Bush Executive Order Aims to Reign in Excessive Regulation

Published April 1, 2007

An executive order signed by President George W. Bush on January 18 will make it more difficult for federal agencies to issue policy guidances that critics have described as back-door attempts to impose regulations.

Executive Order 13422 requires federal agencies to submit any proposed new policy guidance to the Office of Information and Regulatory Affairs (OIRA), a branch of the White House’s Office of Management and Budget.

Under the new rule, federal agencies will be required to demonstrate a market failure in justifying any new policy guidance. The executive order also requires agencies to provide an up-front projection of compliance costs.

Unlike regulatory guidances, policy guidances do not require any public notice or public input.

Before a federal agency can issue a regulatory guidance, which is afforded substantial deference in federal courts, it must provide public notice of the proposed regulation, offer citizens the right to submit comments on the proposed regulation, and then take citizen comments into account in making a final decision.

Bullying Businesses

Federal agencies frequently issue guidances to explain how they will interpret unclear provisions of laws and regulations. Businesses welcome agenda-free policy guidances that provide advance notice of how federal agencies will interpret murky legal language.

However, agencies such as the Occupational Safety and Health Administration and Environmental Protection Agency have been criticized for issuing a multitude of policy guidances designed to bully businesses into abiding by overly restrictive interpretations of laws and regulations.

Regulatory Abuse

The executive order is “another avenue for special interests to slow down and prevent agencies from protecting the public,” Rep. Brad Miller (D-NC), chair of the House Committee on Science and Technology, said in a February 13 news release.

“Guidance documents are abused by federal regulatory agencies that use them as a substitute for regulations, often over years and even decades,” countered Maureen Martin, senior fellow for legal affairs at The Heartland Institute. “When this happens, the constitutional rights of regulated entities are violated because they do not receive notice, nor do they have the right to comment on the guidance. The guidance thus becomes law by agency stealth,” Martin said.

“Executive Order 13422 is a good start, but it falls short of the radical regulatory reforms that are needed,” Martin added. “Essentially, the order adds a layer of bureaucratic review for guidance documents. One promising aspect of EO 13422, however, is that the White House Office of Management and Budget will be reviewing proposed agency guidance documents to determine if they are ‘consistent with applicable law.’ We can hope this review would invalidate at the outset any specious guidance rules.”

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.

For more information …

The full text of Executive Order 13422, issued January 18, 2007, is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to http://www.policybot.org and search for document #20736.