Presidential Executive Order 12044 (Jimmy Carter, 1978)
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Executive Order 12044: Improving Government Regulation was a presidential executive order issued by President Jimmy Carter (D) in 1978. E.O. 12044 was the first executive order that directed agencies to review existing regulations and determine whether or not they should be retained, modified, or repealed—a process known as retrospective regulatory review. Though the order was revoked by President Ronald Reagan (R) in 1981, it established a precedent for retrospective regulatory review that has been altered and amended by subsequent presidential administrations.[1][2]
E.O. 12044 aimed "to adopt procedures to improve existing and future regulations," according to its stated purpose. The order required agencies to (1) develop simple, efficient regulations, (2) identify proposed rules with an associated significant impact, (3) issue economic impact statements for economically significant proposed rules, and (4) review existing agency regulations to determine whether or not the regulations had achieved policy goals. President Carter signed E.O. 12044 on March 23, 1978.[1]
Background
Early executive action
In 1974, President Gerald Ford (R) aimed to introduce economic analysis into the agency rulemaking process by issuing Executive Order 11821, titled "Inflation Impact Statements," which required federal agencies to issue statements evaluating the inflationary impact of major legislation and proposed rules. In determining which proposed legislation and regulations qualified as major proposals, the director of the Office of Management and Budget (OMB) was required to consider each proposal's overall cost to consumers, businesses, and the government as well as any potential effects on industry productivity, competition, and supply. Any proposals where the costs exceeded the benefits were considered to be inflationary, while those where the benefits exceeded the costs were deemed anti-inflationary.[3][4] A report prepared the following year by the OMB and the Council on Wage and Price Stability (CWPS) evaluating the effectiveness of the executive order identified the following motivating factors behind the policy:[2]
| “ | The major reason for the program was that despite the rising importance of Federal regulation and legislation, from an economic perspective the overall quality of regulatory decision and legislative proposals increasingly was called into question. Specifically, agencies often proposed legislation or promulgated important regulations without competent analysis of the costs of the proposal, its benefits, and alternative (perhaps less costly) approaches to securing the same legislative or regulatory objective. ... Such regulations and laws were felt to be inefficient and to contribute to inflation.[5][6] | ” |
The report found that the majority of agency feedback and public comments on the program favored its continuation. Ford renamed the program "Economic Impact Statements" under E.O. 11949 on December 31, 1976, and extended its expiration date through December 31,1977.[7][8]
Executive Order 12044
- See also: Retrospective regulatory review and Significant rule
President Jimmy Carter (D) expanded on Ford's initial effort to evaluate the economic impact of agency regulations by issuing Executive Order 12044, titled "Improving Government Regulation," on March 23, 1978. The order instituted the presidential practice of directing agencies to review existing regulations and determine whether or not they should be retained, modified, or repealed—a process known as retrospective regulatory review. Carter's order required agencies to (1) develop simple, efficient regulations, (2) identify proposed rules with an associated significant impact, (3) issue economic impact statements for economically significant proposed rules, and (4) review existing agency regulations to determine whether or not the regulations had achieved policy goals.[1]
The economic impact statements required under the executive order included a description of the situation requiring regulation, an outline of all possible regulatory approaches to address the issue, an economic analysis of each approach, and a defense of the agency's choice of the proposed rule over other alternatives. However, the executive order did not require that agencies directly weigh the potential costs against the anticipated benefits of a proposed rule, an approach known as cost-benefit analysis. A report by the Mercatus Center at George Mason University that examined CWPS analyses of proposed rules between 1978 and 1981 identified the following concerns with agency performance under E.O. 12044:[1][9][10]
| “ | The majority of CWPS filings included at least one of the following conclusions: the regulatory agency either failed to estimate benefits or had done so incorrectly, the agency either failed to estimate costs or had done so incorrectly, and the agency should have examined different regulatory options.[9][6] | ” |
President Ronald Reagan (R) revoked Carter's E.O. 12044 on February 17, 1981, and issued E.O. 12291, which "implemented a scheme that arguably asserted much more extensive control over the rulemaking process," according to the Congressional Research Service. Reagan's order explicitly required agencies to prepare a cost-benefit analysis for any proposed rules with a potentially significant economic impact, among other provisions.[2][9][10]
Provisions
E.O. 12044 included the following provisions:
Section 1: Policy
The first section of E.O. 12044 aimed to provide agencies with guidelines to develop simple and efficient regulations that did not create unnecessary burdens for the economy, individuals, organizations, or the government:
| “ |
To achieve these objectives, regulations shall be developed through a process which ensures that: |
” |
Section 2: Developing significant regulations
- See also: Significant rule
E.O. 12044 called on agencies to rework internal processes for developing significant regulations—those with large associated compliance costs for the private sector or local governments, among other considerations. The executive order required agencies to publish a semiannual agenda of regulations to give the public notice of upcoming significant proposed rules. Agency heads were also required to review any suggestions for the development of significant proposed rules and to approve the regulations prior to publication in the Federal Register. The executive order also put forth criteria for identifying significant proposed rules:
| “ |
(e) Criteria for Determining Significant Regulations. Agencies shall establish criteria for identifying which regulations are significant. Agencies shall consider among other things:
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” |
Section 3: Regulatory analysis
- See also: Economically significant rule
The third section of E.O. 12044 put forth procedures for conducting regulatory analysis for economically significant proposed rules—those with an estimated economic impact of $100 million or more, among other considerations:
| “ |
(b) Procedures. Agency heads shall establish procedures for developing the regulatory analysis and obtaining public comment.
