A struggling economy and last November’s electoral realignment, read by some as a reaction to the President’s and Democratic Congress’ significant legislative and regulatory initiatives, have vaulted regulatory review high on the 112th Congressional agenda. Major bills repealing specific regulations (many focusing on the Environmental Protection Agency’s (“EPA”) climate change rules), reforming the rulemaking process, and reasserting Congress’ oversight role have been introduced. Even President Obama has weighed in with orders and pronouncements calling for a more balanced, disciplined, and open regulatory process.

Given the sheer volume of initiatives, not to mention the complexities of the proposed and existing laws, assessing the potential effects of these measures can be challenging. To help you navigate this difficult terrain, Kelley Drye discusses the terms, probable impacts, and general prospects for these bills in the current Congress, focusing on the overarching reform initiatives. We also review President Obama’s recent pronouncements on the topic and what they might portend for the regulatory environment over the next two years.

As a general matter, continuing concern over the fragile economic recovery and a bipartisan emphasis on job creation and support for small businesses, make passage of some form of regulatory reform possible. Prospects will be best for bills that receive bipartisan support in the Senate and that move relatively quickly this year, before battle lines become too rigidly drawn ahead of the 2012 elections. Among the current crop of bills, there are a handful that could meet these criteria. Moreover, opportunities abound for melding existing ideas into a package that could garner support from both chambers and the Administration, assuming a motivated constituency for reform develops.

In the interim, aggressive oversight and agency review, particularly in the House, present substantial opportunities for discrete legislative solutions to particularly burdensome regulations and regulatory enforcement. As to the Administration, there are signs of a more modest regulatory agenda and an increasingly active role for the Office of Management and Budget (“OMB”) as a focal point for a more holistic approach to rulemaking, taking into greater account the economic impact on affected industries.

 Legislative and Executive Actions

Five Key Congressional Reform Initiatives

Beyond economic factors and time-honored partisan debate over the proper role of government in the economy, an interesting theme emerging this year is the propriety and extent of delegation of legislative authority to administrative agencies. Reassertion of Congress’s constitutional lawmaking role has been in the forefront, with Republicans casting the issue of intrusive and excessive regulation as the result of a combination of Congress abandoning its prerogatives and the Executive usurping lawmaking authority.

Click here to view table on Key Regulatory Reform Bills and Where They Stand

This theme has been most prominent in what many consider the preeminent Republican reform bill, the Regulations from the Executive In Need of Scrutiny Act (“REINS Act”) (S. 299, H.R. 10). Introduced by Representative Geoff Davis (R-KY) and freshman Senator Rand Paul (R-KY), these bills have attracted a large number of Republican supporters (127 cosponsors on the House bill and 25 on the Senate bill). In its “Purpose” section, the REINS Act contends that, “[o]ver time, Congress has excessively delegated its constitutional charge while failing to conduct appropriate oversight and retain accountability for the content of the laws it passes.” The prescribed solution is to amend the Congressional Review Act (“CRA”), inverting CRA’s current requirement for the legislature to vote to “veto” a major rule1 (one that must be signed by the President) to a requirement for affirmative congressional assent before major rules issued by regulatory agencies can take effect.

REINS Act proponents argue the CRA has proven ineffectual, having resulted in exactly one rule being vacated since it was passed in 1996—the Occupational Safety and Health Administration’s (“OSHA”) major ergonomics rule, adopted in the waning hours of the Clinton Administration. The primary reason that CRA effort succeeded was the change in administrations, with President Bush and the new Congress being more open to industry concerns. Rarely would an administration accede in the overturning of a major initiative of its own. Thus, if adopted, the REINS Act would undoubtedly lead to nullification of many more unpopular rules.

Questions, however, are already being raised about potential constitutional problems with the REINS Act. Opponents contend that the system of congressional authorization represents an unconstitutional legislative veto because one house alone can kill a regulation. They also note Supreme Court holdings that a statute is suspect if it “involves an attempt by Congress to increase its own powers at the expense of the executive branch.” Morrison v. Olson, 487 U.S. 654 (1988). Supporters distinguish these cases. Constitutional analysis alone will not determine the REINS Act’s fate, but these questions will help arm the bill’s opponents.

