The 50th Anniversary of Centralized Regulatory Review

Calendar Year 2019 marks the fiftieth year since Professor Alan Schmid on leave to a position in the Pentagon declared that benefit-cost analysis should be applied to regulations–a giant departure from its then use to analyze the economic merits of civil works projects such as inland waterways and dams. The foundation for centralized regulatory review (White House Office of Management and Budget review of agency regulations) was laid when, in the Johnson Administration, the Office of the Secretary of the Army began reviewing benefit-cost analyses of Corps of Engineers regulations. Two years subsequent to the publication of Professor Schmid’s paper the Office of Management and Budget initiated the first centralized regulatory review process when the Nixon Administration initiated a review of environmental, health and safety rules with an emphasis on EPA rules. The resultant program which required an analysis of the benefits and costs of a regulation was named the Quality of Life Review and was the first centralized regulatory review program.

In each of the three ensuing Administrations every President strengthened the centralized regulatory review of regulations through the issuance of executive orders, Ford (inflation/economic impact statements), Carter (OMB oversight of the regulatory process) and then the Iconic Executive Order 12291(Reagan) which mandated for the first time–on a government-wide basis–both the benefit-cost analysis of rules and that they be submitted to OMB for review. These landmark actions were then reinforced by supporting executive orders issued by each and every subsequent President including Executive Order 12866 (Clinton), the successor and prevailing executive order for centralized regulatory review.

It is possible that as a result of the aforementioned executive orders that we are entering the stage where Executive Orders will command an even increasingly greater role in the management of the administrative state? In fact a number of recent Administrations have made an exponential increase in the breadth and depth of executive orders.

Time Magazine has stated that Executive Order 12291 is one of nine executive orders that has “changed the course of America”; steps should be taken to ensure that executive orders abide by the high standards established by Executive Order 12291. Failure to do could result in a game changing intervention by either the Congress or the Courts which would jeopardize centralized regulatory review.  It is for this reason that there is a need to review the procedures and standards used for the formulation and implementation of executive orders as set forth in The 50th Anniversary of Centralized Regulatory Review.

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