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Wonkology: Negotiated Rulemaking

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September 6, 2013


What is it?

Negotiated rulemaking, or "neg reg," is an alternate process used by Executive Branch (and independent) agencies to draft regulations with direct input from stakeholders. To develop a regulation using neg reg, the agency selects a 12- to 25-member committee that typically meets once a month for several months. The process involves negotiation among industry representatives and public and private interest groups, ideally allowing the negotiators to resolve concerns and reach consensus before the agency begins its standard notice-and-comment rulemaking procedure.

Is everything negotiable?

Federal agencies have used neg reg since the 1972 passage of the Federal Advisory Committee Act, although the process was more formally codified into law in 1990 and permanently reauthorized in 1996. Over the last 20 years, neg reg has been used across the Executive Branch, including by the Departments of Agriculture, Education, and Transportation, and the National Parks Service, the EPA, the Nuclear Regulatory Commission, and OSHA, among others. The Bush Administration used neg reg to set minimum standards for state-issued driver's licenses, while the Obama Administration used it to implement new regulations on mandatory pork price reporting.

September's hot topic in higher education

The Department of Education may be the agency that relies most frequently on neg reg to promulgate regulations. The centerpiece of President Obama's first term higher education regulatory agenda was the Department of Education's Program Integrity rulemaking. Although that process ultimately yielded several controversial regulations, none received more outspoken support and withering criticism than the "gainful employment rule." As then conceived, the rule tied federal student financial aid to student loan repayment rates and debt-to-income ratios for proprietary and vocational institutions. The Department of Education received a record 90,000 comments prior to its issuance of the 2011 iteration of the rule, only to have several provisions struck down by a federal judge last summer. Rather than appealing the ruling, the Department of Education has decided to begin anew with a slate of 15 negotiators and 14 alternates, announced last month, to write a rule that can pass judicial review. President Obama alluded to this process in his speech on higher education two weeks ago (live-tweeted by us). The first of the committee's negotiating sessions will begin on September 9 and last for three days.