The Preservation of Centralized Regulatory Review

Centralized Regulatory Review conducted by the Office of Information and Regulatory Affairs(OIRA) in the Office of Management and Budget has been in existence half  a century.  Periodically either an incumbent or an incoming Administration examines centralized regulatory review with the objective of ensuring that the existing process complies with recent advances in science, law and economics.

A recently published paper describes a review of the aforementioned process and has made the following recommendations.

1. Designation of Iconic Executive Orders by the Archivist of the United States

Throughout the years many Executive Orders have been issued, A select few of these Executive Orders have withstood the test of time and are not only on the books but are directing major regulatory programs. These select Executive Orders should be designated as “iconic” by the Archivist.  Such a designation will result in a rebuttable presumption against revocation.

2. Issuance of an Executive Order on the Interagency Review of Executive Orders

Presently Executive Order 11030 designates OMB as the agency in charge of the interagency review of proposed Executive Orders, This executive order was written prior to establishment of OIRA.  The Executive Order should be replaced with one which gives OIRA a well defined role in the review of Executive Orders.

3. Issuance of an Executive Order which ensures a consistency in the use of benefit-cost analyses performed for regulatory and non-regulatory programs in the federal government.

For federal regulatory programs existing federal policy results in the promulgation as a final rule of any and all proposed rules whose benefits exceed their costs.

For federal capital construction projects the demonstration of positive net benefits is a necessary but not a sufficient condition for the execution of a project. In addition to demonstrating that the benefits of the project exceed its costs a proposed project must be included in a federal budget and therefore subject to government-wide comparison of its merits relative to is competitors.

Subsequent to seeking public comment on Executive Order 13771,

1. a revised executive order should be issued which amends the Executive Order to address validated deficiencies in the regulatory budget as presently implemented.

2. establishes as federal policy that the demonstration of positive net benefits for a proposed regulation is a necessary but not sufficient condition for promulgation as a final rule and also that the proposed rule must be included in the regulatory budget before it is promulgated.  The failure to adopt the aforementioned policy  is tantamount to establishing the said regulation as an entitlement because its funding is guaranteed by levying a defacto tax on the public just because it meets some metric.

OIRA has paid its dues; it should graduate from its activities devoted solely to being a b/c cop to the manager of the federal regulatory machine which requires a simultaneous examination of all proposed rules as is the case with a regulatory budget. Such a process change would allow OIRA to reward those programs and agencies which adhere to established procedures for the conduct of benefit-cost analyses and would also encourage the beneficiaries of one rule to challenge overly optimistic benefit estimates of its competitors.  See minute 3:30 on this video sponsored by the Gray Center for the Study of the Administrative State.

 

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