Notice & Comment

Cost-Benefit Analysis & EO 12866: A Twenty-Year Retrospective, by Nina Hart

On October 28, 2013, New York University’s Institute for Policy Integrity hosted its Fifth Annual Cost-Benefit Analysis & Issue Advocacy Workshop.  One highlight was an afternoon panel reflecting on the consequences of Executive Order 12866 of 1993, which reaffirmed and expanded on the Reagan Administration’s requirement that significant executive agency regulations be subject to cost-benefit analysis.  The panel featured Boris Bershtyn, former Acting Director of OIRA (2011-13) and General Counsel for OMB (2012-13); Sally Katzen, former Director of OIRA (1993-98); C. Boyden Gray, former White House Counsel (1989-93); and E. Donald Elliott, former Assistant Administrator and General Counsel for the EPA (1989-91).  Richard Revesz, dean emeritus and professor at NYU School of Law, moderated the panel.  Notice and Comment is pleased to present series of posts by blogger Nina Hart on some of the critical issues discussed during the panel and key policy recommendations.

Cost-Benefit Analysis is Here to Stay, but OIRA Faces Resource Constraints that Challenge its Ability to Ensure that CBA Analysis is Performed

Revesz opened the panel by asking what surprised the panelists most about EO 12-866.  Katzen and Gray, both involved in drafting the Executive Order, each began by noting the Order’s durability.  Gray then moved on to a topic that framed much of the session: OIRA’s limited budget. 

To Gray, the limited budget and decrease over time in personnel indicated that the perceived entrenchment of CBA and large monitoring role for OIRA was “more fragile than it appears.”  It is unrealistic for OIRA to actively monitor each agency to ensure it has undertaken a thorough analysis of every regulation.  For example, Gray said, given the complicated economics behind HHS’s determination to narrowly define which insurance plans could be grandfathered into the Affordable Care Act regime, the regulation was likely promulgated absent thorough cost-benefit analysis.  Despite this fact, given OIRA’s scarce resources, it was unlikely that the Office could or did hold the agency to account.

Other consequences that result, at least in part, from what the panelists unanimously perceived to be an inadequate budget include:

  • Nearly all of the impetus to engage in rulemaking has shifted away from the White House to the agencies;
  • OIRA must balance its shortages against the fact that its role is both procedural (akin to “hard look review”) and substantive (evaluation of the CBA itself), and each role places different strains on its resources;
  • Undertaking the “regulatory lookback” imposed by President Obama becomes all the more necessary, but all the more difficult to complete.  It may be desirable to institute “Lookback 2.0” to ensure that this retroactive review of CBA is institutionalized.

Next week, we’ll analyze how personnel challenges impact OIRA’s ability to oversee the regulatory process.

This post was originally published on the legacy ABA Section of Administrative Law and Regulatory Practice Notice and Comment blog, which merged with the Yale Journal on Regulation Notice and Comment blog in 2015.

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