Other measures, including the Regulatory Flexibility Improvement Act (H.R. 527) and the Regulatory Responsibility for Our Economy Act of 2011 (S. 358), build on current review processes. The former, introduced by Representative Lamar Smith (R-TX), would make adjustments to the Carter-era Regulatory Flexibility Act (“RFA”), which saw its last major amendment as part of the Small Business Regulatory Enforcement Fairness Act (“SBREFA”) in 1996 (passed along with the CRA as part of the House Republicans’ Contract with America). The RFA is akin to the National Environmental Policy Act (“NEPA”) for small businesses. It forces agencies, at an early stage in the process, to assess the impacts of regulations on small entities (including small governmental and non-profit organizations) and investigate less burdensome means of achieving required ends. The RFA is largely procedural, requiring impacts analysis and consideration of alternatives. It does not require adoption of the least burdensome approach.

Congressional Review Act of 1996

The Congressional Review Act (“CRA”) was adopted as part of SBREFA in 1996. The CRA requires submission of all rules to the Comptroller General and both Houses of Congress, along with analyses required by applicable laws, such as the RFA, for review. “Major rules” are not effective until at least 60 days after the required submission and are subject to a joint resolution of disapproval. As with any bill, such resolution must pass both Houses of Congress (and survive any presidential veto), but if passed, nullifies the regulation. Further, any rule thus disapproved cannot be repromulagated unless and until “specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.”

Major rule means any regulation that is likely to result in: (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.

Among other things, the Regulatory Flexibility Improvement Act (“RFIA”) proposes closing a “loophole” in current law by requiring agencies to consider “any indirect economic effect on small entities which is reasonably foreseeable and results from [a major] rule.” This addresses a line of court decisions denying small businesses standing to challenge RFA compliance for rules with significant, but indirect, impacts. For instance, small entities forced to comply with EPA’s national ambient air quality standards for ozone and particulate matter were unable to challenge EPA’s compliance with the RFA because they were “directly” regulated by states.

Another RFIA provision would expand the use of panels of regulated stakeholders and agency personnel convened by the Small Business Administration’s Office of Advocacy to hash out regulatory issues ahead of major rulemakings. This builds on so-called “SBREFA panels,” which the 1996 amendments required for EPA and OSHA rulemakings. RFIA would also, for the first time, subject land management plans under a variety of laws, including the Federal Land Policy and Management Act, to RFA requirements. And finally, though not exhaustively, the Chief Counsel of the Office of Advocacy would be granted power to promulgate binding rules governing agency compliance with the RFA, which could include, for instance, a common definition of what constitutes a “significant economic impact.”

Taking a different tack, the Regulatory Responsibility for Our Economy Act of 2011 (“RROEA”) would codify the terms of President Obama’s recent Executive Order on regulatory review and reform discussed below). Senator Pat Roberts’ (R-KS) bill establishes a series of standards and procedural requirements for all “regulatory actions”—those “normally” undergoing notice-and-comment rulemaking— and “significant” actions involving annual economic impacts of greater than $100 million.2

Regulatory Flexibility Act (“RFA”), as amended by the Small Business Regulatory Enforcement Fairness Act (“SBREFA”) Signed into law by President Carter in 1980, the RFA forces agencies to assess the impacts of regulations on small entities (including small governmental and non-profit organizations) and investigate less burdensome means of achieving required ends early in the rulemaking process. The RFA is procedural in nature. It does not require agency adoption of any particular option, but does mandate analysis and consideration of alternative approaches.

Initial regulatory flexibility analysis (“IRFA”): Required at the proposed rule stage, the IRFA identifies the rule’s purpose, objectives, source of authority, universe of impacted small businesses, reporting requirements, and any duplicative measures, as well as significant alternatives that reduce adverse impacts on small entities. An IRFA is required unless an agency certifies that the rule will not have a “significant economic impact on a substantial number of small entities.”

Final regulatory flexibility analysis (“FRFA”): Accompanying a final rule, the FRFA responds to public comment and updates the impacts assessment from the IRFA, taking into account any changes to the rule.

The law also establishes the semi-annual Regulatory Flexibility Agenda, a mandatory reporting of all rules expected to have a significant impact and requires review, within 10 years of promulgation, of all major rules to assess their continued efficacy and review their impacts, complexity, and overlap with other rules.

The RFA is overseen and enforced by the Small Business Administration’s Office of Advocacy. The Chief Counsel of Advocacy has the right to comment on proposed rules, provide agency’s compliance guidance, serve as a conduit and advocate small businesses, and even intervene in RFA challenges. This Office of Advocacy is the point of contact for regulated small businesses, and often plays a constructive role in conveying concerns to an agency.

