Advancing Regulations, Retreating Review

By February 19, 2009Regulations

Correction to original post. Executive Order 13422 was not drafted by Susan Dudley. Dudley arrived at OMB on January 30, 2007 — 12 days after EO 13422 was issued (January 18, 2007).

Iain Murray of the Competitive Enterprise Institute sees maneuvering and changes under way in the Executive Branch’s regulatory approval process, as President Obama rescinds President Bush’s Executive Orders 13258 (drafted by John Graham) and 13422 (drafted by Susan Dudley) in order to revert to Clinton’s EO 12866 (drafted by Sally Katzen). Among the impacts:

[13258] and 13422 required agencies preparing draft rules and guidance docs to “identify in writing the specific market failure (such as externalities, market power, lack of information) or other specific problem that [the rule or guidance] intends to address (including, where applicable, the failures of public institutions) that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted.”  Whereas EO 12866 requires agencies to “identify the problem that it intends to address (including, where applicable, the failures of private markets or public institutions that warrant new agency action) as well as assess the significance of that problem. . . . examine whether existing regulations (or other law) have created, or contributed to, the problem that a new regulation is intended to correct and whether those regulations (or other law) should be modified to achieve the intended goal of regulation more effectively.  . . . [and] identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.”

Guidance docs will no longer go through the review process at the Office of Information and Regulatory Affairs, giving agencies more leeway, as we understand it.

OMB Watch, activist supporters of the intrusive regulatory state, find much to like in the White House’s current regulatory reordering.

The executive order Obama issued, Executive Order 13497, was published in the Federal Register on Feb. 4. It revoked a controversial order Bush issued in January 2007 that gave OIRA more control over agency regulatory practices by amending E.O. 12866. Critics of the Bush changes, including OMB Watch, argued that additional delay in issuing regulations would result from two changes: 1) making regulatory policy officers within agencies presidential appointees and giving them power to initiate or kill regulations, thus usurping what had traditionally been a power of the agency heads; and 2) requiring agencies to submit significant guidance documents (nonbinding information documents of all types that clarify how to implement rules) to OIRA for review before releasing the documents. There was no time limit by which OIRA had to act on the guidance documents. 

Wonder how OIRA designee Cass Sunstein regards all this. Like Judd Gregg regarded the Census shift?


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