Guest Author Series: Curtis Copeland on GAO and the Congressional Review Act

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“Errors and Inconsistencies in GAO’s Reports on the Congressional Review Act”

Curtis W. Copeland [1]
July 11, 2018

Introduction

On March 13, 2018, the Government Accountability Office (GAO) published a report that, among other things, concluded federal agencies were frequently not delaying the effective dates of their major rules for 60 days, as required by the Congressional Review Act (CRA).[2]  As a result, GAO said the agencies had failed to give Congress the time it needed to use the CRA to review and possibly disapprove regulations.

However, GAO’s March 2018 report contains legal and methodological errors, and its conclusion regarding the effect of the lack of delay on Congress’ ability to use the CRA is incorrect.  Also, an examination of more than 200 of the reports that GAO prepared on agencies’ major rules revealed that they are inconsistent, and frequently reach incorrect conclusions regarding compliance with the CRA’s delay requirement.[3]

The errors in these reports are particularly troubling because they come at a time when the CRA “has moved from a long period of obscurity to a central role in the balance of power between Congress and the agencies.”[4]  The errors are also of concern because they come from GAO, which has long been regarded as a reliable source of information for Congress and the public, and because GAO has recently played an increasing role in expanding the scope of the CRA.

Errors in GAO’s March 2018 Report

There are arguably three substantive errors in the March 2018 report: (1) GAO misinterpreted the CRA’s “good cause” exception when assessing whether agencies were required to delay the effective dates of their major rules; (2) GAO used the wrong methodology to determine whether agencies had properly delayed the effective dates for their major rules for 60 days; and (3) GAO incorrectly characterized how any failure to delay the effective dates for major rules affects the ability of Congress to use the CRA to disapprove those rules.

Misinterpretation of “Good Cause”

The CRA generally requires federal agencies to delay the effective dates of their major rules for 60 days after the later of two dates – the date that Congress receives the rule, or the date the rule is published in the Federal Register.[5] However, Section 808(2) of the act allows agencies to waive the 60-day delay requirement if there is “good cause” to conclude “that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”[6]

In at least five reports and testimonies during the first 10 years of the CRA’s implementation (1996-2006), GAO consistently interpreted Section 808(2) to mean that agencies could avoid delaying their major rules for 60 days only if a notice of proposed rulemaking was not published pursuant to a similar “good cause” exception in the Administrative Procedure Act (APA, 5 U.S.C. 553(b)(3)(B)).[7]  GAO’s position during this period appeared to be correct because the “good cause” language in Section 808(2) of the CRA is identical to the language in the APA’s exception to notice and comment, and because GAO’s position was consistent with (1) the CRA’s limited legislative history,[8] (2) the Office of Management and Budget’s 1999 guidance on the CRA,[9] and (3) Congressional Research Service reports on the issue.[10]

However, the March 2018 GAO report used what GAO later called a “different” interpretation of the CRA, saying that agencies could waive the 60-day delay requirement only if they had claimed “good cause” under a different APA provision (5 U.S.C. 553(d)(3)).  Therefore, any major rule in which the agency had claimed “good cause” to waive notice and comment procedures would have been exempt from the 60-day delay requirement under GAO’s traditional interpretation of the CRA, but would no longer be exempt under the new interpretation.  GAO would not provide a list of the rules that it considered out of compliance with the delay requirement in the March 2018 report, so it is not possible to know how many of those rules would have been considered in compliance had GAO used its historical interpretation of the CRA (and vice versa). Nevertheless, it is reasonable to conclude that the number could be substantial because, as GAO itself previously reported, rulemaking agencies frequently invoke “good cause” to waive notice and comment.[11]

Curiously, after the March 2018 report was issued, GAO appears to have changed its position again.  In two major rule reports issued in January 2018, GAO did not allow the use of notice and comment “good cause” to waive the 60-day delay requirement.  After being alerted to these reports, GAO published amended reports in April 2018 saying the agency issuing the underlying rules “found good cause to waive publication of a proposed rule and solicitation of public comment and thus the 60-day delay requirement does not apply.”[12]  Therefore, GAO appears to have come full circle regarding the “good cause” exception in the CRA, first interpreting it one way for at least 10 years, then another way for the March 2018 report, and then back to its first interpretation.

Measuring the 60-day Delay Period Incorrectly

As noted previously, the CRA generally requires agencies to delay the effective dates of their major rules for 60 days after the later of two dates – the date that Congress receives the rule, or the date the rule is published in the Federal Register.  However, GAO said in its March 2018 report that it checked to see when Congress received a major rule only if GAO received the rule less than 60 days prior to its effective date.  Also, when checking for congressional receipt, if one House of Congress received the rule at least 60 days prior to the effective date, GAO said it considered the rule to be in compliance with the CRA.

