The Small White House Office That Reads Every Major Rule Before You Do

There is an office in the Executive Office of the President whose name nobody remembers and whose work affects the price of nearly everything you buy. It is not the Oval Office, the National Security Council or the Press Secretary's podium. It has a staff you could seat in one conference room, and an acronym that sounds like a Greek island. It is OIRA, the Office of Information and Regulatory Affairs, and it has one job that matters more than most cabinet departments: it reads the big rules before the rest of us do.

If you want to understand how the executive branch checks itself, this is the place to start. Let me define the terms, state the claim, and then argue it in order.

The Claim

My claim is this. The review of major federal rules by OIRA is the single most important internal check on regulatory excess that the executive branch has. It rests on a simple principle, that a government which imposes costs on citizens should be required to count them. Both parties have kept the system for more than forty years. And conservatives, who sometimes treat it as an inside-the-Beltway curiosity, should defend it and use it.

I will make the case in six steps: where the office came from, what the orders say, how review works, what a cost-benefit analysis is and is not, the strongest objection, and the limits.

Where OIRA Came From

The office was created by the Paperwork Reduction Act of 1980, which President Carter signed in December of that year. The act is about information: it was meant to cut down the flood of forms that agencies imposed on the public, and it placed the job of reviewing those forms in a new office inside the Office of Management and Budget. That office is OIRA. Its head, the Administrator, is appointed by the President and confirmed by the Senate. I describe the paperwork half of the story in That Little Number on a Federal Form Can Protect You From a Penalty.

A statute that creates an office for forms does not, on its face, create a regulatory review office. The extra step came a few weeks later. When Ronald Reagan took office in January 1981, his administration looked for a way to get control of the rulemaking of the agencies, and found that the new office was sitting there, with a name that included the word "regulatory" and a place in the White House. On February 17, 1981, Reagan signed Executive Order 12291, and the office became the center of a new system.

The point worth underlining is the date. The office was created by a Democratic President and a Democratic Congress, and put to its modern use by a Republican President within weeks. That is the first clue that this is not a partisan device.

What the Orders Say

An executive order is a directive from the President to the executive branch. It binds the agencies, not the public, and it does not create rights that a private party can enforce. That limitation is important to remember, and I will come back to it. Within the executive branch, though, it is how a President manages the work of his own departments.

Executive Order 12291 (1981). Reagan's order required each executive agency to prepare a regulatory impact analysis for every "major rule," a category defined mainly by a threshold of an annual effect of $100 million or more on the economy, or by major increases in costs and prices or significant adverse effects on competition, employment or investment. The order told the agencies, as far as the law allowed, to adopt a rule only if its potential benefits to society outweighed its potential costs, and to choose the alternative that imposed the least net cost. The rules, with the analysis, had to go to OMB before they were published.

Executive Order 12866 (1993). Twelve years later, President Clinton replaced the Reagan order with his own, signed on September 30, 1993. It did not abolish the system. It kept the central review, adopted its own language, spoke of a "significant regulatory action," with an annual effect on the economy of $100 million or more as one of the triggers, and set a general rule that review should be completed within ninety days. It stated the principle that agencies should assess both the costs and the benefits of the available alternatives, and that they should choose approaches that maximize net benefits. It also required OIRA to keep a publicly available log of substantive communications with people outside the executive branch, which opened the process to public view.

That is the keystone fact: Clinton kept it. A Democratic President who had every incentive to scrap a Reagan-era device kept the machinery and refined it. Later Presidents of both parties have issued their own orders modifying the system, and the basic structure of Executive Order 12866 has persisted through administrations of both parties, with the cost-benefit principle intact. When a rule is made, someone in the White House asks, "What does this cost, and who pays?"

How Review Works, Step by Step

Here is the process, in order, for a rule that comes to OIRA.

1. The agency drafts. An agency, working under a statute that tells it to issue regulations, prepares a proposed rule. It decides whether the rule is "significant" under the order, using the criteria in the order itself.
2. The agency sends the draft to OIRA. If the rule is significant, the agency submits the draft, together with its analysis of costs, benefits and alternatives, before the notice goes to the Federal Register. The submission is logged on a public website that tracks every rule under review.
3. OIRA circulates it. The office sends the draft to other interested agencies, which may comment. The Department of Labor may have views on a rule written by the Environmental Protection Agency, and the Small Business Administration may have views on both. This interagency review is the part of the process outsiders rarely see, and it is where many problems are caught.
4. OIRA meets with outside parties. Under the order, the office meets with members of the public who ask about a rule under review, and the meetings are disclosed. Business groups, public interest groups and individual citizens can all request them.
5. OIRA concludes the review. It may clear the rule, return it for further consideration, or ask for changes. The general time limit is ninety days, which may be extended.
6. The rule is published. A proposed rule goes into the Federal Register for notice and comment, as the Administrative Procedure Act requires. After the comments, the agency prepares the final rule, and, if it is significant, sends it to OIRA again for a second review before the final version is published.

That is the whole machine. It is not exotic. It is a manager reading the work of his staff before it goes out the door. The thing that is unusual is how rarely a citizen is told that it exists.

What Cost-Benefit Analysis Is

The core of the review is the analysis, and it is the part of the system most often misunderstood, by friends and critics alike.

