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Sixty Years Since the Administrative Procedure Act: Necessary Improvements
Jerry Ellig, Ph.D.Richard A. Williams, Ph.D.
An Unfulfilled Promise
“Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.”
— President Barack Obama Executive Order 13563
Presidents have tried repeatedly…
“This Order is intended to improve the quality of Executive Agency regulatory practices” -Jimmy Carter
Agencies must not issue a regulation unless the potential benefits to society “exceed the potential costs to society.” -Ronald Reagan
“The American people deserve a regulatory system that works for them, not against them…. We do not have such a regulatory system today.” -Bill Clinton
“Always consider costs and reduce burdens for American businesses and consumers when developing rules;” -Barrack Obama
Presidents have tried repeatedly…
“This Order is intended to improve the quality of Executive Agency regulatory practices” -Jimmy Carter
Agencies must not issue a regulation unless the potential benefits to society “exceed the potential costs to society.” -Ronald Reagan
“The American people deserve a regulatory system that works for them, not against them…. We do not have such a regulatory system today.” -Bill Clinton
“Always consider costs and reduce burdens for American businesses and consumers when developing rules;” -Barack Obama
Regulatory Analysis: The Cornerstone
1. Problem
2. Alternative Solutions
3. Benefits and Costs
4. Success Defined
Reality – Decision Making in the Dark
1. Analyses often non-existent or poor quality
2. Analysis frequently not used – ready-fire-aim
rulemaking
3. Outcomes often poorly defined and rarely reported
Ready, Fire, Aim Rulemaking
64% of economically significant regulations proposed in 2008-12 provided no explanation of how the agency used any part of the analysis.
Why analysis matters
FDA - Proposed rule for animal food:
$13-17 million benefits, $87-129 million costs
Mercatus Comment - Apply to pet food only:$12-15 million benefits, $6-9 million costs
Elements of Reform
• Statutory mandate to perform analysis
• Judicial review
• Advance notice with analysis of problem and alternatives
• Formal hearings for substantial rulemakings
• Mandatory reporting of regulatory outcomes
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