By DAVID WESSEL
Barack Obama didn't turn into the reincarnation of Ronald Reagan when he signed an executive order titled "improving regulation."
He didn't disavow the Dodd-Frank Act nor his new health-care law, both of which increase government's role in the economy. He didn't instruct the Environmental Protection Agency to cease efforts to reduce greenhouse-gas emissions by regulation nor exhort the Federal Communications Commission to abandon its "net neutrality" quest. He didn't promise to hold off on any of the 224 major rules that the free-market Competitive Enterprise Institute says are in the pipeline, up from 184 last year.
David Wessel looks at whether President's Obama's pledge to cut through the regulatory red tape will produce real results and does it suggest he's been too heavy handed over the past two years? Plus, new ways to clear snow with less effort.
.Indeed, while the White House was assuaging executives who have been kvetching about regulation, the Treasury secretary was convening the new Financial Stability Oversight Council to pursue just a few of the new rules for the financial system mandated by Dodd-Frank.
So did the president actually change anything? Did he swipe a talking point from Republicans to show that he really does care about the economy? Or was this an admission that his appointees have spent the past two years making up for lost time, pushing so many rules that they may have hurt the economy?
The U.S. Chamber of Commerce seemed to think the latter, lauding the president for a step toward "restoring balance to government regulations." So did Public Citizen, a consumer-advocacy group, which condemned the president for going in "the wrong direction."
Not so, insisted Jacob Lew, who oversees all this as head of the White House Office of Management and Budget. "This is not a radical change in direction, but it is an important inflection point," he said. The president, he said, has formalized "a set of practices that are consistent with what we have been doing," making it "much more likely that things will go through the agencies reflecting that approach."
That hardly sounds like a 180-degree turn.
Yet listen to John Graham, George W. Bush's point man on regulation and now dean of Indiana University's School of Public and Environmental Affairs: "President Obama has acquired or is asserting more new regulatory authority over business than any president in modern history. He is trying to counteract a growing perception that he is 'anti-business."'
"This initiative, even if primarily symbolic, is a modest step in the right direction," Mr. Graham said. After all, this is a presidency distinguished until now by the insistence that the American financial system and economy were under-regulated. Clearly, the president is changing the tone. Whether he is changing the substance depends on how hard he resists the urge to regulate.
A bit of history: In 1981, Ronald Reagan issued an executive order asserting centralized White House review over executive-branch agency regulation-writing, requiring the first cost-benefit tests and empowering a new Office of Information and Regulatory Affairs (OIRA) to block regulatory-happy agencies. In 1993, Bill Clinton issued his own order, different in tone and substance but keeping the OIRA architecture.
The Clinton order lasted six years into George W. Bush's presidency. But a lot depends on how the White House uses its power. In the Bush years, says Michael Livermore of New York University Law School's Institute for Policy Integrity, "the actual practice changed significantly" and "informal reviews" essentially derailed rules secretly. In 2007, Mr. Bush replaced the Clinton order with his own, among other things, strengthening the role of political appointees.
Less than two weeks after his inauguration, Mr. Obama revoked the Bush order. He appointed a head of OIRA, Cass Sunstein, who had championed warnings, disclosures and incentives over rigid rules. The president said "a great deal has been learned" since the 1993 order, and gave his staff 100 days to come up with a new, modern process.
It took 718 days. The order Mr. Obama signed Tuesday "reaffirms the principles" of the Clinton order with a few tweaks. In weighing costs and benefits, for instance, agencies may now consider "equity, human dignity, fairness and distributive impacts." (The Chamber of Commerce didn't mention that.) But it also mandates "greater coordination" to avoid "redundant, inconsistent or overlapping" rules, which sounds smart—if it actually happens.
In a move that could, if taken seriously, make a difference, Mr. Obama told agencies to scour the books for obsolete rules. Sort of. Within 120 days, each agency is to devise "a preliminary plan...to periodically review its existing significant regulations" to see which should be "modified, streamlined, expanded, or repealed." That drew applause from business and regulatory skeptics. In fact, Mr. Clinton made a similar demand in his 1993 order.
All this turns on whether Mr. Obama and his appointees act on his words. "An executive order is like a CEO memo to employees," said Wayne Crews of the Competitive Enterprise Institute. "To the extent the employees don't follow through, they feel the wrath of the CEO—to the extent he experiences any wrath."
Watch what they do, not what they say.
Write to David Wessel
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