ExecutiveOrdersEO
Memo 12866MemorandumObama · D

Presidential Memorandum 12866

Regulatory Flexibility, Small Business, and Job Creation

This memorandum directs executive agencies and requests independent agencies to give serious consideration to reducing regulatory burdens on small businesses when initiating rulemaking with significant economic impact, including through extended compliance dates, performance standards, simplified requirements, different rules by firm size, and exemptions. Agencies must explicitly justify any decision not to provide such flexibility, and the OMB Director is directed to publish the memorandum in the Federal Register.

Federal Register Open PDF 76 FR 3827

Impact dates

  1. Application to rulemakings initiated after memorandum date

Key directives

  • Executive departments and agencies must give serious consideration to reducing regulatory burdens on small businesses through increased flexibility when initiating rulemaking with significant economic impact on a substantial number of small entities
  • Flexibility forms include: extended compliance dates, performance standards rather than design standards, simplification of reporting and compliance requirements, different requirements for large and small firms, and partial or total exemptions
  • Executive agencies must explicitly justify in rule explanations any decision not to provide such flexibility when not legally required
  • Independent agencies are requested (not directed) to follow same approach
  • OMB Director authorized and directed to publish this memorandum in the Federal Register

Who is ordered

Timeline

Immediate

  • Memorandum takes effect upon issuance
  • OMB Director directed to publish in Federal Register

Near term (90d)

  • Agencies must begin applying flexibility considerations to new rulemakings initiated after this date

Long term

  • Ongoing application of regulatory flexibility analysis requirements in future rulemaking
  • Potential cumulative reduction in regulatory burdens on small entities across federal agencies

Risks & tensions

  • Request to independent agencies is non-binding, creating potential inconsistency in application
  • No enforcement mechanism for agencies that fail to justify lack of flexibility
  • Vague standard of 'serious consideration' leaves substantial agency discretion
  • Potential tension between regulatory objectives and small business flexibility
  • Cumulative effects analysis remains difficult to operationalize in practice
Presidential Memorandum 12866: Regulatory Flexibility, Small Business, and Job Creation · Executive Orders