
The First 100 Days: Recommendations for President-Elect Obama
12/4/2008
1. Place a moratorium on finalizing any new regulations, and review those rules finalized but not yet in effect, except those required by statutory deadlines, court order, or necessary to meet regulatory emergencies, for 60 days pending agency review and reconsideration.
Most recent presidential administrations have developed regulations in the closing days and months of their administrations that reflect that outgoing president's policy priorities. These "midnight regulations" may be hurriedly developed without full vetting or careful consideration.
Some midnight regulations may still be winding their way toward completion as a new president takes office. The new president should issue a 60-day moratorium on all rules not yet finalized, giving his appointees time to adequately review them. The moratorium should be announced in a memorandum to agency heads on the first day in office in January 2009. Moratoria have become standard operating procedure for incoming administrations to stop any regulations that are in the pipeline that may be inconsistent with the new president's policies and priorities.
For those midnight regulations the previous president finalized and published, the new administration should review any final rules not yet in effect. If new rules that have not been implemented need reconsideration, the administration should determine the approaches that can be employed to change or rescind a rule on a case-by-case basis.
2. To set a new tone for the new administration, the president should pursue the timely appointment of qualified individuals to regulatory agencies critical to protecting the public. In the past, presidents have too often appointed people to head agencies who were either unqualified or were too closely tied to interests they are asked to regulate as agency leaders. These appointments often have had severe consequences for the interests public protections are intended to serve. If a president appoints officials who formerly worked for the industries they will now oversee, the president and Congress need to ensure that the appointee will work in the public's interest.
The new president should draw attention to the importance and uniqueness of regulatory agencies by quickly appointing qualified people with the knowledge, technical expertise, and management skills to restore these agencies to the mission of protecting the public.
3. Increase agency funding for regulatory implementation and enforcement. Regulatory agencies urgently need more resources to meet their statutory obligations and organizational missions, as well as for regulatory compliance and enforcement. (See Recommendation C.1.) The new president will immediately need to begin preparing his budget proposal for FY 2010. The president-elect should ask agencies to review their budgets to identify data gaps, restore needed collection programs, and address new areas of information needs as they are confronted with new regulatory problems, and for developing and enforcing regulations. Once the new president takes office, any changes to agency budget requests should be submitted to OMB to help the president in preparing budget revisions for Fiscal Years 2009 and 2010.
4. The president should form a blue ribbon commission to analyze the regulatory process with the goals of examining existing requirements and reducing unnecessary delay. The president should establish a blue ribbon commission of experts on federal regulation, including those who may work in government, to: (a) identify existing regulatory requirements imposed by statute, by executive branch policies, and by organizational barriers; (b) make recommendations for changes in regulatory executive orders, directives, and memoranda in order to reduce delays in the rulemaking process; and (c) make recommendations for changes in statutory and procedural requirements in order to reduce delays. The commission should be created within the first 100 days of the administration and the results sent to the president within six months. The president should use this report as a basis for making changes to executive orders and other regulatory policy pronouncements as identified below.
We arrived at the decision to recommend a blue ribbon panel from our discussions about the many requirements — assessments, directives, legislative requirements, etc. — that create burdens on agencies as they try to promulgate regulations in a timely and flexible manner. Some of us felt that the Small Business Regulatory Enforcement Fairness Act (SBREFA), along with risk assessment, peer review, and other requirements, have caused unnecessary delay. Others focused on different analytical requirements or institutional barriers. Although many people have different opinions about which of these requirements are burdens and which are necessities, we agreed that serious reform should start by considering the removal of all such requirements from the process and then the addition of requirements deemed essential to efficient, effective, and timely rulemaking. A balanced blue ribbon panel of regulatory experts may be the most thoughtful way of achieving this broad evaluation of the process.
The commission should assess the costs involved in rulemaking. There is not reliable information about how much it costs agencies to develop rules or the costs of the procedural burdens imposed on agencies by various directives and assessments.
The president should use the results from the commission to consolidate needed analytical requirements and procedures so that agencies, Congress, and the public are clear about steps the president is imposing beyond those required by statute. Additionally, the president should ask Congress to remove or modify statutory requirements that are unnecessary or reduce agency flexibility in addressing regulatory needs. The president should use the report as the basis for suggesting to Congress a thorough reexamination, consolidation, and simplification of all statutes concerning rulemaking.
Congress should use the commission's work to address changes in the structure of the regulatory process, including 1) legislative reforms to the role of agencies, and 2) legislative reforms that address the role of the executive branch in the regulatory process (such as changes to the Paperwork Reduction Act, the Regulatory Flexibility Act, etc.)
Examining Procedural Requirements
The extensive number of analytical requirements and procedural hurdles are key factors in causing agency delay in promulgating rules.1 The commission should review statutes, executive orders, legislative provisions, and other procedural requirements currently imposed on agencies in developing and promulgating regulations. This broad review should include requirements that may not only affect a few agencies (such as panels created under the Small Business Regulatory Enforcement Fairness Act) but also government-wide requirements (such as assessments on private property rights and the impacts on children). The commission should then recommend executive and legislative branch actions to reduce delay from unnecessary burdens and lead to better protections and potential costs savings.
