key term - Executive Order 12866

Definition

Executive Order 12866, signed by President Bill Clinton in 1993, establishes a framework for regulatory planning and review within the federal government. It emphasizes the importance of cost-benefit analysis in rulemaking, requiring agencies to assess the potential impacts of their regulations before implementation.

5 Must Know Facts For Your Next Test

1. Executive Order 12866 applies to significant regulatory actions that are likely to have an economic impact of $100 million or more.
2. The order requires federal agencies to develop regulatory agendas and submit them to OIRA, ensuring transparency and accountability in the regulatory process.
3. It mandates public participation in the rulemaking process by allowing stakeholders to comment on proposed regulations, which helps improve regulatory outcomes.
4. Agencies must identify and analyze regulatory alternatives to achieve desired outcomes while minimizing costs, fostering innovative approaches to problem-solving.
5. Executive Order 12866 has been a foundation for subsequent executive orders aimed at improving regulatory efficiency and reducing unnecessary burdens on businesses.

Review Questions

• How does Executive Order 12866 impact the decision-making process of federal agencies when developing new regulations?
  • Executive Order 12866 significantly impacts federal agencies by requiring them to conduct thorough cost-benefit analyses before implementing new regulations. Agencies must assess the potential economic impacts of their rules, ensuring that any proposed regulation is justified by its benefits relative to its costs. This structured approach encourages agencies to think critically about the necessity and efficiency of their rules, ultimately leading to more informed decision-making.
• Discuss the role of public participation as mandated by Executive Order 12866 in enhancing regulatory effectiveness.
  • Public participation is a critical aspect of Executive Order 12866, as it allows stakeholders, including businesses and citizens, to provide input on proposed regulations. By soliciting comments from the public, agencies can gather diverse perspectives and insights that may reveal potential issues or improvements. This feedback loop not only improves the quality of regulations but also fosters trust between regulators and those affected by their rules, making the regulatory process more transparent and accountable.
• Evaluate how Executive Order 12866 has influenced the balance between regulatory oversight and economic growth in recent years.
  • Executive Order 12866 has played a pivotal role in shaping the balance between regulatory oversight and economic growth by emphasizing the importance of cost-benefit analyses and stakeholder engagement. In recent years, this approach has encouraged agencies to scrutinize proposed regulations more carefully, aiming to minimize unnecessary burdens on businesses while still achieving public policy goals. The focus on data-driven decision-making has led to an environment where regulations are increasingly designed to support innovation and economic development, reflecting a more adaptive and responsive regulatory framework.

Related terms

Cost-Benefit Analysis: A systematic approach for estimating the strengths and weaknesses of alternatives in order to determine the best option that provides the greatest net benefit.

Regulatory Flexibility Act: A law that requires federal agencies to consider the impact of their regulations on small businesses and to find ways to minimize any adverse effects.

Office of Information and Regulatory Affairs (OIRA): A division of the Office of Management and Budget that oversees the implementation of government-wide policies on regulatory matters and reviews significant regulations proposed by federal agencies.