SBREFA: Adopted in 1996, SBREFA was the last major amendment to the RFA. Among other things, it created a review panel process for major rules being considered by the EPA and OSHA. Most significantly, but not exhaustively, SBREFA added judicial review to the RFA, allowing small entities the right to challenge an agency’s lack of adherence to the law’s procedural requirements.

The RROEA adopts one of the broadest definitions of a rule in current usage, and includes actions by the so-called independent agencies like the Securities and Exchange Commission, thereby maximizing the law’s coverage and impact. Among its more novel features, RROEA would require a stay of any “regulation” adopted without informal rulemaking procedures under the Administrative Procedure Act (“APA”) if a party asserts that notice and comment rulemaking was required. This stay provision, which would remain effective until a court challenge is finally disposed of, is one of the two substantive provisions of the bill.

The other is a proposed requirement that agencies review each significant regulatory action at least every five years “to determine whether such regulations should be modified, streamlined, expanded, or repealed so as to make the regulatory program of the agency more effective or less burdensome in achieving the regulatory objectives.” A report on these findings, and actions taken in response, would have to be submitted to the congressional committees of jurisdiction. The balance of provisions largely underscore standards, considerations, public processes, and informational requirements that are set forth in other laws and authorities, such as the APA, the Unfunded Mandates Act, Executive Order (“EO”) 12866, the Information Quality Act, and others. RROEA does not provide a private right of action to enforce its terms.

Finally, though not exhaustively, Congressman Don Young (R-AK) has introduced a pair of comprehensive reform bills. The Regulation Audit Revive Economy Act of 2011 (“RARE Act”) seeks to impose a wholesale moratorium on new rules, subject to certain exceptions. The bill would charge the OMB with conducting a uniform cost/benefit assessment of “each rule that is being enforced as of the date of the enactment of this Act.” Along with the results of this analysis, the Budget Director would be tasked with providing Congress recommendations for reform and the total number of major and minor rules currently in effect. The new regulation moratorium would lift 14 days after OMB makes its report or two years after enactment of the RARE Act.

Rep. Young’s second bill is the Congressional Office of Regulatory Analysis Creation and Sunset and Review Act of 2011 (“CORA”), Title I of which would create a new congressional office for review and analysis of major rules. In large measure, CORA seeks to transfer and expand duties from the Comptroller General under the CRA, the Unfunded Mandates Act, and other laws, vesting the Director of the proposed review office with certain oversight and reporting duties. In addition to cost/benefit and net benefits analyses of major rules, this new Director also would be responsible for analyzing “non-major” rules at the direction of congressional committees.

CORA’s sunset review provisions (Title II) would expand and expedite periodic review of regulations currently required under the RFA.3 New major rules, i.e., those meeting the definition of a “significant regulatory action” above, would have to be reviewed every three or seven years by the OMB’s Office of Information and Regulatory Affairs (“OIRA”), while existing rules would be reviewed on a staggered schedule. Uniquely, the proposed “sunset review” allows for public input on issues such as the rule’s costs and burdens, recommendations for alternatives to or termination of the rule, implementation concerns, duplication, clarity, unintended effects, and like matters. It also would grant the right to petition an agency for review of “non-major rules.”

 Congressional Plans for Regulatory Oversight

Perhaps just as important as legislative initiatives is oversight. Congressman Darrell Issa (R-CA), chair of the House Committee on Oversight and Government Reform, has made review of “job killing” regulations a centerpiece of the Committee’s work. Further, many of the major authorizing committees in the House have made oversight of agencies under their jurisdiction a major part of their agendas. And in February, the House passed H. Res. 72, directing certain standing committees to inventory and review existing, pending, and proposed regulations and orders from agencies of the federal government, particularly with respect to their effect on jobs and economic growth.

As a result, in addition to the many bills aimed at new, major regulations, such as EPA’s greenhouse gas rules which topped industry complaints to Chairman Issa, there will be ample opportunities for industry representatives to identify, and provide testimony on, longstanding regulations they view as duplicative, unduly burdensome, and unnecessary.

