Traffic light against blue skyPhoto: Horia VarlanIn January, President Obama issued a call for all federal agencies to review their existing regulations, looking for rules that had grown outdated, ineffective, or insufficient over time. Back then, there was much discussion over whether the move was a gift to business or a robust defense of strong protections even in a downturned economy. 

Now, the EPA and other agencies have released their proposed plans for retrospective review, and the proof is in the regulatory pudding. In its current form, there is too little in the EPA’s proposal that suggests review efforts will strive to enhance cumulative net regulatory benefits. Ideally, these plans would be neutral, and would seek to maximize net benefits regardless of whether rules needed to be rolled back, updated, or expanded. 

Largely, it seems, the EPA has focused narrowly on paperwork reductions and appealed to specific business interests — a far cry from modernizing the regulatory state. There has been far too little emphasis on updating and expanding rules.

The very first rule selected for review by the EPA provides a telling example. The EPA proposes revisiting its rule that protects children and adults from lead-based paint dust and chips. This rule was developed only three years ago, has been in effect for just over a year, and was most recently amended in May 2010. Yet without identifying any changed circumstances, new technological developments, new scientific understandings, or new data on the costs and benefits of complying with the rule, the EPA now suggests this rule has grown outdated or ineffective, and warrants another review.

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In fact, the only reason EPA gives for targeting this rule is that it had received complaints about the regulation. While both the public and regulated businesses may be excellent sources of information on when changed circumstances or new data on regulatory benefits or burdens provide a legitimate reason for retrospective review, changing a rule simply because the regulated party does not care for it and complains loudly about it is a bad basis for policy.

A large number of other rules identified for review in both the EPA’s plans and other agencies’ agendas concentrate on opportunities to reduce paperwork burdens by simplifying reporting requirements and allowing electronic data collection. While these are certainly worthwhile efforts, President Obama’s call was about more than letting businesses submit their permit applications online. 

It was supposed to be a request for agencies to look broadly for the chance to improve the effectiveness and efficiency of rules. It would have been better to also look for cases where new technology has reduced compliance costs and a stronger rule could deliver more net social benefits, or where economic circumstances have changed and point to the need for a more flexible approach to regulation. 

By concentrating too much on the admittedly low-hanging fruit of paperwork reductions, agencies risk missing opportunities to pick reviews that might deliver even greater gains to net benefits.

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There are some bright spots. For example, the EPA has long been notoriously slow in reviewing certain air quality standards as required by statute; the agency’s proposal now refocuses on prioritizing the most important of these reviews and completing them. The EPA also occasionally seems open to the possibility of expanding a rule based on a retrospective analysis; it noted that it’s considering expanding current protections on pesticide exposure. 

The EPA’s plan is also commendable for encouraging the use of the latest scientific methodologies and newer regulatory techniques, like disclosure, to increase the effectiveness of its regulatory programs. In line with the president’s executive order, the EPA does aim to improve transparency and promote innovation. Yet overall, the federal agencies’ initial proposals on retrospective review read more like a series of small gifts to business than a truly balanced approach for reassessing its existing regulations.  

The EPA and the other agencies still have a lot of work to do to develop a more balanced, meaningful, and long-lasting plan for retrospective review.

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