Federalism

This executive order establishes principles and criteria for federal agencies to follow when making policies that affect state and local governments, emphasizing constitutional federalism, state autonomy, and consultation with state/local officials. It requires agencies to streamline waiver processes and provide funding for unfunded mandates, while revoking two prior federalism executive orders from 1987 and 1993.

Federal Register Open PDF 63 FR 27651

Impact dates

Sep 11, 1998
Agency must render decision on complete waiver application
Aug 12, 1998
Order becomes effective

Key directives

Agencies must have effective process for state/local input on regulations with federalism implications
Agencies may not promulgate unfunded mandates with substantial direct compliance costs on states/localities unless funds provided or consultation documented with OMB
Agencies must review and streamline waiver application processes
Agencies must render waiver decisions within 120 days of complete application
Independent regulatory agencies encouraged but not required to comply

Who is ordered

OMB Director · Office of Management and Budget

Timeline

Immediate

Revocation of Executive Orders 12612 (1987) and 12875 (1993)
Order supplements existing requirements under EO 12866, EO 12988, and OMB Circular A-19

Near term (90d)

Order becomes effective 90 days after signing (August 12, 1998)
Agencies must establish effective consultation processes with state/local governments

Long term

Ongoing requirement for agencies to review and streamline state/local waiver processes
Continuous application of federalism policymaking criteria to regulations with federalism implications
120-day decision requirement for waiver applications

Risks & tensions

Section 7(a) explicitly states order creates no enforceable rights, limiting legal recourse for states/localities
Independent regulatory agencies are only 'encouraged' to comply, creating potential gap in coverage (Section 6)
Waiver provisions apply only to 'discretionary' requirements, excluding mandatory statutory provisions (Section 5(d))
Unfunded mandate restriction contains large exceptions ('to the extent practicable and permitted by law'), potentially weakening enforcement
Vague standard of 'meaningful and timely input' for consultation leaves implementation to agency discretion