Moving Forward with Regulatory Lookback
Editor’s Note: The insightful and valuable article below on retrospective regulatory review analysis makes a statement which requires clarification. Specifically, the regulatory review function in the 1970s was far from “ad hoc and largely unmanaged.” To the contrary, as the history of pre-OIRA regulatory review explained, the Quality of Life Review (QLR) regulatory review process under President Nixon,
set the template for actions taken by the Ford, Carter, and Reagan Administrations since it: 1) required that proposed and final regulatory documents, including but not limited to rules, be submitted to OMB for review; 2) required economic analysis of regulations including a cost-benefit analysis and comparison to regulatory alternatives; and 3) established a regulatory calendar subject to OMB review. As discussed below, the budget side of OMB’s oversight of the regulatory review process, combined with the determination of the White House to ensure its authority over agency regulatory actions, ensured vigorous enforcement of the QLR process.
President Obama has rightly called on government agencies to establish ongoing routines for reviewing existing regulations to determine if they need modification or repeal. Over the last two years, the White House Office of Information and Regulatory Affairs (OIRA) has overseen a signature regulatory “lookback” initiative that has prompted dozens of federal agencies to review hundreds of regulations. This regulatory initiative represents a good first step toward increasing the retrospective review of regulation, but by itself will do little to build a lasting culture of serious regulatory evaluation. After all, past administrations have made similar review efforts, but these ad hoc exercises have never taken root. If President Obama is serious about institutionalizing the practice of retrospective review, his Administration will need to take further steps in the coming years. This essay offers three feasible actions – guidelines, plans, and prompts – that President Obama’s next OIRA Administrator should take to move forward with regulatory lookback and improve both the regularity and rigor of regulatory evaluation.
Responding to an executive order from President Obama, dozens of federal agencies over the last two years have undertaken extensive reviews of the regulations on their books, looking for antiquated, counterproductive, or unnecessary rules that should be modified or eliminated. According to the Administration, agencies have collectively completed more than five hundred regulatory reviews and initiated policy modifications expected to yield cost savings in the billions of dollars. These results look good, to be sure, but they are only a small step toward achieving the Administration’s broader goal of institutionalizing retrospective regulatory analysis. To avoid squandering the progress made so far, the Administration must use the next several years to take additional steps to improve retrospective regulatory analysis and identify still better targets for the application of more rigorous evaluation research.
The Obama Administration has sometimes characterized its existing retrospective review initiative as “historic” 2 and “unprecedented.” 3 But actually it is far from unprecedented. President Clinton issued an executive order requiring agencies to develop programs by which they would “periodically review” existing regulations, 4 and Vice President Gore oversaw a government-wide regulatory review process that trimmed a sizeable number of pages of outmoded rules from the Code of Federal Regulations. 5 Under President George W. Bush, the White House Office of Information and Regulatory Affairs (OIRA) invited members of the public to nominate existing rules needing review and reconsideration, a process which led to the scrutiny of nearly four hundred rules and regulatory guidance documents. 6
Although retrospectively reviewing regulation is far from new, what makes the Obama Administration’s latest round of review distinctive is its laudable but ambitious goal of institutionalizing the practice of what the Administration calls regulatory lookback. 7 President Obama’s first OIRA Administrator, Cass Sunstein, proclaimed that the Administration’s lookback would not be a “one-time endeavor” as in previous administrations; instead, the Obama Administration’s lookback aspires to be just a first step toward building “a regulatory culture of regular evaluation.” 8
Widespread acceptance of continuous regulatory review is exactly what is needed to fulfill what President Obama has rightly characterized as the government’s duty to “measure, and seek to improve, the actual results of regulatory requirements.” 9 Unfortunately, the federal government’s treatment of retrospective regulatory review still lags far behind agencies’ practice of prospectively analyzing proposed regulations, a process institutionalized by President Reagan and overseen by OIRA for the last thirty years. It is fair to say that retrospective review is today where prospective analysis was in the 1970s: ad hoc and largely unmanaged.
Without doing more, the Obama Administration’s recent lookback initiative will end up in the same dustbin as the regulatory review processes initiated under Clinton and Bush. Sure, some discrete improvements in specific regulations will likely result, but retrospective review will remain a periodic and unsystematic fancy rather than a serious, ongoing part of regulatory policymaking.