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Report to Congressional Requesters:

September 2003:

Rulemaking:

OMB's Role in Reviews of Agencies' Draft Rules and the Transparency of 
Those Reviews:

GAO-03-929:

GAO Highlights:

Highlights of GAO-03-929, a report to congressional requesters

Why GAO Did This Study:

Under Executive Order 12866, the Office of Management and Budgets 
Office of Information and Regulatory Affairs (OIRA) reviews hundreds 
of agency rules each year before they are published in the Federal 
Register. Those reviews can have a significant effect on a broad array 
of public policies. GAO was asked to (1) describe OIRAs review 
process and any changes in its policies or processes in recent years, 
(2) provide detailed information about rules submitted by nine health, 
safety, or environmental agencies that were returned, withdrawn, or 
changed at OIRAs suggestion, and (3) describe how OIRA decided that 
certain existing rules merited high priority review.

What GAO Found:

The formal process by which OIRA reviews agencies proposed and final 
rules is essentially unchanged since Executive Order 12866 was issued 
in 1993. However, there have been several changes in OIRAs policies 
in recent years, including increased use of public letters explaining 
why rules were returned to the agencies and prompting the development 
of new rules, increased emphasis on economic analysis, stricter 
adherence to the 90-day time limit for OIRA review, and improvements 
in the transparency of the OIRA review process (although some elements 
of that process are still unclear). Underlying many of these changes 
is a shift in how recent OIRA administrators view the offices role in 
the rulemaking processfrom counselor to gatekeeper. OIRA 
sometimes reviews drafts of rules before they are formally submitted, 
and OIRA has said it can have its greatest influence on agencies 
rules during this informal review period. However, OIRA contends that 
agencies need only document the changes made to rules during what are 
sometimes very brief formal review periods. 

Because about 400 rules were changed, returned, or withdrawn during 
the 1-year period that GAO examined, the review focused on 85 rules 
from the nine health, safety, or environmental agencies with five or 
more such rules. OIRA significantly affected 25 of those 85 rules. The 
Environmental Protection Agencys rules were most often significantly 
changed, and almost all of the returned rules were from the Department 
of Transportation. OIRAs suggestions appeared to have at least some 
effect on almost all of the 25 rules potential costs and benefits or 
the agencies estimates of those costs and benefits. Outside parties 
contacted OIRA before or during its formal review regarding 11 of the 
25 rules that OIRA significantly affected. In 7 of these 11 cases, at 
least some of OIRAs recommendations were similar to those of the 
outside parties, but we could not determine whether those contacts 
influenced OIRAs actions. The agencies docket files did not always 
provide clear and complete documentation of the changes made during 
OIRAs review or at OIRAs suggestion, as required by the executive 
order. However, some agencies clearly documented these changes, 
sometimes including changes suggested during OIRAs informal reviews.

OIRA did not publicly disclose how it determined that 23 of the 71 
rules nominated by the public for change or elimination in 2001 
merited high priority review. As explained to GAO, OIRA desk officers 
made the initial determinations regarding issues with which they were 
familiar, subject to the approval by OIRA management. The Mercatus 
Center at George Mason University made most of the nominations overall 
and in the high priority group. Regulatory agencies or OIRA have at 
least begun to address the issues raised in many of the 23 
suggestions. OIRAs 2002 nomination and review process was different 
from the 2001 process in several respects (e.g., broader request for 
reforms, more responses from more commentors, prioritization of the 
suggestions being made by the agencies, and clearer discussion of 
process and criteria). 

What GAO Recommends:

GAO recommends that the OMB Director build on recent improvements that 
have been made in the transparency of the OIRA review process. In 
particular, GAO recommends that agencies be instructed to document 
substantive changes made at OIRAs suggestion to draft rules submitted 
for review whenever they occur, not just changes that OIRA recommended 
during formal reviews. 

OMB said the factual foundations of our report were well grounded but 
disagreed with most of our recommendations, saying that the report had 
not demonstrated the need or desirability of changing the agencys 
existing level of transparency. 

[End of section]

Contents:

Letter: 

Executive Summary:

Purpose: 

Background: 

Results in Brief: 

Principal Findings: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Chapter 1:

Background: 

Objectives, Scope, and Methodology: 

Chapter 2: Some of OIRA's Regulatory Review Policies Have Changed: 

OIRA Regulatory Review Process: 

Changes in Regulatory Review Policies: 

Chapter 3: OIRA's Effects on Rules Submitted for Executive Order 
Review Varied: 

OIRA Significantly Affected About One-Third of the Rules That the 
Selected Agencies Submitted for Review: 

OIRA Affected the Costs and Benefits or Estimates in Some Rules: 

Outside Parties Contacted OIRA Regarding about Half of the Rules OIRA 
Significantly Affected: 

Documentation of OIRA's Reviews Varied, but Some Agencies' Practices 
Improved Transparency: 

Chapter 4: Many Rules Nominated for Reform Are Being Changed: 

Mercatus Center Nominated Most Rules Selected for High Priority Review 
in 2001 Report: 

How High Priority Review Selections Were Made: 

Status of Rules Selected for High Priority Review: 

Second Round of Nominations Was Different: 

Chapter 5: Conclusions and Recommendations: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendixes:

Appendix I: Objectives, Scope, and Methodology: 

Objectives: 

Scope and Methodology: 

Limitations: 

Appendix II: Summary Information on Selected Rules Submitted to OIRA 
for Executive Order Review between July 2001 and June 2002: 

Explanation of Table Contents: 

Appendix III: Case Studies on Significantly Affected Rules With 
Evidence That OIRA Was Contacted by External Parties: 

Control of Emissions from Nonroad Large Spark Engines: 

Proposed Nonconformance Penalties for 2004 and Later Model Year 
Emission Standards for Heavy-duty Diesel Engines and Heavy-duty Diesel 
Vehicles: 

Identification and Listing of Hazardous Waste (Manganese): 

Minimizing Adverse Environmental Impact from Cooling Water Intake 
Structures at New Facilities: 

National Pollutant Discharge Elimination System (Existing Intake 
Structures): 

Effluent Limitation Guidelines and New Source Performance Standards for 
the Construction and Development Category: 

Effluent Limitations Guidelines for the Iron and Steel Manufacturing 
Point Source Category: 

Tire Pressure Monitoring Systems: 

Part 145 Review: Repair Stations: 

Appendix IV: Status of 23 High Priority Review Rules: 

Appendix V: Comments from the Office of the Information and Regulatory 
Affairs: 

Tables: 

Table 1: Selected Agencies' Regulatory Submissions by Outcome: 

Table 2: Nature of Changes Made at the Suggestion or Recommendation of 
OIRA: 

Table 3: Rules from FAA and EPA's Office of Air and Radiation and Office 
of Water Were Most Often Significantly Affected by OIRA Review: 

Table 4: OIRA Was Only Slightly More Likely to Significantly Affect 
Economically Significant Rules: 

Table 5: Agencies' Compliance with Executive Order 12866 Documentation 
Requirements Was Mixed: 

Table 6: The Mercatus Center Suggested Most of the 23 "High-Priority 
Review" Rules: 

Table 7: Findings and Determinations for Rules Changed after Submission 
to OIRA: 

Table 8: Findings and Determinations for Rules Returned to Agency after 
Submission to OIRA: 

Table 9: Findings and Determinations for Rules Withdrawn after 
Submission to OIRA: 

Table 10: Status of the 23 High Priority Review Suggestions Identified 
in OIRA's December 2001 Report on the Costs and Benefits of Federal 
Regulations: 

Figures: 

Figure 1: OIRA Is One of the Statutory Offices within OMB: 

Figure 2: Organization of OIRA: 

Figure 3: Number of Rules That OIRA Reviewed Dropped Under Executive 
Order 12866: 

Figure 4: The OIRA Regulatory Review Process: 

Figure 5: OIRA Returned More Rules to Agencies in Calendar Year 2001 
Than in the 7 Previous Years Combined: 

Figure 6: OIRA Returned Only Two Rules Between February 2002 and May 
2003: 

Figure 7: The Number of OIRA Reviews Lasting More Than 90 Days Dropped 
Sharply in 2002: 

Figure 8: OIRA Recently Reversed a 20-year Decline in Staffing: 

Figure 9: EPA Air and Water Rules Were More Often Significantly Changed 
at the Suggestion of OIRA: 

Figure 10: Outside Parties Most Often Contacted OIRA Regarding EPA 
Rules:

Abbreviations: 

APA: Administrative Procedure Act:

Animal and Plant Health Inspection Service:

ARSA: Aeronautical Repair Station Association:

BLM: Bureau of Land Management:

CEA: Council of Economic Advisors:

CEED: Center for Energy and Economic Development:

CFR: Code of Federal Regulations:

CWD: chronic wasting disease:

DOE: Department of Energy:

DOI: Department of the Interior:

DOL: Department of Labor:

DOT: Department of Transportation:

EEAC: Equal Employment Advisory Council:

EEOC: Equal Employment Opportunity Commission:

EPA: Environmental Protection Agency:

EPF: Employment Policy Foundation:

FAA: Federal Aviation Administration:

FDA: Food and Drug Administration:

FMCSA: Federal Motor Carriers Safety Administration:

FTE: full-time equivalent:

HHS: Department of Health and Human Services:

ICR: information collection request:

MACT: maximum achievable control technology:

MGD: million gallons per day:

MOU: memorandum of understanding:

NCP: nonconformance penalty:

NHTSA: National Highway Traffic Safety Administration:

NMMA: National Marine Manufacturers Association:

OFCCP: Office of Federal Contract Compliance Programs:

OIRA: Office of Information and Regulatory Affairs:

OMB: Office of Management and Budget:

OSHA: Occupational Safety and Health Administration:

PRA: Paperwork Reduction Act:

RCRA: Resource Conservation and Recovery Act:

RFG: reformulated gasoline:

RIN: regulation information number:

SBA: Small Business Administration:

SDWA: Safe Drinking Water Act:

TPMS: tire pressure monitoring system:

TSS: total suspended solids:

USDA: Department of Agriculture:

VSL: value of a statistical life:

VSLY: value of a statistical life year:

WRAP: Western Regional Air Partnership: 

Letter September 22, 2003:

The Honorable Richard J. Durbin 
Ranking Minority Member 
Subcommittee on Oversight of Government Management, Restructuring, and 
the District of Columbia 
Committee on Governmental Affairs 
United States Senate:

The Honorable Joseph I. Lieberman 
Ranking Minority Member 
Committee on Governmental Affairs 
United States Senate:

In response to your request, this report on the regulatory review 
process of the Office of Management and Budget's (OMB) Office of 
Information and Regulatory Affairs (OIRA) (1) describes OIRA's review 
process and any changes in its policies or processes in recent years, 
(2) provides detailed information about rules submitted by nine health, 
safety, or environmental agencies that were returned, withdrawn, or 
changed at OIRA's suggestion, and (3) describes how OIRA decided that 
certain rules merited "high priority" review. We include 
recommendations to the Director of OMB to improve the transparency of 
the OIRA review process.

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we will not distribute it until 30 
days from the date of this letter. We will then send copies to the 
Director of OMB and will provide copies to others on request. It will 
also be available at no charge on GAO's Web site at [Hyperlink, http:/
/www.gao.gov] http://www.gao.gov.

If you have any questions concerning this report, please call me or 
Curtis Copeland at (202) 512-6806. Key contributors to this report were 
Ben Atwater, Tim Bober, and Joseph Santiago.

Signed by:

Victor S. Rezendes 

Managing Director, Strategic Issues:

[End of section]

Executive Summary:

Purpose:

The Office of Information and Regulatory Affairs (OIRA) within the 
Office of Management and Budget (OMB) is a relatively small office 
(currently, 55 full-time equivalents), but it can have a significant--
if not determinative--effect on a broad array of federal regulations 
that agencies issue to enact statutes and establish specific 
requirements. Under Executive Order 12866, OIRA reviews hundreds of 
significant proposed and final rules from all federal agencies (other 
than independent regulatory agencies) before they are published in the 
Federal Register. As a result of OIRA's review, many draft rules are 
changed before publication, withdrawn before a review is completed, or 
returned to the agencies because, in OIRA's opinion, certain aspects of 
the rule need to be reconsidered.

Despite its importance, OIRA's regulatory review function generally is 
not well documented or well understood. Therefore, the Ranking Minority 
Members of the Senate Committee on Governmental Affairs and its 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia requested that we examine and 
report on certain aspects of OIRA's operations. Specifically, we were 
asked to (1) describe OIRA's current regulatory review policies and 
processes and determine whether, and if so how, those policies have 
changed in recent years, (2) provide detailed information about the 
effects of OIRA's reviews of rules submitted by nine health, safety, 
and environmental agencies that were returned to the agencies for 
reconsideration, withdrawn at OIRA's request, or significantly changed 
in response to OIRA's reviews during a 1-year period, and (3) describe 
how OIRA determined that certain existing rules listed in its reports 
to Congress on the costs and benefits of federal regulations merited 
high priority review for potential modification or rescission. We also 
examined the transparency of the OIRA's review process. To address 
these objectives, we interviewed OIRA representatives, former OIRA 
officials, agency officials, and others knowledgeable about the OIRA 
review process. We also examined documentation at both OIRA and 
regulatory agencies to determine the effect of OIRA's reviews. Specific 
elements of our methodology are discussed in the sections below.

Background:

The Paperwork Reduction Act of 1980 established OIRA to provide central 
agency leadership and oversight of governmentwide efforts to reduce 
unnecessary paperwork burden and manage information resources. In 1981, 
OIRA's responsibilities expanded when Executive Order 12291 authorized 
it to review all proposed and final regulations from nonindependent 
regulatory agencies--between 2,000 and 3,000 rules each year. OIRA's 
regulatory review function under this executive order was highly 
controversial, with concerns raised about its effects on separation of 
powers, public participation, transparency, and the timeliness of 
agencies' rulemaking efforts. In September 1993, Executive Order 12866 
replaced Executive Order 12291 and made several changes to OIRA's 
regulatory review function. For example, Executive Order 12866 limits 
OIRA's regulatory reviews to nonindependent agencies' "significant 
regulatory actions" (e.g., rules expected to have an annual effect of 
$100 million or more on the economy or raising other coordination, 
budgetary, or policy issues). As a result, the number of OIRA reviews 
declined to about 500 to 700 each year. The executive order also 
generally requires OIRA to complete its review within 90 days after an 
agency formally submits a draft regulation, and contains several 
"transparency" provisions that require both OIRA and the agencies to 
disclose certain information about the review process. For example, 
section 6 of the order requires agencies to publicly identify the 
substantive changes made to rules during OIRA's review and at OIRA's 
suggestion or recommendation. It also requires OIRA to disclose all of 
the documents exchanged between the agencies and OIRA during the review 
process. The executive order and related OIRA guidance also identify 
some regulatory principles and analytical practices (e.g., considering 
the costs and benefits of a proposed regulation and assessing 
alternative approaches) that help to guide OIRA's reviews of agencies' 
draft regulatory actions.

In January 1998, we reported on the implementation of the transparency 
requirements in Executive Order 12866 that are applicable to rulemaking 
agencies.[Footnote 1] We concluded that complete documentation of all 
substantive changes made in the rules, and of all the changes that OIRA 
had suggested, was available to the public for only about one-quarter 
of the 122 rules that we reviewed. The agencies' rulemaking dockets had 
only some or no documentation for the remaining rules, and we could not 
always determine whether OIRA had made available all relevant documents 
exchanged between the agencies and OIRA. We recommended that the 
Director of OMB provide the agencies with guidance on how to implement 
these transparency requirements. OMB disagreed with our recommendations 
in this area and did not implement them.

Results in Brief:

OIRA's formal review process is essentially unchanged since Executive 
Order 12866 was issued in 1993. However, there have been several 
changes in OIRA policies and practices in recent years, particularly 
since the current OIRA Administrator took office in July 2001. Those 
changes, some of which the Administrator said would "have a long-
lasting impact on the regulatory state," include increased use of 
public letters explaining why OIRA returned rules to the agencies for 
their reconsideration (return letters) and suggesting regulatory action 
(prompt letters), increased emphasis on benefit-cost analysis and peer 
review, stricter adherence to the 90-day time limit for OIRA review, 
improvements in the transparency of the OIRA review process, and an 
increase in the size and skills of OIRA's staff. However, some of these 
changes are not as significant a departure from previous practice as 
they initially appear. Underlying many of the changes in OIRA's 
policies is a shift in how the Administrator (and, ultimately, the 
President) views OIRA's role in the regulatory process--less of a 
"counselor" to the agencies and more of a "gatekeeper." Prior to the 
formal executive order review process, OIRA sometimes informally 
reviews agencies' draft rules, and OIRA has said it can have a 
significant influence on the rules during this informal review period.

OIRA's database indicated that about 400 draft rules were changed, 
returned, or withdrawn from OIRA during the 1-year period from July 
2001 through June 2002. Therefore, we focused our examination of the 
effects of OIRA's review on 85 changed, returned, or withdrawn rules 
that had been submitted by the nine health, safety, or environmental 
agencies with 5 or more such rules.[Footnote 2] We concluded that OIRA 
had significantly affected 25 of the 85 rules by suggesting changes 
that revised the scope, impact, or costs and benefits of the rules, 
returning the rules for reconsideration by the agency, or, in one case, 
requesting that the agency withdraw the rule from review. The 
Environmental Protection Agency's (EPA) rules were most often 
significantly changed, and almost all of the returned rules were from 
the Department of Transportation (DOT), as was the rule withdrawn at 
OIRA's request. Many of OIRA's actions in these cases appeared to have 
been prompted by concerns about the cost and cost effectiveness of the 
regulatory options that agencies selected, in keeping with general 
principles established by Executive Order 12866 and related OIRA 
guidance. In almost all of the 25 rules that were significantly 
affected, OIRA's actions appeared to have at least some effect on the 
potential costs and benefits associated with the rule or prompted 
revisions to the agency's estimates of those costs and benefits. As 
permitted by the executive order, outside parties contacted OIRA before 
or during the formal review period regarding 11 of these 25 
rules.[Footnote 3] Although OIRA's positions regarding 7 of the 11 
rules were similar in some respects to those expressed by the outside 
parties, it is impossible to determine the extent to which those 
contacts might have influenced OIRA's actions, if at all. OIRA might 
have reached the same conclusions in the absence of those contacts. The 
transparency of the agencies' and OIRA's actions during these 85 
reviews varied, with the docket files for between 45 percent and 62 
percent of the rules providing clear and complete documentation of all 
elements expected under the two relevant portions of the executive 
order. However, a few agencies exhibited exemplary transparency 
practices.

In May 2001, OIRA asked the public to nominate rules that it believed 
should be modified or rescinded. OIRA decided that 23 of the 71 
nominations that it received merited high priority review, but did not 
publicly disclose how those determinations were made. Representatives 
of OIRA told us that the agency's desk officers initially determined 
which nominations should be placed in the high priority category, 
subject to the approval by OIRA management, with the final decisions 
made by the Administrator. Forty-four of the 71 nominations were from 
the Mercatus Center at George Mason University, as were 14 of the 23 
high priority nominations.[Footnote 4] As of May 2003, regulatory 
agencies or OIRA had addressed or begun to address the issues raised in 
many of these 23 suggestions. In March 2002 OIRA again solicited public 
comments on regulations in need of reform. However, this effort was 
different from the 2001 process in several respects (e.g., broader 
request for reforms, more responses from more commentors, no ranking of 
the suggestions being made by the agencies, nominations to strengthen 
rules, and clearer discussion of process and criteria).

Although both OIRA and some of the rulemaking agencies have improved 
the transparency of the regulatory review process, our review indicated 
that some elements of the process remain unclear. For example, neither 
OIRA nor the agencies are required to disclose why rules are withdrawn 
from review, and the descriptions that OIRA discloses about its 
contacts with outside parties is often not very helpful. In particular, 
OIRA representatives said neither they nor the rulemaking agencies are 
required to disclose the changes made to rules while they are under 
informal review--the period in which OIRA said it can have its greatest 
effect. This interpretation of this aspect of the executive order's 
transparency requirements restricts those requirements to the formal 
review period, which can be as short as 1 day.

Principal Findings:

:

OIRA's Regulatory Review Process and Changes in Policies/Practices:

OIRA's formal regulatory review process begins when the rulemaking 
agency sends a draft proposed or final rule and other parts of the 
review package to OIRA. OIRA desk officers do not use a standard 
"checklist" in their reviews, but most OIRA regulatory reviews are 
similar in that all rules must be consistent with applicable law, the 
President's priorities, and the principles in Executive Order 12866, 
and must not conflict with the policies or practices of other agencies. 
OIRA regulatory reviews differ somewhat depending on the content of the 
draft rules. For example, if the rule contains a collection of 
information under the Paperwork Reduction Act, the desk officer would 
also review the rule for compliance with that act. If the draft rule is 
"economically significant," the desk officer would review the agency's 
economic analysis. There is usually some form of communication between 
OIRA and the agency during the review, most commonly by e-mail or 
telephone. OIRA desk officers always consult with and obtain the 
consent of the appropriate resource management officer on the budget 
side of OMB before approving a rule. OIRA may also consult with others 
within the Executive Office of the President or other agencies, 
managing an interagency review process.

In some cases, OIRA also reviews drafts of agencies' rules before 
formal submission (e.g., large rules with statutory or judicial 
deadlines and/or that require discussions with other agencies). OIRA 
indicated that these informal reviews are increasing, and that reviews 
before formal submission can have a substantial effect on the agencies' 
regulatory analysis and the substance of the rules--before the 
agencies' positions become too entrenched. OIRA also informally 
consulted with agencies and reviewed agencies' draft rules before 
formal submission during previous administrations.

OIRA representatives told us that the formal process the office uses to 
review draft rules has been essentially the same since Executive Order 
12866 was established in 1993. However, several notable changes in 
OIRA's policies and practices have occurred since the current 
Administrator took office in July 2001, including (1) an overall 
resurgence in the "gatekeeper" role that OIRA played shortly after it 
was established, (2) increased use of return letters, (3) greater 
emphasis on economic analysis and the issuance of new draft guidelines 
on economic analysis, (4), fewer reviews extending beyond the 90-day 
limit, (5) the use of "prompt" letters that suggest regulatory 
priorities to the agencies, (6) improvements in the transparency of 
OIRA's regulatory review process (e.g., electronic access to 
information about rules under review and fuller disclosure of OIRA's 
contacts with outside parties), and (7) expansion of the size and 
expertise of OIRA staff. In some cases, though, the changes are less 
different from previous practices than they initially appear. For 
example, in the first 8 months after the Administrator took office, 
OIRA returned 21 of the nearly 400 rules it reviewed to the agencies--
more returns than in the previous 7 years combined. However, in the 
subsequent 15 months OIRA returned only 2 of the more than 850 rules 
that it reviewed. Also, OIRA prompted agencies to initiate rulemaking 
in particular areas during previous administrations--albeit not through 
public letters.

OIRA's Effect on Changed, Withdrawn, and Returned Rules:

Because of the large number of draft rules that had been changed, 
withdrawn, or returned to the agencies from July 1, 2001, through June 
30, 2002, we focused our analysis on the rules that were submitted by 
health, safety, or environmental agencies or offices with five or more 
rules that were changed, withdrawn, or returned during this 1-year 
period.[Footnote 5] This resulted in the selection of 85 rules from 9 
agencies: the Animal and Plant Health Inspection Service (APHIS) within 
the Department of Agriculture; 
the Food and Drug Administration (FDA) within the Department of Health 
and Human Services; the Occupational Safety and Health Administration 
(OSHA) within the Department of Labor; the Federal Aviation 
Administration (FAA), Federal Motor Carrier Safety Administration 
(FMCSA), and National Highway Traffic Safety Administration (NHTSA) 
within DOT; and the Offices of Air and Radiation, Solid Waste and 
Emergency Response, and Water within EPA.

We concluded that OIRA's review had a significant effect on 25 of the 
85 draft rules. In 17 of the 25 rules, OIRA recommended the revision, 
elimination, or delay of certain provisions in the draft regulatory 
text, the addition or revision of regulatory alternatives that provided 
more flexible and/or less costly compliance options, or the revision of 
agencies' cost and/or benefit estimates for the rules. EPA submitted 14 
of the 17 rules that were significantly changed at OIRA's suggestion. 
For example, at OIRA's suggestion, EPA took the following actions:

* Eliminated manganese from a list of hazardous constituents in a final 
rule on the identification and listing of hazardous wastes (see app. 
II, ID 56).

* Delayed the compliance date for states to report two types of 
emissions in a final rule on consolidated emissions reporting (ID 50).

* Made compliance requirements more flexible in a proposed rule on 
pollutant discharge elimination systems for large cooling water intake 
structures at existing power generating facilities by allowing options 
for a site-specific approach to minimizing environmental harm (ID 68).

