the Federal Maritime Commis-
sion] as Chairman.”); 47 U.S.C. § 154(a) (“The Federal Communications Commission . . .
shall be composed of five commissioners appointed by the President, by and with the
advice and consent of the Senate, one of whom the President shall designate as chair-
man.”); Reorg. Plan No. 10 of 1950, § 3, 64 Stat. 1265, 1266 (effective May 24, 1950)
(“The functions of the [Securities and Exchange] Commission with respect to choosing a
Chairman from among the commissioners composing the Commission are hereby trans-
ferred to the President.”); Reorg. Plan No. 8 of 1950, § 3, 64 Stat. 1264, 1265 (effective
May 24, 1950) (“The functions of the [Federal Trade] Commission with respect to
choosing a Chairman from among the membership of the Commission are hereby trans-
ferred to the President.”).
25
43 Op. O.L.C. __ (Oct. 8, 2019)
ment, and agencies with independent litigating authority will exercise that
authority without OMB or OIRA review. In fact, Congress has given
Cabinet departments independent litigating authority in limited circum-
stances, see, e.g., 29 U.S.C. § 216(e)(3)(B) (Department of Labor), yet
those agencies have long been subject to EO 12866.
3. OMB Bypass Authority. Congress has given some independent regu-
latory agencies the authority to bypass OMB by submitting reports, budg-
ets, or testimony directly to Congress without prior OMB review. For the
CFPB, for example, Congress provided that
[n]o officer or agency of the United States shall have any authority
to require the Director or any other officer of the Bureau to submit
legislative recommendations, or testimony or comments on legisla-
tion, to any officer or agency of the United States for approval,
comments, or review prior to the submission of such recommenda-
tions, testimony, or comments to the Congress[.]
12 U.S.C. § 5492(c)(4); see also, e.g., 12 U.S.C. § 250 (similar provision
covering the “the Securities and Exchange Commission, the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, . . . the Director of the
Federal Housing Finance Agency, [and] the National Credit Union Ad-
ministration”); 49 U.S.C. § 1303(d) (Surface Transportation Board).
Although these statutes do not mention OMB by name, OMB has long
operated the executive branch clearance processes that these statutes
allow agencies to bypass. See OMB Circular No. A-11, Preparation,
Submission, and Execution of the Budget (2017); OMB Circular No. A-19,
Legislative Coordination and Clearance (1979). In other instances, Con-
gress has effectively prohibited advance OMB review by directing that an
independent regulatory agency’s budget requests, prepared testimony, or
legislative proposals be submitted concurrently to Congress whenever
they are submitted to OMB. See, e.g., 7 U.S.C. § 2(a)(10)(A) (Commodity
Futures Trading Commission); 15 U.S.C. § 2076(k)(1) (Consumer Prod-
ucts Safety Commission); 42 U.S.C. § 7171( j) (Federal Energy Regulato-
ry Commission).
The Executive Branch has long objected to efforts to minimize presi-
dential supervision of the agencies in testifying and submitting proposed
legislation to Congress, treating those restrictions as an infringement of
the President’s Article II authority, including his Article II, Section 3
26
Extending Regulatory Review to Independent Regulatory Agencies
authority to recommend to Congress “such Measures as he shall judge
necessary and expedient.” See, e.g., Constitutionality of the Direct Re-
porting Requirement in Section 802(e)(1) of the Implementing Recom-
mendations of the 9/11 Commission Act of 2007, 32 Op. O.L.C. 27, 28
(2008) (“For decades, the Executive Branch has consistently objected to
direct reporting requirements . . . on the ground that such requirements
infringe upon the President’s constitutional supervisory authority over
Executive Branch subordinates and information.”); Authority of the Spe-
cial Counsel of the Merit Systems Protection Board to Litigate and Submit
Legislation to Congress, 8 Op. O.L.C. 30, 34, 36 (1984) (“[T]he Special
Counsel has proposed legislation authorizing him to submit directly to
Congress legislative recommendations that he ‘deems necessary to further
enhance the ability of the office to perform its duties.’”; “The Special
Counsel’s proposal would severely impair the President’s ability to per-
form his constitutional obligation to ‘recommend to [Congress’s] Consid-
eration such Measures as he shall judge necessary and expedient.’”); see
also Separation of Powers, 20 Op. O.L.C. at 174–75; Common Legislative
Encroachments on Executive Branch Authority, 13 Op. O.L.C. 248, 254–
55 (1989); Constitutionality of Statute Requiring Executive Agency to
Report Directly to Congress, 6 Op. O.L.C. 632, 639–42 (1982). But even
if these bypass statutes are constitutional, none of them speaks to OMB or
OIRA review of an agency’s proposed rulemakings; all of them apply
only to budget requests, to proposed legislation and testimony, or to some
combination thereof.
