The 1992 Regulatory Moratorium: Did It Make a Difference?

Abstract

History of Presidential Involvement in Rulemaking Since the Roosevelt administration and the recommendations of the Brownlow Commission, presidents have attempted to assert more control over regulatory agencies. Although in the past the appointment power was a mechanism used by presidents to oversee agencies, it has not provided an adequate amount of control over many agency actions. Bureaucratic advantages such as knowledge, history, and seniority put the chief executive at a disadvantage vis-a-vis the large executive branch. Moe (1985a) states that presidents began to combat this by strengthening the institutional presidency, which consists of the White House, the Office of Management and Budget (OMB), and other executive offices (e.g., Council of Economic Advisors). Recent research posits that the president can rely more on the loyalty of these inner parts of the executive branch than the individual cabinet level agencies. Moves by the Reagan administration to politicize the bureaucracy by placing loyal soldiers in many positions was another mechanism to assert control (Moe, 1985a). Many of these mechanisms were an attempt to control the bureaucracy. The issuing of regulations may be the most important function of many agencies because these regulations constitute the setting of policy and the development of law. During the 1970s, presidents imposed procedural constraints on rulemaking, such as requiring inflation-impact statements and environmental-impact statements, to facilitate closer review of regulation development by the White House. The Carter administration first formalized presidential regulatory review with Executive Order 12044. Executive Order 12044 dealt with general policy goals and criteria, the agencies' internal regulatory procedures, regulatory analysis (specifically for major regulations with an impact of over $100 million), and the review of existing regulations. The Regulatory Analysis Review Group (RARG), made up of representatives of OMB, the Council of Economic Advisors, several cabinet departments, and other White House offices, had the responsibility for implementing this order and coordinating interagency review. Executive Order 12044 met with some success in getting agencies to conduct more detailed analysis of regulatory actions (Tolchin and Tolchin, 1983). But, this order was only the beginning of the more active assault on regulations that occurred during the Reagan administration. Presidential involvement in regulation came to the forefront of policy making during the Reagan administration (Duffy, 1993). One of President Reagan's first acts as president was the issuance of Executive Order 12291. This order did a number of things including suspending or postponing a large number of regulations issued by agencies at the end of the Carter administration, requiring agencies to publish semi-annual regulatory agendas of those actions they expected to publish, setting up the presidential Task Force on Regulatory Relief to be chaired by Vice President Bush (an early precursor to the Competitiveness Council), and establishing a routine mechanism for OMB review of agency regulations. In addition, control of regulatory review was placed in the newly created Office of Information and Regulatory Affairs (OIRA) within OMB. This office was created by the promulgation of the Paperwork Reduction Act of 1980, enacted during the end of the Carter administration. This move by the Reagan administration basically developed a central clearinghouse for agency regulations (Benda and Levine, 1985). Probably the most important component of Executive Order 12291 was the requirement that agencies complete Regulatory Impact Analyses (RIAs) for all major regulations. The RIA had to apply cost-benefit analysis requiring the benefits of a regulation to outweigh its costs. OMB had enormous discretion in terms of these requirements and could waive them if desired. This would most likely occur if the action reduced regulatory burden. …