President Obama Outlines Vision for Regulation: New Directives Strike the Right Balance
President Obama yesterday issued a new executive order and several other directives to help ensure that regulation is cost-effective, evidence-based, and transparent to the public. He announced his plan in a Wall Street Journal op-ed.
This effort mirrors recommendations provided by the Center for American Progress. It also draws a useful contrast to congressional conservatives who are taking aim at new safeguards to protect public health, safety, the environment, and the country’s economic well-being.
The president notes that smart regulation has helped make the country stronger, citing child labor laws, the Clean Air Act, and protections against hidden credit card fees. The financial meltdown of 2008 and the BP oil spill show what can happen when we lack adequate regulatory oversight. “Where necessary, we won’t shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws,” Obama writes.
At the same time, the federal government should make sure that it does not impose unnecessary burdens on business. Regulations that are duplicative, outdated, or ineffective should be removed. And new regulation should only be adopted if the public need is clear. President Obama’s directives seek to strike the right balance so that we maximize regulatory benefits and minimize the costs.
The new executive order asks agencies to submit plans for reviewing existing regulations “to determine whether any such regulations should be modified, streamlined, expanded, or repealed.” Agencies must also base new regulation on “the open exchange of information and perspectives” of those outside the federal government, including private-sector stakeholders and the general public, and coordinate with each other to integrate and simplify their regulatory requirements. The Center for American Progress, at the beginning of the Obama administration, offered recommendations for a new executive order along these lines.
Accompanying the executive order, President Obama also issued two memoranda to federal agencies—one on reducing burdens to small business and another on disclosing information on regulatory compliance. The small business memo instructs agencies to make special considerations for small business to reduce regulatory burdens. This largely repeats the requirements of the Regulatory Flexibility Act of 1980, which requires agencies to analyze the effects of new regulation on small business.
The other memo instructs agencies to make information on enforcement actions, such as warnings and citations, “accessible, downloadable, and searchable online.” Plans for doing this must be developed within 120 days. Several agencies, including the Department of Labor and the Environmental Protection Agency, already provide enforcement information through searchable websites. This sort of information can be used to hold both the government and the private sector accountable—to ensure that laws are being enforced and observed. American Progress has also recommended similar data-driven efforts.
The president’s Wall Street Journal op-ed comes as congressional Republicans prepare for battle. Republicans have talked about using the little-used Congressional Review Act to vote down Obama administration regulations. And they are sure to try to block funding for implementing specific regulations. Prime targets include regulations to implement health care and financial reform legislation, as well as regulations to promote clean energy.
This is a “no regulation” agenda. It assumes an infallible market no matter the evidence. Indeed, even the collapse of our financial system is not enough to convince Republicans that their anything-goes economic policies are demonstrably dangerous. President Obama offers a different vision: Regulation is sometimes necessary to safeguard the American people. Failure to act in these cases can lead to catastrophic consequences. But we also must take care to minimize burdens on business. If we do this well, we will grow the economy, create jobs, and build a healthier, safer society.
Reece Rushing is director of government reform at the Center for American Progress.
The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.