Tuesday, January 18, 2011

President Obama Orders Review to Identify and Repeal Outmoded and Burdensome Federal Regulations

President Obama has issued an Executive Order requiring the periodic review of existing significant federal regulations in order to identify rules that may be outmoded, ineffective or excessively burdensome, and to streamline, expand, or repeal them in accordance with what has been learned. This retrospective analyses, including supporting data, should be released online whenever possible.

Also, within 120 days of the date of the order, federal agencies must develop and submit to the Office of Information and Regulatory Affairs a preliminary plan under which the agency will periodically review its existing significant regulations to determine whether they should be streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.

Noting that some industries face a significant number of regulations, some of which may be redundant, inconsistent, or overlapping, the Executive Order requires greater coordination across agencies to reduce these requirements and harmonize regulations. In developing regulations and identifying appropriate approaches, each agency must promote coordination, simplification, and harmonization. Each agency must also seek to identify means to achieve regulatory goals that are designed to promote innovation.

The Executive Order also speaks prospectively by requiring federal agencies to adopt a regulation only upon a reasoned determination that its benefits justify its costs and to tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, to the extent practicable, the costs of cumulative regulations. In choosing among alternative regulations, the regulator must select those approaches that maximize net benefits, including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity.

Also, to the extent feasible, the agency must specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt. Federal regulators must also identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.