When Congress enacts a statute, it often delegates rulemaking authority to federal agencies to implement the statute. When issuing regulations, agencies are required to follow certain procedures. The first and arguably most significant requirements of the rulemaking process were established by the Administrative Procedure Act (APA) of 1946. The APA set up the basic framework for rulemaking: agencies are required to publish a notice of rulemaking in the Federal Registe r , take comments on the proposed rule, and publish a final rule in the Federal Register . Since the passage of the APA, additional procedures have been established in various statutes, executive orders, and guidance documents. Potential additional changes to the rulemaking process have been discussed and proposed, including many proposals in the 112 th Congress. This report discusses one potential change to the rulemaking process that has been discussed over the past three decades and proposed in legislation in the 112 th Congress: extension of the requirements of Executive Order (E.O.) 12866 to the independent regulatory agencies, also known as independent regulatory commissions (hereafter referred to as IRCs). E.O. 12866 contains two major requirements: First, it requires that agencies complete cost-benefit analysis (CBA) of "economically significant" rules, considering the potential costs, benefits, and feasible alternatives to proposed and final rules. Second, the order requires centralized review of "significant" rules in the Office of Management and Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA). Historically, the IRCs have been exempted from requirements for CBA and centralized review. Senator Rob Portman introduced a bill in the 112 th Congress, S. 3468 , which would authorize the President to extend to the IRCs, through the issuance of an executive order, E.O. 12866's requirements for CBA and OIRA review. If the requirements of E.O. 12866 were extended to the IRCs, there could be significant implications for those agencies. Proponents of extending the requirements argue that subjecting the IRCs to CBA requirements and OIRA review could improve the quality of regulations issued by those agencies. On the other hand, extending CBA requirements and OIRA review to the IRCs could grant OIRA (and by extension, the President) the potential authority to influence or delay rulemaking proceedings, and such a requirement could potentially decrease the independence of the IRCs. This report begins with a brief overview of E.O. 12866 and the IRCs. The report then provides a detailed discussion of the two major requirements of the order and analyzes the potential changes to the order that have been proposed in the 112 th Congress. President William Clinton issued E.O. 12866 in 1993. The executive order, which still remains in place today, replaced E.O. 12291, which was issued by President Ronald Reagan in 1981. E.O. 12291 had similar requirements for agencies to conduct CBA and send their rules to OIRA for review, but its requirement for centralized review applied to all rules, not just "significant" rules. The parts of E.O. 12866 that require agencies to complete CBA and to submit their rules to OIRA for review do not currently apply to statutorily designated "independent regulatory agencies," nor did they under President Reagan's order. The details of these two requirements are discussed more below (see sections entitled " Cost-Benefit Analysis Requirements Under Executive Order 12866 " and " OIRA Review of Regulations Under Executive Order 12866 "). The exemption of IRCs from various requirements provides them with an element of independence from presidential control. E.O. 12866 uses the definition of an independent regulatory agency established in 1980 by the Paperwork Reduction Act (PRA; 44 U.S.C. §3502(5)). The independent regulatory agencies listed are as follows: The Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Consumer Product Safety Commission, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Energy Regulatory Commission, the Federal Housing Finance Agency, the Federal Maritime Commission, the Federal Trade Commission, the Interstate Commerce Commission, the Mine Enforcement Safety and Health Review Commission, the National Labor Relations Board, the Nuclear Regulatory Commission, the Occupational Safety and Health Review Commission, the Postal Regulatory Commission, the Securities and Exchange Commission, the Bureau of Consumer Financial Protection, the Office of Financial Research, Office of the Comptroller of the Currency, and any other similar agency designated by statute as a Federal independent regulatory agency or commission. The current exemption for the IRCs from presidential review of agency rulemaking is one of the indicia of agency independence. Other elements of independence that provide various degrees of insulation from presidential intrusion into the budgetary, regulatory, and litigation processes are (1) "for cause" removal protections for the agency heads; (2) structural designs; (3) exemptions from OMB clearance requirements for legislative proposals, testimony, and comments; (4) authority to bypass OMB when submitting the agency's budget, or to submit the agency's budget to OMB and Congress concurrently; and (5) independent litigation authority. The remainder of this report discusses the two main requirements of E.O. 12866 in greater detail and analyzes the possible implications of extending those requirements to the IRCs. The primary cross-cutting requirement for agencies to consider costs and benefits when issuing rules is found in E.O. 12866, which requires agencies to assess costs and benefits for "significant" rules, both at the proposed rule and final rule stage. "Significant" rules are defined in the executive order as follows: Any regulatory action that is likely to result in a rule that may (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive order. Rules falling into the first category of this definition are considered "economically significant" rules. When issuing "economically significant" rules, Section 6(a) of E.O. 12866 requires agencies to perform a much more detailed CBA, assessing the costs, benefits, and "reasonably feasible alternatives" to the planned rule. Other provisions of E.O. 12866 also make reference to the consideration of costs and benefits during the rulemaking process for all rules, not just "significant" rules. Section 1(b)(5) requires an agency to "design its regulations in the most cost-effective manner to achieve the regulatory objective" and to "consider incentives for innovation, consistency, predictability, the costs of enforcement and compliance (to the government, regulated entities, and the public), flexibility, distributive impacts, and equity." Section 1(b)(6) requires agencies to "assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs." Finally, Section 1(b)(11) requires agencies to "tailor [their] regulations to impose the least burden on society," while "obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations." In September 2003, OMB finalized Circular A-4 on "Regulatory Analysis," which refined and replaced an earlier OMB guidance document providing good-guidance practices to agencies for conducting their CBAs. The circular states that it was "designed to assist analysts in the regulatory agencies by defining good regulatory analysis ... and standardizing the way benefits and costs of Federal regulatory actions are measured and reported." The document provides some specific information that agencies should generally include in their analyses, such as the statutory or judicial directives that authorize the action; the underlying problem or market failure prompting the regulation; consideration of a "reasonable number" of regulatory alternatives; and both a cost-benefit analysis and a cost-effectiveness analysis. Circular A-4 remains the current OMB guidance for agencies preparing CBAs. In January 2011, President Barack Obama issued E.O. 13563 to supplement and re-emphasize the general requirements of E.O. 12866. E.O. 13563, like E.O. 12866, stressed the importance of cost-benefit considerations in the rulemaking process. Specifically, Section 1(b)(2) of E.O. 13563 encouraged agencies to "tailor [their] regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations"; and to "select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity)." E.O. 13563 also instituted a retrospective review of regulations, under which agencies were required to "consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned." E.O. 13563 used the same definition of "agency" as E.O. 12866, thereby excluding the IRCs. However, on July 14, 2011, President Obama issued E.O.