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January 2011 - Posts

Obama’s new Executive Order - Improving Regulation and Regulatory Review

Today, President Obama signed an Executive Order (the text of which is available here) outlining his regulatory strategy. This Executive Order "is supplemental to and reaffirms the principles, structures, and definitions governing contemporary regulatory review that were established in Executive Order 12866 of September 30, 1993" that was signed by Bill Clinton.

Today's Executive Order enunciates the following general principles of regulation: "Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.  It must be based on the best available science.  It must allow for public participation and an open exchange of ideas.  It must promote predictability and reduce uncertainty.  It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends.  It must take into account benefits and costs, both quantitative and qualitative.  It must ensure that regulations are accessible, consistent, written in plain language, and easy to understand.  It must measure, and seek to improve, the actual results of regulatory requirements."

President Obama also describes his approach to regulation in an op-ed in today's Wall Street Journal (Barack Obama, Toward a 21st-Century Regulatory System). According to this op-ed, over the past two years the goal of the administration has been to "strike the right balance": ensure proper oversight and transparency while not placing unreasonable burdens on business-burdens that might stifle innovation and have a chilling effect on growth and jobs. Obama then suggests that creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract: "As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends-giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing. We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. ... And finally, today I am directing federal agencies to do more to account for-and reduce-the burdens regulations may place on small businesses."

Consistent with this presentation, the basic prongs of the regulatory strategy as detailed in the Executive Order are:

  •  Public participation.
  •  Greater coordination across agencies to reduce costs, simplify and harmonize rules and promote innovation.
  •  Flexibility and freedom of choice for the public.
  •  Objectivity of any scientific and technological information and processes used to support the agency's regulatory actions.
  •  Retrospective analyses of existing rules that may be outmoded, ineffective, insufficient, or excessively burdensome.

Furthermore, as part of the immediate implementation of this regulatory strategy, President Obama also issued a memorandum to the heads of Executive Agencies and Departments calling for more transparency and accountability in regulatory compliance, as well as a memorandum emphasizing the need to reduce burdens on small businesses whenever possible. Further information and links to these texts can be found here.