On Balance: Executive Order 12866 and the Durability of Core Regulatory Principles

On September 24, 2018, experts gathered at the George Washington University (GW) to commemorate the 25th anniversary of Executive Order (E.O.) 12866Regulatory Planning and Review—and discuss the implications of its provisions and future prospects. The Society for Benefit-Cost Analysis (SBCA) cosponsored the event with the GW Regulatory Studies CenterABA Section of Administrative Law and Regulatory Practice, and the Trachtenberg School of Public Policy and Public Administration. (Additional information on the event, including commentaries by the speakers, and videos when they become available, are posted on the GW website.)


The E.O., which President Clinton signed in 1993, expanded on previous executive orders requiring benefit-cost analysis and formalized the principles of regulation and centralized review procedures that still guide the rulemaking process (see also an earlier “On Balance” post, written by Susan Dudley and Clark Nardinelli, which preceded the event). The three panels highlighted insights from government experts, scholars, and past and present administrators of the Office of Information and Regulatory Affairs (OIRA) responsible for applying the order’s principles under presidents Clinton, Bush, Obama, and Trump. The most significant theme that emerged from each panel was the durability of E.O. 12866’s principles and process—both across administrations and over time.

Bridget Dooling (GW Regulatory Studies Center), a former senior staff member at OIRA, moderated the first panel, which looked back on the past 25 years. The panel consisted of three OIRA administrators from each previous presidential administration, along with two regulatory experts at federal agencies.

Sally Katzen (NYU Law School), who oversaw the drafting of E.O. 12866 as OIRA Administrator under Clinton, attributed the longevity of the order to both the substantive principles contained in the document and the process used to engage stakeholders across several drafts of the document. Clark Nardinelli, Chief Economist at the Food and Drug Administration, expounded on the substantive contributions of the order—particularly the document’s 12 principles of regulation.

These principles established best practices, including identifying the problem to address, evaluating alternative approaches, and assessing benefits and costs to inform construction of cost-effective regulations. Following these best practices has increased the quality of regulatory analysis, improved coordination and cooperation among agencies and OIRA, and mitigated interagency disputes. Panelists pointed out that the order expanded the role of economists in the rulemaking process and reduced reliance on other frameworks that might reduce innovation and competition, such as adopting a precautionary principle in evaluating new technologies and innovations.

Shawne McGibbon, General Counsel of the Administrative Conference of the United States, moderated the second panel, which offered legislative perspectives on the order. Panelists focused on the importance of E.O. 12866’s interaction with legislative actions and how the order’s principles supplemented the notice-and-comment provisions in the Administrative Procedure Act of 1946. The bipartisan and bicameral congressional staff on the panel explained how the order helps generate products closer to congressional intent and often avoids the need to exercise the Congressional Review Act of 1996. As one speaker pointed out, higher quality products from agencies ultimately make Congress's job easier.

The third panel centered on the future of OIRA review, offering both a detailed look at how OIRA review works in practice and potential changes to the review process. Current OIRA Administrator, Neomi Rao, observed that the order required “regulatory humility” by obliging regulators to identify a compelling public need for regulation and to think about what can actually be accomplished by government action. In the same vein, Susan Dudley (GW Regulatory Studies Center), a former OIRA Administrator, encouraged regulators to consider the ability of competition and innovation to increase societal welfare, especially as technology advances at an accelerating pace.

Closely tied to regulatory humility is the importance of retrospective review: looking back and evaluating the effectiveness of existing regulations. Panelists described the interaction between ex ante and ex post analysis (particularly how agencies can use ex post review to verify their ex ante assumptions), and they offered practical suggestions on how to orient new regulations for future retrospective reviews. (The topic of regulatory review has been extensively discussed by scholars at the GW Regulatory Studies Center—see for example, commentary by Sofie E. Miller—and in  recent articles in the Journal of Benefit Cost Analysis (JBCA) by Richard Morgenstern and by Art Fraas and Alex Egorenkov.)

Some disagreements emerged, such as over the Trump administration’s E.O. 13771, which established a one-in-two-out standard for new regulations and imposed a regulatory budget constraint. (This rule has been extensively discussed in many fora; see for example, commentary by GW scholars Sofie E. Miller and Susan E. Dudley and a recent article by Andrea Renda in the JBCA). Nevertheless, fundamental agreement was clearly evident for certain issues, including the benefits of extending E.O. 12866 to independent regulatory agencies. In addition, remarks by OIRA administrators, past and present, consistently indicated strong support for E.O. 12866 and its principles, regardless of an administration’s policy goals.

While regulatory policy has changed and developed over the past 25 years, E.O. 12866 has remained of central importance to the regulatory process. Assembling an array of experts from different presidential administrations, federal agencies, and branches of government, the event underscored the possibility of genuine bipartisan agreement when process and principles are carefully established and applied. Simply put, the document’s underlying principles are the key to its durability and longevity. As regulatory practitioners and experts continue to adapt to the changing economic, technological, and political landscape, considering how to best expand E.O. 12866’s legacy will be essential to producing beneficial outcomes.

Note: An expanded version of this post to “On Balance” was written by Mark Febrizio, Daniel R. Pérez, and Zhoudan Xie. “25 Years of E.O. 12866 - Reg Studies Reflection,” can be found on the GW website.

Share this post:

Comments on "On Balance: Executive Order 12866 and the Durability of Core Regulatory Principles"

Comments 0-5 of 0

Please login to comment