For example, the House Energy and Commerce Committee’s Subcommittee on Envrionment and the Economy recently held a hearing on environmental regulations and their impact on the economy and jobs and the Committee’s Commerce, Manufacturing and Trade Subcommittee is taking a close look at the Consumer Product Safety Improve Act (“CPSIA”), also with an eye toward addressing regulations that are seen as stif ling innovation and job creation. For its part, the Natural Resources Committee’s oversight plan includes a focus on the Endangered Species Act (“ESA”), highlighting high-cost ESA rules that are not well supported by the best available science. Virtually every committee has a similar regulatory oversight plan for substantive laws under their jurisdiction.

In general, oversight and investigation will lead to opportunities to advocate for legislative relief for potentially outmoded and costly rules promulgated under a variety of statutes. Additionally, as discussed below, Congress’s appetite for change and desire to spur business opens the door for effective advocacy for legislative compromise and action.

 President Obama’s Regulatory Reform Initiatives

Among his earliest initiatives upon taking office, President Obama rescinded two of President George W. Bush’s orders relating to White House review of regulations.4 Within these now-rescinded orders were two of President Bush’s most controversial innovations: (1) An expansion of review of inf luential “guidance documents,” which generally should not prescribe regulatory policy, but can reorient agency interpretations or priorities in a manner that has real regulatory bite; and (2) a measure granting political appointees in agencies’ Regulatory Policy Offices a large role in setting the regulatory agenda and directing major regulatory initiatives. To those in the regulated community, President Obama’s early order signaled the advent of a more regulatorily active administration.

President Obama also announced a wide-ranging review of EO 12866, even, for the first time, inviting public comment (a measure consistent with a near contemporaneous memorandum entitled “Transparency and Open Government”). A major overhaul of EO 12866 never materialized. Nor, with the shift in the political winds since the mid-term elections, is one likely. Instead, on January 18, 2011, the President issued Executive Order 13563, a rather modest document that nonetheless provides some clues on the course of regulatory policy over the next two years.

Executive Order 12866: Regulatory Planning and Review

Executive Order 12866, issued in 1993, vests regulatory review authority with the Office of Information and Regulatory Affairs (“OIRA”), part of the Office of Management and Budget. The Vice President is designated as the “principal advisor to the President on . . . regulatory policy.” Objectives of OIRA’s review of major rules include ensuring uniformity in rulemaking processes, minimization of regulatory burdens, and alignment federal regulatory policy with that of the Administration.

Executive Order 12866 sets forth the basic questions each federal agency (excluding the independent agencies such as the FCC) must address when promulgating regulations. In addition to analysis of costs and benefits and consideration of alternatives (such as incentives for innovation) to direct regulation, EO 12866 also directs agencies to –

  • “[A]void regulations that are inconsistent, incompatible, or duplicative with its other regulations or those of other Federal agencies”; and
  • “[T]ailor its regulations to impose the least burden on society, including individuals, businesses of differing sizes, and other entities (including small communities and governmental entities), consistent with obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.”

The principal tools for identifying potential overlap and inconsistencies are the Vice President’s Agencies Policy Meeting; the Unified Regulatory Agenda; and the Regulatory Plan, processes in which even independent agencies are required to participate.

The Policy Meeting, which occurs “early in each year’s planning cycle,” brings together agency heads and advisors to “seek a common understanding of priorities and to coordinate regulatory efforts.” The Unified Regulatory Agenda is a semi-annual, Federal Registerpublished list of rules in development, while the Regulatory Plan is a more detailed list of the “most significant regulatory actions that the agency reasonably expects to issue in proposed or final form in that fiscal year or thereafter.” Each agency must list the rule’s purpose, terms, alternatives, estimated costs and benefits, legal basis, statement of need, and agency contact.

The Unified Agenda and Regulatory Plan present an opportunity for regulated entities to identify regulatory overlaps, duplication and cumulative impacts of proposed rules. Importantly, however, EO 12866 does not create any legal rights that can be judicially enforced.

Rather than altering, or even amending EO 12866, the order is styled as “supplemental to and reaffirm[ing of ] the principles” of the current review structure. EO 13563 states five principles to which agencies “must,” to the extent consistent with governing statutes, adhere. These are:

  1. The benefits of a regulation should justify its costs (recognizing that some benefits and costs are difficult to quantify);
  2. They should be tailored to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations;
  3. In choosing among alternative regulatory approaches, those that “maximize net benefits” (economic, environmental, public health and safety; distributive impacts; and equity); 
  4. Use of “performance objectives” are preferred over methods specifying behaviors or manner of compliance that regulated entities must adopt; and
  5. Alternatives to direct regulation, including use of economic incentives to encourage the desired behavior (e.g., user fees or marketable permits, or information to guide choices) must be assessed and considered.