Congress’s decision to enact such bypass statutes is further evidence
that independent regulatory agencies are not, merely by virtue of tenure
protection, entirely free from presidential supervision (contra the dictum
in Humphrey’s Executor). Congress has expressly sought to limit OMB’s
authority to coordinate the interagency clearance process in various re-
spects, but has not imposed any statutory restrictions on OMB’s authority
to conduct regulatory review. This only underscores that Congress left the
latter untouched. We must presume that Congress “says what it means and
means what it says” in these statutes. Simmons v. Himmelreich, 136 S. Ct.
1843, 1848 (2016). By their plain terms, these statutes do not purport to
forbid requiring independent regulatory agencies to participate in the EO
12866 centralized review process.
Congress has also required two agencies to submit certain financial op-
erating plans and forecasts to OMB, but then provided in a “rule of con-
27
43 Op. O.L.C. __ (Oct. 8, 2019)
struction” that those requirements “may not be construed as implying”
that OMB has “any jurisdiction or oversight over the affairs or opera-
tions” of the agencies. 12 U.S.C. § 1827(c)(3) (Federal Deposit Insurance
Corporation); see also id. § 5497(a)(4)(E) (CFPB). By its own terms, that
rule of construction simply precludes the inference that the agencies’
submission of required documents otherwise implies OMB supervision.
The rule of construction, like OMB bypass statutes generally, does not
speak to or limit the President’s authority under Article II to require an
agency to participate in centralized regulatory review of the agency’s
proposed rulemakings.
4. Sunshine Act. Congress has required multi-member agencies to
comply with the Government in the Sunshine Act, 5 U.S.C. § 552b, but
the requirements of that law do not preclude application of EO 12866.
The Sunshine Act applies to any “agency . . . headed by a collegial body
composed of two or more individual members, a majority of whom are
appointed to such position by the President with the advice and consent of
the Senate.” Id. § 552b(a)(1). The Act requires that “every portion of
every meeting” of such an agency “be open to public observation,” sub-
ject to various exceptions, id. § 552b(b), and it defines a “meeting” as
“the deliberations of at least the number of individual agency members
required to take action on behalf of the agency where such deliberations
determine or result in the joint conduct or disposition of official agency
business,” id. § 552b(a)(2). The public is entitled to at least one week’s
advance notice of any such meeting. Id. § 552b(e)(1). The Act’s require-
ments do not apply to formal rulemakings, see id. § 552b(c)(10); Time,
Inc. v. U.S. Postal Serv., 667 F.2d 329, 334 (2d Cir. 1981), but there is no
comparable exception for informal rulemakings—the kind of rulemakings
to which EO 12866 applies, see EO 12866, § 3(d)(1). Thus, the Act re-
quires covered agencies, such as the SEC and FTC, to meet in public
whenever a quorum of agency members convenes to engage in notice-
and-comment rulemaking.
The Sunshine Act’s requirements would not preclude compliance with
EO 12866, because most discussions between a covered agency and OIRA
would likely not qualify as a “meeting.” As the Supreme Court explained
in FCC v. ITT World Communications, Inc., 466 U.S. 463 (1984), Con-
gress was cognizant in drafting the Sunshine Act that “the administrative
process cannot be conducted entirely in the public eye.” Id. at 469. The
Act is therefore limited to “meetings” as defined above. See id. at 471
28Extending Regulatory Review to Independent Regulatory Agencies
(holding that a “meeting” must involve deliberations “sufficiently focused
on discrete proposals or issues as to cause or be likely to cause the indi-
vidual participating members to form reasonably firm positions” (internal
quotation marks omitted)). Many of the consultations that occur in the
EO 12866 process likely would not meet that standard. As the Court
explained, “‘informal background discussions that clarify issues and
expose varying views’ are a necessary part of an agency’s work,” and the
Act was not intended to “prevent such discussions.” Id. at 469–70 (brack-
ets omitted). A “meeting” also must involve “at least the number of indi-
vidual agency members required to take action on behalf of the agency.”
5 U.S.C. § 552b(a)(2). An exchange of views between OIRA and the staff
of an agency (or its Chairman) during the EO 12866 process would not
qualify. Thus, the Sunshine Act would be consistent with applying EO
12866 to independent agencies.
