Rulemaking Requirements from the Executive Office of the President

From acus wiki
Revision as of 17:30, 9 November 2018 by Tori (talk | contribs) (→‎Other OMB Documents)
Jump to: navigation, search

This section discusses the most significant presidential Executive Orders, Bulletins, and Memoranda, which pertain to the rulemaking process or federal regulation. Other executive orders and memoranda may be found in other sections, e.g., those relating to the Federal Advisory Committee Act.

More information on many of these matters can be found on the website of OMB’s Office of Information and Regulatory Affairs (OIRA), and through ACUS's Table of Executive Order Requirements.

Lead Agency:

The Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB)

Executive Orders

Other White House Bulletins and Memoranda

Overview

History of Presidential Oversight of Rulemaking and Regulation

Presidential oversight of regulation is not a recent innovation. It has been in effect, in one form or another, since 1971, and it accompanied a major expansion in the scope and complexity of federal regulation that occurred in the 1960s and 1970s when a number of important social and environmental regulatory statutes were enacted.

In June 1971, President Nixon established a “Quality of Life Review” program, under which all “significant” draft proposed and final rules were submitted to the Office of Management and Budget (OMB), which circulated them to other agencies for comment. Agencies were required to submit a summary of their proposals, a description of the alternatives that had been considered, and a cost comparison of alternatives. In practice, this program applied to rules pertaining to environmental quality, consumer protection, and occupational health and safety.

In 1974, President Ford issued an executive order requiring executive branch agencies to prepare an “inflation impact statement” for each “major” federal action. The order empowered the Director of OMB to administer the program, with authority to delegate functions to other agencies, including the Council on Wage and Price Stability (COWPS). Under the Inflation Impact Statement program, agencies were required to prepare an inflation impact statement (IIS) for “major” rules prior to publication of the notice of proposed rulemaking (NPRM), and then to forward a summary of the IIS to COWPS upon publication of the NPRM. COWPS would review the IIS and, in its discretion, offer informal criticism of the proposal or participate in the public proceedings on the rule.

President Carter continued presidential review of agency rules by means of Executive Order 12,044, issued in 1978. Under the order, executive agencies were required to: (1) publish semi-annual agendas, describing and giving the legal bases for, any “significant” regulations under development by the agency; (2) establish procedures to identify “significant” rules, to evaluate their need, and to have the agency head assure that the “least burdensome of the acceptable alternatives” was proposed; and (3) prepare a “regulatory analysis” that examined the cost-effectiveness of alternative regulatory approaches for “major rules.”

President Carter also established a Regulatory Analysis Review Group to review the regulatory analyses prepared for a limited number of proposed “major” rules and to submit comments on the proposed rules during the public comment period. He created another rulemaking review body, the Regulatory Council, which was charged with coordinating agency rulemaking to avoid duplication of effort or conflicting policy in regulation of any area. These efforts to coordinate agency rulemaking were challenged unsuccessfully in several lawsuits.

President Reagan acted quickly after taking office to increase control over executive branch rulemaking. On February 17, 1981, the President issued an executive order on federal regulations designed “to reduce the burdens of existing and future regulations, increase agency accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and insure well-reasoned regulations.” The new Executive Order 12,291 replaced Executive Order 12,044, which President Reagan said had “proven ineffective.”

Executive Order 12,291 contained both substantive requirements and procedural steps to be followed in the development and promulgation of new rules. The Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget was given responsibility for implementing Executive Order 12,291. OMB’s rulemaking review function is supplemented by the powers it was given in the Paperwork Reduction Act of 1980, by which Congress statutorily established OIRA to, among other things, review and approve or disapprove agency “information collection requests.”

The Office of Legal Counsel in the U.S. Department of Justice issued an opinion supporting the validity of Executive Order 12,291. The opinion stated that the President’s authority to issue the order was based on his constitutional power to “take care that the laws be faithfully executed.” While concluding that any inquiry into Congressional intent in enacting specific rulemaking statutes “will usually support the legality of presidential supervision of rulemaking by Executive Branch agencies,” the opinion stated that presidential supervision of agency rulemaking “is more readily justified when it does not purport wholly to displace, but only to guide and limit, discretion which Congress had allocated to a particular subordinate official.”

Despite criticism of this new form of presidential review, President Reagan began his second term by expanding the program through Executive Order 12,498, which established a “regulatory planning process” with the purpose of helping to “ensure that each major step in the process of rule development is consistent with Administration policy.”

According to OMB, the problem with regulatory review under Executive Order 12,291 was that such review “often came late in the regulatory process, after huge investments of agency time and resources, and often after agency staff commitments to constituents had made it extremely difficult to consider any legally acceptable, but previously ignored, regulatory alternative.” This resulted, OMB said, in the “bureaucracy often present[ing] agency heads with faits accompli.”

