Regulatory Budgeting in the U.S. Federal Government: A First-Hand Account of the Initial Experience and Recommendations for Future Regulatory Budgets

Abstract

Regulatory budgets have been explored in the academic literature and employed around the world for decades, but the U.S. Federal Government did not establish a regulatory budget until January 30, 2017, with the signing of Executive Order 13,771. The budget set in place by that order achieved its central goal: Federal departments and agencies reporting to the president imposed, on net, no new regulatory costs during the entire four-year period they operated on a regulatory budget. According to the Office of Information and Regulatory Affairs, federal departments and agencies actually achieved a net regulatory cost savings of $198.6 billion over those four years.

This commentary, based on the author’s experience helping to develop and implement that budget, offers perspective on the design and structure of the first U.S. federal regulatory budget. It responds to several criticisms, and it offers lessons and recommendations for future regulatory budgeting efforts.

Keywords: regulatory budget, benefit-cost analysis

JEL Classification: D61, H61, K20, L51