Executive Order 12866: advantages and disadvantages of the administration's new regulatory plan on risk, benefit, and...

The 1993 Executive Order 12866 as implemented by the 1996 OMB document proposes a new paradigm for the evaluation of risks, benefits, and costs. The new regulatory plan would replace the current methodology in two ways. In place of the current methodology for risk assessment based on conservative generic default assumptions that provide an upper-bound risk value that is treated as the "benefit," the new regulatory plan establishes a state of the art guidance for the economic evaluation of risks, benefits, and costs. Second, the new plan requires changes in risk assessment to provide the necessary foundation for the new economic evaluation of risks, benefits, and costs. The advantages and disadvantages of the new regulatory plan are discussed.