A cost-benefit analysis is an attempt to answer two questions about a proposed rule. What will it cost, in money, time and lost opportunities, for the people who must comply? And what good will it do, in the things the rule is meant to achieve? The analysis puts the answers side by side, over time, for the proposed rule and for the alternatives the agency considered. The guidance on how to do it is in OMB Circular A-4, first issued in September 2003, which instructs agencies on defining the baseline, identifying the alternatives, monetizing the effects where possible and treating the future consistently. The 2003 version told agencies to present their results using discount rates of both 3 and 7 percent, so that the reader could see how much the conclusions depended on how future benefits are valued. The circular has been revised since, and its details are debated, so check the current version on the OMB website before relying on any specific number.

I want to be exact about what cost-benefit analysis does not do. It does not decide the question. It informs it. It does not tell you that a life has a price, though it must, to function, assign a value to risk reduction, and that is the part its critics dislike. It does not give a final answer. What it does is demand that the case for a rule be made in numbers that others can check, and that the choice among alternatives be stated.

Why This Is a Conservative Tool

Here is where the argument turns, and where I will ask the conservative reader to pay attention.

1. It puts the burden of proof on the government. The conservative presumption is that power should justify itself, and that a rule that takes money, time or freedom from citizens should be required to show what it buys. Cost-benefit analysis is the formal demand that it do so.
2. It makes the hidden cost visible. As I argue in A Regulatory Budget Would Make Washington Count the Cost of Its Rules, the costs of regulation do not appear in the federal budget. The analysis is the only document in the rulemaking record in which they are totaled.
3. It restores a measure of accountability. The people who write rules are career staff in agencies. The office that reviews them reports to the President, who is elected. That connects the daily work of the administrative state to the one official the whole nation votes for, which is what the Constitution contemplates.
4. It has a constitutional footing. Article II, Section 1 provides that "The executive Power shall be vested in a President of the United States of America." Section 3 directs that "he shall take Care that the Laws be faithfully executed." And in Section 2, the Opinions Clause lets him "require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices." A President who reviews the rules written in his name is exercising that power, and the cost-benefit principle is a rule of his own management. For how that text applies, see Eleven Questions About Presidential Power, Answered From Article II.

None of this is a left-right matter. It is why Cass Sunstein, who served as OIRA's administrator under President Obama, was a champion of cost-benefit analysis in his scholarship and in his work, and why President Obama's own Executive Order 13563 in 2011 reaffirmed the principles of Executive Order 12866. Conservatives who dismiss the system as a bureaucratic sideshow are giving away a tool the other side has been careful to keep.

The Strongest Objection

The best objection comes from two directions at once.

From the left: cost-benefit analysis is a way to put a dollar figure on clean air and human life, and a way to slow protective rules by demanding numbers that cannot be known. Delay in review is a victory for the regulated industries.

From the right: OIRA is part of the White House, and a President who wants a rule can bend the analysis to suit it. A system that depends on the self-discipline of the people it governs is not a check.

Both objections have force, and here is the answer to each.

1. On delay. The ninety-day limit is a real constraint, and the process is public. A rule that is held up can be identified, and the Administrator answers for it. The remedy for slow review is a deadline and transparency, not abolition.
2. On values. The analysis does not replace the judgment about what is worth protecting, it only requires that the judgment be stated. A rule that is worth its cost should be able to say so in numbers. If the only way to defend a rule is to forbid anyone from adding it up, that is a sign about the rule.
3. On manipulation. The analysis can be gamed, and a President can lean on it. That is true of any internal check. The answer is that the analysis is published, the meetings are disclosed, and the numbers can be attacked in comments and in court, where an agency that has not examined the costs can be told that its decision is arbitrary and capricious. The check is imperfect, but it exists, and an imperfect check is a better place to start than none.

The Limits

I said I would state the limits, and they are real. First, an executive order does not bind the courts or create private rights. A citizen cannot sue an agency for skipping a step in the order, so enforcement is political. Second, the independent regulatory commissions, which are the bodies discussed in Humphrey's Executor Created a Fourth Branch the Constitution Never Mentions, were historically not subject to the same review of their rules, which left a large slice of regulation outside the check. In February 2025, Executive Order 14215 directed independent agencies, with an exception for the Federal Reserve's monetary policy functions, to send significant regulatory actions to OIRA before publication. Third, review covers the rules that agencies publish, and not the guidance, letters and enforcement priorities that carry much of the practical weight, a gap discussed in Guidance Documents Are Rules That Skipped the Line, and Families Pay for It.

And fourth, review at the White House is only as good as the statutes it is applied to. If Congress writes a statute that commands an agency to issue a rule regardless of the cost, the analysis can inform the choice but cannot overrule the law. The deeper remedy is a Congress that writes clearer statutes, a theme running through Make Congress Vote on Every Major Rule, and Watch Accountability Return.

The Case in Brief

1. OIRA, created by the Paperwork Reduction Act of 1980, reviews significant federal rules before they are published, and it is the executive branch's main internal check on its own agencies.
2. Reagan's Executive Order 12291 of 1981 required cost-benefit analysis of major rules, and Clinton's Executive Order 12866 of 1993 kept the system, which is why it has survived changes of party.
3. Review runs step by step: the agency drafts, OIRA circulates the draft, meets outside parties, concludes within about ninety days, and the rule then goes to notice and comment.
4. Cost-benefit analysis is a conservative tool because it puts the burden of proof on the government, makes hidden costs visible and ties the daily work of agencies to the elected President.
5. The system has limits: executive orders create no private rights, independent commissions are largely outside it, and guidance escapes it, so Congress must still write clearer laws.

What you can do: look up the list of rules under review on the federal government's regulatory information site, pick one that affects your work or town, and submit a comment during its notice-and-comment period, or request a meeting with OIRA under the order.