EO 13563 also stresses public participation, encouraged and facilitated through use of on-line dockets (e.g., agency websites, www.regulations.gov) and extended proposed rule comment periods (generally 60 days). Agencies are directed to make all pertinent information readily available, particularly “scientific and technical findings” supporting a proposed rule. Finally, opportunities for input, presumably scoping or advanced notices of proposed rulemaking, should be available prior to the proposed rule stage. Notably, input is to be solicited from affected parties, as well as “those who are likely to benefit” from the rulemaking.

To avoid duplicative and cumulative regulatory impacts, agencies are encouraged to simplify and harmonize rules; provide “f lexible approaches” (including “warnings” and “default rules”); use objective and sound science (as defined in a prior Obama Administration Memorandum); and review existing rules using “retrospective analysis” with an eye toward modifying, discarding, or expanding such rules.

Notably, EO 13563 was accompanied by two Presidential Memoranda, one entitled “Regulatory Flexibility, Small Business, and Job Creation,” the other simply “Regulatory Compliance.” Directed to federal agencies, the latter provides details on implementing more open and accessible systems for distributing information related to rulemaking. The former discusses the Regulatory Flexibility Act’s terms and purposes, and directs executive departments and federal agencies, and encourages independent agencies (which are not covered by EO 12866, but do generally fall within the RFA’s definition of an agency), to consider f lexible approaches and minimizing burdens on small businesses.

 Analysis

Prospects for Legislation

It is still too early to judge whether the two houses of Congress, and the parties that control each, will find ways to achieve progress on key policy priorities. Already the focus has shifted from regulatory reform to budgetary questions, including a new continuing resolution and an upcoming, and certain to be contentious, debate over raising the debt ceiling. At least in this first session of the 112th Congress, however, Democrats and Republicans alike will need to demonstrate some legislative successes. Further, so long as jobs and the economy remain an issue—a near certainty—regulatory reform will be a prime candidate for bipartisan compromise and action.

The REINS Act is the centerpiece of Republican’s regulatory reform efforts and a major priority, a fact witnessed by the large numbers of sponsors the bill has in each chamber. This may, however, prove also to be the bill’s Achilles heel. Currently, there appears to be little, if any, Democratic support for the legislation in either Chamber, and debate over the bill in the blogosphere has a decidedly partisan cast. Indeed, as mentioned, the issue of the bill’s constitutionality is a hot topic of discussion, with answers tending to follow ideology. As such, it could prove difficult for the REINS Act to reach the necessary 60 votes in the Senate.

Further, should it pass (particularly if it passes as a stand-alone measure), it is difficult to see the President signing this bill given the weakening it implies for Executive power, separation of powers being one of the touchstones in the debate over the REINS Act’s constitutionality. That said, it is possible to see some compromise, perhaps involving affirmative review of “super major rules” with, for instance, a billion dollars in economic costs, being part of a broader reform package.

Bills like the Regulatory Flexibility Improvement Act, Senator Roberts’ Regulatory Responsibility for Our Economy Act, and Rep. Young’s CORA Act may suggest a way forward. By focusing on improving, expanding, and codifying existing regulatory review processes, these measures appear to be in the mainstream of what is feasible, familiar, and effective.

The RFIA, for instance, makes incremental improvements to what has proven to be a popular law focusing on the disproportionate regulatory impacts faced by small businesses. The RFA has been in existence for 30 years and has established itself as a routine and, for the most part, non-controversial part of the rulemaking process. In general, it is popular with the regulated community and lawmakers. Given the particular sensitivity to small business issues—take Congress’ rapid and bipartisan reconsideration of the 1099 reporting requirement under last year’s Affordable Care Act as an example—we would estimate the prospects for passage of this law (in some form) as being relatively strong in the House and at least possible in the Senate—with passage perhaps hinging on a handful of conservative Democrats.

 One of the main issues with Senator Roberts’ bill is that the RROEA arguably duplicates analyses and standards already widely required. It also lacks provisions with real bite, i.e., those that empower regulated entities with new tools to combat duplicative and overbearing rules. One key exception is the automatic stay of agency policy statements challenged on the basis that they are, in fact if not form, rules that should have been issued through notice-and-comment procedures. The President could argue, with some justification, that this provision is a recipe for litigation and gridlock, and thus is unlikely to garner the Administration’s support.