There appear to be several methodological problems with this approach.

  • First, when determining the starting point of the required 60-day delay period for major rules, the CRA says nothing at all about when GAO receives a rule.
  • Second, GAO said that it checked the dates that Congress received a rule only if GAO received the rule less than 60 days prior to its effective date. As a result, GAO would have missed any rule that was submitted to GAO in a timely manner, but was not submitted to Congress until much later – which happens frequently.
  • Third, GAO said that when it checked for congressional receipt, it checked to see if the rule had been submitted to at least one House of Congress within the required timeframe. However, the date that one House of Congress receives a rule is not the same as the date that Congress as a whole receives the rule. The House and Senate parliamentarians do not consider a rule to have been received by Congress as a whole until both chambers have received it. [13] GAO itself has taken this position in previous legal opinions.[14]

Because GAO would not provide a list of the major rules in its March 2018 report that it considered not in compliance, with the CRA, it is impossible to know how these methodological problems affected GAO’s results.  However, as discussed later, an examination of recent major rule reports indicated that GAO frequently mischaracterized agency compliance with the 60-day delay requirement.

Incorrect Characterization of Effect on Congress’ Ability to Use the CRA

In several places in its March 2018 report, GAO said that agencies’ failure to delay the effective dates of their major rules for the required 60-day period represented a “failure to provide Congress the required time to review and possibly disapprove regulations,” thereby “making it more difficult for Congress to exercise its oversight role under [the] CRA.”[15]

These statements are not correct.  Although providing a 60-day delay in the effective date of a major rule can help ensure that Congress has an opportunity to review and possibly disapprove the rule before the rule takes effect, failing to provide the 60-day delay has no effect on Congress’ overall ability to use the CRA to review and disapprove agency rules.  In fact, the text of the CRA seems to expect Congress to be able to take action after rules have taken effect.  For example, Section 801(f) of the act states:  “Any rule that takes effect and later is made of no force or effect by enactment of a joint resolution under section 802 shall be treated as though such rule had never taken effect.”

Also, the CRA disapproval process was explicitly designed to be used before or after rules have taken effect.  For example, Section 802 of the act allows Members of Congress to introduce resolutions of disapproval for 60 “days of continuous session” after Congress receives a rule – which excludes all calendar days when either the House or the Senate is adjourned for more than three days.  Furthermore, if a rule is submitted to Congress with less than 60 Senate “session days” or House “legislative days” prior to sine die adjournment, the CRA requires that the rule be carried over to the next session of Congress, and it is treated as if it was submitted on the 15th legislative or session day – thereby starting the clock for a new 60 “days of continuous session” during which Members of Congress can introduce resolutions of disapproval.[16]  As a result, Members are allowed to introduce resolutions of disapproval regarding rules that could have taken effect months earlier.  Finally, expedited procedures in the Senate are available for 60 session days after rules are submitted to Congress, and it normally takes much more than 60 calendar days for the Senate to use all 60 session days.

Errors in GAO’s Major Rule Reports

An examination of more than 200 GAO major rule reports for a three-year period (rules published from April 2015 through March 2018) revealed that these reports frequently suffered from some of the same legal and methodological errors that were apparent in the March 2018 GAO report on the CRA.  Specifically, the reports were inconsistent with regard to the interpretation of the “good cause” provision in the CRA, and they frequently measured the length of the 60-day delay period incorrectly.  Also, the reports often did not contain all of the information that Congress and the public would need to understand how GAO reached its compliance determinations.

“Good Cause” Inconsistency

For example, the major rule reports varied in how “good cause” was treated in relation to the CRA requirement to delay the effective dates of rules for 60 days.  In some reports, GAO allowed agencies to waive the 60-day delay requirement when the agencies had claimed “good cause” to avoid notice and comment under 5 U.S.C. 553(b)(3)(B), but in other reports GAO did not.  The same was true with regard to claims of good cause to waive effective dates under 5 U.S.C. 553(d)(3); sometimes such claims were permitted to waive the 60-day delay requirement, but other times they were not.  Also, GAO sometimes interpreted agency claims under Section 553(b)(3)(B) as claims under Section 553(d)(3), and allowed agencies to make rules effective in less than 60 days.