Executive Order 12866, Regulatory Planning and Review
The commission should also examine the appropriate relationship among agencies and between agencies and White House offices such as the Office of Information and Regulatory Affairs (OIRA). This review should occur with a focus on reducing procedural delays in the regulatory process. One important aspect of the review should be an examination of Executive Order 12866, Regulatory Planning and Review. The order establishes the president's policies regarding White House review of agency regulatory activities and establishes the relationship between the White House and the regulatory agencies.
Many strongly oppose centralized White House review, and there are equally strong proponents. The Steering Committee does not have a recommendation about whether there should be White House review of regulation, but the Committee does believe that if such review continues, it must be done in a manner far different than the past 28 years. The White House, including OMB, cannot continue to micromanage agency regulations.
This has significant implications for E.O. 12866, as this order (and its predecessor, E.O. 12291) has served as the vehicle for defining White House review of regulations and requirements imposed on agencies. Accordingly, we believe:
- That E.O. 12866 is outdated and should no longer continue to be used;
- That there needs to be a fundamental restructuring of the interaction between OIRA and the agencies, placing greater priority on agency expertise and statutory authority for decision-making; and
- That the era of imposing simplistic one-size-fits-all approaches to rulemaking in agencies by White House offices must end.
We are divided about whether any executive order is needed to replace E.O. 12866. If the president chooses to replace the order, we do agree that the restructuring or replacement of the order should be a product of the blue ribbon commission's careful review. We strongly urge the president to ensure that any new order streamlines or eliminates requirements that unnecessarily cause delay, encourages agency flexibility in addressing regulatory issues, and respects both the statutory authority and the expertise that regulatory agencies have in the rulemaking process. The locus of decision making authority should reside in the federal agencies given the legal mandate to promulgate regulations.
5. The president should appoint a qualified administrator for the Office of Information and Regulatory Affairs within the Office of Management and Budget who can lead the office in fulfillment of its statutory obligations and transform the role of OIRA. There has been great controversy over the role of OIRA in regulatory affairs because of its control over regulatory information and decisions. In this role, it has strayed from its responsibilities under the Paperwork Reduction Act and created procedural hurdles in the regulatory process. Too often, OIRA has usurped agency authority by forcing agencies to use certain standards, to rely solely on specific research that bolsters OIRA's point of view, and to change results in agency analyses in order to achieve outcomes the office wants.
The new administrator must change the role of OIRA, altering its substantive engagement in individual rules. We recognize that the president has a right to pursue consistency between agency decisions and his priorities. Also, the president exercises some control over regulatory decisions through the appointment and removal of agency heads. When conflicts arise over substance — whether between an agency developing a rule and the president or between two or more agency heads — the president (or more likely his designee, currently the OIRA administrator) should consult with agency heads, recognizing the legal responsibility of those appointed by the president to implement congressional delegations of authority, including regulatory responsibilities.
The new OIRA administrator should be well versed in issues pertaining to information resources management, including those dealing with dissemination of information, particularly since information management is the statutory responsibility of the office. The administrator should be charged with coordinating the recommendations from the blue ribbon commission (see Recommendation 4 above) that the president approves and assisting agency heads in implementing them. The president should appoint a person who is committed to and qualified to lead OIRA in this revised role.
6. The president should rescind E.O. 13422 immediately. The executive order, issued in January 2007, places significant rulemaking authority in Regulatory Policy Officers, displacing agency head authority and adding more power to White House rulemaking judgments. The E.O. requires that Regulatory Policy Officers approve the initiation of any rulemaking. Concerns have been raised about the constitutionality of delegating this authority and about placing the authority for initiating a rulemaking, especially in very large agencies, in one person's hands. In addition, the order is overly broad in its definition of what constitutes guidance from agencies, allowing OIRA to control the substance and timing of disclosure for information clearly not intended to impact rules. The elimination of E.O. 13422 should be announced at the same time as the 60-day moratorium on publishing new rules. (See Recommendation 1 above.)
7. The president should improve executive branch transparency by replacing the Ashcroft memorandum with another memorandum directing agencies to make more information publicly available. On October 12, 2001, then-Attorney General John Ashcroft issued a memorandum urging federal agencies to exercise greater caution in disclosing information requested under the Freedom of Information Act (FOIA). The Ashcroft memo prompted agencies to unnecessarily withhold government information from the public and, by pushing agencies to resist the public over FOIA requests, worsened the FOIA backlog. Ashcroft's memo superseded a 1993 memorandum from then-Attorney General Janet Reno that promoted disclosure of government information under FOIA unless it was "reasonably foreseeable that disclosure would be harmful." The Reno memo created an agency climate in which officials were more likely to share information with the public when responding to FOIA requests.2 The president should instruct the new Attorney General to embrace the policy direction of the Reno memo and to reverse the Ashcroft memo. He should do so as soon as possible to send a message that the new administration favors a presumption of greater transparency. (See Recommendation D.3.a.)
ENDNOTES
- We recognize that analytical and procedural requirements are not the sole reason for agency delay and inaction. In fact, when an administration wants to move quickly on a regulation, it has found a way to do so notwithstanding the many requirements that must be hurdled. Nonetheless, we agree that the existing requirements have been layered one on top of the other, creating hoops that are no longer meaningful and indeed add to the ossification.
- Because this report addresses the rulemaking process, the focus here is on the benefits of disclosing information on domestic policy issues, not foreign policy or national security matters. However, to the best of our knowledge, the push for greater disclosure under the Reno memo never led to the release of government information that risked our national security or public well-being.
