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President Bush Made a Strong Effort to Control Bureaucracy

by U.S. Chamber of Commerce Vice President, Enviromnent, Technology and Regulatory Affairs William Kovacs - 01/23/07 10:30 AM ET

President Bush amended Executive Order 12866, which was issued by President Clinton in 1993 as an attempt to get control over the proliferation of rules issued by agencies. In it, he broke new ground in the sense that he reassured a regulatory planning process, cost-benefit analysis, and regulatory impact analysis.

Between 1993 and 2000 it was honored more in the breech, and agencies did whatever they wanted to do. When President Bush came in one of his first acts was to issue an interpretation of 12866, indicating this time it was really going to be enforced—that he was going to put in a new team at OMB and make sure the executive agencies complied with the order. He nominated John Graham, and for five years John made a valiant attempt to get control of the agencies, but the agencies were issuing 40,000 new rules every year.
This time what President Bush did was he amended the executive order to do several things. The first is to require all agencies, before they issue a new rule, to state specifically what market failure occurred that requires the rule and to explain the significant impact of the rule and assess how it will be implemented.

Second it establishes a regulatory policy officer, in each state and each department, who deals directly with OMB and must personally approve the fact that the rule is in compliance with the President’s executive order.

Finally, as to all new rules, not only must there be a cost-benefit analysis, but the agency must give a cost-benefit analysis for all the rules they’re doing in the course of the year so the Administration is able to assess the overall cost of regulation.

This is the culmination of fifty years of Presidents trying to get some control over the bureaucracy. There are 192,000 rules on the books, probably half a million guidance documents, 40,000 new regulations every year, and the cost to the American public was $1 trillion, which is four times more than all the corporations pay in taxes.

So somebody’s gotta get control over it, and this is as good an attempt from someone as I’ve ever seen.