Regulatory Reform (Improvement) Legislation, May 1999
The issue
Should federal agencies be required by law to use science-based risk assessments
and cost-benefit analyses in rulemakings to write new regulations, and subject them
to independent peer review? And should there be yearly tallies of the cumulative
costs and benefits of all federal regulations?
Why it's important
Federal agencies are supposed to engage in cost-benefits analyses and other methods
of review (per President Clinton's Executive Order 12866) during rulemakings. But
agencies rarely follow EO 12886's steps and, according to the General Accounting
Office, when they do, disclosure and explanation of the analyses is neither "explicit"
nor is it summarized. Fortunately, regulatory improvement initiatives to rectify
the situation are making progress in the 106th Congress.
Senators Fred Thompson (R-TN) and Carl Levin (D-MI) have introduced the Regulatory
Improvement Act of 1999, S 746, that would require agencies to do cost-benefit analyses
for significant rules (i.e., that would have an economic impact of $100 million
or more). Rules costing $500 million or more would also undergo peer review by an
outside panel.
Please note that an agency would not be forced to pursue less costly options and
that cost considerations would not be allowed to trump health and safety. But when
presenting the results of the cost-benefit analysis and risk assessment, the rulemaking
agency would be required to have a clear and understandable executive summary in
the rulemaking record. In addition, judicial review (the right to sue the agency)
would apply to procedures used in an agency's analysis of regulatory impact. The
bill also codifies the review procedure conducted by the Office of Management and
Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA) and requires
public disclosure of OIRA's review process.
S 746 was approved by the Senate Governmental Affairs Committee on May 20th and
is ready to be voted on by the full Senate; there is currently no companion bill
in the House.
The Regulatory Right-to-Know Act of 1999 (S 59/HR 1704) is now pending in both the
Senate and House and would provide an annual government-wide accounting of the costs
and benefits for all regulations. In April, the House subcommittee on regulatory
affairs approved HR 1704 to have OMB prepare yearly accounting statements. In the
Senate, the Governmental Affairs Committee approved similar legislation, S 59, and
added an amendment to create a Congressional Office of Regulatory Analysis (CORA).
CORA would analyze the costs and benefits of significant rules and unfunded mandates.
NRCA's position
NRCA supports the Regulatory Improvement Act of 1999 (S 746). It has bipartisan
support and OMB stated that if the bill emerges from the Senate and House as proposed,
the president would sign it. NRCA also supports the Regulatory-Right-to Know Act
of 1999 (S 59/HR 1704) and has testified in favor of creating a Congressional Office
of Regulatory Analysis.
The other side
Opponents contend that these bills will weaken environmental and safety and health
regulations by imposing unnecessary and burdensome procedures in the agency rulemaking
process.
(Embargo until May 21, 1999)