Incorrect Measurement of Delay Period

The major rule reports also appear to have measured the 60-day period incorrectly, leading to incorrect conclusions regarding agency compliance with the CRA.  Some of these errors appear to have occurred because of the procedures that GAO said it used in its March 2018 report.  In at least 15 of its major rule reports, GAO appears to have used the dates that it received the rules as a proxy for congressional receipt, and (because GAO received the rules at least 60 days before their effective dates) erroneously concluded that the agencies had complied with the CRA. In a number of other major rule reports, even though GAO received the major rules fewer than 60 days prior to their effective dates, there was no indication that GAO checked to see when either House of Congress received the rules.  As a result, GAO erroneously concluded that the issuing agencies had complied with the CRA’s delay requirement.

In still other major rule reports, GAO concluded that the rulemaking agency was in compliance with the CRA’s 60-day delay requirement, but the information needed to determine noncompliance was contained in the GAO major rule reports or GAO’s CRA database.  For example, in some reports, GAO provided the dates showing that rules had been published in the Federal Register fewer than 60 days prior to their effective dates, but GAO nevertheless stated that the issuing agencies had “complied with the applicable requirements.”

Incomplete Information

The major rule reports were also frequently incomplete in that they did not contain all of the information readers would need to understand how GAO determined that a rule was or was not in compliance with the 60-day delay requirement: (1) the date that Congress (i.e., the last chamber) received the rule, (2) the date the rule was published in the Federal Register, and (3) the effective date of the rule.  GAO only rarely mentioned when Congress received the rules, and the reports frequently did not mention their effective dates.  As a result, based only on the information in the major rule reports, it was often impossible to know whether GAO’s conclusions were correct, or to understand why GAO reached those conclusions.

Conclusions

The CRA was enacted in March 1996, and during its first 20 years of implementation it was used to disapprove only one rule. However, since February 2017, Congress and the President have used the CRA to disapprove 16 agency rules covering a wide range of policy issues, from environmental protection to the ability of the mentally ill to purchase firearms.  Also, the recognized scope of the CRA has recently been expanded to include rules and guidance documents that were issued at any time since the CRA was enacted in 1996, but were not submitted to Congress at the time they were issued.  Although the total number of such unsubmitted covered rules and guidance documents is unclear, the number of guidance documents alone could be in the thousands.

Because of this increased level of activity and its expanded applicability, the CRA has taken on more importance within the past 18 months, and is now viewed by some as a “secret weapon” that Congress and the President can use to change the direction of public policy.[17] Therefore, whenever anyone speaks or writes about the CRA, and particularly when those statements are making judgments about whether or not federal agencies are complying with the act’s requirements, it is essential that those characterizations and judgments are accurate.

It is particularly important that GAO’s reports, testimonies, and legal opinions regarding the CRA be accurate.  Congress and the public have long relied on GAO as an unimpeachable source of valid, unbiased, and reliable information.   Also, GAO has played a increasingly important role in expanding the scope of the CRA, issuing six legal opinions from October 2017 through May 2018 regarding whether certain agency actions constitute “rules” under the act (more than half as many as were issued during the first 20 years of the CRA’s existence).[18]  The Senate considers the publication of affirmative GAO opinions in the Congressional Record as the date when Members may introduce resolutions of disapproval.  Because GAO now plays a more important role than ever in the CRA process, it is more important than ever that its opinions, testimonies, and reports regarding the CRA be considered credible and reliable.

Recommendations

Therefore, GAO should reexamine and amend its March 2018 report and testimony, and should reexamine all of its major rule reports and, where necessary, amend them.  Those reexaminations should consistently: (1) use the interpretation of the “good cause” exception that GAO used for at least the first 10 years of the CRA’s implementation (and in the two major rule reports that were reissued in April 2018); and (2) measure the length of the required 60-day delay periods from the starting points that were stipulated in the CRA – i.e., when a rule was published in the Federal Register, or when a rule was received by Congress (whichever is later).  In addition, GAO should clearly indicate in its revised March 2018 report and testimony that any failure to delay the effective dates of major rules for the full 60-day period has no effect on Congress’ overall ability to use the CRA to disapprove agency rules.

Also, GAO’s major rule reports should be more transparent to Congress and the public, clearly laying out all of the information readers need to understand how and why GAO made its CRA compliance determinations.  Specifically, GAO should indicate in each of its major rule reports (1) when Congress as a whole (i.e., the last chamber) received the rule at issue, (2) when the rule was published in the Federal Register (if it was published), and (3) when the rule is scheduled to take effect.

