Further Amendment to Executive Order 12866 on Regulatory Planning and Review

Background

Executive Order 13422, signed by President George W. Bush in early 2007, aimed to tighten control and oversight over federal regulatory processes. One of its notable impacts was the enhancement of the Office of Information and Regulatory Affairs (OIRA)'s role by requiring agencies to justify regulations through a written identification of market failures or other specific problems. This requirement was supposed to ensure regulations addressed real and significant issues, thereby adding a layer of economic justification and potentially limiting the number of new regulations introduced. Agencies now had to provide evidence and assessments to back up the necessity of regulatory actions, which could lead to delays or discouragement in pursuing new initiatives.

Another significant impact of the order was its expansion of the types of documents subject to review. By including "guidance documents" in addition to regulations, the order widened the scope of OIRA's oversight. This meant regulatory agencies were compelled to submit these less formal policy statements for review if they were considered "significant." This inclusion represented a marked shift from previous practices, as guidance documents do not typically carry the same weight as formal regulations and do not require public notice or comment. The broader inclusion affected how agencies communicated policy directions, potentially stifling flexibility and responsiveness due to the extended review processes.

Executive Order 13422 also introduced a requirement that each agency appoint a Presidential appointee as the Regulatory Policy Officer (RPO) responsible for regulatory actions. The RPO, potentially exercising the President's preferences more directly, had the authority to approve or deny rulemaking initiation. This structural change centralized regulatory power, reducing individual agencies' autonomy. Agencies could not pursue regulatory actions without RPO approval, aiming to align federal regulations more closely with the President's priorities. While intended to bring cohesion, it raised concerns about the politicization of regulatory decisions.

Reason for Revocation

President Barack Obama's decision to revoke Executive Order 13422 shortly after taking office was reflective of a broader ideological shift intended to reduce excessive centralization and politicization in regulatory review. The revocation was in line with Obama's broader agenda to restore scientific and technical decisions to experts, reducing political interference. The Bush-era regulations were perceived by some critics as overly politicized, limiting agencies' ability to address emergent social and environmental issues effectively.

The Obama administration aimed to facilitate a more transparent and evidence-based regulatory process by revoking Bush's order. The new administration viewed the previous requirements as potentially stifling necessary regulations intended to address significant public health, environmental, and economic challenges. The directive's reversal was part of reorienting federal policy toward enhanced regulatory autonomy and responsiveness at the agency level, enabling agencies to act more quickly and decisively without excessive executive branch oversights.

Another ideological underpinning of the revocation was the emphasis on the active role of government in addressing societal inequities and challenges. President Obama sought to empower federal agencies to pursue robust regulatory agendas that aligned with his administration’s priorities, including environmental sustainability and public welfare. Removing barriers to regulation enabled agencies like the Environmental Protection Agency (EPA) and the Department of Labor to accelerate their initiatives without being hampered by cumbersome reviews.

Lastly, the administration was keen on promoting regulatory transparency and public participation. By revoking these procedures, Obama intended to restore public trust in regulatory processes—trust that was believed to have been eroded by experiences of unnecessary scrutiny and delays. The revocation followed broader calls from policy advocates and experts for agile government interventions in the face of economic crises and other emergent threats, aligning federal policy with progressive governance principles.

Winners

The revocation of the order was likely to benefit various public sector and environmental advocacy groups. Organizations seeking more aggressive regulatory enforcement in areas such as environmental protection, labor safety, and public health had championed increased regulatory autonomy. By removing the barriers that delayed policy implementation, these groups saw an opportunity for swifter action on issues such as climate change regulation, which they argued required urgent and decisive mandates.

Federal agencies themselves, particularly those like the Environmental Protection Agency and the Department of Health and Human Services, stood to gain from the revocation. Eased regulatory process restrictions allowed them to engage more directly in crafting and implementing policies that aligned with their scientific findings and policy goals. The increased autonomy improved likelihoods of quickly adapting to technological advancements and emerging health crises, fostering more timely interventions.

Economic sectors such as renewable energy also benefited, as the removal of burdensome regulatory reviews enabled the swift advancement of initiatives aligned with the Obama administration's commitment to green energy. The revocation allowed these industries to flourish by accelerating approval processes for new projects and grants, further contributing to the transitional shift away from fossil fuels and encouraging investment in sustainable technologies.

Losers

Conversely, industries dependent on slower regulatory processes to adapt to new regulations, such as fossil fuels or certain manufacturing sectors, may have been disadvantaged by the revocation. These industries often relied on extended review timelines to prepare for compliance and advocated for increased regulatory scrutiny to delay potentially unfavorable policies affecting operations or financial performance.

Corporations facing heightened regulatory costs as a result of more rapid regulatory execution suffered from the revocation. By allowing regulations to pass through bureaucratic pipelines more efficiently, businesses had less time to adjust operations or lobby for more favorable terms. The Obama-era regulatory approaches were critiqued by some business advocates for diminishing flexibility, creating a climate of uncertainty for companies wary of increased regulatory burdens and compliance costs.

Political actors and ideologues favoring limited government intervention and advocating for market-driven solutions perceived the revocation as a negative development. The shift towards proactive government regulation was inconsistent with deregulatory policies espoused by proponents of free-market mechanisms. Anti-regulatory sentiment, mostly from conservative policymakers, viewed increased regulation as stifling economic growth, innovation, and competitive advantage on the global stage, marking the revocation as a step backward in promoting economic freedom.