Executive Order 12,498’s regulatory planning process was designed to avoid this problem. Under this procedure, the head of each agency was required to determine at the beginning of the regulatory process whether a proposed regulatory venture was “consistent with the goals of the Administration.” At the beginning of the year, Agency heads were to develop a plan for managing the agency’s most significant regulatory actions. OMB then reviewed the plan for consistency with the administration’s program and published the coordinated agency plans in a government-wide document. This document, entitled Regulatory Program of the United States Government, governed more than 20 major rulemaking agencies and was published each year during the second Reagan term and the Bush administration to inform Congress and the public of the government’s regulatory plans.

President Reagan, in 1987 and 1988, issued three additional executive orders, dealing with federalism, interference with property rights (which is still in effect), and the family. OMB was given a role in ensuring coordination of regulatory policy in these areas. President Bush basically continued the program of presidential review of agency rulemaking established by President Reagan, although due to Congressional opposition to OIRA actions, President Bush’s nominee to head OIRA was not confirmed. To counter this weakening of OIRA’s authority, President Bush created the Council on Competitiveness, headed by Vice President Quayle, and gave it authority to intervene in major agency rulemakings. Several of the Council’s interventions provoked intense criticisms leading up to the 1992 elections.

The Clinton Executive Order—Executive Order 12,866

With the election of President Clinton, one of his first actions was an attempt to reestablish some bipartisan consensus on rulemaking review. His nominee as OIRA Administrator was the first subcabinet nominee to be appointed. Following the example of the Reagan Administration, President Clinton then set out to redraft the extant Executive Order, and produced Executive Order 12,866 on September 30, 1993. This Order, which remains operative, carries over many of the principles of E.O. 12,291 (and E.O. 12,498), which it superseded, but it also made some significant modifications that simplified the process, made it more selective, and introduced more transparency into the OMB/agency consultations. In drafting this Order, the Clinton Administration followed many of the suggestions of ACUS in its Recommendation 88-9.

The Order begins with a lengthy “Statement of Regulatory Philosophy and Principles,” which are quite similar to those in Executive Order 12,291 except that it takes pains to specify that measurement of costs and benefits should include both quantifiable and qualitative measures. As with previous Orders, Executive Order 12,866 retains the traditional (since 1978) level of $100 million annual effect on the economy for those major rules (now referred to as “economically significant” rules) that must be accompanied by cost-benefit assessments when forwarded to OIRA as proposed and final rules.

Executive Order 12,866 also retains the OIRA review process for other rules, although it only requires that “significant regulatory actions” be subject to review. This includes those $100 million rules plus others that have material adverse effects on “the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” It also includes rules that may materially alter the budgetary impact of benefit programs or the rights of recipients, that raise “novel legal or policy issues” or are inconsistent or interfere with actions taken by another agency. The process established for identifying such “significant regulatory actions” relies on agency identification of them in the first instance, vetted by OIRA. Rules that are not so identified may be issued without OIRA review. This selectivity streamlined the review process considerably, and made it possible to include, for the first time, a deadline (of 90 days, with one 30-day extension allowed) for completion of OIRA review. In the event of an unresolved dispute between OIRA and the agency, the Vice President is directed to make the decision (or recommend one to the President).

The review process set forth in the Order made significant improvements in transparency. Following an ACUS recommendation closely, the Order provides that after the agency has concluded its rulemaking it should make available to the public all submissions to OIRA, and identify all changes made in the rule, noting those made at the behest of OIRA. In addition, OIRA, for its part, must regularize the way it receives any outside communications concerning an agency rule that is subject to review. Only the Administrator or her designee may receive such communications. OIRA must forward any such communications to the agency within ten days, invite agency officials to any meetings held with outsiders, and maintain a public log of all such contacts. At the end of the proceeding OIRA must also make available all documents exchanged with the agency.

In place of the Reagan E.O. 12,498 on regulatory planning, the Clinton Order establishes its own yearly planning mechanism. It continues the semiannual publication of the Unified Regulatory Agenda, which lists all proposed, pending and completed regulatory and deregulatory actions. And it requires that the October Agenda contain each agency’s annual Regulatory Plans, which must be approved personally by the agency head. These plans must be forwarded to OIRA (and then on to affected agencies, the Vice President and a group of named high-level White House Advisors) by June 1 of each year. The plans are supposed to also include agency determinations on which existing rules are to be reviewed and reconsidered during the ensuing year, and “preliminary estimates of the anticipated costs and benefits” of each rule planned for that calendar year. These actions do not represent any sharp break from the practices of previous administrations. However, Executive Order 12,866 is a departure in one regard—for the first time the independent regulatory agencies are specifically directed to comply with the planning and agenda provisions (though not with the rule-review process).

