Executive Order 12866: Regulatory Planning and Review

Executive Order 12866, signed by President Clinton on September 30, 1993, is the framework that requires federal executive agencies to justify their most consequential regulations through cost-benefit analysis and submit them to a White House review office before they can take effect. The order remains in force today, and it still sets the ground rules for how significant federal rules are planned, analyzed, and cleared for publication, though executive actions in 2025 have adjusted some of the pieces around it.

What the Order Requires of Agencies

Section 1 sets out a philosophy that governs every significant rulemaking. Agencies should regulate only when required by law or when a genuine public need exists, such as a market failure that leaves health, safety, or the environment unprotected. When an agency does regulate, it must assess the costs and benefits of the available alternatives and select the approach that maximizes net benefits, unless a statute directs otherwise.¹

Those aren’t aspirational statements. They function as the standard against which every significant rule is measured during review. Agencies also have to consider whether existing regulations contributed to the problem the new rule addresses, look at non-regulatory alternatives such as market incentives or public information, and pick the most cost-effective design. Enforcement costs, flexibility, innovation, and distributional effects all belong in the analysis.²

The Regulatory Impact Analysis

For rules that cross the significance threshold, the sponsoring agency prepares a detailed cost-benefit analysis before submitting the rule for review. The analysis has to do three things: identify the specific market failure or public need the rule addresses, examine alternative approaches including not regulating at all, and weigh anticipated costs against benefits using the best available scientific and economic data.³

The problem statement matters more than it might sound. Agencies can’t simply assert that something is broken. They have to explain why existing law or private markets haven’t already addressed it. If that step fails, the rest of the analysis falls apart.

The methodology agencies use is governed by OMB Circular A-4. The Biden administration issued a substantially revised version in November 2023; the Trump administration revoked it and reinstated the original 2003 Circular.⁴

Which Agencies and Rules Are Covered

The order applies to executive agencies, meaning cabinet departments and most other bodies under the President’s direct control. Independent regulatory agencies like the Federal Communications Commission and the Securities and Exchange Commission are excluded from the mandatory review process because Congress gave them a degree of independence from presidential control. The order encourages those agencies to follow its principles but doesn’t require it.¹

Even inside executive agencies, several categories of rules fall outside the order’s definition of a regulation and skip review entirely:

Rules tied to military or foreign affairs functions, though procurement rules and regulations governing the import or export of non-defense items still go through review.
Rules limited to an agency’s own organization, management, or personnel.
Regulations issued through the formal, trial-like rulemaking process under the Administrative Procedure Act.
Categories the OIRA Administrator exempts by discretion.

In emergencies, or when a statute demands faster action than the review timeline allows, agencies must notify OIRA as soon as possible and meet the analytical requirements to the extent practicable.²

What Counts as a Significant Rule

Not every federal rule goes through OIRA review. Only rules meeting the Section 3(f) definition of a “significant regulatory action” do. A rule qualifies if it is likely to:

Have an annual economic impact of $100 million or more, or a material adverse effect on the economy, a sector of it, productivity, competition, jobs, the environment, public health or safety, or state, local, or tribal governments.
Create a serious inconsistency with, or interfere with, a rule or policy planned or adopted by another agency.
Materially change the financial impact of entitlements, grants, user fees, or loan programs, or alter the rights and obligations of recipients.
Raise novel legal or policy issues arising from the President’s priorities or the principles in the order.

In 2023, President Biden’s Executive Order 14094 raised the economic threshold from $100 million to $200 million to reflect inflation. President Trump revoked EO 14094 on January 20, 2025, restoring the $100 million figure. EO 12866 itself does not adjust the number for inflation, so it stays at $100 million until another executive order changes it.

