March 20, 2012
I am pleased that the Administrator of the Office of Information and Regulatory Affairs released a memorandum today providing guidance to all executive agencies on the appropriate manner in which to conduct rigorous cost-benefit analyses and to consider the cumulative impacts of their regulatory actions in light of new and existing regulations. I believe this directive is responsive to my letter of February 23, 2012 to the Office of Management and Budget requesting a review of the Commodity Futures Trading Commission’s conduct of cost-benefit analysis.
Specifically, the Administrator’s memorandum clarifies that, among other things, executive agencies should: (1) avoid unnecessary and inconsistent requirements; (2) improve regulatory outcomes by engaging in early and close consultation with affected stakeholders; and (3) coordinate the timing, content and requirements of multiple rulemakings that are contemplated for a particular industry or sector, so as to increase the net benefits.
I continue to maintain that the Commission should fully embrace the higher standards expressed in Executive Order 13,563 and embodied in today’s memorandum in developing its cost benefit analyses for all pending and future rulemakings implementing financial reform under the Dodd-Frank Act. The Commission must do a better job in consulting with the public as it develops sweeping economic reform. It must develop consistent baselines based on the status quo, include policy alternatives and a reproducible quantitative analysis.
Executive Order 13,5631 was released on January 18, 2011 directing executive agencies to maintain high standard in developing their cost benefit analysis. On July 11, 2011, the President issued further direction in Executive Order 13,579,2 which applied the same standards of Executive Order 13,563, to apply to Independent Regulatory Agencies.
Last Updated: March 22, 2012