Last week, President Obama issued Executive Order 13579, which encourages independent agencies to “promote the goal … of a regulatory system that protects public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.” Independent regulatory agencies have flown under the regulatory review radar, as past executive orders regarding regulatory analysis and oversight covered only executive branch agencies. This distinction has been raising eyebrows for years, considering that independent agencies, regulating areas such as financial markets, consumer products, transportation, energy, telecommunications and international trade, have significant impacts on the economy and consumers. The former OIRA administrators gathered at the 30th anniversary conference hosted by the George Washington University Regulatory Studies Center agreed on the importance of engaging independent regulatory agencies in regulatory analysis and oversight.
The president has taken a step towards greater accountability by informing independent agencies that they “should” comply with “requirements directed to executive agencies concerning public participation, integration and innovation, flexible approaches, and science,” but ultimately, it still is at the discretion of the agencies themselves whether or not they “shall.”
In this new executive order, President Obama also asks each independent agency to release a plan to the public within the next four months “under which the agency will periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives.”
Chairmen from several independent agencies have already voiced their enthusiasm to heed the president’s call to improve their regulatory review systems, create more cost-effective regulations and axe outdated rules. The American people should be interested in following how well they actually do. For those independent agencies that feel inspired by the new executive order to improve their regulatory outcomes, I offer the following suggestions:
First, adhere to the philosophy and principles expressed in Executive Order 12866, issued in 1993 by President Clinton, retained by President Bush and still applicable to executive branch agencies today. There is nothing inherently different about the subjects regulated by independent agencies that would make conducting the regulatory analysis required by the order any less relevant. With the new executive order, it is clear that regulations and regulatory processes of all agencies are under the microscope, and independent agencies can use the extra attention as an opportunity to prove themselves equal to the challenge by following procedures designed to ensure that only necessary and cost-beneficial rules are being imposed on the public.
Second, independent agencies should use OMB Circular A-4 as a guide for how to conduct a thorough regulatory analysis. One particularly useful section of the circular states that agencies “should present a summary of the benefit and cost estimates for each alternative,” implying that cost-benefit analysis should illuminate how various alternatives stack up against each other.
Finally, independent agencies can demonstrate their commitment to review the effectiveness and burden of regulations already on the books by creating a platform for open exchange so the public can share their responses to the agencies’ plans and hold them more accountable. If they want to embrace the “spirit” of the new executive order, independent agencies should offer the public a podium to provide feedback about their proposed plans for retrospective regulatory review.
Whether independent agencies take the retrospective review exercise seriously remains to be seen. Unlike executive branch agencies, they are not obligated to submit plans to OIRA for review, but they “should” report to the public within the next four months. Americans interested in fixing regulations that hinder economic growth, innovation, competitiveness and job creation should review these plans carefully. While transparent agency plans for retrospective review are an important first step, to some degree it will fall upon us, the public, to hold independent agencies accountable for following through with their plans. At the end of the day, it will be the public’s job to determine how well independent agencies are doing theirs.
Schinria Islam is an intern at The George Washington University Regulatory Studies Center, which works to raise awareness of regulations’ effects and improve regulatory policy through research, education and outreach. She is currently a senior at the University of Nevada studying economics and psychology.