A Historical Note on Centralized Regulatory Review for the Trump Administration: Nixon, Carter, Reagan, and Clinton

Editor’s Note: Cross-posted from OIRA Watch.

Decisions made in each of the aforementioned Administrations were a defining moment which shaped the breadth and depth of centralized regulatory review by the White House Office  of Management and Budget, the most significant institutional feature of the regulatory state.

Academicians are basically of two schools of thought, one believing that Presidential involvement in the regulatory process should be limited to oversight of the process but not control of the process and the other believing the President should  exercise both functions.

President Carter issued the first Executive Order, Executive Order 12044, which gave OMB oversight of the regulatory process but not control over individual regulations.

Section 5 (c) of the Order states:

The Office of Management and Budget shall assure the effective implementation of this Order. OMB shall report at least semiannually to the President on the effectiveness of the Order and agency compliance with its provisions. By May 1, 1980, OMB shall recommend to the President whether or not there is a continued need for the Order and any further steps or actions necessary to achieve its purposes.

Earlier, as discussed below, President Nixon initiated a far broader program but by a Memorandum to agencies not an Executive Order.

Within the Carter Administration the contents of the Executive Order were debated endlessly with OMB  review of individual regulations being taken off the table and instead Presidential oversight being the adopted policy. A number individuals, including veterans of the Nixon Quality of Life Review, were not satisfied with the limitations and worked to preserve the precedent of OMB review of individual regulations. The compromise was the establishment of the RARG, the Regulatory Analysis Review Group, which was a CEA-OMB lead interagency review of select regulations made on the record subsequent to the issuance of a proposed rule.

The Nixon Quality of Life Review was the most stringent of all centralized regulatory reviews conducted in the Executive Office of the President because it was conducted by the “budget” side of OMB meaning that those conducting the reviews not only reviewed an agency’s regulations but also its budget, personnel level, information collections and its overall policies to assess, and enforce, their compliance with Presidential policy. In addition the Nixon program granted OMB the authority to review guidance and related quasi-rulemaking documents.

For a number of reasons the strength of the Nixon Quality of Life Review process was lessened when Executive Order 12991 was issued in the Reagan Administration; the paramount reason was that the regulatory review function had to be separated from the budget function as a result of the proposal to create OIRA and secondarily because it did not apply to guidance documents.

Executive Order 12886 issued during the Clinton Administration reduced the strength of centralized review even further in that it limited OMB review to only those regulatory actions classified as significant; nonetheless the Clinton Executive Order was precedent-setting in that the entire concept of centralized regulatory review was in jeopardy. The Obama Administration, while adhering to the Clinton Executive Order, also made a very significant contribution to centralized regulatory review because it continued the centralized review of regulations after a de novo review of the matter. The Obama endorsement of centralized regulatory review, however defined, cemented its place in history because eight sitting Presidents endorsed its implementation.

The end result is that the current process for centralized regulatory review (Obama) is considerably more encompassing than that utilized by the Carter Administration but considerably less stringent than that of the Reagan Administration and most certainly less stringent than that of the Nixon Administration.

It should be noted that making a decision on the structure and responsibilities of OIRA without recognizing that it is currently operating at a fifty percent reduction in its initial personnel level, and the attendant need to restore it to is initial level if it to assume new responsibilities, is pure fantasy.

N. B. One potential reform which should be considered by the Trump Administration is to inject a level playing field into a program initiated during the second Bush Administration. Read this article for a more complete history of centralized regulatory review.

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