President Obama Moves to Update Review Process for EPA Rules

May 8, 2009
Client Alert Newsletter May 2009

President Obama signaled his intent to revisit the process and principles governing the review of federal regulations in Executive Order No. 13,497. For more than two decades, the Office of Management and Budget ("OMB") has played a central role in reviewing federal regulations, including those promulgated by the U.S. Environmental Protection Agency ("EPA"). OMB's role, and the framework for modern regulatory review, is rooted in a 1993 Executive Order issued by President Clinton, through which OMB was tasked with reviewing federal agency actions to determine their economic costs and benefits and ensuring their consistency with Presidential priorities. Depending on the outcome of the process initiated by Executive Order No. 13,497, the role that the White House, and OMB in particular, plays in the promulgation and review of agency regulations could be fundamentally altered.

Indeed, the recently issued Executive Order directly affects OMB's ongoing regulatory review role by revoking two executive orders issued by President George W. Bush, which amended President Clinton’s 1993 executive order. The Bush orders had (1) expanded the scope of OMB regulatory review to include agency guidance documents, (2) required agencies to justify to OMB any new regulation by identifying the "market failure" that necessitated the regulation, and (3) required Regulatory Policy Officers in every agency to be presidential appointees. Citing the lessons learned about regulation since 1993, the recently issued Executive Order requires the Director of OMB to produce a set of recommendations for a new Executive Order on federal regulatory review within 100 days. The anticipated OMB recommendations, which are expected to be completed in the near future, have been the focus of significant public interest since they are expected to offer suggestions on such central regulatory review issues as the roles of cost-benefit analysis and behavioral sciences in federal regulation.