GAO Responses

GAO was first alerted to many of these issues just after the March 2018 was issued, it responded nearly two weeks later by saying that the judgments in the report “were appropriate and conformed to GAO policies and procedures.”[19] GAO was then provided a more detailed description of the concerns, and nearly six weeks later responded by generally defending the methodology and conclusions in its reports. Finally, when GAO was provided with a draft of this report in late May 2018, GAO said it was initiating a review by its Chief Quality Officer and staff from the Office of the General Counsel.  As of the date of this report, six weeks after GAO started this latest review, and nearly four months after GAO was first notified of these concerns, GAO’s review was reportedly continuing.


[1] The author worked at GAO from 1980 to 2004, and then at the Congressional Research Service from 2004 until he retired in 2011.  After retirement, he served as a consultant and special counsel to the Administrative Conference of the United States (ACUS) for several years.  He is no longer affiliated with any organization.

[2] U.S. Government Accountability Office (hereafter, GAO), Federal Rulemaking: OMB Should Work with Agencies to Improve Congressional Review Act Compliance during and at the End of Presidents’ Terms, GAO-18-183, March 13, 2018.  The CRA defines a “major” rule to include those with a $100 million annual impact on the economy.

[3] Section 801(a)(2)(A) of the CRA requires GAO to prepare a report for Congress on each major rule, including an assessment of the issuing agency’s compliance with certain rulemaking requirements.  To view an index to GAO’s major rule reports, or to research those reports, see https://www.gao.gov/fedrules.html.

[4] Dechert LLP, “Congress Applies the Congressional Review Act in a New Way – Voiding CFPB Bulletin on Indirect Auto Lending,” June 7, 2018, available at https://www.jdsupra.com/legalnews/congress-applies-the-congressional-41466/.

[5] 5 U.S.C. 801(a)(3).

[6] 5 U.S.C. 808(2).

[7] GAO, Congressional Review Act, GAO/T-OGC-97-29, March 6, 1997, p. 3; Congressional Review Act: Implementation and Coordination, GAO/T-OGC-98-38, March 10, 1998, pp. 3-4; Regulatory Reform: Major Rules Submitted for Congressional Review During the First 2 Years, GAO-GGD-98-102R, April 24, 1998, p. 11; Congressional Review Act: Update on Implementation and Coordination, GAO/T-OGC-98-55, June 17, 1998, p. 4; and Federal Rulemaking: Perspectives on 10 Years of Congressional Review Act Implementation, GAO-06-601T, March 30, 2006, p. 5.

[8] Congressional Record, April 18, 1996, p. S3683.

[9] Memorandum from Jacob J. Lew, Director, Office of Management and Budget, for the Heads of Departments, Agencies, and Independent Establishments, “Guidance for Implementing the Congressional Review Act,” M-99-13, March 30, 1999, p. 6, available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/1999/m99-13.pdf.

[10] CRS, Congressional Review Act: Rules Not Submitted to GAO and Congress, R40997, December 29, 2009, p. 3, available at http://www.thecre.com/forum2/wp-content/uploads/2014/08/CRS-Report-GAO.pdf; and The Congressional Review Act: Frequently Asked Questions, R43992, November 17, 2016, available at https://fas.org/sgp/crs/misc/R43992.pdf.

[11] GAO, Federal Rulemaking: Agencies Could Take Additional Steps to Respond to

Public Comments, GAO-13-21, December 20, 2012.  GAO said about 35% of major rules had no notice of proposed rulemaking, with agencies frequently citing “good cause.”

[12] GAO, B-329681, April 26, 2018, p. 2, available at https://www.gao.gov/assets/690/689388.pdf; and B-329682, April 26, 2018, p. 2, available at https://www.gao.gov/assets/690/689409.pdf.

[13] See CRS, R43992, op. cit., p. 12.

[14] See, for example, GAO, B-289880, April 5, 2002,

[15] GAO-18-183, op. cit., Highlights, p. 26, and p. 36.

[16] For more on this issue, see CRS, Congressional Review Act: Disapproval of Rules in a Subsequent Session of Congress, RL34633, September 3, 2008, available at https://fas.org/sgp/crs/misc/RL34633.pdf.

[17] Fred Barnes, “Congressional Republicans’ Secret Weapon,” The Weekly Standard,, May 25, 2018, available at https://www.weeklystandard.com/fred-barnes/congressional-republicans-secret-weapon; and Michael Grunwald, “Trump’s Secret Weapon Against Obama’s Legacy,” Politico Magazine, April 10, 2017, available at https://www.politico.com/magazine/story/2017/04/donald-trump-obama-legacy-215009.

[18] See, for example, GAO, B-329272: Oct 19, 2017; B-238859: Oct 23, 2017; B-329065: Nov 15, 2017; and B-329129: Dec 5, 2017.

[19] Email from Charles, Managing Director, GAO’s Office of Public Affairs, March 26, 2018.

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