What We'll Look For in the Obama Administration's Forthcoming Executive Order on Regulatory Process

by Ben Somberg

November 23, 2009

The Obama Administration is expected to issue revisions to Executive Order 12,866, which specifies how the White House Office of Management and Budget (OMB) supervises federal regulatory agencies as they develop regulations to protect health, safety, the environment, and more (see the full comments on the matter submitted by CPR's board members in March).

CPR President Rena Steinzor and Board Member Rob Glicksman have issued a backgrounder on the coming Executive Order -- explaining the context and setting out six specific criteria on which to judge the Order. They are:

  1. Does the new EO continue to require agencies to justify proposed rules by quantifying “benefits” in dollar terms only – thus inviting agencies to ignore benefits that defy such monetization?
  2. Does the new EO continue to apply a “discount rate” to benefits of regulatory protections that won’t be realized for several years to come? And if it does apply a discount rate, is it set at the current rate of 7 percent, a number so high that future benefits from, for example, efforts to slow climate change essentially drop out of the equation after a couple of decades?
  3. Does the new EO explicitly disavow the “senior death discount” or other versions of lowering the value of a year of life if people are sick or handicapped?
  4. Does the new EO embrace – and to what extent – Sunstein’s attachment to “behavioral economics”? In particular, does it substitute warnings to citizens about potential harms for actual regulatory protection from harms? And does it rely on “willingness to pay” studies that peg the “benefits” of regulation to suspect data on how much people say, in the abstract, they are willing to pay to avoid certain harms.
  5. Does the new EO preserve OIRA’s power to “return” proposed regulations it does not like to agencies for time-consuming additional evaluation rather than simply advise agency heads that it disagrees with their judgments?
  6. Does the new EO impose transparency on OIRA’s activities, most significantly by ending OIRA’s practice of forcing regulatory agencies to meet with it behind closed doors and using those meetings to kill ideas for proposed regulations even before they are made public?

 We'll have more, of course, when the Order is issued.

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