* Revised the benefit-cost and cost-effectiveness estimates in a 
proposed rule on emissions from spark ignition marine vessels and 
highway motorcycles (ID 54).

OIRA returned 7 of the 25 rules to the agencies for reconsideration (6 
of which had been submitted by DOT). For example, OIRA returned a NHTSA 
final rule on tire pressure monitoring systems because, in the office's 
opinion, the agency's analysis did not adequately demonstrate that 
NHTSA 
had selected the best available regulatory alternative (ID 
78).[Footnote 6] OIRA returned a proposed FAA rule on certification of 
pilots, aircraft, and repairmen for the operation of light sport 
aircraft because it believed that the agency's regulatory analysis did 
not sufficiently justify the rule (ID 73). OIRA also requested that an 
FAA rule be withdrawn by the agency. Overall, we determined that rules 
submitted by three of the agencies (FAA, EPA's Office of Air and 
Radiation, and EPA's Office of Water) were much more often 
significantly affected by OIRA's review than rules submitted by the 
other six agencies in our study.

In 22 of the 25 rules that OIRA significantly affected, the changes 
appeared to have an effect on either the costs and/or benefits of the 
rules or the agencies' estimates of those costs and/or benefits. For 
example, in the above-mentioned EPA rule on cooling water intake 
structures, the approach that OIRA recommended was expected to have 
somewhat lower benefits than the approach EPA proposed but was 
estimated to cost significantly less, thereby yielding much larger net 
benefits. In the tire pressure monitoring system rule, NHTSA inserted 
(at OIRA's suggestion) additional estimates of some costs and benefits 
of regulatory alternatives and added information about benefits that 
might be realized with different regulatory alternatives.

In 34 of the 60 rules that OIRA did not significantly affect, the 
changes that OIRA suggested primarily involved revisions to the 
language in the preambles of the draft rules (e.g., expanding or 
clarifying agencies explanations of certain issues) or suggestions that 
the agencies request public comments on particular issues. Although we 
did not consider these types of changes to be "significant," they were 
substantive in that they made the rules easier to understand and/or 
could affect the final versions of the rules. OIRA suggested only minor 
editorial changes or no changes to 20 rules and returned 2 others for 
procedural rather than substantive reasons. Four rules were withdrawn 
from OIRA's review solely at the agencies' initiative or because of a 
"mutual decision" made by the agencies and OIRA.

Materials in the OIRA docket or the rulemaking agencies' dockets 
indicated that outside parties (most commonly representatives of 
regulated entities) had contacted OIRA regarding 11 of the 25 rules 
that OIRA significantly affected (including 8 of the 15 rules submitted 
by EPA that were significantly affected). In 7 of the 11 rules, at 
least some of the actions that OIRA recommended were similar to those 
suggested to OIRA by outside parties. For example:

* In the above-mentioned rule on cooling water intake structures, 
OIRA's suggested revisions of the regulatory language regarding the use 
of a site-specific approach to minimizing environmental harm were 
similar to those previously recommended by representatives of the 
electric industry during their contacts with OIRA (ID 68).

* In letters and meetings with OIRA, representatives from steel 
manufacturers and a chemical company opposed the listing of manganese 
as a hazardous waste constituent in an EPA final rule (ID 56). 
Subsequently, the main focus of OIRA's suggested changes to this rule 
was the deferral of final action on all parts of the rule identifying 
manganese as a hazardous constituent.

However, it is impossible to determine whether OIRA's contacts with 
those outside parties affected its conclusions; OIRA may have reached 
the same conclusions without those contacts. In the four other cases, 
OIRA's recommended actions did not appear to be similar to those 
suggested by outside parties. OIRA generally disclosed its contacts 
with outside parties; we identified only four such contacts regarding 
the rules in our review that OIRA had not disclosed. However, because 
our knowledge of such contacts is generally limited to what OIRA or the 
agencies disclose, we cannot be sure that there were not other contacts 
that did not come to our attention.

Rules and Regulatory Programs Selected for High Priority Review:

Congress has required OMB to submit "recommendations for reform" with 
its recent reports on the costs and benefits of federal regulations. In 
May 2001, OIRA asked the public to suggest "specific regulations that 
could be rescinded or changed that would increase net benefits to the 
public." Of the 71 nominations that OIRA received, 44 were from the 
Mercatus Center at George Mason University. OIRA reviewed the 
suggestions and selected 23 of them for high priority review--including 
14 of the 44 Mercatus nominations. In its December 2001 final report, 
OIRA said the high priority designation indicated that it was inclined 
to agree with the recommendation. However, OIRA did not indicate in the 
report how it made that determination. OIRA representatives described 
the process to us as a "bottom up" exercise, with desk officers making 
the initial determinations and the final decisions being made by the 
OIRA Administrator. Five of the 23 rules designated for high priority 
review had been issued at the end of the Clinton Administration, and 13 
had been issued by EPA or were environmental in nature.

As of May 2003, most of these 23 high-priority review items were at 
least in the process of being addressed by either the rulemaking 
agencies or OIRA. For example:

* One of the nominations focused on a Department of Energy (DOE) rule 
issued in January 2001 that would have raised the energy efficiency of 
new central air conditioners by 30 percent. In May 2002, DOE withdrew 
the rule and issued a new rule raising the efficiency level by 20 
percent.

* An EPA July 2000 final rule regarding allowable amounts of pollution 
in water ("total maximum daily load") was also the subject of a 
suggested change. In March 2003, EPA published a final rule withdrawing 
the July 2000 rule. By May 2003, a draft of a new proposed rule was 
undergoing informal interagency review.

However, in a few cases the agencies and/or OIRA decided not to take 
any action or had not made a decision regarding the rules in question.

In March 2002, OIRA again asked the public to nominate rules for 
reform, and received suggestions involving 267 regulations and 49 
guidance documents from approximately 1,700 individuals, trade 
associations, nonprofit organizations, and others. In contrast to the 
first round, OIRA asked the public to nominate not only regulations 
that could be rescinded or changed, but also rules that could be 
expanded. Also, OIRA did not designate certain nominated rules for high 
priority review. Instead, OIRA forwarded the nominations to the 
appropriate agencies for their review and prioritization, and suggested 
that the agencies rely on three criteria: efficiency, fairness, and 
practicality. Although most of the nominations sought modifications 
that would increase regulatory flexibility or rescind rules, more than 
a quarter of them suggested making rules more stringent or developing 
new rules.

Improvements Notwithstanding, OIRA's Review Process Is Still Not Well 
Documented or Clear:

OIRA and some of the agencies whose rules we examined have taken 
several steps to improve the transparency of the regulatory review 
process and its outcomes since our last review. For example, OIRA's 
disclosure of its contacts with outside parties is now triggered by the 
start of informal review, not just formal reviews, and OIRA is now 
providing electronic access to review information. Also, some agencies' 
dockets now more clearly indicated the changes made to their rules than 
was the case during our previous review 5 years ago, and some agencies' 
practices in this area were exemplary (FDA, FMCSA, and EPA's Office of 
Water).

However, the agencies still varied in the extent to which the 
transparency requirements in Executive Order 12866 were satisfied. 
Where the requirements were applicable, the agencies clearly identified 
the substantive changes made between the draft submitted for review and 
the action subsequently announced in only about 45 percent of the 
rules. The agencies clearly identified the changes made at OIRA's 
suggestion or recommendation in about 62 percent of these rules. FAA 
had no such documentation available, and OSHA said it did not keep the 
information in its docket to ensure that it is not part of the official 
rulemaking record if a lawsuit is filed. Other agencies had copies of 
e-mails between them and OIRA discussing changes that had been made to 
the rules, but we could not tell whether these e-mails represented all 
or just some of the changes that had been made.

Also, several aspects of the OIRA review process remain unclear, and 
could be improved to better allow the public to understand the effects 
of OIRA's reviews. For example:

* There is no requirement that either OIRA or the agencies explain why 
rules are withdrawn before OIRA completes its review.

* Although the executive order requires OIRA to disclose its contacts 
with outside parties regarding rules under review, the information that 
OIRA provides in its publicly available meeting log often does not 
allow the public to know what rule is being discussed or what parties 
were represented.

* The executive order requires OIRA to disclose "all documents 
exchanged" between the office and the rulemaking agency during the 
review, but OIRA said it would not do so regarding exchanges between 
the agencies and OIRA staff at the level where most such exchanges 
occur.

* The "consistent with change" category in OIRA's public database does 
not indicate whether the changes made to agencies' rules during the 
formal review process had been suggested by OIRA or the agencies, or 
whether the changes were substantive or editorial in nature.

* The agencies differed considerably regarding what types of changes 
made to their rules were "substantive" and therefore needed to be 
documented. For example, documentation for some rules included changes 
made to both the regulatory text and the agencies' explanations of 
their rules, while other documentation only included changes to the 
regulatory text.

* OIRA said informal submission of a draft rule for review triggers the 
office's disclosure requirements regarding its contacts with outside 
parties, but OIRA representatives said it does not trigger the 
requirements that the office and the rulemaking agency disclose the 
changes made during the review--even though OIRA has said it can have a 
significant influence on agencies' draft rules during this informal 
review period. OIRA indicated that the transparency requirements only 
apply to the formal review period--which can be as short as 1 day--even 
though OIRA may have been reviewing substantive drafts of agencies' 
rule weeks or even months in advance of the formal review period.

In some cases, the agencies or OIRA included materials in their files 
(e.g., substantive changes made during OIRA's informal review) that, 
while not required by the executive order as interpreted by OIRA, 
provided valuable insights regarding OIRA's effect on the development 
of those rules. Although OIRA indicated that disclosure of substantive 
changes made to agencies rules during informal review could have a 
"chilling effect" on OIRA-agency interactions, we saw no evidence of 
that effect in those instances where the substantive changes were 
already being disclosed. However, we recognize that OIRA and the 
agencies should be able to discuss regulatory matters in general 
without having to document and disclose those communications.

Recommendations for Executive Action:

We recommend that the Director of the Office of Management and Budget:

* Define the transparency requirements applicable to the agencies and 
OIRA in section 6 of Executive Order 12866 in such a way that they 
include not only the formal review period, but also the informal review 
period when OIRA says it can have its most important impact on 
agencies' rules. Doing so would make the trigger for the transparency 
requirements applicable to OIRA's and the agencies' interaction 
consistent with the trigger for the transparency requirements 
applicable to OIRA regarding its communications with outside parties.

* Change OIRA's database to clearly differentiate within the 
"consistent with change" outcome category which rules were 
substantively changed at OIRA's suggestion or recommendation and which 
were changed in other ways and for other reasons.

* Improve the implementation of the transparency requirements in the 
executive order that are applicable to OIRA. Specifically, the 
Administrator should take the following actions:

* More clearly indicate in the meeting log which regulatory action was 
being discussed and the affiliations of the participants in those 
meetings.

* Because most of the documents that are exchanged while rules are 
under review at OIRA are exchanged between agency staff and OIRA desk 
officers, OIRA should reexamine its current policy that only documents 
exchanged by OIRA branch chiefs and above need to be disclosed.

* Establish procedures whereby either OIRA or the agencies disclose the 
reasons why rules are withdrawn from OIRA review.

* Improve the implementation of the transparency requirements in the 
executive order that are applicable to rulemaking agencies. 
Specifically, the Administrator should take the following actions:

* Define the types of "substantive" changes during the OIRA review 
process that agencies should disclose as including not only changes 
made to the regulatory text but also other, noneditorial changes that 
could ultimately affect the rules' application (e.g., explanations 
supporting the choice of one alternative over another and solicitations 
of comments on the estimated benefits and costs of regulatory options).

* Instruct agencies to put information about changes made in a rule 
after submission for OIRA's review and those made at OIRA's suggestion 
or recommendation in the agencies' public rulemaking dockets, and to do 
so within a reasonable period after the rules have been published.

* Encourage agencies to use "best practice" methods of documentation 
that clearly describe those changes (e.g., like those used by FDA, 
EPA's Office of Water, or FMCSA).

Agency Comments and Our Evaluation:

On August 8, 2003, we provided a draft of this report to the Director 
of the Office of Management and Budget for his review and comment. On 
September 2, 2003, the Administrator of OIRA provided written comments 
on the draft report. (See app. V for a copy of these comments.) The 
Administrator said OIRA believed the "factual foundations of the report 
are well grounded," and was pleased that the report noted improvements 
in the timeliness of OIRA's reviews and the transparency of the review 
process. He indicated that OIRA agreed with our recommendation to 
improve the clarity of the office's meeting log, but said OIRA did not 
agree with all of the recommendations in the draft report. He said the 
report had not demonstrated the need or desirability of changing the 
agency's existing "unprecedented" level of transparency, and cited 
several specific examples. However, we continue to believe that 
improvements can and should be made to improve the transparency of the 
OIRA review process. The difficulties that we experienced during this 
review clearly demonstrated that OIRA's reviews are not always 
transparent to the public. (See chapter 5 for a fuller description of 
OMB's comments and our evaluation.):

[End of section]

Chapter 1: 

Introduction:

Federal regulation, like taxing and spending, is one of the basic tools 
of government used to implement public policy. Regulations generally 
start with an act of Congress and are the means by which statutes are 
enacted in specific requirements are established. Federal agencies 
issue more than 4,000 regulatory actions each year on topics ranging 
from the timing of bridge openings to the permissible levels of 
contaminants in drinking water. The costs and benefits associated with 
all federal regulations has been a subject of great controversy, with 
the costs estimated in the hundreds of billions of dollars and the 
benefits estimates even higher. During the past 50 to 60 years, 
Congress and various presidents have developed an elaborate set of 
procedures and requirements to guide the federal rulemaking process. 
One of the most important yet least understood of these requirements is 
the provision that federal agencies (other than independent regulatory 
agencies) submit their draft rules to the Office of Information and 
Regulatory Affairs (OIRA) within the Office of Management and Budget 
(OMB) for review before being published in the Federal Register. 
Although a relatively small office (about 55 full-time equivalent or 
"FTE" positions), OIRA reviews can have a significant--if not 
determinative--effect on federal rulemaking and, therefore, public 
policy.

Because OIRA's regulatory review function is not well understood, the 
Ranking Minority Members of the Senate Committee on Governmental 
Affairs and its Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia requested that we 
examine and report on certain aspects of its operation. Specifically, 
they requested that we (1) describe OIRA's current regulatory review 
policies and processes and determine whether, and if so how, those 
policies have changed in recent years, (2) provide information about 
health, safety, and environmental rules from nine selected agencies 
that were returned to the agencies for reconsideration, withdrawn at 
OIRA's request, or significantly changed in response to OIRA's reviews 
during a 1-year period, and (3) describe how OIRA determined that 
certain existing rules listed in its reports to Congress on the costs 
and benefits of federal regulations merited high priority review for 
potential modification or rescission.

Background:

OMB is part of the Executive Office of the President, along with such 
agencies as the Council of Economic Advisors (CEA), the Council on 
Environmental Quality, and the Office of Science and Technology Policy. 
These agencies help develop and implement the policies and programs of 
the President. As figure 1 shows, OIRA is one of the statutory offices 
within OMB--which are sometimes collectively referred to as the 
"management" side of OMB. Other OMB offices include the resource 
management offices, which review agencies' budget submissions and are 
sometimes collectively referred to as OMB's "budget" side.[Footnote 7]

Figure 1: OIRA Is One of the Statutory Offices within OMB:

[See PDF for image]

[End of figure]

The Administrator of OIRA is appointed by the President, subject to the 
advice and consent of the Senate. As figure 2 illustrates, OIRA 
currently has four branches: (1) Information Policy and Technology, (2) 
Statistical and Science Policy, (3) Health, Transportation, and General 
Government, and (4) Natural Resources, Energy, and Agriculture. Of 
these, the last two branches are primarily responsible for reviewing 
agencies' draft proposed and final regulations under Executive Order 
12866. However, as discussed later in this report, the other branches 
as well as other parts of OMB and the Executive Office of the President 
may be consulted during their reviews.

Figure 2: Organization of OIRA:

[See PDF for image]

[End of figure]

The Rulemaking Process and Presidential Review:

The basic process by which federal agencies develop and issue 
regulations is spelled out in the Administrative Procedure Act of 1946, 
as amended (APA), codified at 5 U.S.C. section 553. Among other things, 
the APA generally requires agencies to (1) publish a notice of proposed 
rulemaking in the Federal Register, (2) allow interested persons an 
opportunity to participate in the rulemaking process by providing 
"written data, views, or arguments," and (3) publish the final rule 30 
days before it becomes effective. However, the APA allows agencies to 
issue final rules without a previous notice of proposed rulemaking in 
certain cases.[Footnote 8]

The Paperwork Reduction Act (PRA) of 1980 established OIRA to provide 
central agency leadership and oversight of governmentwide efforts to 
reduce unnecessary paperwork burden and improve the management of 
information resources. Specifically, the act required OIRA to review 
and approve agencies' proposed collections of information before the 
agencies could collect information from the public. In recent years, 
OIRA has reviewed between 3,000 and 5,000 proposed collections of 
information each year under the PRA. Although many federal regulations 
have an information collection component, the PRA did not specifically 
authorize OIRA to review or comment on the substance of those 
regulations.

Nevertheless, centralized review of agencies' regulations within the 
Executive Office of the President has been part of the rulemaking 
process for more than 30 years. For example:

* In 1971, President Nixon established a "Quality of Life Review" 
program in which agencies submitted all significant draft proposed and 
final rules to OMB, which then circulated them to other agencies for 
comment. In their submissions, agencies provided a summary of their 
proposals, a description of the alternatives that they considered, and 
the cost of those alternatives.

* In 1974, President Ford issued Executive Order 11821, which required 
agencies to prepare an "inflation impact statement" for each "major" 
proposed rule before publication in the Federal Register, and to send a 
summary of those statements to the Council on Wage and Price Stability 
when the rule was published. The council would then review the 
statement and either provide comments to the agency or participate in 
the comment process.

* In 1978, President Carter issued Executive Order 12044, which (among 
other things) required agencies to publish semiannual agendas of any 
significant rules under development and to prepare a regulatory 
analysis that examined the cost-effectiveness (i.e., the least cost of 
achieving the objective) of alternative regulatory approaches for major 
rules. President Carter also established (1) a "regulatory analysis 
review group" to review the analyses prepared for certain major rules 
and to submit comments during the comment period, and (2) a "regulatory 
council" to coordinate agencies' actions to avoid conflicting 
requirements and duplication of effort.

Perhaps the most significant development in this evolution of 
presidential review of rulemaking occurred in 1981 when President 
Reagan issued 
Executive Order 12291.[Footnote 9] The executive order replaced 
Executive Order 12044 and established a set of general requirements for 
rulemaking--e.g., that (to the extent permitted by law) (1) the 
potential benefits of a regulatory action must outweigh the potential 
costs to society, (2) regulatory objectives should maximize net 
benefits to society, and (3) agencies should select the regulatory 
alternative involving the least net cost to society. The order also 
required federal agencies (other than independent regulatory agencies) 
to send a copy of each draft proposed and final rule to OMB before 
publication in the Federal Register. In addition, it required covered 
agencies to prepare a regulatory impact analysis for each "major" rule, 
and authorized OMB to review "any preliminary or final Regulatory 
Impact Analysis, notice of proposed rulemaking, or final rule based on 
the requirements of this Order."[Footnote 10] As a result of this 
order, OIRA's responsibilities were greatly expanded from paperwork 
reviews to examinations of the substance of covered agencies' proposed 
and final rules--between 2,000 and 3,000 reviews per year.[Footnote 11] 
In 1985, President Reagan extended OIRA's influence even further by 
issuing Executive Order 12498, which required nonindependent agencies 
to submit a regulatory plan to OMB for review each year that covered 
all of their significant regulatory actions underway or planned.

The expansion of OIRA's role in the rulemaking process as a result of 
these executive orders was not without controversy. Concerns were 
raised by members of Congress, public interest groups, and others 
regarding a variety of issues, including whether OIRA's role violated 
constitutional separation of powers, and the effect that OIRA's review 
had on public participation under the APA and the timeliness of 
agencies' rulemaking. (Neither the order nor OIRA guidance placed any 
time limits on OIRA's reviews.) Concerns were also raised regarding the 
transparency of OIRA's reviews, specifically whether OIRA had become a 
clandestine conduit for outside influence in the rulemaking process. In 
response to those criticisms, in June 1986, the OIRA Administrator 
issued a memorandum for the heads of departments and agencies subject 
to the executive orders describing OIRA procedures to improve the 
transparency of the process. For example, the memorandum said that only 
the Administrator or the Deputy Administrator could communicate with 
outside parties regarding rules submitted for review, and that OIRA 
would make available to the public all written materials received from 
outside parties. OIRA also said that it would, upon written request, 
make available all written correspondence between OIRA and the agency 
head regarding a draft submitted for review.

In 1987 the National Academy of Public Administration published a 
report on presidential management of agency rulemaking that summarized 
the criticisms of the OIRA regulatory review effort as well as the 
positions of its proponents.[Footnote 12] The report also described a 
number of issues in regulatory review and offered recommendations for 
improvement. For example, the report recommended that "regulatory 
management be accepted as an essential element of presidential 
management." It also recommended that regulatory agencies "log, 
summarize, and include in the rulemaking record all communications from 
outside parties, OMB, or other executive or legislative branch 
officials concerning the merits of proposed regulations.":

In 1988 the Administrative Conference of the United States also 
examined the issue of presidential review of agency rulemaking and 
concluded that the reviews could improve coordination and resolve 
conflicts among agencies. However, the conference also said 
presidential review "does not displace responsibilities placed in the 
agency by law nor authorize the use of factors not otherwise permitted 
by law." The Conference recommended public disclosure of proposed and 
final agency rules submitted to OIRA under the executive order, 
communications from OMB relating to the substance of rules, and 
communications with outside parties, and also recommended that the 
reviews be completed in a "timely fashion."[Footnote 13]

Executive Order 12866:

On September 30, 1993, President Clinton issued Executive Order 12866 
on "Regulatory Planning and Review," which revoked Executive Orders 
12291 and 12498 and established a new regulatory philosophy and set of 
principles, as well as a new process for OIRA review. In its statement 
of regulatory philosophy, the executive order states, among other 
things, that agencies should assess all costs and benefits of available 
regulatory alternatives, including both quantitative and qualitative 
measures. It also provides that agencies should select regulatory 
approaches that maximize net benefits (unless a statute requires 
another approach). Where permissible and applicable, the order states 
agencies should adhere to a set of principles, including (1) 
consideration of the degree and nature of risk posed when setting 
regulatory priorities, (2) adoption of regulations only upon a 
"reasoned determination that the benefits of the intended regulation 
justify its costs," and (3) tailoring regulations to impose the least 
burden on society needed to achieve the regulatory objectives. Some of 
the stated objectives of the order are "to reaffirm the primacy of 
Federal agencies in the regulatory decision-making process; to restore 
the integrity and legitimacy of regulatory review and oversight; and to 
make the process more accessible and open to the public." Section 2(b) 
of the order assigns responsibility for review of agency rulemaking to 
OMB, and specifically names OIRA as "the repository of expertise 
concerning regulatory issues." The order also named the Vice President 
as principle advisor to the President on regulatory policy, planning, 
and review.

Section 6 of Executive Order 12866 established agency and OIRA 
responsibilities in the centralized review of regulations. Like its 
predecessor, the new executive order limits OIRA reviews to rules 
published by agencies other than independent regulatory agencies. 
However, in contrast to the broad scope of review under Executive Order 
11291, the new order limits OIRA reviews to actions identified by the 
rulemaking agency or OIRA as "significant" regulatory actions, which 
are defined in section 3(f) of the order as the following:

"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.":

As figure 3 shows, by focusing OIRA's reviews on significant rules, the 
number of draft proposed and final rules that OIRA examined fell from 
between 2,000 and 3,000 per year under the Executive Order 12291 to 
between 500 and 700 rules per year under Executive Order 12866.

Figure 3: Number of Rules That OIRA Reviewed Dropped Under Executive 
Order 12866:

[See PDF for image]

[End of figure]

Executive Order 12866 also differs from its predecessor in other 
respects. For example, the order required that OIRA generally complete 
its review of proposed and final rules within 90 calendar days. It also 
requires both the agencies and OIRA to disclose certain information 
about how the regulatory reviews were conducted. For example, agencies 
are required to identify for the public (1) the substantive changes 
made to rules between the draft submitted to OIRA for review and the 
action subsequently announced and (2) changes made at the suggestion or 
recommendation of OIRA. OIRA is required to provide agencies with a 
copy of all written communications between OIRA personnel and parties 
outside of the executive branch, and a list of the dates and names of 
individuals involved in substantive oral communications. OIRA is also 
instructed to maintain a 
public log of all regulatory actions under review and of all of the 
above-mentioned documents provided to the agencies.[Footnote 14]

In October 1993, the OIRA Administrator issued guidance to the heads of 
executive department and agencies regarding the implementation of 
Executive Order 12866. The section of that guidance on "Openness and 
Public Accountability" that discussed the order's transparency 
requirements indicated that the requirement that agencies identify for 
the public the changes made at the suggestion or recommendation of OIRA 
only applies to changes made after draft rules are formally submitted 
to OIRA for review. In January 1996, OIRA published a document that 
described "best practices" for preparing the economic analysis of 
significant regulatory actions called for by the executive order. This 
document was revised and issued as guidance in 2000, and is described 
in greater detail in chapter 2 of this report.