The RARE Act, similar to the REINS Act, may simply be too much of a departure from established practices to pass a cloture vote in the Senate, even assuming it gets introduced in that chamber and makes it out of committee. A blanket moratorium on new rules, even with exceptions, is an infringement on Executive prerogatives and potentially so disruptive that it is difficult seeing any Administration offering its support.

By contrast, the CORA Act incorporates elements of regulatory review processes in both the RFA and EO 12866. While legislators may debate over whether a default review period of three years is too short a time period to trigger a new look at major rules, the concept of review is well-established and generally thought beneficial by all parties. Certainly, it is consistent with President Obama’s recent executive order. It also difficult to argue with allowing public input on the workings and continued utility of such regulations, a novel feature that has the potential to garner Democratic support, particularly from Blue Dogs.

If there is any path to a legislative breakthrough in this Congress, it may well lie in merging the elements of the reform bills that build on existing structures, rather than upending established practices in a manner that could be perceived as overtly partisan. This approach may not satisfy those at the extremes of each party, but for businesses that struggle under increasing regulatory burdens, it could provide some measure of relief.

Such a measure might expand the type of analyses included in the RFA to cover entities of all sizes, in addition to a continued focus on small business, providing legally-required regulatory review with the possibility of public input, patching up the RFA itself, and even incorporating other elements of EO 12866 as positive law.

Assessment of the Administration’s Direction

Questions have arisen as to whether the Obama Administration’s recent regulatory reform and review initiatives represent a tactical maneuver or a fundamental realignment in regulatory philosophy toward a more practical and cost-aware approach.

Undoubtedly, this Administration has been much more activist on the regulatory front than its two immediate predecessors. According to Susan Dudley, former head of OIRA under President Bush and current Director of George Washington University’s Regulatory Studies Center, the past two years have seen 132 “major regulations” (those with economic impacts in excess of $100 million annually). This averages to 66 major rules per year, compared to 48 and 47 annually under the Bush and Clinton Administrations, respectively. Average cost of federal regulations is estimated by the Small Business Administration’s Office of Advocacy at $15,586 per household each year.

In assessing the likelihood of meaningful cost/benefit analysis, regulatory streamlining and review (particularly with respect to cumulative impacts of regulations on economic sectors across federal agencies), and rollback of outdated and redundant regulations, it is useful to take the long view. While President Obama’s early moves, discussed above, justifiably generated concern among the regulated community, the fact that Cass Sunstein, a regulatory expert and strong advocate for the use of cost/benefit analysis in rulemaking, was tapped to head OIRA provided some reassurance the review process would continue to have teeth. The record thus far is mixed. While liberal groups continue to fault OIRA for interfering with regulatory processes, notably with respect to EPA’s proposal to declare coal ash a hazardous substance, conservatives and congressional Republicans note the Office’s failure to review all economically significant rules and for the number and breadth of regulations this Administration has enacted.

In the end, it appears that no major overhaul of EO 12866 is in the offing. Indeed, EO 13563, affirming existing regulatory review processes and placing emphasis on job creation, economic growth, and minimizing costs tends to affirm this view. Some would say that with his recent outreach to the U.S. Chamber of Commerce, appointment of William Daley as Chief of Staff, and recent regulatory decisions (e.g., on boiler MACT, ozone, and biomass), it appears that the President is tacking to the center.

An early indicator to watch is the way OIRA approaches major rules currently under review. OIRA should be the focal point of industry input on major rules. As always, for small business, the SBA Office of Advocacy also remains an effective and useful entry point for any issues relating to existing and proposed rules.

Conclusion

President Obama has made it clear that he favors a more efficient and effective regulatory process, not only with these orders, but with a Wall Street Journal editorial published January 18, 2011, and, subsequently, in his State of the Union address. His stance would make it very difficult for him to veto any legislation that was reasonably respectful of Executive Branch prerogatives. Legislation that codifies some of the elements of EO 12866, improves the Regulatory Flexibility Act, and ensures that agencies avoid duplication and take a hard look at economic impacts and real mitigating alternatives for businesses of all sizes would stand a very good chance of passage and enactment. The real question is whether a constituency develops to advocate for relatively modest, yet effective, reform.