Obama's Executive Order Attempts to Improve Regulatory System

President Barack Obama signed an executive order Tuesday that would require regulatory agencies to include the public in the rule-making process, and order periodic reviews of existing regulation to determine whether they should be modified or repealed.  

The order states that the regulatory process should include public participation. Regulations should be based on the "open exchange of information and perspectives" between government officials, experts, stakeholders and the general public. To that end, regulatory agencies will be required to provide the public a "meaningful opportunity" to comment on proposed regulations. Furthermore, agencies must make available scientific and technical findings relevant to proposed rules.

The order further insists that rule-making agencies "attempt to promote" coordination with each other to avoid redundant or inconsistent rules. Additionally, agencies should look for regulatory approaches that "reduce burdens and maintain flexibility and freedom of choice for the public."

Regulatory agencies are required to submit a plan to the Office of Information and Regulatory Affairs within 120 days of the date of the order that outlines the agency's process for reviewing existing regulations.

The order stresses the importance of science in the rule-making process, stating that the regulatory system must be based on the "best available science," and insisting that each agency "ensure the objectivity of any scientific and technological information and processes used to support the agency's regulatory actions."

In an op-ed piece for The Wall Street Journal, Obama wrote Tuesday that the free market system has been a source of "dazzling ideas," and the "greatest force for prosperity the world has ever known."

While Obama praised the free market system, he stressed that regulations and balance were an important part of a working system.

"We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse," he wrote.

Jack Lew, director of the Office of Management and Budget, wrote in a blog post on WhiteHouse.gov that the country has occasionally "gone too far in one direction" regarding regulation, either stifling job creation or failing to provide enough oversight.

"We believe that it is particularly critical now, as our economy continues to recover and create new jobs, that our regulatory strategy be as evidence-based, predictable, cost-effective, and carefully targeted as possible to enable American businesses to continue to grow and innovate," Lew wrote.

Read commentary from Investment Advisor Editor-in-Chief John Sullivan on Obama's "cynical move to the center."