Is E.O. 12991 a requirement for administrative agencies to conduct a cost-benefit analysis before rule adoption?

Executive Order 12991 does not impose a mandatory requirement for administrative agencies to conduct a cost-benefit analysis before the adoption of rules. Instead, it encourages agencies to consider such analyses as part of their decision-making process. The purpose of this executive order is to enhance the quality of federal regulations by promoting the use of cost-benefit analysis as a method for improving regulatory decision-making, but it does not establish a legal obligation to perform these analyses prior to rule adoption.

The order suggests that agencies should utilize cost-benefit analysis to improve the overall efficiency and effectiveness of their regulatory activities. However, the application of cost-benefit analysis is generally context-dependent and may vary based on various factors, including the specific legal statutes governing an agency's operations and the nature of the proposed regulation. Therefore, while performing a cost-benefit analysis is recommended and can be crucial in certain scenarios, it is not a mandatory step enforced by E.O. 12991 for all rulemaking actions by administrative agencies.

This distinction clarifies why the other options do not accurately reflect the nature of E.O. 12991. The executive order does not confer an option to conduct analyses based specifically on circumstances or restricts them only to certain types of rules. Instead, it merely