The order also allocates responsibilities to both federal agencies and the Office of Management and Budget (OMB) in a centralized regulatory review process, and recognizes OMB’s Office of Information and Regulatory Affairs (OIRA) as the repository of expertise on regulatory issues. As the Chairman and Ranking Member of this Subcommittee requested, we focused our review on three issues: (1) the extent to which agencies are adhering to and OIRA is applying the executive order’s cost-benefit analysis requirements; (2) whether OIRA is significantly changing agencies’ proposed regulations during its review process; and (3) whether agencies are eliminating regulations and, if so, whether the elimination and revision of regulations are reducing regulatory burden. Cost-Benefit Analysis Requirements

Agencies’ responsibilities in the executive order to assess the costs and benefits of their proposed regulations vary depending on whether the regulatory action involved is “significant” or “economically significant.” A significant regulatory action is defined in the order as any action “that is likely to result in a rule that may (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”
Any regulatory action that meets the first of these criteria is considered “economically significant.” If the action does not meet the first criterion but meets any of the other three criteria, it is considered “significant for noneconomic reasons.”

			OIRA’s Interpretation of the Order’s Cost-Benefit Requirements

said that agencies should, at a minimum, include a statement in the preamble to proposed significant regulations indicating that they considered the potential costs and benefits of the regulations during their development. For 28 of the 29 economically significant rules, a cost-benefit analysis document was either in OIRA’s files or was provided by OIRA staff. benefits of the regulatory action. Although we found evidence of some OIRA involvement in all of the regulations we investigated, the data available did not provide sufficient evidence to conclusively determine whether OIRA-recommended changes were made to all of the regulations. Most OIRA Changes Appeared Substantive

In 21 of the 32 rules for which evidence existed of OIRA-suggested changes, the changes made to the rules appeared to be substantive in nature. Therefore, for these entries there did not appear to be any reduction in substantive regulatory burden.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the implementation of Executive Order 12866, which is intended to improve regulatory planning and review.

What GAO Found

GAO noted that: (1) the extent of federal agencies' cost-benefit analyses of proposed regulations depends on whether the regulatory action is economically significant or significant for noneconomic reasons; (2) agencies are required to provide the Office of Information and Regulatory Affairs (OIRA) with their cost-benefit analyses of the regulatory action, but agencies often do not perform these analyses because they believe the analyses are not worth the time and effort; (3) OIRA provided cost-benefit analyses for 28 of 29 economically significant regulatory actions reviewed, but 2 of these analysis did not contain all required elements; (4) 14 significant noneconomic regulatory actions did not have cost-benefit analyses for various reasons; (5) although there was evidence of OIRA involvement in all regulations reviewed, the data was insufficient to determine whether OIRA-recommended changes were made; (6) at present, OIRA reviews are limited to only significant regulatory actions; (7) OIRA works informally with agencies during regulations' development and its influence may often be indirect and subtle; (8) for 21 of 32 rules, OIRA-suggested changes appear to have been substantive; and (9) periodic agency reviews of regulations have resulted in the elimination or revision of some regulations, but the overall regulatory burden appears not to have been significantly reduced because of regulatory obsolescence and duplication and the addition of new regulations.