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” |
Section 4: Review of existing regulations
The fourth section of E.O. 12044 established criteria and processes for conducting retrospective regulatory reviews:
| “ |
In selecting regulations to be reviewed, agencies shall consider such criteria as:
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” |
Other provisions
The remaining sections of E.O. 12044 included provisions related to the implementation and application of the executive order.[1]
Presidential administrations
President Jimmy Carter's (D) E.O. 12044 of 1978 is considered to be the first executive order to implement retrospective regulatory review, according to the U.S. Government Accountability Office (GAO). Though the executive order was revoked by President Ronald Reagan in 1981, it established a precedent for retrospective regulatory review that has been altered and amended by subsequent presidential administrations:[11]
Jimmy Carter, Ronald Reagan, and George H.W. Bush (1977-1993)
In a 2007 report on the effectiveness and transparency of retrospective regulatory reviews conducted by federal agencies, the U.S. Government Accountability Office (GAO) claimed that the presidential practice of directing agencies to review and reconsider existing regulations began with the administration of President Jimmy Carter and was continued by his successors:[11]
| “ | President Carter’s Executive Order 12044 required agencies to periodically review existing rules; one charge of President Reagan’s task force on regulatory relief was to recommend changes to existing regulations; President George H.W. Bush instructed agencies to identify existing regulations to eliminate unnecessary regulatory burden.[6] | ” |
| —U.S. Government Accountability Office[11] | ||
Bill Clinton and George W. Bush (1993-2009)
Executive Order 12866, issued by President Bill Clinton (D) in 1993, ordered agencies to develop a plan for the periodic review of existing significant rules. The order also authorized the Office of Information and Regulatory Affairs within the Office of Management and Budget to review all new and preexisting significant regulatory actions.[12][11]
According to the 2007 GAO report on retrospective regulatory review, "In 2001, 2002, and 2004, the administration of President George W. Bush asked the public to suggest reforms of existing regulations."[11]
Barack Obama (2009-2017)
The retrospective review requirements of E.O. 12866 were revised in two executive orders issued by President Barack Obama (D). Executive Order 13563, "Improving Regulation and Regulatory Review," was issued by President Obama on January 18, 2011. The order included the following requirements for agencies to conduct retrospective analyses of existing rules:[13]
| “ | To facilitate the periodic review of existing significant regulations, agencies shall consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Such retrospective analyses, including supporting data, should be released online whenever possible.[6] | ” |
| —Executive Order 13563 (2011)[13] | ||
Executive Order 13610, "Identifying and Reducing Regulatory Burdens," was issued by President Barack Obama on May 10, 2012. It contained additional provisions on retrospective regulatory review, including a requirement for agencies to report on their reviews to the Office of Information and Regulatory Affairs twice per year, in January and July. It also provided for public participation in the retrospective review process.[14][15]
Donald Trump
President Donald Trump (R) included retrospective regulatory review requirements in Executive Order 13771, "Reducing Regulation and Controlling Regulatory Costs," which he issued on January 30, 2017. The order stated that the executive branch ought to be "prudent and financially responsible in the expenditure of funds" from taxpayers while also managing the compliance costs that organizations and individuals face in order to obey federal regulations. The order also required that agencies engaged in a rulemaking, whenever possible, conduct retrospective reviews of their existing regulations and recommend two for repeal:[16]
| “ | Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.[6] | ” |
| —Executive Order 13771 (2017)[16] | ||
Regulations related to the military, foreign affairs, and national security, as well as regulations related to agency management and organization, were exempted from the requirements of this order.[16]
See also
- Retrospective regulatory review
- U.S. Office of Information and Regulatory Affairs
- U.S. Office of Management and Budget
- Significant regulatory action
External links
- Executive Order 12044, "Improving Government Regulations" (1978)
- RegInfo.gov
- Regulations.gov
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 The American Presidency Project, "Executive Order 12044—Improving Government Regulations," March 23, 1978
- ↑ 2.0 2.1 2.2 Congressional Research Service, "Executive Orders: Issuance, Modification, and Revocation ," April 16, 2014
- ↑ Drutman, Lee. (2015). The Business of America is Lobbying: How Corporations Became Politicized and Politics Became More Corporate. New York, NY: Oxford University Press.
- ↑ American Presidency Project, "Executive Order 11821—Inflation Impact Statements," November 27, 1974
- ↑ Center for Regulatory Effectiveness, "An Evaluation of the Inflation Impact Statement Program," December 7, 1976
- ↑ 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Cite error: Invalid
<ref>tag; no text was provided for refs namedreport - ↑ The American Presidency Project, "Executive Order 11949—Economic Impact Statements," December 31, 1976
- ↑ 9.0 9.1 9.2 Mercatus Center—George Mason University, "Regulatory Impact Analysis: Four Decades of Foibles," January 2015
- ↑ 10.0 10.1 The Brookings Institution, "Evaluating the Trump Administration’s Regulatory Reform Program," October 2017
- ↑ 11.0 11.1 11.2 11.3 11.4 U.S. Government Accountability Office, "Reexamining Regulations: Opportunities Exist to Improve Effectiveness and Transparency of Retrospective Reviews," July 2007
- ↑ Federal Register, "Executive Order 12866," October 4, 1993
- ↑ 13.0 13.1 Cite error: Invalid
<ref>tag; no text was provided for refs namedimproving - ↑ White House Archives, "Executive Order -- Identifying and Reducing Regulatory Burdens," May 10, 2012
- ↑ The Regulatory Group, "Regulatory Glossary," accessed August 28, 2017
- ↑ 16.0 16.1 16.2 White House Office of the Press Secretary, "Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs," January 30, 2017
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