Urgent Priority for Next President: Executive Order Limiting Regulation

As the Democrat and Republican parties debate priority issues for their party policy platforms, they have a unique opportunity to strike at out-of-control regulations. A new report from the Competitive Enterprise Institute (CEI) offers a starting point for both party platforms and especially the next president: President Ronald Reagan’s 1981 executive order (E.O. 12291).

“Federal regulations impose hundreds of billions of dollars in costs on American businesses, job creators and consumers, yet oversight of most regulations is weak,” said Wayne Crews, CEI vice president for policy. “The next president can put some limits on government growth by restoring and improving an executive order put forward by President Reagan in 1981 requiring agencies to emphasize cost analysis of rules and submit them to stricter White House review.”

The Reagan executive order had a record of success, up until it was later weakened by President Clinton.

  • The number of Federal Register pages, for example, skyrocketed during the 1970s after the creation of several new federal agencies, peaking at 73,258 in 1980. But by 1986, five years into the Reagan presidency, the number of Federal Register pages had declined to a low of 44,812— a 28,446-page drop.
  • The number of rules issued peaked at 7,745 in 1980 but then declined during the Reagan years to as low as 4,589.

The job of the White House Office of Management and Budget (OMB) is to assist the president in supervising the administration of executive branch agencies. But now, the OMB annually reviews only a few hundred rules that have big economic or policy consequences. A new Reagan-style executive order would extend that review to include not just regulations that are part of the formal rulemaking process but so-called regulatory “dark matter” – all the agency guidance, documents, bulletins, and memoranda that have grown during the Obama years.

Another benefit of a Reagan-style executive order will be a better division of oversight duties with Congress. While the White House reviews rules within its reach, Congress can tackle the rest, especially rules coming from independent agencies like the Federal Communications Commissions and all the new rules unleashed by the Dodd-Frank financial law. These are largely exempt from executive order review.

The CEI report also puts forward a set of reforms Congress should undertake, such as requiring a congressional vote on regulations with a big economic or policy impact.