How OIRA Reviews a Rule

The Office of Information and Regulatory Affairs sits inside the Office of Management and Budget and acts as the White House gatekeeper. When an executive agency develops a significant rule, OIRA reviews the supporting analysis, coordinates with other affected agencies, and decides whether the rule aligns with the President’s priorities and the principles of EO 12866.⁵

Once an agency submits its analysis and draft rule, OIRA has 90 calendar days to complete review. Preliminary actions like advance notices of proposed rulemaking get a shorter 10-working-day window, and if OIRA has already reviewed the same material with no material change, the period shrinks to 45 days.⁶

The 90-day clock can be extended two ways. The OMB Director can approve a single extension of up to 30 additional calendar days. Separately, the head of the rulemaking agency can request an extension with no stated limit, so reviews of controversial or analytically complex rules occasionally stretch well past 120 days. Once review is complete, OIRA notifies the agency, which can then publish the rule in the Federal Register.⁵

Return Letters

If OIRA finds problems during review, the Administrator can issue a return letter sending the rule back to the agency for reconsideration. Returns happen when the cost-benefit analysis is inadequate, when the proposed standards aren’t supported by that analysis, when the rule conflicts with the President’s priorities, or when it clashes with other executive orders or statutes. A return isn’t necessarily a policy veto; it means the rulemaking needs more work before it can move forward.⁷

The order doesn’t explicitly give OIRA veto power, but agencies almost always comply with return letters. A returned rule stalls until OIRA’s concerns are addressed.

Prompt Letters

Prompt letters run the other direction. OIRA sends them on its own initiative to suggest that an agency prioritize a regulatory issue, speed up an existing rulemaking, or reconsider whether a current rule should be modified or rescinded. OIRA requests a response within 30 days.⁸

Public Participation During Review

While a rule is under OIRA review, anyone can request a meeting to discuss it. Industry groups, advocacy organizations, individual businesses, and members of the public all use this channel. You find the rule’s Regulatory Identification Number on Reginfo.gov, submit a meeting request, verify your email, and OIRA schedules the meeting.⁹

These meetings carry transparency requirements. OIRA publicly discloses the subject, date, and names of all participants, along with any written materials outside parties provide. It all goes on Reginfo.gov, so anyone can see who is lobbying OIRA about a rule and what arguments they’re making.⁹

Can You Sue Over It

No. Section 10 states that the order “does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.” You cannot sue a federal agency for failing to follow the order’s requirements. If an agency skips the cost-benefit analysis or ignores OIRA’s review, the remedy is political and internal to the executive branch, not judicial.¹

Judicial review of the final rule under the Administrative Procedure Act or other statutes still exists. A court can review a rule for being arbitrary or unsupported by evidence. What courts will not do is evaluate whether OIRA’s internal review process was properly followed, because EO 12866 is an internal management tool rather than a source of legal rights.

What Changed in 2025

The core framework of EO 12866 is intact, but the surrounding architecture shifted. In January 2025, the Trump administration revoked Executive Order 14094, which had raised the significance threshold to $200 million and broadened OIRA’s modernization agenda. The threshold reverted to $100 million. A February 2025 executive order confirmed that agencies must continue following the processes in EO 12866 when submitting regulations to OIRA.¹⁰

The “Unleashing Prosperity Through Deregulation” order added constraints on top of EO 12866. No regulation can be issued unless it appeared in the most recent Unified Regulatory Agenda, and the OMB Director must approve any additions or removals from that agenda. That order also revoked the 2023 revision of OMB Circular A-4 and reinstated the original 2003 version.⁴

The practical effect is a tighter leash on new rulemaking. Agencies now face both the longstanding analytical requirements of EO 12866 and additional procedural hurdles that give the OMB Director more direct control over which rules move forward.

1
GovInfo. Executive Order 12866 – Regulatory Planning and Review
2
National Archives. Executive Order 12866 – Regulatory Planning and Review
3
The White House. Economic Analysis of Federal Regulations Under Executive Order 12866
4
The White House. Unleashing Prosperity Through Deregulation
5
Reginfo.gov. FAQ – Reginfo.gov
6
HHS. Executive Order 12866 – Regulatory Planning and Review
7
Reginfo.gov. OIRA Return Letters
8
George W. Bush White House Archives. OIRA Review Process
9
Reginfo.gov. EO 12866 Meeting Request
10
The White House. Ensuring Lawful Governance and Implementing the President’s Department of Government Efficiency Regulatory Initiative