Prior Report on Transparency Requirements:

In January 1998, we reported on the implementation of some of the 
transparency requirements in Executive Order 12866 within selected 
agencies.[Footnote 15] We concluded that the agencies had complete 
documentation of changes made during OIRA's review for only about 26 
percent of the 122 regulatory actions that we reviewed. The agencies 
had complete documentation of the changes that OIRA suggested or 
recommended for only about 24 percent of the rules. In other cases the 
agencies had some documentation that changes had been made, but it was 
not clear whether all such changes had been documented. In addition, 
the documentation that we were able to locate was sometimes not 
available to the public or hard to find. In our report, we recommended 
that OIRA provide agencies with guidance on how to implement the 
transparency requirements in the executive order. Specifically, we said 
the guidance should require the agencies to include a single document 
in the public rulemaking docket for each regulatory action that (1) 
identified all substantive changes made during OIRA's review and at the 
suggestion or recommendation of OIRA or (2) states that no changes were 
made.[Footnote 16] We also said that the guidance should point to best 
practices in some agencies to suggest how other agencies could organize 
their dockets to best facilitate public access and disclosure. OIRA 
disagreed with our recommendations and did not implement them.

Objectives, Scope, and Methodology:

The overall objective of this assignment was to determine how OIRA 
conducts its regulatory reviews. The requesters indicated that little 
was known about those reviews, the effects that outside parties have on 
OIRA decision making, or the impact of OIRA decisions on the American 
public. Our specific objectives were the following:

* Describe OIRA's current regulatory review policies and processes and 
determine whether, and if so how, those policies and processes have 
changed in recent years.

* Identify the rules issued by selected agencies that were reviewed by 
OIRA between July 1, 2001, through June 30, 2002, and that were either 
significantly changed at OIRA's direction, returned by OIRA for further 
consideration by the agencies, or withdrawn by the agencies at OIRA's 
suggestion. For each such rule, (a) describe the changes made by OIRA, 
the reasons why the rule was returned or withdrawn, and any subsequent 
activity regarding the rule, (b) describe, to the extent possible, the 
effects of the changes, returns, and withdrawals on the rule's original 
benefits and costs, and (c) determine whether there are any indications 
that the actions OIRA took were traceable to suggestions offered by 
regulated entities or outside parties and, if so, whether OIRA publicly 
disclosed their involvement. We also examined OIRA's and the agencies' 
application of the transparency requirements in the executive order and 
related guidance.

* Describe how OIRA determined that certain existing rules listed in 
its reports to Congress on the costs and benefits of federal 
regulations merited high priority review. Specifically, determine (a) 
which organizations or persons suggested that these rules be reviewed, 
(b) what process OIRA used to select and prioritize the rules, (c) the 
extent to which OIRA publicly disclosed its selection and priority-
setting process, and (d) the current status of those rules.

A detailed discussion of our methodology and scope limitations is 
provided in appendix I. In brief, we defined OIRA's "current" 
regulatory review policies and processes as those in place as of June 
2002 or later. To describe those policies and processes and any changes 
in recent years, we reviewed relevant documents (e.g., executive 
orders, legislation, and OMB guidance) and interviewed current OIRA and 
agency staff, two former OIRA Administrators, and knowledgeable 
officials and staff from external groups that are actively involved in 
observing and commenting on the federal regulatory process.

We focused our efforts in the second objective on those rules submitted 
for OIRA review that met the following criteria: (a) the rule was 
submitted to OIRA as a proposed, interim final, or final rule, (b) OMB 
completed its review of the rule between July 1, 2001, and June 30, 
2002, (c) the rule was returned to the rulemaking agency by OIRA, 
withdrawn from OIRA's review by the agency, or changed after submission 
for OIRA's review, and (d) it was included among the set of health, 
safety, or environmental rules from those agencies or subagencies that 
OIRA's Executive Order Review database indicated had five or more rules 
returned, withdrawn, or changed during the period in scope for this 
objective. A total of 85 rules from nine agencies--the Animal Plant and 
Health Inspection Service (APHIS); Food and Drug Administration (FDA); 
Occupational Safety and Health Administration (OSHA); Department of 
Transportation's (DOT) Federal Aviation Administration (FAA); Federal 
Motor Carrier Safety Administration (FMCSA); and National Highway 
Traffic Safety Administration (NHTSA); and the Environmental Protection 
Agency's (EPA) Office of Air and Radiation, Office of Solid Waste and 
Emergency Response, and Office of Water--met these criteria.[Footnote 
17] We also reviewed documents in both agencies' and OIRA's rulemaking 
dockets, and interviewed OIRA and agency officials to obtain 
information about the regulatory review process for the individual 
rules included in our scope.

Our work to address the third objective focused on the particular rules 
identified for high priority review in the 2001 and 2002 versions of 
OMB's annual report to Congress on the costs and benefits of federal 
regulations. We reviewed any available documentation describing the 
process that OIRA used to select certain rules for high priority 
review. We also interviewed OIRA representatives and representatives of 
other relevant agencies and organizations to determine how the 
classifications were made and why the particular selected rules were 
designated as high priority.

The specific limitations to our engagement are identified with each of 
our findings. In general, our findings were sometimes limited to the 
documentation that was available. Some types of OIRA's influence on 
rules may not be reflected in the documentation we relied on in this 
review. For example, in a previous review DOT officials told us that 
they will not even propose certain regulatory provisions because they 
know that OIRA will not find them acceptable.[Footnote 18] Also, we 
cannot be sure that we have identified all changes to the selected 
rules that were made at the direction or suggestion of OIRA (e.g., 
changes made during informal OIRA reviews that were not documented), 
nor can we be sure that we identified all the effects of such changes 
on the rules or all instances in which an outside party may have 
influenced OIRA's actions. We conducted our review from July 2002 
through May 2003 at the headquarters offices of the above-mentioned 
agencies in accordance with generally accepted government auditing 
standards. We verified data elements that we used from OIRA's database 
and found only minor differences between that database and information 
in OIRA's and agencies' files. Therefore, we concluded that the data 
were sufficiently reliable for purposes of our report. We provided a 
draft of this report to OMB for comment. The comments that we received, 
and our evaluation of those comments, are reflected in the "Agency 
Comments and Our Evaluation" section of chapter 5 of this report.

[End of section]

Chapter 2: Some of OIRA's Regulatory Review Policies Have Changed:

Our first objective was to describe OIRA's current regulatory review 
policies and processes and determine whether, and if so how, those 
policies and processes have changed in recent years. We determined that 
OIRA's formal regulatory review process under Executive Order 12866 
sometimes also includes informal reviews before the official submission 
of draft rules by the agencies. Both types of reviews focus on the 
draft rules' adherence to applicable laws, executive orders, guidance 
documents, and the President's policies. The OIRA review process is 
essentially unchanged since the office began reviewing rules in 1981. 
The most significant changes occurred in 1993 with the issuance of 
Executive Order 12866. However, there have been several other changes 
in policies and emphasis in recent years, particularly since the 
current OIRA Administrator took office in July 2001. Those changes 
include increased use of return letters and the advent of "prompt" 
letters, increased emphasis on benefit-cost analysis and peer review, 
stricter adherence to the 90-day period for OIRA review, improvements 
in the transparency of the OIRA review process, and an increase in the 
size and skills of OIRA staff. However, some of these changes are not 
as significant a departure from previous practice as they initially 
appear. Underlying many of these changes is a shift in how the 
Administrator views OIRA's role in the regulatory process.

OIRA Regulatory Review Process:

As noted in chapter 1 of this report, Executive Order 12866 limits 
OIRA's regulatory reviews to significant rules that are initiated by 
agencies other than independent regulatory agencies.[Footnote 19] The 
executive order also establishes certain requirements regarding how 
those reviews are conducted (e.g., generally requiring the reviews to 
be completed within 90 calendar days after the rule is submitted to 
OIRA). Although the overall process that OIRA uses to review covered 
agencies' draft rules is described in the executive order or other OIRA 
publications, the specific details about how the office conducts its 
reviews are not well understood. One rulemaking agency official 
described the review process to us as a "black box" into which agencies 
submit rules that later come out intact, changed, withdrawn, or 
returned.

As figure 4 shows, OIRA reviews agencies' draft rules at both the 
proposed and final stages of rulemaking.[Footnote 20] In each phase, 
the rulemaking agency formally submits a regulatory review package to 
OIRA (consisting of the rule, any supporting materials, and a 
transmittal form) and OIRA initiates a review. During the review 
process, OIRA analyzes the draft rule in light of the principles of 
Executive Order 12866, and discusses the package with staff and 
officials at the rulemaking agency, and, if the occasion warrants, with 
other agencies with whom interagency coordination will be necessary. In 
the course of that process, the draft rule that is submitted by the 
agency often changes. In some cases, agencies withdraw the draft rule 
from OIRA during the review period and the rule may or may not be 
subsequently resubmitted to OIRA.

Figure 4: The OIRA Regulatory Review Process:

[See PDF for image]

[End of figure]

At the end of the review period, OIRA either concludes that the draft 
rule is consistent with the principles of the executive order (which 
occurs in the vast majority of cases) or returns the rule to the agency 
"for further consideration."[Footnote 21] If a draft rule that was 
determined to be consistent with the executive order had been modified 
in the course of the review, the rule is coded in the OIRA database as 
"consistent with change" (regardless of the source or extent of the 
change). If no changes have been made to the draft rule during the 
review, the rule is coded as "consistent without change." OIRA only 
codes rules as "consistent with no change" if they are exactly the same 
at the end of the review period as the original submission. Even 
editorial changes made at the rulemaking agency's initiative can cause 
a rule to be coded "consistent with change.":

If the draft is a proposed rule, upon completion of OIRA's review the 
agency may then publish a notice of proposed rulemaking and, in 
accordance with the APA, obtain comments during the specified period 
(usually at least 30 days), review the comments received, and make any 
changes to the rule that it believes are necessary to respond to those 
comments. If the draft is a final rule, the agency may publish the 
final rule after OIRA concludes its review and the rule will take 
effect either at that point or at some later date specified by the 
agency. OIRA representatives emphasized that the office does not 
"approve" or "disapprove" draft rules. They noted that the rulemaking 
agency has been vested with authority by Congress to issue regulations, 
and said OIRA's review of draft rules under Executive Order 12866 does 
not displace that authority. They said any changes that are made to 
draft rules as a result of that review are made by the rulemaking 
agency, not OIRA.

Figure 4 also illustrates that for some rules there are two distinct 
phases of OIRA's review: (1) a formal review period after the rule is 
officially submitted to OIRA and (2) an informal review period before 
submission of the rule.

Formal Review:

According to OIRA representatives, the formal regulatory review process 
begins when the rulemaking agency sends the draft rule to the OIRA 
docket librarian (either electronically or hand carried), who logs the 
receipt of the rule and forwards it to the appropriate desk officer. 
The representatives said that OIRA desk officers do not use a standard 
"checklist" to review agencies' rules, but indicated that most reviews 
are similar in certain respects. Section 6 of Executive Order 12866 
states that the OIRA Administrator is to provide meaningful guidance 
and oversight "so that each agency's regulatory actions are consistent 
with applicable law, the President's priorities, and the principles set 
forth in this Executive order, and do not conflict with the policies or 
actions of another agency." The laws applicable to specific regulations 
vary, but always include the specific statutory authority under which 
each regulation is being developed (e.g., the Clean Air Act or the 
Occupational Safety and Health Act) as well as a variety of 
crosscutting regulatory statutes (e.g., the APA and the Regulatory 
Flexibility Act).

The principles in Executive Order 12866 that are intended to guide 
covered agencies' rulemaking practices (and therefore guide OIRA's 
review practices as well) include the following:

* Identify and assess available alternatives to direct regulation;

* design regulations in the most cost-effective manner to achieve the 
regulatory objective;

* assess both the costs and benefits of the intended regulation, and 
propose or adopt a regulation only upon a reasoned determination that 
the benefits of the intended regulation justify its costs;

* base decisions on the best reasonably obtainable scientific, 
technical, economic, and other information;

* identify and assess alternative forms of regulation; and:

* tailor regulations to impose the least burden on society.

In addition, the executive order's "regulatory philosophy" provides 
that "in deciding whether and how to regulate, agencies should assess 
all costs and benefits of available regulatory alternatives, including 
the alternative of not regulating." It goes on to state that, unless a 
statute requires another regulatory approach, "in choosing among 
alternative regulatory approaches, agencies should select those 
approaches that maximize net benefits.":

The type of review that OIRA conducts sometimes depends on the type of 
draft rule submitted. For example, if the draft rule contains a 
collection of information covered by the Paperwork Reduction Act, OIRA 
representatives said that the desk officer would also review it for 
compliance with the act. (They indicated that conducting both reviews 
simultaneously can be more difficult if different offices within the 
rulemaking agencies are responsible for the rule and the information 
collection.) If the draft rule is "economically significant" (e.g., has 
an annual impact on the economy of at least $100 million), the 
executive order requires agencies to prepare an economic analysis 
describing, among other things, the alternatives that the agency 
considered and the costs and benefits of those alternatives. For those 
economically significant rules, the desk officers review the economic 
analyses using the "best practices" document developed in January 1996 
and the related guidance document issued in 2000. (These documents are 
described in more detail later in this report.):

In addition to Executive Order 12866, there are several memoranda and 
guidance documents from OMB and/or the OIRA Administrator that provide 
additional details regarding the content of OIRA's regulatory reviews. 
For example, on September 20, 2001, the OIRA Administrator sent a 
memorandum to the President's Management Council on "Presidential 
Review of Agency Rulemaking by OIRA." An attachment to the memorandum 
described "the general principles and procedures that will be applied 
by OMB in the implementation of E.O. 12866 and related statutory and 
executive authority." For example, the attachment indicated that the 
office would, where appropriate, (1) include an evaluation of whether 
the agency has, in assessing exposure to a risk or environmental 
hazard, conducted an adequate risk assessment, (2) give "a measure of 
deference" to regulatory impact analyses and other supporting technical 
documents that have been peer reviewed in accordance with specified 
procedures,[Footnote 22] (3) ensure that regulatory clearance packages 
satisfy the requirements in other executive orders (e.g., include the 
certifications required by Executive Order 13132 on "Federalism" and 
Executive Order 13175 on "Consultation and Coordination with Indian 
Tribal Governments"), (4) consult with the Small Business 
Administration (SBA) and the SBA Chief Counsel for Advocacy, and (5) 
evaluate the possible impact of the draft rule on the programs of other 
federal agencies. (Several of these elements are discussed more fully 
later in this chapter, including OMB's guidance on economic analysis.):

OIRA representatives said that there is usually some type of 
communication (often via e-mail or telephone) between the desk officer 
and the rulemaking agency regarding specific issues in the draft rule. 
The representatives said briefings and meetings are sometimes held 
between OIRA and the agency during the review process, with branch 
chiefs, the Deputy Administrator, and/or the Administrator involved in 
some of these meetings.[Footnote 23] They also said that the desk 
officers always consult with the resource management officers on the 
budget side of OMB as part of their reviews, and reviews of draft rules 
are not completed until those resource management officers sign off. 
(In fact, they said that the resource management offices might take the 
lead in the review for rules involving the "transfer" of federal funds 
within society.) If the draft rule is economically significant, they 
said the desk officer would also consult with an economist to help 
review the required economic analysis. For other rules the OIRA 
representatives said the desk officer might consult with other OIRA 
staff on issues involving statistics and surveys, information 
technology and systems, or privacy issues. In certain cases, OIRA may 
circulate a draft rule to other parts of the Executive Office of the 
President (e.g., the Office of Science and Technology Policy or the 
Council on Environmental Quality) or other agencies (e.g. SBA for rules 
having an impact on small businesses, or DOE, DOT, the Department of 
Agriculture, and the Department of the Interior for certain EPA rules). 
In those cases, OIRA may not only review the rule itself, but also 
manage an interagency review process.

Executive Order 12866 generally requires OIRA to complete its 
regulatory reviews within certain time frames--(1) within 10 working 
days of submission for any preliminary actions prior to a notice of 
proposed rulemaking (e.g., a notice of inquiry or an advance notice of 
proposed rulemaking) or (2) within 90 calendar days of submission for 
all other regulatory actions (or 45 days if OIRA had previously 
reviewed the material and there had been no material changes in the 
facts or circumstances upon which the regulatory action was based). At 
the conclusion of its review, they said OIRA notifies the issuing 
agency by telephone. At that point, the agency may publish the rule in 
the Federal Register.

As noted previously, a draft rule that has been reviewed and judged 
consistent with the executive order may be coded in the office's 
database as "consistent with no change" (meaning that OIRA considered 
the draft rule as submitted to be consistent with all applicable 
requirements) or "consistent with change" (which means that the draft 
rule was changed at either the issuing agency's initiation or at the 
suggestion of OIRA, and that OIRA then considered the changed rule to 
be consistent with all applicable requirements). If the rule is 
returned to the issuing agency for reconsideration, the executive order 
requires OIRA to provide a written explanation for the return. Section 
7 of Executive Order 12866 originally required the President or the 
Vice President to resolve any disagreements or conflicts between or 
among agency heads or between OMB and any agency that cannot be 
resolved by the OIRA Administrator. However, in February 2002, 
Executive Order 13258 reassigned the Vice President's responsibilities 
in this area to the President's chief of staff.

Executive Order 12866 also requires OIRA to take certain actions to 
ensure greater openness, accessibility, and accountability in the 
regulatory review process. For example, the order says that a 
representative from the agency issuing the regulation must be invited 
to any meeting between OIRA personnel and persons not employed by the 
executive branch of the federal government regarding a rule under 
executive order review.[Footnote 24] It also requires OIRA to forward 
to the issuing agency within 10 working days any written communications 
between such outside contacts and OIRA personnel, as well as the dates 
and names of such outside contacts involved in substantive oral 
communications with OIRA staff. Other requirements include public 
disclosure of such written and oral communications, and the maintenance 
of a publicly available log containing, among other things, the status 
of all regulatory actions. After the regulatory action has been 
published in the Federal Register or otherwise issued (or after the 
agency announces it will not publish or issue the action), the 
executive order requires OIRA to make available to the public "all 
documents exchanged between OIRA and the agency during the review." The 
executive order established other transparency requirements for 
rulemaking agencies (e.g., requiring them to identify substantive 
changes made to draft rules during OIRA's review and at the suggestion 
or recommendation of OIRA).

Informal Review:

In its December 2001 report on the costs and benefits of federal 
regulations, OIRA stated that the office's original review process "was 
designed as an end-of-the-pipeline check against poorly conceived 
regulations."[Footnote 25] However, OIRA also stated that by the time 
an agency formally submits a rule to OIRA for review there may be 
"strong institutional momentum" behind the proposal and, as a result, 
the agency may be reluctant to address certain issues that OIRA 
analysts might raise. Therefore, OIRA indicated "there is value in 
promoting a role for OIRA's analytic perspective earlier in the 
process, before the agency becomes too entrenched." OIRA went on to 
state the following:

"A common yet informal practice is for agencies to share preliminary 
drafts of rules and/or analyses with OIRA desk officers prior to final 
decision making at the agency. This practice is useful for agencies 
since they have the opportunity to educate OIRA desk officers in a more 
patient way, before the formal 90-day review clock at OMB begins to 
tick. The practice is also useful for OIRA analysts because they have 
the opportunity to flag serious problems early enough to facilitate 
correction before the agency's position is irreversible.":

However, because of its size, OIRA cannot informally review each of the 
hundreds of significant proposed and final rules that are submitted to 
the office each year. OIRA representatives told us that a variety of 
factors could trigger informal discussions about a forthcoming rule. 
For example, they said informal reviews are sometimes used when there 
is a statutory or legal deadline for a rule or when the rule has a 
large impact on society and requires discussion with not only OMB but 
also other federal agencies. Therefore, they said informal review is 
more likely regarding rules issued by certain agencies (e.g., EPA, DOT, 
the Department of Agriculture, and the Department of Health and Human 
Services) that issue those types of rules. OIRA representatives also 
said there is an important distinction between informal consultations 
between OIRA and agency staff that may occur at any time and informal 
reviews that occur when OIRA is provided a substantive draft of a rule.

There have been some indications that OIRA has increased its use of 
informal reviews in recent years. For example, in its March 2002 draft 
report to Congress on the costs and benefits of federal regulation, 
OIRA said "agencies are beginning to invite OIRA staff into earlier 
phases of regulatory development in order to prevent returns late in 
the rulemaking process. It is at these early stages where OIRA's 
analytic approach can most improve on the quality of regulatory 
analyses and the substance of rules." Similarly, the Administrator said 
"we are trying to transform OIRA from an end-of-the-pipeline 
organization to one that also engages in early promotion of good 
policies and prevention of bad ones." He also said "an increasing 
number of agencies are becoming more receptive to early discussions 
with OMB, at least on highly significant rulemakings." As OIRA noted, 
that receptivity may be enhanced by the threat of a returned rule. In 
early 2002, the Administrator said OIRA was trying "to create an 
incentive for agencies to come to us when they know they have something 
that in the final analysis is going to be something we're going to be 
looking at carefully. And I think that agencies that wait until the 
last minute and then come to us--well, in a sense, they're rolling the 
dice."[Footnote 26] Perhaps the clearest manifestation of OIRA's early 
involvement in rulemaking occurred in 2002, when OIRA and EPA began 
what EPA described as an "unusual collaboration," working closely 
together to develop a rule curbing pollution from diesel-powered 
nonroad vehicles. EPA also indicated that it would collaborate with 
OIRA on the design of an "innovative regulatory analysis" for the rule.

However, OIRA informally consulted with agencies and reviewed agencies' 
draft rules before formal submission during previous administrations as 
well. For example, in September 1996, the then-OIRA Administrator 
testified that her office is sometimes "involved earlier and more 
deeply in an agency rulemaking--before the agency has completed all of 
its own evaluation and its internal and/or interagency coordination, 
and has become invested in its decision." An OIRA representative told 
us that informal reviews probably had been conducted since OIRA began 
reviewing rules, but became more common when Executive Order 12866 was 
adopted in 1993 and OIRA's reviews were focused on "significant" rules. 
He said because these more complex rules can take years to develop, it 
makes sense for agencies to involve OMB earlier in the process so that 
policy disagreements can be discussed before substantial amounts of 
staff work is conducted.

Changes in Regulatory Review Policies:

According to OIRA representatives, the process that OIRA uses to review 
draft rules has been essentially the same since that process was 
established in 1981. OIRA representatives indicated that the review 
process had changed less in recent years than the changes that occurred 
with the advent of Executive Order 12866 in 1993 (e.g., the focus on 
"significant" rules, the 90-day clock, and the transparency 
requirements). In presentations before various groups, the OIRA 
Administrator has said that the office is "pursuing the agenda of 
quality regulation under the terms of the Clinton-Gore executive order, 
which we believeis based on sound principles and procedures.":

However, there have been several subtle yet notable changes in OIRA 
policies and practices in recent years--particularly since the current 
OIRA Administrator took office in July 2001. In October 2002, the 
Administrator said "the changes we are making at OMB in pursuit of 
smarter regulation are not headline grabbers: No far-reaching 
legislative initiatives, no rhetoric-laden executive orders, and no 
campaigns of regulatory relief. Yet we are making some changes that we 
believe will have a long-lasting impact on the regulatory state.":

Some of OIRA's review policies and practices that the Administrator and 
others have identified as significant changes are clear departures from 
the policies evident in previous administrations. However, other recent 
OIRA policies and practices are only incrementally different from those 
evident in previous administrations or have caveats that must be 
recognized in their implementation.

OIRA as Regulatory "Gatekeeper":

Overall, there has been a notable change in how recent Administrators 
(and perhaps more generally, how recent administrations) have viewed 
OIRA's role in the rulemaking process and its relationships with 
rulemaking agencies--in essence, whether OIRA should play a more 
collaborative, consultative role in relation to the agencies, or 
whether OIRA should take on more of a "gatekeeper" role. This change in 
philosophy has implications for virtually all of OIRA's 
responsibilities, and may be a precipitating factor for many of the 
other changes identified in this section of our report.

