Obama's Regulatory Reforms Protect the Status Quo

1/25/2011

On Jan. 18, President Obama issued a long-awaited executive order on the regulatory process and two related presidential memoranda. The order and the memos are aimed at reaffirming the existing regulatory process rather than significantly reforming it. The most impactful of the three documents is likely to be the memo on regulatory compliance, which stems from the administration's commitment to greater government accountability.

In a Jan. 30, 2009, memo, Obama sought to reform the regulatory process, stating that the principles set out in Executive Order 12866 (E.O. 12866), "Regulatory Planning and Review," "should be revisited." E.O. 12866 is the 1993 presidential order that defines much of the structure by which agencies produce regulations.

The president's 2009 memo asked agencies to develop within 100 days recommendations for a new order. In an unprecedented step, the administration solicited public comments on the development of the order, and it received comments from approximately 160 different organizations and individuals. Nearly two years later, the new executive order reaffirms the principles contained in E.O. 12866 and adds some positive new elements. The order does little, however, to change the existing burdensome regulatory process and could potentially distract agencies with time-consuming reviews of regulations, depending on how the administration implements the order. It is unclear whether any of this is the result of Obama's 2009 memo or the recommendation and public comment process that followed.

Besides reaffirming key elements of E.O. 12866, the new order emphasizes three concepts. First, the order states that "regulations shall be based, to the extent feasible and consistent with law, on the open exchange of information and perspectives among State, local, and tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole."

This focus on public participation tracks efforts within the administration to improve electronic rulemaking by encouraging agencies to have an "open exchange of information" and to create more complete rulemaking dockets. This section urges agencies to provide "timely online access to the rulemaking docket on Regulations.gov, including relevant scientific and technical findings" in "open formats" that can be easily searched and downloaded.

Second, the order emphasizes the administration's focus on scientific integrity in the rulemaking process, an issue not addressed by E.O. 12866. Section 5 of the order states, "Consistent with the President's Memorandum for the Heads of Executive Departments and Agencies, 'Scientific Integrity' (March 9, 2009), and its implementing guidance, each agency shall ensure the objectivity of any scientific and technological information and processes used to support the agency's regulatory actions."

In addition to the March memo, the Office of Science and Technology Policy issued a memo to executive branch agencies touting the importance of science in policy development and identifying three issues in need of agency attention: federal scientists' right to communicate their work to the media and the public; scientific and technical advice developed and presented by federal advisory committees; and professional development of federal scientists and engineers. Scientific integrity issues became an important focus of this administration because of the extensive political interference in scientific and technical issues exerted by the Bush administration.

Third, the Obama order contains a section called "Retrospective Analyses of Existing Rules," which directs agencies to consider how to best review rules "that may be outmoded, ineffective, insufficient, or excessively burdensome." This section requires agencies to submit to the Office of Information and Regulatory Affairs (OIRA) preliminary plans by which agencies will periodically review existing rules. Agencies already conduct reviews of some rules as requirements or needs exist.

E.O. 12866 has similar language, which required a "program" within 90 days, while the new E.O. asks for only a "preliminary plan" within 120 days. The new order urges agencies to release the results of the retroactive analyses; E.O. 12866 was silent on the topic of disclosure of reviews.

Obama's memo entitled "Regulatory Flexibility, Small Business, and Job Creation" accepts the long-held position of corporations and conservatives that regulations impose unnecessary burdens on small businesses. This assumption was reflected in the Regulatory Flexibility Act (RFA), enacted in 1980. The law requires agencies to conduct an assessment of a proposed regulation's impact on small entities.

While the memo provides little in the way of new requirements, it does say that agencies are "to reduce regulatory burdens on small businesses…" There is no emphasis on balancing these burdens with the benefits generated by public protections, and the approach is inconsistent with the balancing of costs and benefits, which the administration has been advocating for the last two years. Moreover, the memo states that regulatory flexibility analyses that agencies conduct under the RFA are intended to ensure that proposed and final rules "are less likely to be based on intuition and guesswork." In making such a statement, the memo repeats a false notion perpetuated by anti-regulatory forces. In fact, public protections are usually developed in a painstaking fashion based on fact, science, interagency review, and extensive public comment periods.

The second memo released by the president as part of his regulatory reform strategy is about regulatory compliance. The memo builds on the government accountability agenda of the administration by focusing on disclosure of regulatory data by agencies. It directs agencies to develop within 120 days plans to disclose regulatory compliance and enforcement activities in online, searchable formats. This disclosure is intended to allow the public and the Office of Management and Budget (OMB) to more easily assess which agencies are most effectively enforcing compliance and reducing overlapping enforcement efforts. If fully implemented, the emphasis on transparency should allow the public to hold the administration accountable for its enforcement actions.

Viewed as a whole, the reform policies issued by the administration do little to achieve the transformation of the regulatory process that Obama called for when he ordered E.O. 12866 to be revisited. Rather than defend the work of his administration in providing health, safety, and environmental protections, the policies leave in place a process designed to delay and stifle agencies' abilities to produce timely and responsive policies to address the serious problems facing the nation.