The Clinton Executive Order was generally well received by most observers of the regulatory scene. Its basic approach has remained fundamentally unchanged since its issuance, and OIRA has worked out a stable and workable relationship with the agencies in administering it. The once rather vibrant legal and policy debate over the pros and cons of presidential review has gradually evolved into a fairly broad agreement that it is not only legal, but that if properly administered, it is essential to effective executive branch management. Nevertheless, there has been some serious criticism of OIRA’s failure to meet the deadlines set in the Order.

President Clinton also issued a presidential directive on plain language, and number of other executive orders that remain in effect, concerning: environmental justice in minority populations and low-income populations (E.O. 12,898), civil justice reform (E.O. 12,988), protection of children from environmental risks (E.O. 13,045), federalism (E.O. 13,132), and consultation with Indian Tribal Governments (E.O. 13,175).

President Bush continued the use of Executive Order 12,866, although he did make several significant changes. In 2002, he made some small changes in Executive Order 13,258, basically removing the Vice President from the process. In January 2007, in Executive Order 13,422, he made more fundamental changes. Most significantly he added a requirement that “significant guidance documents” also be reviewed by OIRA in a way similar to significant regulatory actions. He also required that agencies identify in writing specific “market failures” that necessitate a rulemaking, that agency Regulatory Policy Officers be presidential appointees, that these officers must approve the Regulatory Plan, that aggregate costs and benefits for all rules must be included in the Regulatory Plan, and that agencies consider whether to use “formal” (“on the record”) rulemaking for “complex determinations”. However, as mentioned below, President Obama, upon assuming office, revoked the Bush changes and reinstated the original Clinton order. However, by later memorandum, the requirement that significant guidance documents be reviewed by OIRA was reinstated.

OIRA did issue a memorandum in September 2001, putting its own stamp on the E.O. 12,866 process. The memorandum describes the “general principles and procedures that will be applied by OMB in the implementation of E.O. 12,866 and related statutory and executive authority.”

Significantly, during the Bush Administration, OIRA also announced several new initiatives in its review process. First, it made extensive use of its website to publish its guidelines and other information pertaining to its review process and specific rule reviews. This continues today. Second, it began the practice of issuing public “return letters” that send rules back to the agency for reconsideration, “review letters” that comment on aspects of a particular rule review, and “prompt letters,” which are sent on OMB’s initiative and contain suggestions for new or stronger regulations. While these letters are still posted on reginfo.gov, the Obama and the Trump Administrations have made little use of this practice.

More importantly, during the Bush Administration, OMB also issued four far-reaching documents affecting the regulatory process that remain in effect today. In 2003 it issued a revised OMB Circular A-4, which provides guidance on the development of regulatory analyses. OMB also issued a more far-reaching and controversial “Peer Review Bulletin” in December 2004, which requires administrative agencies to conduct a peer review on all “influential regulatory information that the agency intends to disseminate.” Finally, in 2007, OMB issued an important new government-wide “Bulletin on Good Guidance Practices.” It also (along with the Office of Science and Technology Policy) issued a set of “Updated Principles for Risk Analysis.” In so doing it declined to finalize a Proposed Risk Assessment Bulletin that the two agencies had issued in January 2006, in favor of updating the Clinton Administration’s Principles issued in 1995. Finally, President Bush issued two other executive orders concerning regulations that remain in effect today: (1) analysis of adverse effects on energy supply, distribution, or use (E.O. 13,211) and (2) proper consideration of small entities in agency rulemaking (E.O. 13,272).

Developments in the Obama Administration

Shortly after taking office, President Obama revoked the Bush Amendments to Executive Order 12,866 and directed the Director of OMB, in consultation with regulatory agencies, to produce a set of recommendations for a new executive order on federal regulatory review within 100 days, followed by an unusual request for public comments on the same subject. Almost 200 public comments were received.

After about a year of internal consideration, the White House finally settled on its approach to OMB review—basically to reaffirm Executive Order 12,866. It did so on January 18, 2011, with Executive Order 13,563, Improving Regulation and Regulatory Review. In Section 1(b), the Order stated: “This order is supplemental to and reaffirms the principles, structures, and definitions governing contemporary regulatory review that were established in Executive Order 12866 . . . .”

It did contain a few new mandates and points of emphasis. Most notably, agencies were urged (as appropriate and within legal constraints) to (1) consider “values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts”; (2) “afford the public a meaningful opportunity to comment through the Internet on any proposed regulation, with a comment period that should generally be at least 60 days”; (3) “provide, for both proposed and final rules, timely online access to the rulemaking docket on regulations.gov, including relevant scientific and technical findings, in an open format that can be easily searched and downloaded”; (4) for proposed rules, provide “an opportunity for public comment on all pertinent parts of the rulemaking docket, including relevant scientific and technical findings”; (5) seek public input from affected persons “[b]efore issuing a notice of proposed rulemaking”; (6) “identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice”; (7) “promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned”; and (8) “[w]ithin 120 days of the date of this order, . . . develop and submit to [OIRA] a preliminary plan” for periodically reviewing “its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives.”