Perhaps the clearest indications of this change in philosophy are in 
the public statements of recent Administrators. For example, in a May 
1994 report to the President on the first 6 months of Executive Order 
12866, the Administrator of OIRA at the time said the relationship 
between OIRA and the agencies had "vastly improved" and that "rule 
writers and rule reviewers were learning to work together as partners 
rather than as adversaries." Officials we spoke with in 1996 at both 
EPA and DOT confirmed this perception. In testimony before the Senate 
Committee on Governmental Affairs in September 1996, the Administrator 
said, "we have consciously changed the way we relate to the agencies" 
and described that change as a "paradigm shift" from the relationship 
during previous administrations. She described OIRA's relationship with 
rulemaking agencies as "collegial" and "constructive," and said OIRA 
was "not in the business of playing 'gotcha' with them."[Footnote 27] 
She cited an article that she said accurately described OIRA's approach 
as a "consensual process," and that said OIRA functioned "more as a 
counselor during the review process than as an enforcer of the 
executive order."[Footnote 28] She also emphasized that this 
collaborative approach yielded better results than a more 
confrontational OIRA-agency relationship.

Another former OIRA Administrator voiced similar sentiments during our 
review. He said that during his and his predecessor's tenure in the 
mid-to-late 1990s OIRA acted in a spirit of partnership with agencies 
submitting regulations for review. He also said that although agencies 
were not allowed to do whatever they wanted, OIRA did not dictate how 
regulations should be written and worked with the agencies to ensure 
transparency and fairness in the rulemaking process.

The current Administrator has characterized OIRA's role and 
relationship with the agencies in quite different terms. For example, 
in its December 2002 report on the costs and benefits of federal 
regulations, OIRA described itself as the "gatekeeper for new 
rulemakings."[Footnote 29] In a speech, the current Administrator 
described OIRA's regulatory review process as "a form of consumer 
protection to protect people from poorly designed rules." He went on to 
say that OMB's process of centralized oversight "is a device to 
strengthen the hands of scientists, engineers and economists within the 
agencies--they now know that regulatory proposals cannot survive OMB 
review without careful supporting analysis." He also said OMB review is 
a device "to combat the tunnel vision that plagues the thinking of 
single-mission regulators." The Administrator has also compared OIRA's 
role in reviewing agencies' proposed regulations to OMB's role in 
reviewing agencies' budget requests:

"Now, no one would suggest that agencies should be permitted to 
negotiate their 'on-budget' resources from Congress, without any OMB 
review. Likewise, Presidents realize that regulatory expenditures, 
while off budget, require fiscal restraint for the same reasons that 
the size of public budgets need to be restrained. If the President 
restrains the federal budget without restraining regulation, regulatory 
advocates may simply respond by urging Congress to shift regulatory 
costs from the federal budget to states and the private sector. In 
other words, the President cannot manage the Nation's fiscal health 
without managing the regulatory state.":

Comments from both the current and former OIRA Administrators suggest 
that the change in the philosophy underlying OIRA's regulatory review 
function may be, at least in part, a function of the change in the 
presidency that the office serves. A previous Administrator emphasized 
that OIRA is part of the Executive Office of the President, and the 
President is the office's chief client. Therefore, she said, a change 
in the presidency has a profound effect on how OIRA operates. She also 
said each new Administrator of OIRA--and ultimately each new 
administration--represents a reaction to the previous Administrator and 
administration. Just as the Clinton administration's OIRA was a 
reaction to the administrations that preceded it, she said the current 
Bush administration's OIRA is a reaction to the Clinton period. 
Similarly, in March 2002, the current OIRA Administrator said 
"Presidents use the powers of OMB regarding agency action to advance 
Administration priorities and policy objectives We should remember 
that OMB is an office within the 
Executive Office of the President and its actions necessarily reflect 
Presidential priorities."[Footnote 30]

Increased Use of Return Letters:

One clear indication of the emergence of OIRA's "gatekeeper" role is 
the office's increased use of return letters since 2001. During the 
first 7 full calendar years that Executive Order 12866 was in place 
(1994 through 2000), OIRA generally reviewed between 500 and 700 rules 
each year but returned very few of them to the agencies--three rules in 
1995 and four in 1997. (See fig. 5.) However, although the total number 
of rules reviewed each year remained about the same, the number of 
rules returned to the agencies increased dramatically in 2001. In fact, 
OIRA returned almost three times as many rules that year (18 rules) 
than in the 7 previous years combined. All of the returns during 
calendar year 2001 occurred after the current Administrator took office 
in July 2001. In calendar years 2001 and 2002 combined, OIRA returned a 
total of 23 rules to the agencies.

Figure 5: OIRA Returned More Rules to Agencies in Calendar Year 2001 
Than in the 7 Previous Years Combined:

[See PDF for image]

[End of figure]

DOT had the most rules returned during 2001 and 2002 (eight), followed 
by the Social Security Administration (five), the Department of 
Veterans Affairs (four), and the Department of Housing and Urban 
Development (two). The Department of Agriculture, the Office of 
Personnel Management, EPA, and SBA each received one return letter. In 
the letters, OIRA commonly said that it returned the rules because of 
concerns about the agencies' analytic approach--such as whether the 
agency had considered all reasonable regulatory alternatives, or had 
selected the alternative that would produce the greatest net benefits. 
In its December 2002 report on the costs and benefits of regulations, 
OIRA reported that 10 of the 22 rules returned by October 2002 had been 
resubmitted and approved for publication.

Recent OIRA Administrators have taken very different positions 
regarding the use of return letters, reflecting the philosophical 
differences between the administrations in OIRA's relationship with the 
agencies and explaining the dramatic change in the use of returns. For 
example, two former OIRA Administrators during the previous 
administration told us that the objective of the review process was to 
achieve an end result that was mutually agreeable, and that they viewed 
return letters as evidence of a failure of the collaborative review 
process. One of the former Administrators noted that the agencies and 
OIRA are parts of the same administration "team," so any public failure 
to agree on how a rule should be written could only be seen as a 
breakdown of that process.

In contrast, the current OIRA Administrator said in one of his speeches 
that the office is using a "carrot and stick" strategy in its efforts 
to encourage better regulatory analysis, and that the "stick" has been 
the revival of the return letter. In its March 2002 draft report on the 
costs and benefits of federal regulations, OIRA noted that no rules had 
been returned to the agencies for reconsideration during the previous 
administration's final 3 years, and said "the degree of OIRA's actual 
effectiveness can be questioned when it declines to use its authority 
to return rules." OIRA noted that under the current administration the 
office had revived the return letter, "making clear that OMB is serious 
about the quality of new rulemakings.":

However, OIRA's increased use of return letters appears to have been 
short lived. As figure 6 shows, the sharp increase in the use of return 
letters was primarily in the current Administrator's first 8 months in 
office (July 2001 through February 2002). During that period, OIRA 
returned 21 of the 415 rules that it reviewed to the agencies. More 
than half (11) of the 21 rules that OIRA returned during this period 
were sent to the agencies in a single month--September 2001. However, 
during the following 15-month period (from March 2002 through May 
2003), OIRA returned to the agencies only 2 of the 863 rules that it 
reviewed--about the same pace as during the previous administration.

Figure 6: OIRA Returned Only Two Rules Between February 2002 and May 
2003:

[See PDF for image]

[End of figure]

In its December 2002 report on the costs and benefits of federal 
regulations, OIRA indicated that the decline in the number of returns 
since February 2002 was a reflection of the improved quality of 
regulatory packages. OIRA also said that an even more important factor 
was the "earlier interaction between OIRA and agency staffs during 
regulatory development in order to prevent returns late in the 
rulemaking process. It is at these early stages where OIRA's analytic 
approach can most improve the quality of regulatory analyses and the 
substance of rules.":

Greater Emphasis on Economic Analysis:

Some of the officials from rulemaking agencies who regularly interact 
with OIRA also told us that there is a greater expectation now than 
several years ago that the agencies' economic analyses (both benefit-
cost and cost-effectiveness) will be thorough. Officials from one 
agency described it as a "more relentless emphasis" on benefit-cost 
analysis, and said OIRA is expecting the agencies to devote more money 
and effort to refining their analyses to develop rules that are more 
cost effective. Officials in another agency said there had been a 
perceptible "stepping up the bar" regarding what is expected in 
agencies' analyses. They also said that OIRA is looking for greater 
quantification of benefits and more justification and breakdown of 
marginal benefits of every line item in the agency's rules, and that 
OIRA now expects agencies to do a benefit-cost analysis for all 
regulatory options, not just for the option that the agency selected.

OIRA representatives pointed out that their office has always pushed 
for agencies to do a better job with their analyses. However, they 
confirmed that the current Administrator is somewhat more interested in 
having the agencies do better analyses than previous Administrators. In 
fact, they said the current Administrator said early in his tenure that 
he would return a rule if the analysis needed work, even if the rule 
itself was acceptable.

Emphasis on 90-day Period for Review:

Another clear change in OIRA regulatory review policy since the current 
OIRA Administrator took office has been a stricter adherence to the 
time frames for OIRA review. As mentioned earlier in this report, 
Executive Order 12866 generally requires OIRA to complete its 
regulatory reviews within 90 calendar days of submission for all draft 
proposed and final rules. The executive order allows the review period 
to be extended once upon the written permission of the OMB Director and 
at the request of the rulemaking agency.[Footnote 31] According to a 
former OIRA Administrator, the 90-day time limit in the executive order 
was put in place because of "strident complaints" about the length of 
reviews during the previous administrations' implementation of 
Executive Order 12291 in the 1980's and early 1990's. However, she said 
the time limit created an unintended "perverse incentive" for the 
agencies to respond to OMB suggestions late in the 90-day period, and 
then suggest that the rule be approved because of the time limit. As a 
result, she said, review periods were often extended beyond the 90-day 
limit.

As figure 7 indicates, during each of the calendar years 1999, 2000, 
and 2001, more than 100 OIRA reviews exceeded the 90-day limit (115, 
159, and 149, respectively). However, during calendar year 2002 (the 
current Administrator's first full year in office) only 9 reviews 
lasted longer than 90 days. According to an OIRA representative, 
virtually all of the extensions of the review periods in each of these 
4 years were done at the request of the agency issuing the rule. 
(However, officials from one agency and a previous OIRA Administrator 
told us that OIRA sometimes asked the agency to request an extension.):

Figure 7: The Number of OIRA Reviews Lasting More Than 90 Days Dropped 
Sharply in 2002:

[See PDF for image]

[End of figure]

The dramatic decline in the number of reviews lasting more than 90 days 
is traceable to clear differences in philosophy between Administrators 
regarding the importance of this requirement. For example, in September 
1997 the OIRA Administrator at the time testified that "when two or 
more agencies are at loggerheads over a regulatory issue, it may well 
take more than 90, or even 120, days to obtain needed data and 
analyses, to conduct the appropriate evaluation, and to arrange for the 
policy officials in the interested agencies to come to agreement." For 
that and other reasons she opposed draft legislation that would have 
imposed a statutory time limit on OIRA reviews. Another OIRA 
Administrator during the previous administration told us during our 
review that he considered it more important to "get the rule right" 
rather than rigidly adhere to a 90-day time limitation. Several of the 
agency officials that we contacted during this review confirmed that 
view, saying that during the previous administration OIRA often worked 
with the agencies after the 90-day deadline had passed in order to 
resolve comments or questions. In contrast, in May 2002 the current 
OIRA Administrator said "agencies have sometimes been forced to wait 6 
months, a year, or even longer to get an answer from OMB. We have 
changed that practice. I have instructed my staff that no rule will 
stay longer than 90 days at OMB without my personal authorization." 
According to OIRA's December 2002 report on the costs and benefits of 
regulations, the office now regards the 90-day review limit as "a 
performance indicator for a strong regulatory gatekeeper." OIRA 
representatives confirmed that close adherence to the 90-day clock is 
new, and said that OIRA management tracks all rules that have been 
under formal review for more than 60 days. They also said that a 
benefit of stricter adherence to the 90-day review limit is that it 
forces officials to make decisions sooner, thereby moving the review 
along more quickly.

Officials from several rulemaking agencies also told us that OIRA staff 
currently seem much more focused on the 90-day clock than during the 
previous administration. In fact, concerns about adherence to this 
fixed review period might have precipitated some of the return letters 
that have been more common during the current administration. For 
example, in the September 14, 2001, return letter to DOT, the OIRA 
Administrator said "(s)ince the resolution of the concerns will take 
some additional time, I am returning the draft final rule on flight 
data recorders to the Department for your reconsideration." The return 
letters for this rule and for one other rule were sent to the agencies 
shortly after the rules' 90-day review periods had ended. An OIRA 
representative told us that the 90-day clock may play a role in some 
returns, but not always.

Officials in other agencies also said that rules are sometimes returned 
or withdrawn at OIRA's request when time is running out on the 90-day 
clock and it is recognized that more time is needed to resolve issues 
"off the clock" or during a separate 90-day period. Representatives of 
OIRA told us they do not request that agencies withdraw rules, and 
emphasized that it is the agencies--not OIRA--that ultimately make 
withdrawal decisions. They also said agencies sometimes withdraw rules 
as a negotiating strategy.

Although an increased emphasis on the 90-day time limit is clearly an 
area of change in recent years, the formal review period itself may be 
somewhat of an artificial construct if OIRA and the agency had been 
substantively discussing the rule and/or exchanging drafts of the rule 
before formal submission. For example, on December 10, 2001, EPA 
formally submitted a draft rule to OIRA on proposed nonconformance 
penalties for heavy-duty diesel engines. OIRA's database indicates that 
it completed its review 10 days later on December 20, 2001. However, 
public documents indicate that EPA and OIRA met with outside parties in 
early October 2001 and mid-November 2001 to discuss the rule, and that 
EPA informally submitted a version of the draft rule and its economic 
analysis to OIRA in late October 2001--weeks before the 10-day formal 
review period began. (See GAO ID 53 in app. II of this report.) OIRA 
records indicate that the formal review period for an EPA Clean Water 
Act rule in which OIRA made significant changes was even shorter--1 
day. (See GAO ID 69 in app. II of this report.):

Use of Prompt Letters:

Another change in OIRA policies and practices has been the development 
of a new form of communication with the agencies--the "prompt letter." 
In its December 2002 report on the costs and benefits of federal 
regulations, OIRA stated that the office had historically been a 
reactive force in the regulatory process, responding to proposed and 
final rules that were generated by federal agencies. However, the 
report went on to say that OIRA had recently begun "taking a more 
proactive role in suggesting regulatory priorities for agency 
consideration," and the prompt letter is the format by which those 
suggestions are brought to the agencies' attention.

By the end of May 2003, OIRA had sent nine prompt letters to regulatory 
agencies.[Footnote 32] Several of the initial prompt letters 
recommended that the agencies consider taking regulatory actions 
regarding particular issues. Notably, the letters did not always 
suggest that the agency publish a rule on the issue, sometimes 
recognized that the agency had already begun taking action, and 
generally left the final decision to the agency regarding what action 
to take. For example:

* In September 2001, OIRA sent a letter to the Department of Health and 
Human Services suggesting that FDA publish a final rule requiring that 
the amount of trans fatty acid present in food be included in a 
product's label. However, OIRA said the agency should review the 
comments received on its proposed rule and proceed to final rulemaking 
"if appropriate.":

* Also in September 2001, OIRA sent a letter to OSHA requesting that 
the agency "consider whether promotion of (automatic external heart 
defibrillators) should be elevated to a priority." However, OIRA said 
it understood that OSHA had limited resources and other constraints, 
and was simply asking the agency to consider the matter.

* In December 2001, OIRA sent a letter to DOT encouraging NHTSA to give 
greater priority to modifying its frontal occupant protection standard 
by establishing a high-speed, frontal offset crash test. OIRA 
recognized that the agency had already signaled its intent to move 
forward with this standard, and also recognized NHTSA's resource 
constraints and other legislative mandates.

* In May 2002, OIRA sent a letter to the Office of Federal Housing 
Enterprise Oversight recommending that the office consider developing a 
rule strengthening the corporate governance of Fannie Mae and Freddie 
Mac, and to require them to make certain public disclosures.

* In May 2003, OIRA sent a letter to the Departments of Agriculture and 
Health and Human Services requesting them to "further incorporate the 
large body of recent public health evidence linking food consumption 
patterns to health and disease" as the departments revise their dietary 
guidelines and update the "Food Guide Pyramid." Specifically, OIRA 
recommended that the revisions "emphasize the benefits of reducing 
foods high in trans fatty acids and increasing consumption of foods 
rich in omega-3 fatty acid.":

Other OIRA prompt letters were even less focused on rulemaking or 
guidance, instead recommending that the agencies better focus certain 
research or programs. For example, in December 2001 OIRA sent a letter 
to EPA highlighting "some critical research needs that can help target 
environmental-protection investments to the most important sources of 
(fine particulate matter) and thereby better inform cost-benefit 
studies of future air pollution control policies." OIRA recognized that 
EPA already devoted a substantial share of its research budget on 
particulate matter, but suggested that the research focus on three 
particular issues. Similarly, in February 2003, OIRA sent a letter to 
the Department of Energy raising several issues regarding a particular 
energy modeling system, and suggested changes in that system that 
would, in OIRA's view, better enable the agency to assess the potential 
of hybrid-electric and diesel powered vehicles.

In March 2002 the OIRA Administrator said that the prompt letters 
issued as of that date "have emerged primarily from discussions with my 
professional staff," but encouraged the public to submit ideas for 
prompts. In another speech he said the use of prompt letters "enables 
OMB to publicly identify areas where agencies might improve regulatory 
policies." He also said that prompt letters differ from the more 
definitive presidential directive in that the letters represent a 
"public request that is intended to stimulate agency and public 
deliberation," and emphasized that "final decisions about priorities 
remain with the agencies.":

Although OIRA's use of public prompt letters is new, the concept of 
OIRA (or, more generally, the President) making regulatory suggestions 
to the agencies is not.[Footnote 33] One former OIRA Administrator told 
us that every administration has had certain areas of regulatory 
emphasis and has communicated those ideas to rulemaking agencies in a 
variety of ways. She said that if OIRA wanted the agencies to initiate 
rulemaking in a particular area, "we could get the agencies' attention 
without using a letter." Similarly, another former OIRA Administrator 
said that during his tenure if OIRA thought an agency should regulate 
in a particular area, he would call an agency official and talk about 
the issue rather than sending a public prompt letter than could 
embarrass the agency. Officials in one agency also indicated that these 
types of communications had existed previously--albeit not publicly. As 
indicated in the following quote from its December 2002 report on the 
costs and benefits of federal regulation, OIRA identified the public 
nature of the prompt letter as a distinguishing feature:

"An important feature of the prompt letter can be its public nature, 
aimed at stimulating agency, public and congressional interest in a 
potential regulatory or informational priority. Although prompt letters 
could be treated as confidential pre-decisional communications, OIRA 
believes that it was wiser to make these prompt letters publicly 
available in order to focus congressional and public scrutiny on the 
important underlying issues.":

An OIRA branch chief told us that the office still does, on occasion, 
call an agency on the telephone and suggest areas for regulation. He 
said the strategy used (telephone versus prompt letter) depends on a 
variety of circumstances, but noted that prompt letters are more 
"transparent" and may have more impact than a telephone call.

Several of the agencies have taken some type of action in response to 
the OIRA prompt letters, and other actions were planned. For example, 
in December 2001 OSHA issued a technical information bulletin regarding 
the use of defibrillators in the workplace. In July 2003, FDA published 
a final rule on trans-fatty acids. NHTSA said that it planned to issue 
a notice of proposed rulemaking on offset crash testing in 2003.

Post-Review Letters:

In 2001 and 2002, OIRA sent a total of five "post-review letters" to 
rulemaking agencies and posted those letters on its Web site. As of May 
2003, no post-review letters had been sent since August 2002. OIRA 
representatives said that although individual branch chiefs or desk 
officers had previously provided staff-level comments to rulemaking 
agencies at the conclusion of reviews, the use of a public letter 
signed by the Administrator to convey those comments represented a 
change in OIRA policy.

In some of the post-review letters, OIRA expressed concerns about the 
rulemaking agencies' analyses and the cost-effectiveness of the rules 
that were similar in many respects to the concerns that the office had 
expressed in the previously mentioned return letters. For example, 
after OIRA completed its review of EPA's draft proposed rule on 
"Control of Emissions from Nonroad Large Spark-Ignition Engines and 
Recreational Engines (Marine and Land-Based)" in September 2001, the 
OIRA Administrator sent a letter to EPA noting that he was "concerned 
that the regulatory analysis is not sufficient to support a reasoned 
determination on the appropriate regulation of these sources." 
Specifically, he said that the analysis did not "provide a benefit/cost 
analysis integral to the decision-making process" and did not evaluate 
any alternatives as required by the Unfunded Mandates Reform Act of 
1995 and Executive Order 12866. The Administrator said he expected 
improvements to the analysis to be submitted before the final rule was 
submitted, and said EPA and OIRA should schedule "quarterly meetings to 
review the progress in developing a refined analysis.":

However, in other post-review letters, OIRA expressed other types of 
comments. For example:

* In an October 2001 letter regarding an FAA draft proposed rule on 
"Traffic Alert and Collision Avoidance Systems," the OIRA Administrator 
recognized that despite the rule's high cost compared to its benefits, 
the agency had "limited alternatives available under the statute." In 
that regard, he indicated that the department and the agency should 
share with Congress "any information made available by the public that 
bears on the reasonableness of implementing the statute." He also 
encouraged FAA to carefully assess the impact of the rule on small 
entities and the financial health of the industry "in light of recent 
events.":

* In a June 2002 letter regarding a NHTSA final rule on tire pressure 
monitoring systems, the OIRA Administrator expressed his appreciation 
for the "significant improvements NHTSA made in the regulatory 
analysis," and encouraged the agency to conduct a study examining the 
relative frequency of different causes of crashes.

* In an August 2002 letter regarding a Department of Housing and Urban 
Development rule on improving the process for obtaining mortgages, the 
OIRA Administrator encouraged the department to continue its work to 
improve and simplify the proposed forms, and suggested that the 
department "further strengthen the economic and regulatory flexibility 
analyses.":

A former OIRA Administrator told us that the office's current use of 
public post-review letters represents a change in policy from the 
previous administration. She said that during the previous 
administration OIRA might have spoken with an agency about what it 
should be doing before a proposed rule was resubmitted, but OIRA would 
not have put those comments in writing. She described the previous 
process as "non-public post review comments," and said written material 
was too confrontational.

Transparency Improvements:

On numerous occasions, the current OIRA Administrator has identified 
improvements in the transparency of the office's regulatory review 
process as a key area of change, and has described the establishment of 
a climate of openness at OIRA as his "first priority." The 
Administrator said the information that OIRA discloses about its 
reviews is intended to "diminish the culture of secrecy and mystery 
that has surrounded my Office since it was launched early in the Reagan 
Administration," and said that "more openness at OMB about regulatory 
review will enhance public appreciation of the value and legitimacy of 
a centralized analytical approach to regulatory policy." He also 
described the transparency of OIRA's regulatory review process as 
"critical to our ability to improve the nation's regulatory system," 
and said "only if it is clear how the OMB review process works and what 
it does will Congress and the public understand our role and the 
reasons behind our decisions." He also said "we see openness not simply 
as a canon of good government but as a strategy to transform the public 
debate about regulation to one of substancerather than process." 
Similarly, in May 2002 the OMB Director said that one way to establish 
public confidence in the "consumer protection" mission of OMB is 
"maximum openness.":

Disclosure of Contacts with Outside Parties:

In October 2001, the OIRA Administrator sent a memorandum to OIRA staff 
(and published it on the office's Web site) that, among other things, 
delineated OIRA's disclosure procedures regarding substantive 
communications with outside parties (i.e., persons not employed by the 
executive branch) while rules were under review. Many of the procedures 
listed were the same as or clarifications of the disclosure 
requirements in Executive Order 12866. For example, like the executive 
order, the memorandum said that (1) only the Administrator or a 
particular designee can receive substantive telephone calls from 
outside parties, (2) a representative from the issuing agency must be 
invited to any meeting between OIRA personnel and outside parties, and 
(3) OIRA must send to the regulatory agency all written communications 
between OIRA personnel and outside parties within 10 days.

However, the Administrator's October 2001 memorandum also extended the 
executive order's disclosure requirements in certain areas. For 
example, the memorandum said that OIRA would disclose substantive 
telephone calls with outside parties about a rule under review if the 
calls are initiated by the Administrator, not just the calls that the 
Administrator receives from outside parties. Also, the memorandum said 
that OIRA considers a rule to be under review for purposes of OIRA's 
disclosure requirements regarding outside parties not just during the 
formal review process, but before formal submission of the review 
package (i.e., during the previously mentioned informal review period) 
if OIRA has started a "substantive discussion with the agency 
concerning the provisions of a draft rule or OIRA has received the rule 
in draft." As a result of this change in policy, for the first time 
OIRA began disclosing letters, telephone conversations, and meetings 
that occurred during the informal review period. In its 2001 report on 
the costs and benefits of federal regulations, OIRA described why the 
office believed that these outside contacts before a rule is formally 
submitted should be disclosed.