* * * * *
We thus conclude that none of the common statutory hallmarks of in-
dependent agencies would stand in the way of applying EO 12866 to such
agencies. Nothing in the centralized regulatory review process is incon-
sistent with their traditional “independence.” EO 12866 expressly pre-
serves the substantive rulemaking discretion afforded to independent
agencies, just as it preserves the substantive discretion enjoyed by non-
independent agencies. It does so, however, within the framework of
presidential supervision and OIRA administrative expertise that has
promoted good administrative governance since the earliest days of the
Reagan Administration.
Finally, we note that our conclusion is consistent with those of the Ad-
ministrative Conference of the United States and the American Bar Asso-
ciation, both of which have long endorsed the President’s authority to
extend EO 12866 to independent agencies. 15 A 2017 report by the House
15 See, e.g., Section of Administrative Law and Regulatory Practice, ABA, Improving
the Administrative State: A Report to the President-Elect of the United States at 10
(2016); Letter for Ron Johnson, Chairman, and Thomas R. Carper, Ranking Member,
Senate Committee on Homeland Security and Governmental Affairs, from Thomas M.
Susman, Director, Governmental Affairs Office, ABA, Re: Support for S. 1067, the
“Independent Agency Regulatory Analysis Act of 2015” (July 23, 2015); House of
Delegates, ABA, Recommendation: Presidential Review of Rulemaking (Aug. 7–8,
29
43 Op. O.L.C. __ (Oct. 8, 2019)
Committee on Oversight and Government Reform similarly opined that
the President “has always had the authority to extend OIRA review to
independent agencies.” OIRA Insight, Reform, and Accountability Act,
H.R. Rep. No. 115-19, at 7 (2017). As a matter of practice, OMB advises
that “[a] number of ‘independent’ agencies, including the SEC, CFTC, the
FCC, and others have consulted with OIRA regarding best practices for
regulatory reform and cost-benefit analysis,” OMB Letter at 7, and as
noted above, the SSA has formally complied with the regulatory review
process. We do not suggest, of course, that separation of powers questions
may be decided by popular vote, but the views of congressional commit-
tees, administrative law experts, and practitioners confirm our view that
extending EO 12866 to independent regulatory agencies would not com-
promise the appropriate and lawful performance of their statutory respon-
sibilities.
IV.
For the foregoing reasons, we conclude that the President may require
independent regulatory agencies to comply with the centralized regulatory
review process prescribed by EO 12866. There is nothing in the statutory
composition of independent agencies or in their other generally shared
attributes that would preclude the full application of EO 12866 to them.
We have not reviewed the organic statute of each independent agency and
therefore do not rule out the possibility that a particular statutory provi-
sion of a particular agency—if constitutionally valid and sufficiently
1990), https://www.americanbar.org/content/dam/aba/directories/policy/1990_am_302.
authcheckdam.pdf; Recommendations of the Administrative Conference Regarding
Administrative Practice and Procedure, 54 Fed. Reg. 5207, 5208 & n.2 (Feb. 2, 1989);
Strauss & Sunstein, Role of the President, 38 Admin. L. Rev. at 206–07 (reprinting
recommendation of the Administrative Law Section of the ABA). Former officials from
independent agencies have offered the same view. See Letter for Ronald H. Johnson,
Chairman, Senate Committee on Homeland Security and Governmental Affairs, from
Nancy Nord, Former Commissioner, Consumer Product Safety Commission, et al., at 1
(June 17, 2015) (letter from eight former members of independent agencies). A number
of academics have done the same. See also, e.g., Datla & Revesz, Deconstructing
Independent Agencies, 98 Cornell L. Rev. at 837; Robert W. Hahn & Cass R. Sunstein,
A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost -
Benefit Analysis, 150 U. Pa. L. Rev. 1489, 1535 (2002); Kagan, Presidential Administra-
tion, 114 Harv. L. Rev. at 2324–25 & n.311; Strauss & Sunstein, Role of the President,
38 Admin. L. Rev. at 200.
30
Extending Regulatory Review to Independent Regulatory Agencies
clear—may conflict with certain requirements of EO 12866. EO 12866
expressly contemplates, however, that it would yield to such a provision,
and such a potential conflict would therefore pose no barrier to the gen-
eral extension of EO 12866.
Should an independent agency identify a specific statutory provision
that it believes requires modification of the processes and procedures of
EO 12866, we would be happy to examine the matter. Please let us know
if we may be of further assistance in that or in any other regard.
STEVEN A. ENGEL
Assistant Attorney General
Office of Legal Counsel
31