It has been a busy couple of days for afficionados of the regulatory process (those few of us). Two days ago President Obama directed OMB Director Peter Orszag to reexamine the primary executive order (12866) on regulatory review. Yesterday, Yesterday President Obama revoked Executive Order 13422.
It has been a busy couple of days for afficionados of the regulatory process (those few of us). Two days ago President Obama directed OMB Director Peter Orszag to reexamine the primary executive order (12866) on regulatory review. Yesterday, Yesterday President Obama revoked Executive Order 13422.
E.O. 13422 was issued by President Bush in 2007. It made three main changes to E.O. 12866. The first of these was to require that agencies demonstrate that a "market failure" existed whenever issuing a significant regulation. The second was to require a new position at each agency, a "regulatory policy officer" who was presidentially appointed to sign off on each significant regulation.
These two changes were widely decried but may have been largely symbolic in practice. Agencies are quite adept at finding rationales for their regulations and any economist worth his salt could find a market failure rationale for most agency actions. As for the regulatory policy officer, this ostensibly increases the role of politics in the regulatory process but agency heads are also politically appointed and it is hard to imagine that many important regulations would escape their notice in this day and age.
The third change however, is potentially the most significant. It gave OMB (specifically the Office of Information and Regulatory Affairs (OIRA)) authority to review significant agency guidance documents. Agencies issue guidance in order to clarify their regulations and they are usually issued to facilitate compliance. However, as regulation has become more difficult for agencies, agency opponents have accused agencies as using guidance documents as a backdoor means of regulation.
Giving OIRA authority to review guidance documents potentially extends presidential control of agency actions. Revoking the E.O. returns this authority to agencies.