"Interested outside parties have gradually learned about this informal 
process of agency-OIRA discussion and thus attempts are made to provide 
information to agency and OIRA analysts. In order to protect the 
integrity of OIRA and the administrative record, an informal practice 
has developed that communications between OIRA and outside parties are 
treated as 'covered by E.O. 12866' as soon as a rulemaking has 
proceeded to a point where OIRA desk officers have received from 
agencies copies of preliminary draft regulatory text or analysis.":

However, OIRA representatives that we contacted during this review 
emphasized that a rule is not considered under review with regard to 
these disclosure requirements if OIRA and an agency are in general 
consultation about an issue, but the consultation has not become 
"substantive" and/or the agency has not submitted a substantive draft 
of a rule for informal review. Therefore, at that "preinformal review" 
stage of the process, OIRA can communicate with outside parties about 
the issue and not have to disclose those communications.

The October 2001 memorandum also announced that much of the information 
generated through the disclosure requirements would be available to the 
public on the agency's Web site, including summary information on 
meetings, phone calls, and other oral communications with outside 
parties and a list of the written correspondence that OIRA had received 
from outside parties. The memorandum said that other information 
previously available in hard copy and/or in the OIRA docket library 
would also be posted to the Web site (e.g., monthly regulatory review 
lists and statistics and the text of written outside 
communications).[Footnote 34] Improving access to information about 
OIRA's review process by putting the information on the office's Web 
site has been widely hailed as a significant improvement in the 
transparency of the regulatory review process.[Footnote 35]

However, we concluded that some of the information that OIRA provides 
on its Web site regarding its communications with outside parties is 
not very informative. As a result, it is sometimes difficult to 
understand what rule a meeting was about or the affiliations of the 
meeting participants. For example, during our review the OIRA Web site 
provided the following descriptions:

* On February 3, 2003, an OIRA desk officer had a meeting with a person 
whose affiliation was listed as "Albemarle" regarding an EPA issue 
identified as "N-Propyl Bromid (nPB).":

* On October 24, 2002, OIRA leadership and staff met with four 
individuals regarding a Centers for Medicare and Medicaid Services 
issue identified as "Outpatient.":

* On June 27, 2002, the Administrator and other OIRA staff met with 
several individuals whose affiliations were listed as "TPLG," "American 
Association," "Powell Golstein," and "Hunton & Williams" regarding a 
Centers for Medicare and Medicaid Services issue identified as 
"Inherent Reasonableness.":

* On April 26, 2002, OIRA and OMB leadership and staff met with several 
individuals regarding a General Services Administration issue 
identified as "DOT Gov Rule: 3090-AH41." Two of the non-OMB 
participants' affiliations were listed as "NASCIO" and "PTI.":

The OIRA Web site included a column for each meeting in which the 
client being represented by an outside party could be identified. 
However, we found that this column was usually blank. An OIRA 
representative told us that he recognized that OIRA could sometimes do 
a better job describing the rule being discussed at meetings as well as 
the affiliations of the meeting participants, and said that he had 
already notified OIRA staff that the information posted on executive 
order meetings should be clearer regarding these issues (e.g., no 
abbreviations when identifying the affiliations of outside parties).

OIRA's practice of providing minimal information to the public about 
its meetings with outside parties stands in contrast to the more 
formal, APA-driven practices of certain agencies that we reviewed. For 
example, on October 26, 2001, the OIRA Administrator and three OIRA 
staff members met with representatives of the automobile industry 
regarding a NHTSA tire pressure monitoring proposed rule. Two 
representatives from NHTSA were also present. The OIRA web page listed 
the names and affiliations of those present. However, the DOT 
electronic docket contained a memorandum providing that information and 
also described the positions taken by the various parties at the 
meeting. The memorandum indicated it was prepared pursuant to DOT Order 
2100.2, which requires that DOT agencies prepare a report on meetings 
with outside parties for the rulemaking docket. The DOT order also says 
"a mere recitation that on X day a meeting was held with listed persons 
to discuss a named general subject is inadequate.":

Disclosure of OIRA-Agency Interactions:

The Administrator's October 2001 memorandum also briefly discussed the 
requirements in Executive Order 12866 regarding disclosure of OIRA's 
interactions with the rulemaking agencies. For example, it stated that 
OIRA would, upon request, provide certain materials to the public after 
a reviewed rule had been published, including the draft as originally 
submitted, any material submitted by the agency during the review, 
pages where changes occurred in the course of review, and 
correspondence between OIRA and the agency that had been exchanged 
during the review.

However, OIRA representatives told us that the term "during the review" 
in this context has a different meaning from the term "under review" 
with regard to OIRA's contacts with outside parties. As mentioned 
previously, OIRA considers a rule under review whenever informal review 
begins, and said it would disclose all contacts with outside parties 
after that date. In contrast, OIRA considers the period "during the 
review" in relation to its contacts with the rulemaking agencies to 
include only a rule's formal review period. Therefore, whereas OIRA 
discloses its contacts with outside parties during informal reviews, it 
does not disclose its contacts with rulemaking agencies during this 
period.

Similarly, OIRA representatives also said that the transparency 
requirements in the executive order that are applicable to the agencies 
are not triggered by informal reviews. As noted previously, the 
executive order requires agencies to identify for the public (1) "the 
substantive changes between the draft submitted to OIRA for review and 
the action subsequently announced," and (2) "those changes in the 
regulatory action that were made at the suggestion or recommendation of 
OIRA." The OIRA representatives said they considered the second of 
these requirements to be a subset of the first, and that the term "the 
draft submitted to OIRA for review" refers to the draft rule submitted 
for formal review, not any drafts submitted for informal review.

Therefore, under this interpretation of the executive order, an agency 
could submit a draft rule to OIRA for informal review, make changes in 
response to multiple OIRA suggestions and recommendations, and neither 
the agency nor OIRA would have to disclose those changes to the public. 
If the rule was not subsequently changed during the formal review 
period, OIRA would code the rule in its database as "consistent with no 
change" and the public would never know that OIRA had influenced its 
development.

OIRA representatives told us that drafts of a rule that are informally 
submitted to OIRA do not represent the agency's official position, and 
therefore should not be disclosed to the public even after the rule is 
published. They also said that postpublication disclosure of 
communications between OIRA and the agency that occur prior to formal 
rule submission could have a "chilling effect" on those communications 
in the future. Similarly, in its 2002 report on the costs and benefits 
of regulations, OIRA said it believes "that its interactions with 
agencies prior to formal regulatory review are pre-decisional 
communications that should generally be insulated from public 
disclosure in order to facilitate valuable deliberative exchanges." 
However, in the same report, OIRA said "it is at these early stages 
where OIRA's analytic approach can most improve the quality of 
regulatory analyses and the substance of rules.":

During our review we found evidence that some of these OIRA-agency 
communications are being disclosed. OIRA's and the agencies' dockets 
for several of the rules that we examined in chapter 3 of this report 
contained e-mails and faxes between OIRA and the agency about rules 
under informal review. Those documents proved very helpful to us in 
determining what changes had been made to agencies' rules at the 
suggestion of OIRA.

Other Caveats:

There are also other caveats to the OIRA-agency transparency 
requirements in the executive order and the Administrator's October 
2001 memorandum. For example, OIRA representatives told us that the 
requirement in the executive order that OIRA make available to the 
public "all documents exchanged between OIRA and the agency" issuing 
the regulation applies only to exchanges made by OIRA staff at the 
branch chief-level and above. Therefore, any e-mails, faxes, or other 
documents exchanged between OIRA desk officers and staff in regulatory 
agencies about rules under review do not have to be disclosed.[Footnote 
36] OIRA said that this "branch chiefs and above" distinction had been 
the office's policy during the previous administration as well.

Other OIRA-agency interactions are not covered by any transparency 
requirements. For example, if OIRA returns a rule to an agency for 
reconsideration, the executive order requires the Administrator to 
provide the agency with a written explanation for the return. The 
return letter is then made available to the public. After OIRA 
concludes its review and a rule is published, the executive order 
requires the agency to disclose to the public the substantive changes 
made during OIRA's review and those made at OIRA's suggestion or 
recommendation. However, if an agency withdraws a rule from OIRA during 
its review--either at its own initiative or at the recommendation of 
OIRA--neither the agency nor OIRA is required to disclose the 
reason.[Footnote 37]

OIRA's "Open Door" Policy on Meetings with Outside Parties:

In its December 2002 report on the costs and benefits of federal 
regulations, OIRA said that it had adopted an "open door approach to 
meeting with outside parties." In explanation, OIRA representative told 
us that if a party outside of the federal government wanted to meet 
with OIRA about a rule under review or a matter of general regulatory 
policy, OIRA would always try and accommodate that request. OIRA 
representatives emphasized that these meetings are initiated by the 
outside parties, not OIRA. However, a former OIRA Administrator told us 
that she did not believe that this "open door" policy was new, and said 
OIRA had meetings with outside interest groups "all of the time" during 
her tenure in the mid-1990s.

Information on the OIRA Web site indicated that from October 2001 
through March 2003, OIRA had more than 100 meetings with outside 
parties. Of these, at least 85 were with representatives of regulated 
entities (primarily private companies); environmental and other public 
interest 
groups were involved in 8 meetings.[Footnote 38] OIRA representatives 
said that one possible explanation for the apparent imbalance in those 
with whom OIRA meets is that there are more regulated entities that are 
directly affected by agencies' regulations than public interest groups 
who have a more general interest in the issues. However, another 
possible explanation is that, while OIRA has said that it will meet 
with any organization that wants to meet with it about a rule under 
review, representatives of several public interest groups told us some 
such groups have made a policy decision to not request meetings with 
OIRA. They said they take this position because their groups do not 
believe that OIRA is the proper locus of authority or decision making 
with regard to rulemaking issues.

Hiring of Additional Staff Specialists:

OIRA has also changed the office's human capital strategy in recent 
years, increasing both the number of staff and adding new types of 
expertise. As figure 8 shows, when OIRA was created in fiscal year 1981 
the office had an FTE ceiling of 90 staff members. By 1997, the number 
of FTEs allocated to OIRA declined to 47--a nearly 50 percent reduction 
since 1981. OIRA noted in its December 2002 report on the costs and 
benefits of regulations that the decline in OIRA staffing during this 
period was more pronounced than the decline in OMB as a whole, and 
occurred at a time when OIRA was given new statutory responsibilities 
(e.g., concerning unfunded mandates, small business, regulatory 
accounting, and information policy) and when regulatory agencies' 
staffing and budgetary levels were increasing. Also during this period, 
though, with the advent of Executive Order 12866 in late 1993, the 
number of rules that OIRA reviewed went from between 2,000 and 3,000 
per year to between 500 and 700 per year.

Figure 8: OIRA Recently Reversed a 20-year Decline in Staffing:

[See PDF for image]

[End of figure]

As the figure shows, OIRA's staffing authorization began to increase in 
2001, and by 2002 the office had 55 authorized FTEs.[Footnote 39] 
Between 2001 and 2003, OIRA had hired five new "specialist" or "expert" 
staff members who were intended to provide new science and engineering 
expertise to OIRA:

* A risk assessor who received her Ph.D. in environmental health/
molecular toxicology from the University of Washington and who most 
recently had been a science and technology fellow at EPA's National 
Center for Environmental Assessment.

* An epidemiologist who received her Ph.D. in geography (resources 
management) from Clark University and who had worked on exposure 
assessment issues at EPA and was an environmental professor and 
researcher at the schools of health at Johns Hopkins University and 
Harvard University.

* An engineer who received his Ph.D. in health policy from Harvard 
University and a Masters of Science from the Massachusetts Institute of 
Technology in civil and environmental engineering and technology and 
policy. He previously worked at Resources for the Future and the 
consulting firm Industrial Economics Incorporated.

* A health economist who received her Ph.D. in health policy from 
Harvard University and a Master of Science degree in earth systems from 
Stanford University. She formerly worked at the American Enterprise 
Institute.

* An economist who received his Ph.D. in economics from the University 
of North Carolina at Chapel Hill and who formerly worked at FDA's 
Center for Food Safety and Applied Nutrition.

In its December 2002 report on regulatory costs and benefits, OIRA said 
these hires would facilitate collaboration with staff in the Office of 
Science and Technology Policy and would "enable us to develop a more 
diversified pool of expertise to ask penetrating technical questions 
about agency proposals." In an October 2002 speech, the Administrator 
said that these new hires also reflected "the increasing importance of 
science-based regulation in the federal agencies." He also indicated 
that his vision for how OIRA should be staffed is similar to that 
outlined in a 1993 book by Stephen Breyer (later appointed to the 
Supreme Court), who suggested the creation of a small, technically-
trained group within OMB that offered its members a special civil 
service career path--similar to that of the French Conseil d' 
Etat.[Footnote 40] Breyer also indicated that this group might assume 
OIRA's mandate to review agencies' proposed rules, "augmented by its 
missions to rationalize risk regulation and seek tradeoffs." The OIRA 
Administrator said "although I am not sure that the British or French 
civil service are exactly the right analogies, I do have in mind a 
talented and analytically keen staff who know how markets work, how 
government works, and respect the role of expertise and values in 
solving national problems.":

Both former OIRA Administrators with whom we spoke supported increasing 
the number of OIRA staff. However, both also indicated that they never 
felt that OIRA was lacking in technical expertise and that they could 
always tap into the resources available in other parts of the Executive 
Office of the President (e.g., the Office of Science and Technology 
Policy or the Council of Economic Advisors) or other agencies if the 
need arose. An OIRA branch chief said the office still utilizes staff 
from other agencies from time to time, in addition to using its new "in 
house" expertise.

Relationship With SBA Office of Advocacy:

In March 2002, the OIRA Administrator and the SBA chief counsel for 
advocacy signed a memorandum of understanding (MOU) committing OIRA and 
the Office of Advocacy to work together to ensure that federal agencies 
comply with the Regulatory Flexibility Act.[Footnote 41] As part of 
OIRA's regulatory reviews, the MOU requires OIRA to consider whether 
agencies should have prepared regulatory flexibility analyses under the 
act. If the Office of Advocacy has concerns about an agency's analysis, 
the MOU requires OIRA to provide a copy of the draft rule to that 
office. Also, the MOU says that OIRA would help the Office of Advocacy 
develop guidance for agencies to follow in complying with the act. In 
May 2003 testimony before the House Committee on Small Business, the 
OIRA Administrator said that this agreement would enhance OIRA's and 
SBA's ability to ensure that agencies are meeting their Regulatory 
Flexibility Act responsibilities.

However, in that same testimony the Administrator said that the 
memorandum of understanding would "formalize OIRA's long-standing 
practice of involving the Office of Advocacy in our review of agency 
regulations." In response to recommendations in our March 1994 report 
on the administration of the Regulatory Flexibility Act, the SBA chief 
counsel for advocacy said that she would send OMB a copy of any written 
notifications of noncompliance with the act that she sends to the 
agencies during the rulemaking process.[Footnote 42] She and the Deputy 
Administrator of OIRA said they would work together to develop criteria 
and procedures for determining agency compliance with the act. The 
Deputy Administrator also said that if the chief counsel notified OMB 
about an agency's compliance with the Regulatory Flexibility Act, OMB 
would discuss the issue with the agency before concluding its review of 
any final regulations.

Proposed New Guidelines on Economic Analysis:

One of the more controversial elements of OIRA's regulatory review 
function involves its examination of agencies' regulatory impact 
analyses that are required in support of the 70 to 110 rules that the 
office has reviewed in recent years that are "economically significant" 
(e.g., have a $100 million impact on the economy). As of May 2003, 
OIRA's approach to these reviews had not officially changed. However, 
OIRA had initiated a process that may ultimately result in alterations 
to its current procedures.

In January 1996, OIRA published a document entitled "Economic Analysis 
of Federal Regulations Under Executive Order 12866." Developed by a 
group established by the OIRA Administrator and cochaired by a member 
of the Council of Economic Advisers (CEA), the document described "best 
practices" for preparing the economic analysis of significant 
regulatory actions called for by the executive order.[Footnote 43] In 
general, the guidance states that the agencies' analyses should contain 
three elements: (1) a statement of the need for the proposed action, 
(2) an examination of alternative approaches, and (3) an analysis of 
benefits and costs. Within each of these areas, the guidance provides 
additional information. For example, in the discussion of benefits and 
costs, the guidance addresses such issues as discounting (when benefits 
and costs occur at different times), the treatment of risk and 
uncertainty, and general methods for valuing health and safety benefits 
(e.g., the monetary valuation of reductions in the risk of illness, 
injury, and premature death). Each of these issues can have a major 
effect on agencies' estimates of benefits and costs. For example, in a 
February 2003 speech the OIRA Administrator noted that the present 
value of 1,000 lives saved 50 years from now is 608 when evaluated at 1 
percent discount rate, 228 when evaluated at 3 percent, and 34 when 
evaluated at 7 percent.[Footnote 44]

In its December 2002 final report on the costs and benefits of federal 
regulations, OIRA noted that it had initiated "a process of refinement" 
to the guidance. In its February 2003 draft report, OIRA said the 
review was again cochaired by the Administrator and a member of the 
CEA, and published proposed revised guidelines for comment. OIRA said 
the key changes in the proposed guidelines included the following:

* The proposal encourages agencies to perform both cost-effectiveness 
and benefit-cost analyses in support of major rules, where feasible, 
because the two techniques offer regulators somewhat different but 
useful perspectives. In the previously mentioned February 2003 speech, 
the Administrator described cost-effectiveness analysis as a "bang for 
the buck" exercise in which the payoff is measured in health units 
rather than dollars. However, since cost-effectiveness analysis only 
provides relative comparisons, he said benefit-cost analysis is still 
needed to determine whether the benefits of any particular alternative 
justify the costs. Also, the Administrator said that OMB believes that 
multiple effectiveness measures based on different value assumptions 
and research designs should be encouraged (which he said can lead to 
inconsistency). To promote more consistency, he said OMB would sponsor 
interagency discussions about the most promising and practical 
effectiveness measures. Also, he said OMB would request that agencies 
provide it with their original data on mortality and morbidity to allow 
OMB to compare across agencies using similar assumptions and methods 
(as an aid to performance-based budgeting).

* When the benefits and costs of rules are expected to occur in 
different periods, the proposal recommends that agencies report the 
results of their analyses using multiple discount rates. Historically, 
OMB has recommended a uniform 7 percent rate of discount for these 
rules. Now, the proposal recommends that the results be computed at 
both 3 percent and 7 percent for rules with impacts primarily within 
this generation. However, for rules with intergenerational impacts, the 
proposal permits additional sensitivity analysis with rates as low as 1 
percent.

* For rules that are expected to have a more than $1 billion impact on 
the economy, the proposal calls for agencies to employ formal 
probability analysis of benefits and costs (rather than a single 
number) unless the benefits and costs are known with a high degree of 
certainty. The Administrator said that information on probabilities is 
crucial when agencies must decide whether to act now, based on 
imperfect science, or whether to collect additional information prior 
to rulemaking--particularly in relation to "low-probability, high-
consequence events such as the events of September 11TH.":

The February 2003 draft guidelines also noted that two widely used 
techniques were being used to assign a monetary value to projected 
reductions in premature mortality--(1) the value of a statistical life 
(VSL) and (2) the value of a statistical life year (VSLY). The 
guidelines pointed out a number of technical issues associated with the 
appropriate use of these measures, and said "in all instancesagencies 
should consider providing estimates of both VSL and VSLY, while 
recognizing the developing states of knowledge in this area." 
Subsequently, AARP and other organizations expressed concern that use 
of the VSLY approach could lead to an undervaluing of the lives of 
older adults. On May 30, 2003, the OIRA Administrator sent a memorandum 
to the President's Management Council that again recommended that 
agency benefit-cost analysts present both VSL and VSLY methods. 
However, the Administrator cautioned that a "simple VSLY method" (i.e., 
assuming that saving 10 life years is 10 times more valuable than 
saving 1 life year) "could underestimate benefits significantly when 
applied to rules that primarily or significantly benefit senior 
citizens." He went on to say that, "when benefit estimates based on the 
VSLY method are presented, as OMB has encouraged since 1996, I 
recommend that agencies present analyses with larger VSLY estimates for 
senior citizens."[Footnote 45]

In February 2003, OIRA released the draft guidelines for public 
comment. After the comment period, OIRA said that it planned to conduct 
an interagency review of the draft guidelines. Until this process is 
complete, OIRA said that it would continue to use the 1996 best 
practices guidance document. However, as noted earlier in this chapter, 
some agency officials told us that OIRA already expects agencies' cost-
benefit analyses to be more thorough than they were required to be 
several years ago.

New Guidelines on Risk Assessment:

Some (but by no means all) of OIRA's regulatory reviews evaluate 
whether an agency's assessment of the exposure to a risk or 
environmental hazard was properly conducted. Risk assessment is a 
complex but valuable set of tools for federal regulatory agencies, 
helping them to identify issues of potential concern, select regulatory 
options, and estimate the range of a forthcoming regulation's benefits. 
As we noted in our August 2001 report, the statutory and legal context 
in which risk assessments are conducted determine the general focus and 
goals of an agency's risk assessment activities, and also may shape how 
those assessments are supposed to be 
conducted.[Footnote 46] Therefore, different agencies (and different 
offices within those agencies) may have distinctive concerns regarding 
chemical risks. OIRA's January 1996 "best practices" guidance contains 
a section on risk assessment, stating in general terms the qualities of 
a good assessment. For example, it says that assessments "should 
present results representing a range of plausible scenarios, together 
with any information that can help in providing a qualitative judgment 
of which scenarios are more scientifically plausible." It also says 
that risk assessments "must provide some estimates of the probability 
distribution of risks with and without the regulation" and, where 
possible, "some estimates of central tendency (e.g., mean and median) 
must be provided in addition to ranges, variances, specified low-end 
and high-end percentile estimates, and other characteristics of the 
distribution.":

In 1996, Congress adopted a basic standard of quality for the use of 
science in health decisions under the Safe Drinking Water Act (SDWA). 
Specifically, Congress provided that if an agency's decision under the 
statute was based on science, it should use "(i) the best available, 
peer-reviewed science and supporting studies conducted in accordance 
with sound and objective scientific practices, and (ii) data collected 
by accepted methods or best available methods (if the reliability of 
the method and the nature of the decision justifies the use of data)." 
Congress also adopted a standard for the dissemination of public 
information involving risks under SDWA, providing that agencies should 
"ensure that the presentation of information on (risk) effects is 
comprehensive, informative, and understandable." In addition, Congress 
required that agencies should, to the extent practicable, specify and 
make available to the public in a supporting document information on 
(1) each population addressed by any estimate of applicable risk 
effects, (2) the expected risk or central estimate of risk for the 
affected populations, (3) each appropriate upper-bound or lower-bound 
estimate of risk, (4) each significant uncertainty identified in the 
process of the risk assessment (and any studies that would help resolve 
the uncertainty), and (5) relevant peer-reviewed studies regarding the 
estimated risk effects.

In his September 2001 memorandum on presidential review of agency 
rulemaking, the OIRA Administrator proposed expanding the applicability 
of these requirements to statutes other than SDWA. Specifically, he 
recommended that each agency consider adopting or adapting these 
standards for judging the quality of scientific information that it 
uses about risk. These recommendations were subsequently contained in 
information quality guidelines intended to ensure and maximize the 
quality, objectivity, utility, and integrity of a wide range of 
information disseminated by federal agencies.[Footnote 47] The 
Administrator said that under these guidelines "the public will be 
provided an opportunity to challenge any health risk information 
disseminated by a federal agency that does not adhere to the OMB and 
agency guidelines. Agencies will be expected to provide a prompt and 
objective response to these challenges." An OIRA representative said 
the office considered the SDWA risk assessment standards "reasonable" 
and a "model" approach the could be used in regulations under other 
statutes (unless, of course, those other statutes prohibited that 
approach).

Deference to Peer Reviewed Regulatory Analyses:

In his September 2001 memorandum on "Presidential Review of Agency 
Rulemaking by OIRA," the OIRA Administrator said OMB recommended that 
agencies subject regulatory impact analyses and other supporting 
documents to independent, external peer review. He also delineated 
certain peer review practices that OMB recommended, including (1) 
selection of reviewers primarily on the basis of necessary technical 
expertise, (2) disclosure of reviewers' prior positions on the issues 
at hand as well as sources of personal and institutional funding, and 
(3) implementation of the review in an open and rigorous manner. In the 
previously mentioned information quality guidelines, OMB noted that if 
peer review is used to help satisfy the "objectivity" standard, the 
review process should meet these criteria. The OIRA Administrator has 
described EPA's 2001 decision on arsenic as an example of a quality, 
peer-reviewed study.

