Executive Order 12044

Original Text

Effective Dates
3/23/1978 - 2/17/1981

Reform Goals
Foster more substantial review of “economically significant” regulations with an expected economic impact > $100 mm or which would cause major price increases. The order states, “Regulations shall be as simple and clear as possible. They shall achieve legislative goals effectively and efficiently. They shall not impose unnecessary burdens on the economy, on individuals, on public or private organizations, or on State and local governments.”

EO 12,044 was part of a larger movement to control the growth of federal government in the 1970's. At the time, there was growing recognition that the government was funding programs indirectly through private sector spending imposed by regulations, a process that involves less oversight than spending tax payer dollars.

Requirements (What of Whom?)
Executive branch agencies were required to:

  • Publish significant rules under development in the federal register biannually 
  • Allow for a 60-day public comment period for each proposed significant rule
  • Conduct an analysis of any rules with an expected economic impact > $100 million or which were expected to cause major price increases
  • Periodically conduct reviews of existing regulations within their domain

For significant rules, agencies were to carefully consider rule alternatives and the economic impacts of each. This analysis was not published in the federal register until the final rule was published. The public could get a copy of the analysis “upon request.”

Independent regulatory agencies were exempted.

Oversight for rule compliance
The Office of Management and Budget (OMB) was to oversee agency compliance and report twice a year to the President on progress.  President Carter also established a Regulatory Analysis Review Group (RARG) in 1978 to review ten to twenty EO 12,044 regulatory analyses each year [1].

Reform “Teeth” 
No formal penalties. Neither the OMB nor RARG had substantiative power to change or block rules that imposed “unnecessary burdens on the economy.” or otherwise failed to meet the goals of the executive order [1].

Outcomes
RARG only reviewed 9 of the 40 rules with more than $100 in economic impact from 1978 - 1980. Though these were generally of high quality and targeted impactful regulations, there is no evidence that they impacted the effectiveness of the final rules in question [1]. The order was discontinued in 1981 by Reagan’s Executive Order 12291 [2].

Commentary
This is a typical example of a reform that created more analysis reporting without specifying any clear decision strategy based on the results. With no third party checks and balances over new rules, Executive Order 12,044 had little impact on the growth in the regulatory burden.

References

  1. Christopher DeMuth. "Constraining Regulatory Costs - Part I: The White House Review Programs." The American. February 6, 1980. Link , PDF
  2. National Archives. "Ronald Reagan Executive Orders - 1981." Link