Washington Energy Report > Troutman Sanders LLP

OMB Guidance on Cumulative Effects of Regulations

On March 20, 2012, the Office of Information and Regulatory Affairs (“OIRA”), the regulatory arm of the Office of Management and Budget (“OMB”), issued new guidance requiring Federal agencies to consider cumulative effects of new and existing rules in order to harmonize and streamline multiple rules. The guidance is based on an executive order issued last year, E.O. 13563, “Improving Regulation and Regulatory Review”. The order requires each agency to consider “the costs of cumulative regulations” that could impose significant regulatory impacts. 

OIRA Director Cass Sunstein noted the President’s Council on Jobs and Competitiveness has emphasized the need for a smart and efficient regulatory system and has focused specifically on the cumulative effects of regulation.  Sunstein emphasized that cumulative burdens can create special challenges for small businesses and startup organizations.

To do so, the guidance directs agencies to actively account for cumulative effects of new and existing rules and to identify opportunities to streamline multiple rules. To meet these objectives, Guidance sets out a series of steps, including:  Early consultation with affected stakeholders on potential interactions between rule under consideration and existing regulations; Specific consideration of cumulative effects of regulations on small businesses and start-ups; Identifying opportunities to increase net benefits of rules and reduce costs; Identification of opportunities to simplify the new and existing rules; and Consideration of cumulative effects of multiple regulations.  Finally, agencies are directed to “select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits.”

Overall, the goals of the guidance are to simplify regulatory requirements on the public and private sectors, to avoid unjustified, redundant, or excessive requirements, and ultimately to increase the net benefits of regulations. The guidance is effective immediately and as OMB’s regulatory gatekeeper, OIRA will oversee agency compliance with both the Executive Order and the Guidance.