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Executive Order 12044: Improving Government Regulation was a presidentialexecutive order issued byPresidentJimmy 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directed agencies to review existing regulations and determine whether or not they should be retained, modified, or repealed—a process known asretrospective regulatory review. Though the order was revoked by PresidentRonald Reagan (R) in 1981, it established a precedent forretrospective regulatory review that has been altered and amended by subsequent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) identifyproposed rules with an associatedsignificant impact, (3) issue economic impact statements foreconomically significantproposed 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 agencyrulemaking process by issuing Executive Order 11821, titled "Inflation Impact Statements," which required federal agencies to issue statements evaluating the inflationary impact of major legislation andproposed rules. In determining which proposed legislation and regulations qualified as major proposals, the director of theOffice 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 theOMB 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 report found that the majority of agency feedback andpublic 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 andSignificant rule

PresidentJimmy 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 asretrospective regulatory review. Carter's order required agencies to (1) develop simple, efficient regulations, (2) identifyproposed rules with an associatedsignificant impact, (3) issue economic impact statements foreconomically significantproposed 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 theproposed 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]

PresidentRonald Reagan (R) revoked Carter's E.O. 12044 on February 17, 1981, and issuedE.O. 12291, which "implemented a scheme that arguably asserted much more extensive control over the rulemaking process," according to theCongressional 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:

Section 2: Developing significant regulations

See also:Significant rule

E.O. 12044 called on agencies to rework internal processes for developingsignificant 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 significantproposed rules. Agency heads were also required to review any suggestions for the development of significantproposed rules and to approve the regulations prior to publication in theFederal Register. The executive order also put forth criteria for identifyingsignificant proposed rules:

Section 3: Regulatory analysis

See also:Economically significant rule

The third section of E.O. 12044 put forth procedures for conducting regulatory analysis foreconomically significant proposed rules—those with an estimated economic impact of $100 million or more, among other considerations:

Section 4: Review of existing regulations

The fourth section of E.O. 12044 established criteria and processes for conductingretrospective regulatory reviews:

Other provisions

The remaining sections of E.O. 12044 included provisions related to the implementation and application of the executive order.^[1]

Presidential administrations

PresidentJimmy Carter's (D) E.O. 12044 of 1978 is considered to be the first executive order to implementretrospective regulatory review, according to theU.S. Government Accountability Office (GAO). Though the executive order was revoked by PresidentRonald Reagan in 1981, it established a precedent forretrospective 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, theU.S. Government Accountability Office (GAO) claimed that the presidential practice of directing agencies to review and reconsider existing regulations began with the administration of PresidentJimmy Carter and was continued by his successors:^[11]

Bill Clinton and George W. Bush (1993-2009)

Executive Order 12866, issued by PresidentBill Clinton (D) in 1993, ordered agencies to develop a plan for the periodic review of existingsignificant rules. The order also authorized theOffice of Information and Regulatory Affairs within theOffice of Management and Budget to review all new and preexistingsignificant regulatory actions.^[12][11]

According to the 2007 GAO report on retrospective regulatory review, "In 2001, 2002, and 2004, the administration of PresidentGeorge W. Bush asked the public to suggest reforms of existing regulations."^[11]

Barack Obama (2009-2017)

The retrospective review requirements ofE.O. 12866 were revised in twoexecutive orders issued by PresidentBarack 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]

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 theOffice 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

PresidentDonald Trump (R) included retrospective regulatory review requirements inExecutive Order 13771, "Reducing Regulation and Controlling Regulatory Costs," which he issued on January 30, 2017. The order stated that theexecutive branch ought to be "prudent and financially responsible in the expenditure of funds" from taxpayers while also managing thecompliance costs that organizations and individuals face in order to obey federal regulations. The order also required that agencies engaged in arulemaking, whenever possible, conduct retrospective reviews of their existing regulations and recommend two for repeal:^[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

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Dresch (2000) "Confronting the Administrative Threat" by Philip Hamburger and Tony Mills (2017) "Constitutionalism after the New Deal" by Cass R. Sunstein (1987) Federalist No. 23 by Alexander Hamilton (1787) "From Administrative State to Constitutional Government" by Joseph Postell (2012) "Interring the Nondelegation Doctrine" by Eric A. Posner and Adrian Vermeule (2002) "Rulemaking as Legislating" by Kathryn Watts (2015) "The Checks & Balances of the Regulatory State" by Paul R. Verkuil (2016) "The Myth of the Nondelegation Doctrine" by Keith E. Whittington and Jason Iuliano (2017) "The Progressive Origins of the Administrative State: Wilson, Goodnow, and Landis" by Ronald J. Pestritto (2007) "The Rise and Rise of the Administrative State" by Gary Lawson (1994) "The Study of Administration" by Woodrow Wilson (1887) "The Threat to Liberty" by Steven F. Hayward (2017) "Why the Modern Administrative State Is Inconsistent with the Rule of Law" by Richard A. Epstein (2008) Agencies Administrative Conference of the United States •United States Civil Service Commission •U.S. Government Accountability Office •U.S. Office of Information and Regulatory Affairs •U.S. Office of Management and Budget