OMB Watch Comments on Obama Regulatory Reform Package

-For Immediate Release-
January 18, 2011

Contact: Brian Gumm, (202) 683-4812,

OMB Watch Comments on Obama Regulatory Reform Package

WASHINGTON, Jan. 18, 2011—The Obama administration today released three documents aimed at reforming some aspects of the regulatory process. Two of the actions, an executive order and a memorandum on small businesses and job creation, reaffirm existing approaches that have been in place for decades. Another memorandum seeks greater government accountability by directing agencies to disclose more regulatory compliance information. OMB Watch believes that while the reform package ushers in some positive policy measures, it also contains some problematic language and reinforces false notions regarding job creation and strong public protections.

The executive order's strong statement of regulatory principles restates those outlined in the existing executive order that defines the regulatory process (Executive Order 12866, issued in 1993), with which federal agencies already comply. Obama's order maintains the strong emphasis on cost-benefit analysis and balancing regulatory benefits with burdens on businesses. Consistent with the administration's focus on openness, the new order also emphasizes the need for agencies to include "the open exchange of information and perspectives" among a range of interested parties and the general public.

"Unfortunately, President Obama's regulatory executive order does little to change the mechanics of a broken regulatory process," said OMB Watch Executive Director Gary D. Bass. "The order reflects, however, the values the administration has stressed in its two years in office: greater public participation, decisions based on the best available science and technology, and greater agency flexibility," Bass said.

The balancing of benefits and burdens in the new executive order is undercut by the memo "Regulatory Flexibility, Small Business, and Job Creation." The memo reinforces the requirements found in the Regulatory Flexibility Act (RFA), which requires 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 RFA's requirements already burden agencies with procedural hurdles that can delay critical public protections. This memo may very well be taken as an insult by the federal agencies, which write reasoned, evidence-based rules now; those rules would never be approved if they were based on 'guesswork'," Bass said.

The second memo, "Regulatory Compliance," acknowledges the significant strides the administration and agencies have made in making regulatory materials available to the public. The memo requires agencies to develop within 120 days plans to make regulatory compliance and enforcement data available online in 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.

Bass noted, "The second memo appears to have been thoughtfully prepared, and OMB Watch applauds this extension of the administration's transparency efforts. It will likely lead to greater regulatory accountability."

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OMB Watch is a nonprofit research and advocacy organization dedicated to promoting government accountability, citizen participation in public policy decisions, and the use of fiscal and regulatory policy to serve the public interest. Find OMB Watch on Facebook and Twitter.

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