Although OIRA did not require greater use of peer review by rulemaking 
agencies in this September 2001 memorandum, the Administrator said that 
OIRA would "be giving a measure of deference" to agencies' analyses 
that were developed in conjunction with certain peer review 
principles.[Footnote 48] In one of his speeches he said that this 
deference to peer reviewed studies was intended to serve as an 
incentive to improved regulatory analysis--the "carrot" portion of the 
"carrot and stick" approach mentioned previously.

However, two former OIRA Administrator indicated that similar deference 
was given during the previous administration to peer reviewed 
regulatory analyses, and that the current administration's initiative 
in this area reflected a change in the degree to which deference is 
given rather than a substantial change of direction. On the other hand, 
they also said the current policy is more explicit than the previous 
administration's approach.

[End of section]

Chapter 3: OIRA's Effects on Rules Submitted for Executive Order Review 
Varied:

[End of section]

OIRA had a significant effect on 25 of the 85 draft proposed and final 
rules from nine selected agencies that it reviewed between July 1, 
2001, and June 30, 2002; 17 of the rules were significantly changed by 
OIRA, 7 were returned to the agencies for reconsideration, and 1 was 
withdrawn by the agency at OIRA's request.[Footnote 49] Almost all of 
the rules that were significantly changed at OIRA's suggestion were 
from EPA. Almost all of the returned rules were from DOT, as was the 
rule withdrawn at OIRA's request. Many of OIRA's actions in these cases 
were prompted by concerns about the quality of the agencies' regulatory 
analyses and/or whether the agencies had selected the most cost-
effective regulatory option. For 22 of the 25 rules, OIRA's actions 
appeared to have at least some effect on the costs and benefits 
associated with the rule or to have prompted revisions in the agency's 
estimates of those costs and benefits. There was evidence that outside 
parties had contacted OIRA before or during OIRA's formal review period 
regarding about half of the significantly changed rules, two of the 
returned rules, and the rule withdrawn at OIRA's request. Although 
OIRA's positions regarding these rules were sometimes similar to those 
expressed by outside parties, it is impossible to determine the extent 
to which those contacts might have influenced OIRA's actions, if at 
all. ORIA might have reached the same conclusions in the absence of 
those contacts. Some of the agencies did not clearly identify all of 
the changes made to their rules during OIRA's review or at OIRA's 
suggestion--as required by Executive Order 12866. However, other 
agencies clearly identified those changes.

OIRA Significantly Affected About One-Third of the Rules That the 
Selected Agencies Submitted for Review:

Our second objective was to provide detailed information on rules that 
were significantly changed by OIRA, withdrawn at OIRA's initiative, or 
returned to the agencies for reconsideration. According to the OIRA 
database, from July 1, 2001, through June 30, 2002, OIRA completed 642 
reviews of agencies' draft regulatory actions submitted under Executive 
Order 12866. The dispositions of these reviews were as follows:

* About 33 percent (214) were coded in the database as "consistent with 
no change," indicating that OIRA considered the rules consistent with 
the executive order as submitted.

* About 50 percent (322) were coded as "consistent with change," 
indicating that the rules had changed after being submitted to OIRA, 
and that OIRA subsequently concluded that the rule was consistent with 
the executive order's requirements.

* About 8 percent (50) were coded as "withdrawn" by the agency.

* About 3 percent (21) were coded as "returned" to the agency by OIRA.

* About 5 percent (35) had some other disposition (e.g., "sent 
improperly," "emergency," or "statutory or judicial deadline").

Because the number of changed, returned, or withdrawn rules 
governmentwide during this time frame was so large (393), we focused 
this part of our review on 85 proposed and final rules with those 
dispositions that were submitted to OIRA by nine selected agencies or 
offices:[Footnote 50]

* The Animal and Plant Health Inspection Service within the Department 
of Agriculture.

* The Food and Drug Administration within the Department of Health and 
Human Services.

* The Occupational Safety and Health Administration within the 
Department of Labor.

* The Federal Aviation Administration, the Federal Motor Carrier Safety 
Administration, and the National Highway Traffic Safety Administration 
within the Department of Transportation.

* The Offices of Air and Radiation, Solid Waste and Emergency Response, 
and Water within EPA.

We selected these agencies and offices because the OIRA database 
indicated they had the most rules that were changed, withdrawn, or 
returned during the relevant 1-year period.

Table 1 shows the number of rules with each type of OIRA disposition 
within each of the selected agencies or offices. We generally did not 
question the rule dispositions used in the OIRA database. However, we 
included one rule from EPA's Office of Air and Radiation in the 
"consistent with change" category that had been coded as a "deadline 
case" in the database because publicly available information indicated 
that the rule had been changed in response to OIRA's review (ID 
41).[Footnote 51] It is unclear whether other rules with "deadline 
case" outcome codes in the database were also changed by OIRA, or why 
other rules that we reviewed with legal deadlines were not coded as 
deadline cases.[Footnote 52] Also, we dropped one rule from EPA's 
Office of Solid Waste and Emergency Response that was coded "consistent 
with change" because it had not been published in the Federal Register 
at the time of our review.

Table 1: Selected Agencies' Regulatory Submissions by Outcome:

Agency: APHIS; Number of rules reviewed between July 1, 2001, and June 
30, 2002, that were coded in the OIRA database as: Consistent with 
change: 12; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 0; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 1; Total: 
13.

Agency: FDA; Number of rules reviewed between July 1, 2001, and June 
30, 2002, that were coded in the OIRA database as: Consistent with 
change: 7; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 0; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 2; Total: 
9.

Agency: OSHA; Number of rules reviewed between July 1, 2001, and June 
30, 2002, that were coded in the OIRA database as: Consistent with 
change: 5; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 0; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 0; Total: 
5.

Agency: DOT-FAA; Number of rules reviewed between July 1, 2001, and 
June 30, 2002, that were coded in the OIRA database as: Consistent with 
change: 5; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 6; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 1; Total: 
12.

Agency: DOT-FMCSA; Number of rules reviewed between July 1, 2001, and 
June 30, 2002, that were coded in the OIRA database as: Consistent with 
change: 6; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 0; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 0; Total: 
6.

Agency: DOT-NHTSA; Number of rules reviewed between July 1, 2001, and 
June 30, 2002, that were coded in the OIRA database as: Consistent with 
change: 5; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 1; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 1; Total: 
7.

Agency: EPA Office of Air and Radiation; Number of rules reviewed 
between July 1, 2001, and June 30, 2002, that were coded in the OIRA 
database as: Consistent with change: 14; Number of rules reviewed 
between July 1, 2001, and June 30, 2002, that were coded in the OIRA 
database as: Returned to agency: 1; Number of rules reviewed between 
July 1, 2001, and June 30, 2002, that were coded in the OIRA database 
as: Withdrawn by the agency: 0; Total: 15.

Agency: EPA Office of Solid Waste and Emergency Response; Number of 
rules reviewed between July 1, 2001, and June 30, 2002, that were coded 
in the OIRA database as: Consistent with change: 9; Number of rules 
reviewed between July 1, 2001, and June 30, 2002, that were coded in 
the OIRA database as: Returned to agency: 0; Number of rules reviewed 
between July 1, 2001, and June 30, 2002, that were coded in the OIRA 
database as: Withdrawn by the agency: 0; Total: 9.

Agency: EPA Office of Water; Number of rules reviewed between July 1, 
2001, and June 30, 2002, that were coded in the OIRA database as: 
Consistent with change: 8; Number of rules reviewed between July 1, 
2001, and June 30, 2002, that were coded in the OIRA database as: 
Returned to agency: 1; Number of rules reviewed between July 1, 2001, 
and June 30, 2002, that were coded in the OIRA database as: Withdrawn 
by the agency: 0; Total: 9.

Agency: Total; Number of rules reviewed between July 1, 2001, and June 
30, 2002, that were coded in the OIRA database as: Consistent with 
change: 71; Number of rules reviewed between July 1, 2001, and June 30, 
2002, that were coded in the OIRA database as: Returned to agency: 9; 
Number of rules reviewed between July 1, 2001, and June 30, 2002, that 
were coded in the OIRA database as: Withdrawn by the agency: 5; Total: 
85.

Source: OIRA's database.

Note: Data in each category reflect the number of proposed, final, and 
interim final rules that OIRA reviewed between July 1, 2001, and June 
30, 2002, but do not include other types of regulatory actions 
submitted to OIRA during this period (e.g., notices, prerules, or 
emergency rules). As discussed later in this report, the nine returned 
rules included two improper submissions--one from FAA and one from the 
EPA Office of Air and Radiation.

[End of table]

Although the OIRA database was useful in focusing our review on certain 
agencies and rules, the categories used in that database are broader 
than the specific types of rules targeted in this section of our 
report--those that were significantly affected by OIRA.

* The "consistent with change" category includes all rules that were 
changed between their formal submission to OIRA for review and their 
issuance by the agency, regardless of the source or the significance of 
the changes made--not just those that were significantly changed at 
OIRA's request. For example, even if the only change made to a rule 
during OIRA's review was the correction of a legal citation made by the 
submitting agency, the rule would be coded in the database as 
"consistent with change.":

* The "returned" category includes all returns, not just those that 
were substantively "returned for reconsideration." Therefore, if OIRA 
returned a rule solely because it was not subject to OIRA review (e.g., 
was improperly submitted), it would be coded in the database as a 
"returned" rule.

* The "withdrawn" category includes all rules withdrawn by the agencies 
during OIRA's review, not just those that were withdrawn at the 
initiation of OIRA. Therefore, if an agency erroneously submitted a 
rule to OIRA and withdrew it solely at the agency's initiative, the 
rule would be coded in the OIRA database as "withdrawn.":

Because of the breadth of these categories, we had to gather additional 
information on each of the 85 changed, returned or withdrawn rules to 
determine which ones had been significantly affected by OIRA and, 
therefore, met our more specific criteria.

Ultimately, we determined that 25 of the 85 rules from these agencies 
were significantly affected by OIRA's review. Specifically, we 
concluded that 17 of the 71 rules that were coded as "changed" in the 
database were significantly affected by OIRA. Seven of the nine rules 
coded as "returned" were returned by OIRA for substantive reasons. One 
of the five "withdrawn" rules was returned at the initiation of OIRA.

OIRA Did Not Significantly Affect Many of the "Changed" Rules:

We used a variety of information sources (e.g., agency and OIRA docket 
materials and interviews with agency officials) to place each of the 71 
rules coded as "consistent with change" into one of three categories:

1. Significant changes--i.e., rules in which the most significant 
changes attributed to OIRA's or OMB's suggestions affected the scope, 
impact, or estimated costs and benefits of the rules as originally 
submitted to OIRA.[Footnote 53] Usually, these significant changes were 
made to the regulatory language that would ultimately appear in the 
Code of Federal Regulations.

2. Other material changes--i.e., rules in which the most significant 
changes attributed to OIRA's or OMB's suggestions resulted in the 
addition or deletion of material in the explanatory preamble section of 
the rule. For example, OIRA may have recommended that agencies provide 
better explanations for certain rulemaking actions and/or suggested 
that agencies ask the public to comment on particular aspects of the 
rules.

3. Minor or no OIRA/OMB changes--i.e., rules in which the most 
significant changes attributed to OIRA's or OMB's suggestions resulted 
in editorial or other minor revisions, or rules in which changes 
occurred prior to publication but not at the suggestion of OIRA or OMB. 
Where no changes were made at OIRA's or OMB's suggestion, the changes 
that caused the rule to be coded "consistent with change" could have 
been initiated by the regulatory agency itself or by another federal 
agency (e.g., the Office of the Federal Register).[Footnote 54]

We placed each of the rules that we examined into the appropriate 
category based on the most significant changes attributed to either 
OIRA or OMB--even if the regulatory agencies initiated more significant 
changes to their rules during the period of OIRA's review than did 
OIRA.[Footnote 55]

Table 2 presents the results of our analysis by agency. We concluded 
that 17 of the 71 rules coded as "consistent with change" in the OIRA 
database (about 24 percent) were significantly changed as a result of 
OIRA's suggestion or recommendation, 34 of the rules had other material 
changes attributable to requests by OIRA, and 20 rules had only minor 
changes or no changes at OIRA's suggestion or recommendation. Fourteen 
of the 17 significantly changed rules were from EPA--all but one of 
which were from the agency's Offices of Air and Radiation or Water. 
Three other rules had significant changes attributed to suggestions 
from OIRA or OMB--two APHIS rules regarding indemnity payments for the 
destruction of diseased animals and one NHTSA rule on tire pressure 
monitoring systems. (See app. II for the coding and detailed 
descriptions of the changes made to each of the 71 rules.):

Table 2: Nature of Changes Made at the Suggestion or Recommendation of 
OIRA:

Agency: APHIS; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 2; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
9; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 1; Total rules changed after submission to 
OIRA: 12.

Agency: FDA; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 0; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
6; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 1; Total rules changed after submission to 
OIRA: 7.

Agency: OSHA; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 0; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
2; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 3; Total rules changed after submission to 
OIRA: 5.

Agency: DOT-FAA; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 0; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
2; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 3; Total rules changed after submission to 
OIRA: 5.

Agency: DOT-FMCSA; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 0; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
3; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 3; Total rules changed after submission to 
OIRA: 6.

Agency: DOT-NHTSA; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 1; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
2; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 2; Total rules changed after submission to 
OIRA: 5.

Agency: EPA Office of Air and Radiation; Number of rules by most 
significant level of change suggested by OIRA: Significant changes: 7; 
Number of rules by most significant level of change suggested by OIRA: 
Other material changes: 4; Number of rules by most significant level of 
change suggested by OIRA: Minor or no changes: 3; Total rules changed 
after submission to OIRA: 14.

Agency: EPA Office of Solid Waste and Emergency Response; Number of 
rules by most significant level of change suggested by OIRA: 
Significant changes: 1; Number of rules by most significant level of 
change suggested by OIRA: Other material changes: 4; Number of rules by 
most significant level of change suggested by OIRA: Minor or no 
changes: 4; Total rules changed after submission to OIRA: 9.

Agency: EPA Office of Water; Number of rules by most significant level 
of change suggested by OIRA: Significant changes: 6; Number of rules by 
most significant level of change suggested by OIRA: Other material 
changes: 2; Number of rules by most significant level of change 
suggested by OIRA: Minor or no changes: 0; Total rules changed after 
submission to OIRA: 8.

Agency: Total; Number of rules by most significant level of change 
suggested by OIRA: Significant changes: 17; Number of rules by most 
significant level of change suggested by OIRA: Other material changes: 
34; Number of rules by most significant level of change suggested by 
OIRA: Minor or no changes: 20; Total rules changed after submission to 
OIRA: 71.

Source: GAO analysis.

[End of table]

As figure 9 illustrates, rules from EPA's Office of Air and Radiation 
and Office of Water were more often significantly changed at the 
suggestion of OIRA than rules from the other agencies and offices that 
we examined.

Figure 9: EPA Air and Water Rules Were More Often Significantly Changed 
at the Suggestion of OIRA:

[See PDF for image]

[End of figure]

Types of Significant Changes Made at OIRA's Suggestion/Recommendation:

In 6 of the 14 EPA rules that were significantly changed, the primary 
effect of OIRA's suggestions or recommendations was to delay or 
eliminate certain regulatory provisions that were included in the draft 
rules as submitted to OIRA. For example:

* In response to OIRA concerns about the information collection request 
associated with an EPA Office of Air and Radiation final rule on 
consolidated emissions reporting, EPA delayed the compliance date for 
states to report on two types of emissions (ID 50).

* OIRA's suggestions also prompted the deletion of provisions covering 
marine and highway motorcycle engines from an EPA Office of Air and:

Radiation proposed rule on emissions from nonroad large spark-ignition 
engines and recreational engines (ID 41).[Footnote 56]

* EPA eliminated manganese from a list of hazardous constituents in an 
Office of Solid Waste and Emergency Response final rule on the 
identification and list of hazardous wastes in response to comments 
from OIRA (ID 56).

In four other significantly changed EPA rules, OIRA suggestions 
encouraged the agency to change, add, or select regulatory alternatives 
that generally provided more flexible and/or less costly compliance 
options to regulated entities. For example:

* OIRA suggestions led to changes in an EPA Office of Water proposed 
rule on pollutant discharge elimination systems for large cooling water 
intake structures at existing power generating facilities that (1) 
lowered the performance standard in the rule, (2) made compliance 
requirements more flexible by allowing options for a site-specific 
approach to minimizing environmental harm, and (3) broadened a 
restoration option whereby firms may repair environmental harm rather 
than comply with the designated performance standard (ID 68). OIRA 
believed that these options were not only less burdensome, but also 
would yield greater net benefits.

* In a related EPA Office of Water final rule on minimizing 
environmental impact from cooling water intake structures at new 
facilities, OIRA-suggested changes included (1) the addition of 
criteria that would allow more facilities to qualify for lower 
performance standards, (2) a changed requirement so that facilities 
only needed to use screens to minimize impingement mortality of fish 
and shellfish if certain criteria were met, and (3) the addition of an 
exception to intake flow requirements regarding cooling water intake 
structures located in a lake or reservoir (ID 65).

In three other EPA rules and the NHTSA tire pressure monitoring systems 
rule, OIRA suggested significant changes to the agencies' regulatory 
impact analysis. For example:

* OIRA suggestions prompted EPA to make changes regarding the discount 
rates and fuel prices that the agency used to estimate the potential 
costs of a proposed rule on nonconformance penalties and emission 
standards for heavy-duty diesel engines and vehicles (ID 53).

* Similarly, OIRA comments led EPA to revise the cost-benefit and cost-
effectiveness estimates in a proposed rule on emissions from spark 
ignition marine vessels and highway motorcycles (ID 54).

In both of the APHIS rules with significant changes attributed to 
requests from OMB, the changes reduced the potential total cost to the 
federal government of paying indemnities to owners of animals destroyed 
or for other measures taken to avoid the spread of certain communicable 
diseases among animals (IDs 9 and 12).

Rules With "Other Material Changes" Attributable to OIRA:

We concluded that in 34 (about 48 percent) of the 71 "consistent with 
change" rules, regulatory agencies made "other material changes" in 
response to OIRA's suggestions or recommendations. Typically, these 
changes augmented an agency's explanation of certain provisions in the 
rule, clarified the agency's basis for decisions made about regulatory 
options or assumptions, better explained the potential impact of 
different options, or requested public comments and data on regulatory 
options or costs. For example, in response to OIRA's suggestions or 
recommendations:

* APHIS revised the preamble to a rule that updated plant pest 
regulations to (1) clarify that the proposed regulations would not 
cover genetically modified organisms, (2) acknowledge there is a 
continuum of risk related to regulated organisms, (3) solicit comments 
about the adequacy of criteria APHIS used to identify organisms for 
inclusion, and (4) solicit comments on the data elements that would 
have to be addressed in a proposed notification system (ID 6).

* FDA added or revised information to the preamble of a final rule on 
notification and recordkeeping requirements for exports to clarify its 
responses to public comments on the proposed rule (ID 13).

* OSHA revised the preamble to a rule on procedures for handling 
discrimination complaints (1) to add information and request public 
comment regarding the whistle-blower model that OSHA chose and (2) to 
clarify that certain procedures would be triggered at the "request of 
the named person" (the person alleged to have violated the act) (ID 
21).

* EPA's Office of Air and Radiation revised the preamble of its 
proposed rule on national emission standards for hazardous air 
pollutants from surface coating of metal furniture to request public 
comments on (1) its conclusion that the creation of subcategories in 
the rule was not warranted and (2) whether there were alternative means 
of monitoring performance for add-on controls at source facilities that 
would be as effective and less expensive than the proposed requirements 
(ID 47).

Rules in Which OIRA Suggested Minor Changes or No Changes:

OIRA suggested only editorial or other minor changes, or no changes at 
all, in 20 (about 28 percent) of the 71 rules coded in the OIRA 
database as "consistent with change." These minor changes included 
rearranging existing text for clarity, correcting spelling errors, 
making word choice changes, and adding or correcting procedural 
language, such as where to submit public comments on the rules being 
published. For example:

* The only two changes that OIRA suggested in a FMCSA rule on 
certification of safety auditors, investigators, and inspectors were to 
delete a redundant sentence and to correct the number cited for a 
relevant executive order (ID 33).

* In an EPA proposed rule on a national ambient air quality standard 
for ozone, OIRA suggested rewording three similar statements in the 
preamble regarding EPA's views about "using plausible but highly 
uncertain assumptions" (ID 42).

* The only change made at OIRA's suggestion in an EPA hazardous waste 
management rule concerning cathode ray tubes and mercury-containing 
equipment was to revise a request for comments on extending the 
"speculative accumulation time of used, broken CRTs" to "two or more 
years" instead of just "two years" (ID 62).

As noted previously, although we concluded that OIRA suggested only 
minor changes or no changes to these rules, some of them appeared to 
have been significantly changed during the period of OIRA's review at 
the initiative of the agencies.

Most of the Rules That OIRA Returned Were for Reconsideration:

Two of the nine rules from the selected agencies that were coded as 
"returned" in the OIRA database were returned because they were 
improperly submitted for review. The other seven rules were returned to 
the issuing agencies for reconsideration--five rules from FAA, one from 
NHTSA, and one from EPA.

In each of these seven cases, OIRA sent the rulemaking agency a "return 
letter" describing its rationale for returning the rule. The letters 
indicated that the returns for reconsideration were most often 
triggered by OIRA concerns about the quality of agencies' regulatory 
analyses or the cost-effectiveness of the proposed regulatory options. 
For example:

* OIRA said it returned a proposed FAA rule on certification of pilots, 
aircraft, and repairmen for the operation of light sport aircraft 
because it believed that the regulatory analysis did not sufficiently 
justify the rule (ID 73).

* OIRA returned another FAA draft final rule after raising questions 
and concerns about the relative cost-effectiveness of requiring 
additional flight data recorder parameters (ID 77).

* OIRA returned a NHTSA final rule on tire pressure monitoring systems 
because, in OIRA's opinion, NHTSA's analysis did not adequately 
demonstrate that the agency had selected the best available alternative 
(ID 78).

* OIRA returned an EPA rule on water quality standards for Indian 
country because, among other issues, EPA did not provide a quantitative 
analysis of the costs and benefits that could result from this 
regulatory action (ID 80).

In other cases, OIRA cited coordination issues as its rationale for the 
returns. For example, in one rule OIRA suggested to FAA that a 
concurrent review of the aging aircraft and corrosion control plan 
rules could assist in determining the most cost-effective way to detect 
and correct problems affecting aging aircraft safety (IDs 76 and 74). 
In another FAA rule on Part 145 repair stations, OIRA cited concerns 
from the Department of State regarding the effect of the rule on 
international treaties (ID 72). (However, FAA officials told us during 
our review that FAA and the Department of State had resolved these 
concerns prior to the rule's submission to OIRA, so the rule might have 
been returned because of a misunderstanding.)[Footnote 57] Another 
factor that seems to have influenced at least some of the returns was 
the 90-day limit for OIRA's reviews. In return letters for three rules, 
OIRA specifically mentioned the need for additional time to resolve 
some of its issues and comments as part of the explanation for 
returning draft rules for reconsideration.

As of May 2003, five of the seven rules that OIRA returned for 
reconsideration by the rulemaking agencies had been resubmitted by the 
agencies, completed another review by OIRA, and were published in the 
Federal Register. Publication of one other rule--FAA's proposed 
revision of digital flight data recorder regulations--was still 
pending, according to FAA officials, but EPA had not resubmitted its 
proposed rule on federal water quality standards for Indian country to 
OIRA.

Agencies, Not OIRA, Initiated Most Withdrawals:

Neither OIRA nor the regulatory agencies are required to document why 
rules are withdrawn from OIRA's review. Therefore, we relied primarily 
on testimonial evidence from agency officials to determine whether the 
five rules within the scope of our review had been withdrawn at the 
suggestion of OIRA or OMB. We determined that only one of the five 
rules appeared to have been withdrawn at OIRA's initiative--FAA's Part 
145 Review rule on repair stations (ID 84). FAA's docket included a 
chronology of developments regarding this rule with an entry stating 
that OIRA instructed the agency to withdraw the rule. FAA officials 
explained that OIRA suggested this withdrawal due to "concerns from 
industry and the State Department."[Footnote 58] (As noted previously, 
OIRA representatives told us they do not request that agencies withdraw 
rules, and emphasized that it is the agencies--not OIRA--that 
ultimately make withdrawal decisions. However, they also said that 
agencies sometimes withdraw rules as a negotiating strategy.):

Agency officials characterized two of the withdrawals as "mutual 
decisions" made by their agencies and OIRA. In one of these cases, an 
APHIS rule on importation of clementines from Spain, an agency official 
said that the rule was withdrawn pending the close of a comment period 
on a related document published by the agency, because keeping the rule 
at OIRA until then would have taken OIRA's review period beyond 90 days 
(ID 81). (It was resubmitted about a month later and subsequently coded 
"consistent with change.") In the other case, an FDA rule on records 
and reports concerning new animal drugs, the agency officials 
characterized the mutual decision as a compromise to address the fact 
that the old proposed rule was "stale" (ID 82). (The rule was later 
published as an "interim final" rule to permit additional public 
comment without having to restart the rulemaking at the proposed rule 
stage.) The remaining two rules--an FDA proposed rule concerning 
dietary ingredients and supplements and a NHTSA rule on light truck 
fuel economy standards--were withdrawn solely at the initiative of the 
agency or its executive department (IDs 83 and 85). All five of the 
withdrawn rules that we examined were subsequently resubmitted to OIRA 
by the agencies and were later characterized by the office as 
consistent with the executive order.