The one action mandate in the new Executive Order was for agencies to develop plans for retrospective review of their existing regulations. On May 26, 2011, the OIRA Administrator announced the results of this effort. On July 11, 2011, President Obama issued a follow-up Executive Order extending the terms of E.O. 13,563 to independent regulatory agencies. On September 15, 2015, President Obama issued Executive Order 13,707, titled Using Behavioral Science Insights to Better Serve the American People. Noting the value of insights from behavioral science to improve the “effectiveness and efficiency of Government.”

Developments in the Trump Administration

Shortly after taking office, President Trump issued Executive Order 13,771, Reducing Regulation and Controlling Regulatory Costs, which requires agencies to identify at least two regulations to be repealed for every proposed or promulgated regulation. The cost of each new regulation must be fully offset by the repeal specified above, and the agency must provide an approximation of the total costs or savings associated with each new regulation or repealed regulation. All regulations must be included in the Unified Agenda, and during the federal budget process, the OMB Director must identify to agencies a total amount of incremental costs of regulations permitted for that fiscal year. The order directed the Director of OMB to provide agency heads with guidance addressing the processes for measuring regulatory costs, the costs of existing regulations, what qualifies as new and offsetting regulations, and situations that would require waivers of the order’s requirements. OIRA issued Guidance Implementing Executive Order 13771, Titled “Reducing Regulation and Controlling Regulatory Costs” to assist agencies in carrying out these requirements.

President Trump also issued Executive Order 13,777, Enforcing the Regulatory Reform Agenda. This order requires the head of each agency to designate an official as its Regulatory Reform Officer (RRO) who would implement initiatives and policies including the EO 13,771, EO 12,866, and Section 6 of EO 13,563 regarding retrospective review. All agencies must also form a Regulatory Reform Task Force made up of the RRO, the Regulatory Policy Officer, a representative from the central policy office, and three senior agency officials if the agency is listed in 31 U.S.C. § 901(b)(1) (the executive departments, EPA, and NASA), which “shall evaluate existing regulations . . . and make recommendations to the agency head regarding their repeal, replacement, or modification.” In making these determinations, the task forces should focus on regulations that (1) “eliminate jobs, or inhibit job creation;” (2) “are outdated, unnecessary, or ineffective;” (3) “impose costs that exceed benefits;” (4) “create serious inconsistency or otherwise interfere with regulatory initiatives and policies;” (5) “are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001, . . . in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility; or” (6) “derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.” The Executive Order also requires agency heads to prioritize regulations that the Regulatory Reform Task Force identifies as outdated, unnecessary, or ineffective when implementing regulatory offsets under E.O. 13,771.

Finally, President Trump issued Executive Order 13,783, Promoting Energy Independence and Economic Growth, which directs agencies to review regulations that “potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources. . . .” This order also revoked Executive Order 13,653, Preparing the United States for the Impact of Climate Change, and memoranda under the Obama Administration related to climate change.

Bibliography

Congressional Documents

OMB/OIRA Documents

Reports to Congress on the Costs and Benefits of Regulations

Other OMB Documents

  • Regulatory Program of the United States Government (1987-1988) (and through 1990-91).
  • Report on Executive Order No. 12,866, 59 Fed. Reg. 24,293 (1994).
  • More Benefits Fewer Burdens—Creating a Regulatory System that Works For the American People, A Report to the President on the Third Anniversary of Executive Order 12,866 (1996).

ACUS Documents

Recommendations

CRS Documents

  • Maeve P. Carey, RL32240, The Federal Rulemaking Process: An Overview (June 17, 2013).
  • Maeve P. Carey, R41974, Cost-Benefit and Other Analysis Requirements in the Rulemaking Process (Dec. 9, 2014).
  • Vivian S. Chu & Daniel T. Shedd, R42720, Presidential Review of Independent Regulatory Commission Rulemaking: Legal Issues (Sept. 10, 2012).
  • Vivian S. Chu & Daniel T. Shedd, RS20846, Executive Orders: Issuance, Modification, and Revocation (Apr. 6, 2014).
  • Curtis Copeland, RL33862, Changes to the OMB Regulatory Review Process by Executive Order 13422 (Jan. 3, 2008).
  • Curtis Copeland, RL32397, Federal Rulemaking: The Role of the Office of Information and Regulatory Affairs (June 9, 2009).

GAO Documents

Other Government Documents

Selected Books and Articles

Miscellaneous

Retrieved from "https://sourcebook.acus.gov/index.php?title=Rulemaking_Requirements_from_the_Executive_Office_of_the_President&oldid=1062"