OMB Nominee Declines to Endorse New FHWA Policy Guidance

OMB Nominee Declines to Endorse New FHWA Policy Guidance

February 03, 2022  | Jeff Davis

President Biden’s nominee to be his budget director declined to defend the Federal Highway Administration’s controversial new policy guidance document when asked about it on two occasions in her Senate confirmation hearing this week.

Shalanda Young, who has been Acting Director of the Office of Management and Budget since early last year and is now the nominee for the full-time job, had her confirmation hearing before the Senate Budget Committee on February 1. She was asked about the FHWA’s December 16, 2021 “Policy on Using Bipartisan Infrastructure Law Resources to Build a Better America.” (For an explanation of why the policy document is controversial, see our coverage here.)

First, Young had this exchange with the ranking minority member of the Budget Committee, Lindsey Graham (R-SC):

SEN. GRAHAM: We just passed a bipartisan infrastructure package that I voted for and it has a lot of money for roads and bridges and ports. One of the things that bothers a lot of us not just me is that the Federal Highway Administration issued a memo recently that says…that runs counter to Congressional intent by discouraging the use of federal dollars by states for new highway capacity projects. In South Carolina, we need all the highways we can get. What’s your view about that memorandum?

MS. YOUNG: Senator, I was not involved in that memorandum and am happy to take your concerns back and work with your to address any shortcomings…

SEN. GRAHAM: Please do, because a lot of who voted for that bill expected the states to have the flexibility they’ve had in the past to do, you know, appropriately what they need to do. In our state, we do need more roads, and I’d appreciate it if you could talk to people over at the highway department about that.

Later in the hearing, Sen. Mitt Romney (R-UT) raised the issue again:

SEN. ROMNEY: I was one of those who was part of the bipartisan negotiating team that put together the infrastructure bill. Our largest single investment was in highways. You can imagine our surprise when we see the Department of Transportation indicating that the highway money can’t be used for increasing capacity of highways. This direction flies in the face of our intent, and our needs. I recognize there are some states that aren’t growing and may not need additional capacity – New York, New Jersey, Delaware, Rhode Island, and so forth. But there are other states that are growing fast – South Carolina, Florida, my state of Utah, fastest growing state in the nation over the last decade. We need to increase the capacity in our highways or were gonna not see the economic growth which we projected as being part of this bill. Could you please get back to me and other members of our bipartisan group on progress on this front and what the status will actually be?

MS. YOUNG: Senator, the ranking member has brought this to my attention today. I will absolutely look into this and thank you for your work on that piece of legislation.

This raises two questions. First of all, was the FHWA policy guidance sent to OMB for approval prior to its public release? All formal regulations and Federal Register notices, and a lot of other types of communications with the public, have to be pre-cleared by OMB to ensure that they are consistent with Administration policy and allow the White House time for its own review as well as possible consultation with other agencies and departments. Young wasn’t familiar with the policy statement, so either (a) it wasn’t sent through OMB at all, or (b) it was sent through OMB and approved, but was not flagged as being a big deal, so no one briefed the Acting Director on it.

Second, has anyone on Capitol Hill requested a GAO review of the FHWA policy guidance document to determine if it is subject to the Congressional Review Act? The FHWA policy guidance was not submitted to Congress, as a proposed formal rule would have been. But that doesn’t mean that the guidance document is exempt from the Congressional Review Act. As this helpful Congressional Research Service report notes:

…some agency actions, such as guidance documents, that may not be subject to notice-and-comment rulemaking procedures could still be considered rules under the CRA and thus could be subject to the CRA’s fast-track disapproval procedures…

To avoid Congress being denied its opportunity to review rules under the CRA, however, a practice has developed that allows Congress to employ the law’s review mechanism even when an agency does not submit a rule for review. That practice has involved seeking an opinion from GAO on whether an agency action should have been submitted under the CRA (i.e., whether the action is covered by the CRA’s definition of rule).

If a Member requests a GAO opinion and GAO concludes that an action should have been submitted, under current practice, Congress can then proceed with consideration of a joint resolution of disapproval. While the House and Senate Parliamentarians are the sole definitive arbiters of procedural matters under the CRA—including the determination of whether a joint resolution of disapproval is privileged under the CRA—it appears that, in recent instances, the chamber Parliamentarians have generally deferred to GAO’s opinions on whether an agency action is covered.

If GAO finds that the FHWA guidance document was important enough that it should have been submitted to Congress like a formal rule, then the Republicans on the Environment and Public Works Committee could use the “fast track” procedures under the Congressional Review Act and force a Senate floor vote on a resolution overturning the guidance document. They could not force the House to take it up, but a Senate vote would put people on record.

The December 16 memo may be enough of an internal policy statement to avoid being classified by GAO as being akin to a rule. But the “Additional Planned Actions” part of the guidance document lists a host of future things that FHWA intends to do, including “incorporating the principles advanced in this Policy into all guidance documents issued for ‘legacy’ apportioned programs for which the BIL includes changes in eligibility or other requirements” and “incorporating the principles advanced in this Policy into all guidance and regulatory documents issued for new programs created by the BIL and administered by FHWA…”

If FHWA follows through, many of those actions could or should be subject to the Congressional Review Act procedures, even if the December 16 policy statement is not. So Senate floor votes on these policies could still be in the future.

In any event, at the end of the hearing, chairman Bernie Sanders (I-VT) said that members had until noon on February 2 to submit questions in writing for the record for Young, and that Young then would have until noon on February 9 to submit her answers. So, assuming that Graham or Romney’s staffs (or someone else) submitted a QFR for Young on this issue, we should see her written reply next week.

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