Federalism

Executive Order 12612 on "Federalism," which President Reagan issued in 1987, says that federal agencies should refrain to the maximum extent possible from establishing uniform, national standards for programs with federalism implications and that, when national standards are required, they should consult with appropriate officials and groups representing the states in developing those standards. Regulations and other policies have federalism implications if they "have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government." This testimony examines (1) how often the preambles to covered agencies' final rules issued between April 1996 and December 1998 mentioned Executive Order 12612 and how often they indicated that the agencies had done federalism assessments under the executive order; (2) what selected agencies have done to implement the executive order's requirements; and (3) the Office of Management and Budget's oversight of federal agencies' implementation of the executive order in the rulemaking process.

GAO noted that: (1) federal agencies covered by Executive Order 12612 mentioned the order in about 27 percent of the more than 11,000 final rules they issued between April 1996 and December 1998; (2) the agencies indicated, however, that they had prepared federalism assessments for only five of these rules; (3) of the 117 major rules issued by these agencies during this period, the preambles indicated that only 1 had a federalism assessment; (4) state and local representatives that GAO consulted said that certain federal agencies should have done assessments for more of these major rules; however, the agencies said that their rules did not have sufficient federalism implications to trigger the executive order's requirements; (5) all three of the federal agencies GAO visited had some kind of written guidance on the executive order and had designated an official or office responsible for ensuring its implementation; (6) however, the methods the agencies use to determine whether federalism assessments are needed varied among the agencies; and (7) OMB officials told GAO that they have taken no specific actions to implement the executive order, but said the order is considered along with other requirements as part of their regulatory review process under Executive Order 12866.