Rules from FAA and EPA's Office of Air and Radiation and Office of 
Water Were More Often Significantly Affected by OIRA:

As table 3 shows, when the results for all the changed, returned, or 
withdrawn rules are combined, it is clear that the rules submitted by 
FAA and EPA's Office of Air and Radiation and Office of Water were most 
often significantly affected by OIRA's review. During the period 
covered by our review, about 56 percent of the rules from these 
agencies (20 of 36) were significantly affected. In contrast, only 
about 10 percent of the rules from the remaining six agencies (5 of 49) 
were significantly affected by OIRA's review.

Table 3: Rules from FAA and EPA's Office of Air and Radiation and 
Office of Water Were Most Often Significantly Affected by OIRA Review:

Agency: APHIS; Rules submitted to OIRA for executive order review: 
Total: 13; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 2; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 15.

Agency: FDA; Rules submitted to OIRA for executive order review: Total: 
9; Rules submitted to OIRA for executive order review: Significantly 
affected by OIRA: Number: 0; Rules submitted to OIRA for executive 
order review: Significantly affected by OIRA: Percent: 0.

Agency: OSHA; Rules submitted to OIRA for executive order review: 
Total: 5; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 0; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 0.

Agency: DOT-FAA; Rules submitted to OIRA for executive order review: 
Total: 12; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 6; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 50.

Agency: DOT-FMCSA; Rules submitted to OIRA for executive order review: 
Total: 6; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 0; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 0.

Agency: DOT-NHTSA; Rules submitted to OIRA for executive order review: 
Total: 7; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 2; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 29.

Agency: EPA-Office of Air and Radiation; Rules submitted to OIRA for 
executive order review: Total: 15; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Number: 7; 
Rules submitted to OIRA for executive order review: Significantly 
affected by OIRA: Percent: 47.

Agency: EPA-Office of Solid Waste and Emergency Response; Rules 
submitted to OIRA for executive order review: Total: 9; Rules submitted 
to OIRA for executive order review: Significantly affected by OIRA: 
Number: 1; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Percent: 11.

Agency: EPA-Office of Water; Rules submitted to OIRA for executive 
order review: Total: 9; Rules submitted to OIRA for executive order 
review: Significantly affected by OIRA: Number: 7; Rules submitted to 
OIRA for executive order review: Significantly affected by OIRA: 
Percent: 78.

Agency: Total; Rules submitted to OIRA for executive order review: 
Total: 85; Rules submitted to OIRA for executive order review: 
Significantly affected by OIRA: Number: 25; Rules submitted to OIRA for 
executive order review: Significantly affected by OIRA: Percent: 29.

Source: GAO analysis.

[End of table]

OIRA representatives suggested that the differences in the extent to 
which OIRA significantly affected agencies' rules might actually be a 
function of differences in the importance or impact of the rules 
submitted--not whether they are from one agency or another. The 
representatives said that OIRA typically spends more time and effort 
reviewing economically significant rules that are likely to have the 
biggest impact on society. Therefore, they indicated that agencies like 
EPA that produce a number of economically significant rules were more 
likely to have their rules significantly affected by OIRA's review than 
agencies like FDA that did not submit as many economically significant 
rules.

As table 4 shows, 14 of the 85 rules that we examined were economically 
significant. We concluded that 5 of those 14 rules (36 percent) had 
been significantly affected by OIRA's review. In comparison, we 
concluded that 20 of the 71 rules that were not economically 
significant (28 percent) had been significantly affected by OIRA's 
review. Therefore, although OIRA was slightly more likely to have had a 
major effect on economically significant rules than other rules, the 
difference was not statistically significant.[Footnote 59]

Table 4: OIRA Was Only Slightly More Likely to Significantly Affect 
Economically Significant Rules:

Type of rule: 

Type of rule: Economically significant; Rules submitted to OIRA for 
executive order review: Total: 14; Rules submitted to OIRA for executive order 
review: Significantly affected by OIRA: Number: 5; Rules submitted to 
OIRA for executive order review: Significantly affected by OIRA: 
Percent: 36.

Type of rule: Not economically significant; Rules submitted to OIRA for executive 
order review: Total: 71; Rules submitted to OIRA for executive order 
review: Significantly affected by OIRA: Number: 20; Rules submitted to 
OIRA for executive order review: Significantly affected by OIRA: 
Percent: 28.

Total; Rules submitted to OIRA for executive order review: Total: 85; 
Rules submitted to OIRA for executive order review: Significantly 
affected by OIRA: Number: 25; Rules submitted to OIRA for executive 
order review: Significantly affected by OIRA: Percent: 29.

Source: GAO analysis.

[End of table]

Notably, all six of the FAA rules that OIRA significantly affected were 
not economically significant. Of the 14 EPA Office of Air and Radiation 
and Office of Water rules that OIRA significantly affected, only 3 were 
economically significant.

OIRA Affected the Costs and Benefits or Estimates in Some Rules:

In 22 of the 25 rules that we concluded had been significantly affected 
by OIRA's suggestions or recommendations, OIRA appeared to have 
influenced either (1) the expected costs and/or benefits of the rules 
and/or (2) the agencies' estimates of those costs and/or benefits. The 
focus of OIRA's changes in most of these cases appeared to be on 
reducing the costs and regulatory burdens, improving the cost-
effectiveness of the rules, and/or yielding greater net benefits. This 
focus is consistent with the emphasis in Executive Order 12866 and the 
related "best practices" document and guidance on improving regulatory 
net benefits and cost-effectiveness and minimizing the cost burden of 
regulation.

OIRA-Suggested Changes That Appeared to Have Affected Costs and 
Benefits:

In at least 12 rules, OIRA or OMB suggested changes to the regulatory 
text that could reasonably be expected to affect the potential costs 
and/or benefits of the regulations. Sometimes there was direct evidence 
in the docket materials of those effects. For example:

* In an EPA Office of Water proposed rule on pollutant discharge 
elimination systems for large cooling water intake structures at 
existing power generating facilities, OIRA recommended that the agency 
select a regulatory alternative that it believed would yield 
substantially greater net benefits (ID 68). The approach that EPA 
originally proposed would have cost an estimated $610 million per year, 
with estimated benefits of $890 million per year, yielding net benefits 
of $280 million. However, OIRA recommended that EPA select another 
approach that, while having estimated benefits of $735 million, was 
expected to cost only $280 million, yielding net benefits of $455 
million.

* In another example, an APHIS rule regarding foot-and-mouth disease, 
OMB suggested changes in the indemnity payments that were, in turn, 
reflected in the agency's revised estimates of the rule's costs and 
benefits (ID 12).

However, in most of the cases in which OIRA suggested changes to 
regulatory text, the documentary evidence of how those changes affected 
the rules' costs and/or benefits was more limited and less clear. In 
some cases the rules at issue were not "economically significant," so 
the regulatory agencies were not required to prepare formal 
quantitative assessments of the rules' expected costs or benefits. In 
another case, the agency prepared those assessments but did not include 
complete copies of the original and revised versions of the cost and 
benefit estimates in the regulatory dockets. Therefore, we were unable 
to compare the agencies' estimates to determine the effect of the OIRA-
suggested changes in the regulatory text.

Nevertheless, even in the absence of such documentation, we believe 
that it is reasonable to assume in at least some cases that the OIRA-
suggested elimination or delay of certain regulatory provisions in the 
text of draft rules as submitted to OIRA would also eliminate or delay 
the expected costs and/or benefits associated with those provisions. 
The following are examples of OIRA suggested changes in regulatory text 
that appeared to affect the rules' expected costs and/or benefits:

* APHIS revised the regulatory text in a proposed rule on payment of 
indemnity for animals affected by foot-and-mouth disease to eliminate 
compensation coverage for certain voluntary actions taken by owners of 
animals, thereby reducing potential costs to the federal government (ID 
12). However, according to an APHIS official (and as explained in the 
preamble of the proposed rule), not providing compensation for the care 
and feeding of "official vaccinates" that could be used as a "fire 
wall" around infected animals to help prevent the spread of the 
disease, and eliminating compensation for cleaning and disinfecting 
non-susceptible animals that could spread the disease even if they 
cannot themselves become infected, could impede eradication efforts, 
thus reducing overall benefits to society.[Footnote 60]

* EPA changed the regulatory text in a final rule regarding cooling 
water intake structures at new facilities to provide regulated entities 
the flexibility to use more alternatives or exceptions to compliance 
with the rule's requirements and standards (ID 65). These changes could 
reasonably be expected to reduce at least some of the regulated 
entities' costs of compliance with those requirements and standards, 
without any documented change in benefits.

* EPA deferred final action on adding manganese to the list of 
hazardous waste constituents, thereby also deferring the potential 
costs and benefits of designating manganese as a hazardous waste 
constituent, with an unknown effect on net benefits (ID 56).

* EPA delayed compliance dates in two provisions of a proposed rule 
setting national emission standards for hazardous air pollutants from 
surface coating of wood building products, thereby producing 
corresponding delays in the costs and benefits expected for the rule 
(ID 51).

OIRA-Suggested Changes that Affected Agencies' Estimates of Costs and 
Benefits:

In 14 rules (including some of the ones described above with regulatory 
text changes), OIRA specifically commented on and requested changes in 
the agencies' analyses of the economic impacts of the draft 
regulations. Six of the seven rules that OIRA returned to agencies for 
reconsideration fell into this category. Although OIRA sometimes 
suggested revisions in existing estimates and calculations, OIRA more 
often suggested changes that added or clarified information and 
analysis presented on a draft rule's economic impacts. For example:

* EPA responded to OIRA comments and suggestions by revising cost-
benefit and cost-effectiveness estimates for a proposed rule regarding 
emissions from spark-ignition marine vessels and highway motorcycles 
(ID 54). As a result of the changes, the estimated annual costs to 
manufacturers were reduced by $4 million and the estimated annual fuel 
savings to the public were increased by $4.3 million.

* OIRA returned an FAA proposed rule on certification of pilots, 
aircraft, and repairmen for the operation of light sport aircraft with 
a request that the agency prepare additional revised analyses of the 
potential impacts (ID 73). OIRA's comments focused on the analytical 
baseline FAA had used and the regulatory alternatives presented. Among 
other things, OIRA suggested that, as part of an improved analysis of 
alternatives, FAA could consider means of improved compliance and 
enforcement of regulations currently in place.

* At OIRA's suggestion, NHTSA inserted additional estimates of some 
costs and benefits of regulatory alternatives (e.g., adding estimates 
of the total estimated costs of the proposed alternatives, where the 
original draft only provided estimates of average cost per vehicle), 
added additional information about the potential range of injuries and 
deaths prevented and other benefits that might be realized with 
different regulatory alternatives, and identified unquantified 
benefits and costs that might be associated with its proposed rule on 
tire pressure monitoring systems (ID 36).

A Focus on Costs, Cost-Effectiveness, and Net Benefits:

In general, the focus of OIRA's changes in most of these cases appeared 
to be on reducing costs and regulatory burdens, improving the cost-
effectiveness of the rules, or maximizing the rules' net benefits. For 
example, OIRA returned six rules for reconsideration because of 
concerns that the agencies' analyses had not adequately captured all 
economic effects of the rules or presented regulatory options that OIRA 
did not believe were cost-effective. In the changed rules, reducing 
costs or improving cost-effectiveness was sometimes accomplished by 
suggesting additional, more flexible regulatory options, but it was not 
always clear whether reductions in costs would necessarily be 
accompanied by increases in net benefits to society. For example, in 
response to an OIRA suggestion, EPA eliminated a regulatory provision 
requiring a minimum net reduction if steel facilities used a voluntary 
pollutant trading mechanism called a "water bubble (ID 71)." EPA's 
original draft rule noted that the mechanism had been structured in a 
way to produce an additional benefit because the amount of the 
pollutant discharges pursuant to the bubble had to be 10-percent to 15-
percent less than the discharges otherwise authorized by the rule 
without the bubble. However, eliminating this minimum net reduction 
requirement might encourage more regulated entities to use this 
voluntary mechanism to comply with the standards of the rule at lower 
cost. The potential change in net benefits to society is therefore not 
clear.

Although attention to the cost side of economic effects was most 
prevalent in OIRA's comments and suggestions, in at least four cases 
OIRA also suggested specific changes in agencies' estimated benefits of 
their rules. OIRA suggested several changes regarding the benefits 
estimates of NHTSA's proposed tire pressure monitoring system rule, in 
particular inserting additional information about benefit estimates, 
such as the range of injuries and deaths prevented, stopping distance 
effects, and average tire life increases (ID 36). OIRA also suggested 
adding a discussion on the effect of human factors on the benefits of 
tire pressure monitoring systems. When OIRA returned NHTSA's draft 
final rule on tire pressure monitoring systems, the office stated that 
the technical foundation for NHTSA's estimates of safety benefits 
needed to be better explained and subjected to sensitivity analysis (ID 
78). OIRA also questioned some of EPA's estimates of the environmental 
impacts associated with a proposed rule on emissions from nonroad large 
spark-ignition engines and recreational engines (ID 41). In an 
indemnity program to address chronic wasting disease (CWD) in cervids 
(antler-bearing animals, such as elk and deer), OIRA asked APHIS to 
avoid citing as a benefit the avoidance of disease in humans caused by 
CWD because this possibility was considered remote by a Harvard risk 
analysis (ID 9).

There were also cases in which OIRA did not directly affect the 
expected costs or benefits of a rule but nevertheless suggested changes 
to an agency's discussion of the rule's costs and benefits. In 19 such 
rules that were changed after submission, OIRA suggested clarification 
or revision of the information presented in the rule about estimated 
costs and benefits or how they were calculated, solicited comments on a 
regulatory agency's cost-benefit estimates, or requested comments on 
ways to make a regulation more cost-effective or less costly and 
burdensome. (At least 2 of the 22 rules that we identified as having 
costs and/or benefits directly affected by OIRA's actions also had such 
clarifications or requests for comments inserted at OIRA's 
suggestion.):

Again, many of OIRA's comments and suggested changes were focused on 
the costs of the proposed regulatory actions, although in these cases 
OIRA's suggestions most often helped to clarify the potential costs of 
regulatory alternatives or how an agency had estimated those costs. In 
at least seven rules, OIRA specifically suggested that agencies solicit 
public comments and data on the potential costs and burdens of proposed 
regulations or suggestions for alternative regulatory options that 
would be more cost-effective or less burdensome. By focusing attention 
and soliciting comments on cost and burden issues, particularly at the 
proposed rule stage, these revisions to preamble language might prompt 
changes in the costs and benefits of the rules in future iterations of 
the rules.

Appendix II includes more detailed information on the extent to which 
OIRA's regulatory reviews had an effect on the potential costs and 
benefits of individual rules within the scope of our report.

Outside Parties Contacted OIRA Regarding about Half of the Rules OIRA 
Significantly Affected:

Another part of this objective was to determine whether there was any 
evidence that the actions that OIRA took (e.g., to suggest significant 
changes to rules or to return them to the agencies for reconsideration) 
were traceable to suggestions offered by regulated entities or other 
parties outside of the federal government. It is not possible to 
independently determine what motivated OIRA's actions with regard to 
any of the rules that it reviewed. However, we did identify a number of 
instances in which outside parties directly contacted OIRA regarding 
rules that OIRA later significantly affected. Those direct contacts 
took the form of either a meeting with OIRA representatives or a letter 
sent to OIRA before or during the period of OIRA's review.[Footnote 61] 
We also identified similarities between the actions that OIRA suggested 
or recommended to the agencies and those advocated to OIRA by outside 
parties through those direct contacts.

Outside parties directly contacted OIRA regarding 11 of the 25 rules 
that OIRA significantly affected--8 of the rules that were 
significantly changed as a result of OIRA's suggestions or 
recommendations, 2 of the rules that OIRA returned to the agencies for 
reconsideration, and the 1 withdrawal that was made at OIRA's request. 
As figure 10 shows, 8 of these 11 rules were from EPA, FAA submitted 2 
of the rules, and 1 was a NHTSA submission.[Footnote 62] In all 11 
cases, representatives of regulated entities were involved in those 
contacts with OIRA. In 3 of the 11 cases, environmental and other 
public interest groups also contacted OIRA about the rules.

Figure 10: Outside Parties Most Often Contacted OIRA Regarding EPA 
Rules:

[See PDF for image]

[End of figure]

In 7 of the 11 cases where there was direct contact with OIRA by 
outside parties, at least some of the actions that OIRA recommended or 
took appeared to be similar to those suggested to OIRA by regulated 
parties. (OIRA did not recommend changes that were similar to all of 
the changes suggested by the regulated entities.) Environmental or 
other public interest groups had also directly contacted OIRA in 3 of 
these 7 cases, but OIRA's actions did not appear to be similar to the 
suggestions offered by those groups. Examples of the 7 cases include 
the following:

* As a result of its review of an EPA Office of Water rule on cooling 
water intake structures at existing power-generating facilities, OIRA 
suggested changes that lowered the draft performance standard and added 
compliance flexibility to the rule by allowing, among other things, 
options for a site-specific approach to minimizing environmental harm 
(ID 68). Some of OIRA's suggested revisions of the regulatory language 
were similar to those proposed by representatives of the electric 
industry--in particular, the site-specific approach--during their 
contacts with OIRA regarding this rule. (The representatives of the 
electric industry also proposed other changes to this rule that OIRA 
did not recommend to EPA.) Representatives of an environmental interest 
group also contacted OIRA regarding this rule, advocating that EPA's 
regulations be based on nationally uniform standards and not on case-
by-case, site-specific determinations.

* During its review of an EPA final rule on identification and listing 
of hazardous waste, industry representatives from steel manufacturers 
and a chemical company sent letters and met with OIRA opposing the 
listing of manganese as a hazardous waste constituent due to concerns 
about the costs that the rule would impose on certain facilities (ID 
56). Industry representatives had raised similar points in the public 
comments they submitted during the proposed rule stage of this 
rulemaking, but EPA was not persuaded to revise its draft of the final 
rule after considering those comments. The main focus of OIRA's 
extensive changes in this rule was the deferral of final action on all 
parts of the draft rule that would have identified manganese as a 
hazardous contaminant, as in the original proposed rule and EPA's draft 
final rule.

* In a draft final rule on tire pressure monitoring systems, NHTSA 
included provisions that would eventually have mandated use of direct 
sensing technologies, rather than indirect technologies, for such 
systems (ID 78).[Footnote 63] Representatives of automobile 
manufacturers contacted OIRA to raise concerns that "the structure of 
the final rule will have the effect of eliminating indirect tire 
pressure monitoring systems as a compliance option." They also argued 
that there was no evidence that safety benefits would be noticeably 
different between systems using indirect and direct sensing 
technologies. OIRA returned this rule to NHTSA for reconsideration, 
citing as its reason that the agency's analysis did not adequately 
demonstrate that NHTSA had selected the best available option and 
raising concerns regarding NHTSA's analysis of the safety impacts of 
regulatory alternatives. OIRA subsequently completed a review 
(consistent with no change) of NHTSA's resubmitted version of the rule 
(with a revised analysis of safety issues, costs, and benefits of 
direct and indirect system alternatives) that allowed either type of 
sensing technology through a phase-in period and deferred until 2005 a 
decision on which performance standards would be effective after 2006.

However, it is impossible to determine the extent to which the 
suggestions made by the regulated parties might have influenced OIRA's 
actions, if at all. OIRA might have independently reached the same 
conclusions or had the same concerns even if the regulated entities had 
not contacted OIRA. An OMB representative told us that in many of these 
meetings outside parties have raised issues that had already been 
expressed in public comments, meetings between the outside parties and 
the regulatory agencies, trade papers, news articles, and other venues-
-all of which might have been reviewed by OIRA.

On the other hand, in 4 of the 11 cases in which regulated parties 
directly contacted OIRA, OIRA's actions or suggestions to the agencies 
did not appear to be similar to the actions or suggestions that the 
regulated parties advocated. Examples of these cases include the 
following:

* Representatives of the steel industry contacted OIRA regarding an EPA 
final rule on effluent limitations guidelines, pretreatment standards, 
and new source performance standards for the iron and steel 
manufacturing point source category (ID 71). In the letter requesting a 
meeting with the OIRA Administrator, the steel industry representatives 
asserted that EPA's revised effluent limitation guidelines were not 
technically, economically, or legally justified, and also raised 
concerns about specific aspects of EPA's benefit-cost analysis. The 
only substantive change that OIRA suggested in this rule, however, was 
to eliminate a preexisting "minimum net reduction" provision in 
regulations that applied if facilities used a "water bubble" 
alternative mechanism for trading pollutants.

* Similarly, representatives from a number of regulated parties 
requested that OIRA return FAA's draft final rule on part 145 repair 
stations to the agency with instructions to prepare a supplemental 
notice of proposed rulemaking and essentially restart most of the 
rulemaking process (IDs 84 and 72). However, OIRA's actions to have the 
agency withdraw the rule and, later, to return the rule to the agency 
for reconsideration cited issues unrelated to those voiced by the 
regulated entities. When FAA resubmitted the same draft rule a third 
time, OIRA completed its review of the rule with an outcome of 
"consistent with no change." An industry representative that we 
interviewed said that the industry groups ultimately did not get the 
changes in the rule that they wanted from OIRA.

Appendix III contains case studies that provide more detailed 
information about each of the rules for which we found evidence that 
outside parties had contacted OIRA.

OIRA Generally Disclosed Outside Contacts:

As noted in chapter 2 of this report, Executive Order 12866 requires 
OIRA to maintain a publicly available log containing the dates and 
names of those involved in substantive oral communications (e.g., 
telephone calls or meetings) between OIRA personnel and outside parties 
and the subject matter discussed. We used the OIRA list of substantive 
outside communications to help us identify the information presented 
above and examined other material to identify those contacts, including 
agencies' rulemaking dockets.

Overall, we identified only two meetings that OIRA had with outside 
parties and two letters to OIRA from outside parties regarding the 
rules in our review that OIRA had not disclosed at the time of our 
review:

* The OIRA docket contained a letter indicating that OIRA had met in 
October 2001 with representatives from the iron and steel industry in 
relation to an EPA draft rule that would have added manganese to a list 
of hazardous waste constituents (ID 56). However, when we examined 
OIRA's meeting log in early 2003 there was no record of this meeting. 
(OIRA subsequently added this meeting to its on-line meeting log.):

* A July 2001 letter sent to OIRA in relation to the FAA part 145 rule 
was included as part of a regulated entity's testimony before a 
congressional committee (IDs 84 and 72). However, OIRA's docket did not 
contain a copy of this correspondence at the time of our review. (OIRA 
subsequently added this letter to its docket.):

* EPA's docket included a February 2002 letter from the Center for 
Energy and Economic Development to the OIRA Administrator regarding 
revisions to a regional haze rule (ID 48).[Footnote 64] However, we did 
not find a copy of this letter in OIRA's docket. EPA's docket for this 
rule also included a copy of an e-mail message from OIRA to EPA noting 
that a meeting at OMB had been scheduled at the Center's request for 
February 5, 2002. However, we did not find documentation for this 
meeting during our review of OIRA's dockets and logs. (OIRA's docket 
did contain a copy of a letter from another outside party regarding 
this rule.):

However, we have no way of knowing whether there were other meetings 
with outside parties or other letters from those parties about rules in 
our review that did not come to our attention. Our knowledge of such 
meetings or correspondence is generally limited to what OIRA or the 
agencies disclose in their files. OIRA representatives told us that 
some of the letters mailed to OIRA after the events of September 11, 
2001, and the anthrax letters in October 2001 may not have been 
delivered, and said they were committed to disclosing all outside 
contacts regarding rules under review.

Documentation of OIRA's Reviews Varied, but Some Agencies' Practices 
Improved Transparency:

Agencies varied in the extent to which they satisfied the documentation 
requirements in Executive Order 12866, but most of the agencies 
satisfied those requirements for most of their rules. However, having 
materials in the agencies' rulemaking dockets does not necessarily mean 
that OIRA's effects on the rules were fully transparent. The executive 
order also requires OIRA to disclose certain information about its 
review process, and we concluded that OIRA generally satisfied those 
requirements regarding the rules that we reviewed.

