May 10, 2012
President Obama on Thursday issued an executive order reinforcing his continuing campaign to look back at federal regulations and eliminate those that “are not necessary, or that impose unnecessary burdens on America’s families and businesses,” as he described it in a statement.
The order to cut red tape, which builds on a similar order from January 2011, came with the announcement of five major regulatory reforms estimated to save $6 billion over the next five years. And it was accompanied by a new report from the Council on Economic Advisers giving a rundown of more than 500 specific agency accomplishments in regulatory review and touting the removal of outdated rules in public health, safety, welfare and the environment.
“Smart rules can save lives and keep us safe, but there are some regulations that don’t make sense and cost too much,” Obama said.
Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, added, “By streamlining some rules and eliminating others, we can save billions of dollars in unnecessary costs while continuing to protect the health and safety of the American people.”
The reforms already in place, which were recommended by the President’s Council on Jobs and Competitiveness, streamline agency procedures for setting priorities, expressing savings in quantifiable terms and seeking public comment. Agencies also are to be held accountable through deadlines for regular public reporting on details of past efforts and plans for the future. Agencies are directed to submit draft reports to OIRA by Sept. 10, and on the second Monday of January and July every year thereafter.
What appears freshest in Thursday’s release is the emphasis in the CEA report on “retrospective analysis.” The text notes that administrations from Ronald Reagan to Bill Clinton to George W. Bush stressed the value of cost-benefit analysis performed before a regulation is implemented.
Then, in 2005, OIRA under Bush began focusing on new analysis after a regulation has been in effect. The report quotes Michael Greenstone, a former chief economist at the Council of Economic Advisers, who said, “The single greatest problem with the current system is that most regulations are subject to a cost-benefit analysis only in advance of their implementation. That is the point when the least is known and any analysis must rest on many unverifiable and potentially controversial assumptions.”
The savings compiled in the CEA report center on the Transportation, Labor, Commerce, and Health and Human Services departments, as well as the Environmental Protection Agency.
For example, Transportation has reduced some federal requirements for state and local authorities for rules on street signs and traffic-control signals.
Health and Human Services has saved doctors and hospitals money by updating management and reporting requirements for Medicare and Medicaid patients. They also eliminated “obsolete e-prescribing technical requirements,” the report said.
EPA has helped gas station owners by eliminating requirements for vapor recovery systems to reduce air pollution. The regulation dated back to 1990, when few cars had built-in pollution controls.
Labor finalized a rule to simplify and to improve hazard warnings for workers while increasing safety.
May 10, 2012