Agencies Varied in Extent to Which Documentation Requirements Were 
Satisfied:

One of the stated purposes of Executive Order 12866 is to make the 
federal rulemaking process more accessible and open to the public. 
Toward that end, the executive order places certain public disclosure 
and documentation requirements on regulatory agencies or OIRA. However, 
some types of actions are not covered by these requirements and, 
therefore, do not have to be disclosed or documented by either party. 
Also, in some cases the executive order does not clearly indicate what 
must be disclosed or documented.

In general, the applicability and nature of the disclosure and 
documentation requirements in the executive order depends on the 
outcome of OIRA's review. If an agency withdraws a rule from OIRA's 
review, neither the agency nor OIRA are required to disclose the 
reason. However, if OIRA returns a rule to an agency for 
reconsideration, section 6(b)(3) of the executive order requires the 
OIRA Administrator to provide the issuing agency with a written 
explanation delineating the pertinent section of the order on which 
OIRA is relying. For rules that OIRA reviews and are subsequently 
published in the Federal Register, the executive order requires 
agencies to make the rule and any cost or benefit information prepared 
available to the public. Two other sections of the order establish 
specific documentation requirements regarding changes made to rules 
submitted to OIRA for review:

* Section 6(a)(3)(E)(ii) of the order states that agencies must 
"identify for the public, in a complete, clear, and simple manner, the 
substantive changes between the draft submitted to OIRA for review and 
the action subsequently announced." However, neither the executive 
order nor OIRA's October 1993 guidance on its implementation defines 
what the term "substantive changes" means.

* Section 6(a)(3)(E)(iii) of the order requires agencies to "identify 
for the public those changes in the regulatory action that were made at 
the suggestion or recommendation of OIRA.":

OIRA's October 1993 guidance on the implementation of the order 
considers the second requirement to be a subset of the first. 
Therefore, under this interpretation, the agencies are only required to 
identify the changes made at OIRA's suggestion or recommendation after 
formal submission of the rule to OIRA--not during any informal review 
period that precedes formal submission. OIRA also took this position in 
response to recommendations in our 1998 report on the implementation of 
these transparency requirements and during this review. This 
distinction is important because, in some of the 25 rules that we 
concluded had been significantly changed at OIRA's suggestion or 
recommendation, OIRA suggested significant changes prior to formal 
submission of the rule to OIRA. Also, some of the rules that were 
reviewed informally for weeks or months had very short formal review 
periods--in some cases as little as a few days.

To determine agencies' compliance with these documentation 
requirements, we considered the required information to have been 
"identified for the public" if it was available in the agencies' public 
docket for the relevant rule. We coded the level of documentation in 
the agencies' dockets for each changed rule into one of four 
categories, reflecting whether (1) all changes were clearly documented, 
(2) changes were identified but it was not clear that all changes had 
been documented or at whose initiative, (3) no changes were documented 
in the agencies' public rulemaking docket, or (4) the Executive Order 
12866 documentation requirements were not applicable.[Footnote 65] The 
first requirement is not applicable when there were no changes made to 
the rule during OIRA's review that the agencies considered 
"substantive." Even if there were substantive changes made during 
OIRA's review, the second requirement is not applicable if those 
changes were not made at the suggestion or recommendation of OIRA. We 
made our determinations regarding agencies' compliance with these 
requirements solely on the basis of the information that would be 
available to a member of the public if he/she had reviewed the docket 
for a given rule.[Footnote 66] Furthermore, because the executive order 
places responsibility to document changes on the agencies rather than 
OIRA, our determinations only reflect material available in the 
regulatory agencies' dockets, not materials in OIRA's public 
files.[Footnote 67] Table 5 presents the results of our analysis of 
agencies' compliance with both documentation requirements in the 
executive order.

Table 5: Agencies' Compliance with Executive Order 12866 Documentation 
Requirements Was Mixed:

Agency: APHIS; Changes made during OIRA review period: All changes 
clearly identified: 1; Changes made during OIRA review period: Not 
clear that all changes had been identified: 8; Changes made during OIRA 
review period: No changes identified in docket: 0; Changes made during 
OIRA review period: Not applicable: 3; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 4; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 5; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 0; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 3; Total number of 
changed rules: 12.

Agency: FDA; Changes made during OIRA review period: All changes 
clearly identified: 7; Changes made during OIRA review period: Not 
clear that all changes had been identified: 0; Changes made during OIRA 
review period: No changes identified in docket: 0; Changes made during 
OIRA review period: Not applicable: 0; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 6; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 0; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 1; Total number of 
changed rules: 7.

Agency: OSHA; Changes made during OIRA review period: All changes 
clearly identified: 0; Changes made during OIRA review period: Not 
clear that all changes had been identified: 0; Changes made during OIRA 
review period: No changes identified in docket: 4; Changes made during 
OIRA review period: Not applicable: 1; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 0; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 2; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 3; Total number of 
changed rules: 5.

Agency: DOT/FAA; Changes made during OIRA review period: All changes 
clearly identified: 0; Changes made during OIRA review period: Not 
clear that all changes had been identified: 0; Changes made during OIRA 
review period: No changes identified in docket: 2; Changes made during 
OIRA review period: Not applicable: 3; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 0; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 2; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 3; Total number of 
changed rules: 5.

Agency: DOT/FMSCA; Changes made during OIRA review period: All changes 
clearly identified: 4; Changes made during OIRA review period: Not 
clear that all changes had been identified: 0; Changes made during OIRA 
review period: No changes identified in docket: 0; Changes made during 
OIRA review period: Not applicable: 2; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 2; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 0; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 4; Total number of 
changed rules: 6.

Agency: DOT/NHTSA; Changes made during OIRA review period: All changes 
clearly identified: 0; Changes made during OIRA review period: Not 
clear that all changes had been identified: 1; Changes made during OIRA 
review period: No changes identified in docket: 0; Changes made during 
OIRA review period: Not applicable: 4; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 1; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 0; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 4; Total number of 
changed rules: 5.

Agency: EPA Office of Air and Radiation; Changes made during OIRA 
review period: All changes clearly identified: 1; Changes made during 
OIRA review period: Not clear that all changes had been identified: 9; 
Changes made during OIRA review period: No changes identified in 
docket: 1; Changes made during OIRA review period: Not applicable: 3; 
Changes made at OIRA's suggestion or recommendation: All changes 
clearly identified: 2; Changes made at OIRA's suggestion or 
recommendation: Not clear that all changes had been identified: 7; 
Changes made at OIRA's suggestion or recommendation: No changes 
identified in docket: 1; Changes made at OIRA's suggestion or 
recommendation: Not applicable: 4; Total number of changed rules: 14.

Agency: EPA Office of Solid Waste and Emergency Response; Changes made 
during OIRA review period: All changes clearly identified: 2; Changes 
made during OIRA review period: Not clear that all changes had been 
identified: 3; Changes made during OIRA review period: No changes 
identified in docket: 0; Changes made during OIRA review period: Not 
applicable: 4; Changes made at OIRA's suggestion or recommendation: All 
changes clearly identified: 5; Changes made at OIRA's suggestion or 
recommendation: Not clear that all changes had been identified: 0; 
Changes made at OIRA's suggestion or recommendation: No changes 
identified in docket: 0; Changes made at OIRA's suggestion or 
recommendation: Not applicable: 4; Total number of changed rules: 9.

Agency: EPA Office of Water; Changes made during OIRA review period: 
All changes clearly identified: 8; Changes made during OIRA review 
period: Not clear that all changes had been identified: 0; Changes made 
during OIRA review period: No changes identified in docket: 0; Changes 
made during OIRA review period: Not applicable: 0; Changes made at 
OIRA's suggestion or recommendation: All changes clearly identified: 8; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 0; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 0; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 0; Total number of 
changed rules: 8.

Agency: Total; Changes made during OIRA review period: All changes 
clearly identified: 23; Changes made during OIRA review period: Not 
clear that all changes had been identified: 21; Changes made during 
OIRA review period: No changes identified in docket: 7; Changes made 
during OIRA review period: Not applicable: 20; Changes made at OIRA's 
suggestion or recommendation: All changes clearly identified: 28; 
Changes made at OIRA's suggestion or recommendation: Not clear that all 
changes had been identified: 12; Changes made at OIRA's suggestion or 
recommendation: No changes identified in docket: 5; Changes made at 
OIRA's suggestion or recommendation: Not applicable: 26; Total number 
of changed rules: 71.

Source: GAO analysis.

[End of table]

For the rules where the requirements were applicable, the results were 
mixed. As discussed in more detail later in this report, some agencies 
(FDA, FMCSA, and EPA's Office of Water) provided clear documentation in 
their rulemaking dockets of all of the changes made to their rules 
during OIRA's review and at OIRA's suggestion or recommendation. In 
contrast, other agencies (FAA and OSHA) did not have any documentation 
of the changes made in their dockets. FAA officials told us that their 
agency had not been documenting changes made during OIRA's review, but 
would do so in the future and put the documentation in the agency's 
rulemaking docket.[Footnote 68] OSHA officials said the documentation 
was available from the Office of the Solicitor, and said that if a 
member of the public wanted information on changes made during OIRA's 
review it would be provided upon specific request. (OSHA officials said 
that they keep the information in the Office of the Solicitor in order 
to ensure that the OIRA-directed change documentation is not part of 
the official rulemaking record if a lawsuit is filed.) However, because 
there is nothing in the OSHA rulemaking docket to identify that 
documentation of OIRA changes exists or is available, a member of the 
public interested in finding this information would have to know to 
specifically request the relevant documentation from the Office of the 
Solicitor.

For the remaining agencies (APHIS, NHTSA, and EPA's Offices of Air and 
Radiation and Solid Waste and Emergency Response), it was unclear that 
the documentation available in the dockets covered all of the relevant 
changes to their rules. For example, these agencies sometimes included 
in their dockets copies of e-mails between OIRA and the agencies 
discussing changes that had been made to the draft rule. However, we 
could not tell whether these e-mails represented all or only some of 
the changes that had been made. In other cases, agencies documented 
changes made, but it was not clear if any of the changes had been at 
the suggestion or recommendation of OIRA. Agency officials later told 
us that, in these cases, the documentation that we found represented 
all of the changes that had been made to the rules during OIRA's review 
or at OIRA's initiative. Therefore, it may be that the lack of clarity 
regarding these agencies' adherence to the documentation requirements 
in the executive order reflected unclear or inadequate labeling and 
attribution of the sources of changes, rather than the absence of 
documentation.

Agencies Varied in How Changes to Draft Rules Were Documented:

Executive Order 12866 does not specify how agencies should document the 
changes made to draft rules after their submission to OIRA, nor is 
there any governmentwide guidance that directs agencies how to do so. 
OIRA representatives told us that it is up to each agency to decide how 
its rulemaking dockets are kept and how they satisfy the executive 
order's requirements. Not surprisingly, therefore, the regulatory 
agencies in our review had different methods of documenting changes to 
the rules that OIRA reviewed under Executive Order 12866. In the cases 
of DOT and EPA, which each had three agencies or program offices in our 
review, the documentation practices also varied across their agencies 
and offices.

How Changes Were Identified:

For example, there were clear differences among the agencies in how 
they "identified for the public" the changes made to draft rules after 
their submission to OIRA and at the suggestion or recommendation of 
OIRA.

* The most common method was the inclusion in the public rulemaking 
docket of a marked-up copy of the rule (or selected pages thereof) as 
submitted to OIRA or after the review was completed showing the changes 
made during the review process. In some cases these marked-up copies 
were done by hand, but in other cases a "redline/strikeout" version was 
prepared electronically, printed, and placed in the public docket. 
Agencies with this type of documentation included FMCSA, NHTSA, and 
EPA's Office of Solid Waste and Emergency Response. In addition to a 
marked-up version of its rules, FDA also included a standard cover form 
that identified the information placed in the dockets to address each 
part of the executive order's documentation requirements.

* Some agencies' documentation included the above marked-up versions of 
the rules and/or copies of e-mail messages of faxes between OIRA and 
the regulatory agencies reflecting the changes that were being made to 
the rules. Agencies with this type of documentation included EPA's 
Office of Air and Radiation and APHIS.

* For all but one of the dockets prepared by EPA's Office of Water, the 
office included a detailed memorandum addressing each of the executive 
order's documentation requirements, summarizing the development and 
review of the rule and identifying all substantive changes made and 
those made at the suggestion of OIRA.[Footnote 69]

How Sources of Changes Were Identified:

The regulatory agencies also differed in how they identified the source 
of the changes (e.g., whether the changes had been made at the 
suggestion of OIRA or at the agency's initiative). Most commonly, the 
agencies noted the source of the changes in the margins of their 
marked-up versions of at least some of the rules (e.g., APHIS, FDA, and 
FMCSA). In those cases where e-mails or faxes were used for 
documentation, the sources of the changes were usually apparent from 
those documents (e.g., EPA's Office of Air and Radiation). If the 
agency prepared a summary memorandum (e.g., EPA's Office of Water), the 
sources were usually identified in that memorandum. However, in some 
cases the agencies did not clearly indicate which of the changes that 
they identified were from OIRA and which were from the agencies.

Other Differences in Documentation:

Other areas in which the agencies' documentation practices differed 
included the following:

* Officials in some of the agencies (e.g., APHIS, FDA, and NHTSA) 
indicated that the only changes to their rules that they considered 
"substantive" were those that affected the impact or text of the rule 
as it appeared in the Code of Federal Regulations (although the 
executive order does not specify that only changes to regulatory text 
are substantive). However, in practice most of these agencies 
documented both regulatory text changes and other changes to the 
preambles of their rules (particularly those that we previously 
identified as "other material changes" in which OIRA suggested that the 
agency clarify or solicit comments on a particular issue). Other 
agencies documented all changes to their rules, even those that were 
editorial or otherwise minor in nature.

* Some agencies documented changes made to their rules by OIRA prior to 
formal submission (e.g., EPA Office of Air and Radiation), while others 
did not.

* Some of the agencies documented when there had been no substantive 
changes made to their rules (e.g., EPA Office of Air and Radiation), 
while others did not (e.g., FAA and NHTSA).

Some Agencies Demonstrated "Best Practices":

Overall, we often found it difficult to identify the changes that had 
been made to agencies' rules during OIRA's review and/or at the 
suggestion or recommendation of OIRA by reviewing material in the 
agencies' rulemaking dockets. As noted previously, one agency (FAA) had 
done nothing at the time of our review to document these changes, and 
another agency (OSHA) placed its documentation in the Office of the 
Solicitor, not the agency's rulemaking docket. (Therefore, a member of 
the public would have to know to ask for the materials from that 
office.) Other agencies did not document any changes if the changes 
were not, in their opinion, "substantive." In another case the agency 
simply provided a copy of the rule as submitted to OIRA and a copy of 
the rule as published in the Federal Register, with no indication of 
what had changed in the text. In still other cases, the changes were 
indicated in a "redline/strikeout" version of the rule, but the 
photocopied redline version was so indistinct that it was difficult to 
identify or attribute all of the changes. The agencies appeared to do a 
better job of documenting the changes that had been initiated by OIRA 
than in clearly identifying whether other substantive changes had been 
made to the rules by the agencies or other parties after submission to 
OIRA. For several of the rules, the agencies added material to the 
public dockets shortly before we arrived or after we told the agencies 
we could not find documentation for certain rules that had been 
changed. For example, FMCSA added documentation of changes made to a 
rule that OIRA had finished reviewing in May 2002 after we asked about 
the rule during a meeting with FMCSA officials in February 2003. 
Executive Order 12866 does not specify when agencies must "identify for 
the public" the changes made during OIRA's review.

In marked contrast, the documentation practices used by some of the 
agencies and offices in our review--FDA, FMCSA and EPA's Office of 
Water--represented what we consider to be "best practices" that not 
only met the minimal requirements of the Executive Order 12866 but also 
made clear how the rules had changed during OIRA's review and which 
changes were made at OIRA's suggestion.

* EPA's Office of Water usually did this through detailed memoranda 
prepared for the docket specifically to address the executive order's 
requirements. For example, in the Office of Water's rule on proposed 
changes to meat and poultry effluent limitations guidelines and 
standards, EPA included a detailed cover memorandum specifically 
addressing the executive order's requirements (ID 67). The memorandum 
not only identified all of the substantive changes made at OIRA's 
suggestion, it also identified the substantive EPA changes made 
independent of other reviewers. Also, the memorandum identified 
nonsubstantive changes that had been suggested by OMB and others (e.g., 
SBA and the Department of Agriculture). Copies of relevant documents 
were attached to the memorandum as well as copies of suggested changes 
that were sent to the agency by the OIRA desk officer.

* FMCSA often provided a "redline/strikeout" version of the revised 
rule after OIRA's review, clearly annotating the changes that had been 
made to the rule between submission of the manuscript to OIRA and its 
publication, as well as the source of each change. For example, in 
several places in the agency's interim final rule regarding a safety 
monitoring system and compliance initiative for Mexico-domiciled motor 
carriers operating in the United States, FMCSA identified changes that 
had been made at the request of OIRA, at the request of the Office of 
the Federal Register, or at FMCSA's initiative after the submission of 
a previous version of the rule to OIRA (ID 32).

* FDA used a standard one-page cover form with attached copies of the 
rule in which the agency had marked the changes made to the rule and 
annotated the sources of those changes. The FDA form, as well as some 
similar forms we found in EPA's dockets, had the additional benefit of 
allowing agency officials to affirmatively indicate whether there were 
substantive changes made to a rule during OIRA's review and, 
separately, whether there were changes made at the suggestion or 
recommendation of OIRA. For example, in the agency's draft final rule 
on food additives, FDA included the cover memorandum and a copy of the 
rule as submitted to OIRA with hand-written annotations of FDA and OIRA 
changes (ID 17). In addition, FDA included a copy of its responses to 
detailed OMB questions about the final rule.

[End of section]

Chapter 4: Many Rules Nominated for Reform Are Being Changed:

Our third objective was to describe how OIRA determined that certain 
existing rules merited high priority review. With regard to OIRA's 2001 
review effort, our specific objectives were to determine (a) which 
organizations or persons suggested that the rules be reviewed, (b) what 
process OIRA used to select and prioritize the nominations, (c) the 
extent to which OIRA publicly disclosed its selection and priority-
setting process, and (d) the current status of those rules. We also 
compared that review effort to a second review that OIRA initiated in 
2002.

In summary, OIRA received 71 nominations from the public in response to 
its May 2001 request for suggestions of rules that should be modified 
or rescinded. Of these, 44 nominations were from the Mercatus Center at 
George Mason University. OIRA selected 23 of the 71 nominations for 
high priority review--14 of which were originally nominated by the 
Mercatus Center. The only other organizations that nominated more than 
one of the suggestions that OIRA so designated were the Equal 
Employment Advisory Council and the Employment Policy Foundation (two 
suggestions each). Representatives of OIRA told us that the office's 
desk officers initially determined which issues merited high priority 
review, subject to the approval by OIRA management. Although OIRA fully 
disclosed the source of each of the nominations that it received and 
defined the priority categories that it used, the office did not 
publicly describe how it decided which nominations merited high 
priority review. As of May 2003, regulatory agencies or OIRA have at 
least begun to address the issues raised in many of the suggestions. In 
March 2002 OIRA again solicited public comments on regulations in need 
of reform, and in response received more than 300 suggestions. However, 
this time OIRA forwarded the suggestions to the relevant federal 
agencies for review and prioritization. In general, OIRA explained the 
process used for this second round of nominations more clearly and 
completely than was done for the first round.

Mercatus Center Nominated Most Rules Selected for High Priority Review 
in 2001 Report:

Section 628(a)(3) of the fiscal year 2000 Treasury and General 
Government Appropriations Act required OMB to submit "recommendations 
for reform" with its report on the costs and benefits of federal 
regulations. In the portion of its May 2001 draft report responding to 
this requirement, OIRA said it did not have enough information to make 
recommendations for the reform of specific regulations or regulatory 
programs, and asked for recommendations and comments on rules and 
regulatory programs that could be "of concern to the public." 
Specifically, OIRA said the following:

"We would like to receive suggestions on specific regulations that 
could be rescinded or changed that would increase net benefits to the 
public by either reducing costs and/or increasing benefits. We would 
appreciate if commenters identified regulations that are obsolete or 
outmoded, and could be rescinded or updated.":

OIRA asked that commenters provide their suggestions in a particular 
format (e.g., name of regulation, agency regulating, citation, and 
description of problem) and invited commenters to suggest "any other 
reforms to the regulatory development and oversight processes that 
would improve regulatory outcomes.":

In its December 2001 final report, OIRA said it received 71 suggestions 
in response to its request from 33 commentators involving 17 agencies. 
In an appendix to the report listing the suggestions, OIRA indicated 
that 44 of them came from the Mercatus Center at George Mason 
University. The report also indicated that OIRA had completed an 
initial review of the suggestions and placed them into one of three 
categories: (1) "high priority," meaning that OIRA was inclined to 
agree with and look into the suggestion, (2) "medium priority," meaning 
that OIRA needed more information about the suggestion, or (3) "low 
priority," meaning that OIRA was not convinced that the suggestion had 
merit. OIRA listed 23 of the suggestions in the first category, and 
said a "prompt letter" might be sent to the responsible agency for its 
"deliberation and response." Eight of the 23 high priority suggestions 
involved regulations from EPA, 5 suggestions involved regulations from 
the Department of Labor (DOL), and 2 each from the Departments of 
Health and Human Services (HHS), Agriculture (USDA), and the Interior 
(DOI). Five of the 23 suggestions involved rules that had been issued 
at the end of the Clinton administration and delayed by a January 20, 
2001, memorandum from Assistant to the President and Chief of Staff 
Andrew H. Card, Jr. (Card memorandum) directing federal agencies to, 
among other things, postpone the effective dates of certain regulations 
for 60 days.[Footnote 70] As table 6 shows, 13 of the 23 
recommendations came from the Mercatus Center, and one was a joint 
recommendation from Mercatus and the Association of Metropolitan Water 
Agencies.

Table 6: The Mercatus Center Suggested Most of the 23 "High-Priority 
Review" Rules:

Commenter: Mercatus Center; Regulation at issue: Central air 
conditioner and heat pump energy conservation standards; Agency issuing 
regulation: Department of Energy.

Commenter: Mercatus Center; Regulation at issue: Standards for privacy 
of individually identifiable health information; Agency issuing 
regulation: HHS.

Commenter: Mercatus Center; Regulation at issue: Food labeling: trans 
fatty acids in nutrition labeling; Agency issuing regulation: HHS/Food 
and Drug Administration.

Commenter: Mercatus Center; Regulation at issue: Hardrock mining; 
Agency issuing regulation: DOI/Bureau of Land Management.

Commenter: Mercatus Center; Regulation at issue: Snowmobile use in 
Rocky Mountain National Park; Agency issuing regulation: DOI/National 
Park Service.

Commenter: Mercatus Center; Regulation at issue: Davis-Bacon Act 
"helpers" regulation; Agency issuing regulation: DOL/ Employment 
Standards Administration.

Commenter: Mercatus Center; Regulation at issue: Hours of service of 
drivers; Agency issuing regulation: DOT/Federal Motor Carrier Safety 
Administration.

Commenter: Mercatus Center; Regulation at issue: Total maximum daily 
loads; Agency issuing regulation: EPA.

Commenter: Mercatus Center; Regulation at issue: Economic incentive 
program guidance; Agency issuing regulation: EPA.

Commenter: Mercatus Center; Regulation at issue: New source review 90-
day review background paper; Agency issuing regulation: EPA.

Commenter: Mercatus Center; Regulation at issue: Concentrated animal 
feeding operations effluent guidelines; Agency issuing regulation: EPA.

Commenter: Mercatus Center/ Association of Metropolitan Water Agencies; 
Regulation at issue: Arsenic in drinking water; Agency issuing 
regulation: EPA.

Commenter: Mercatus Center; Regulation at issue: Roadless area 
conservation (draft environmental impact statement); Agency issuing 
regulation: USDA/ Forest Service.

Commenter: Mercatus Center; Regulation at issue: Forest Service 
planning rules; Agency issuing regulation: USDA/Forest Service.

Commenter: Notre Dame University; Regulation at issue: Title IV 
regulations under the Higher Education Act; Agency issuing regulation: 
Department of Education.

Commenter: Equal Employment Advisory Council; Regulation at issue: 
Office of Federal Contract Compliance Programs' (OFCCP) equal 
opportunity survey; Agency issuing regulation: DOL/OFCCP.

Commenter: Equal Employment Advisory Council; Regulation at issue: 
Uniform Guidelines on Employee Selection Procedures; Agency issuing 
regulation: Equal Employment Opportunity Commission.

Commenter: Employment Policy Foundation (EPF); Regulation at issue: 
Procedures for certification of employment based immigration and guest 
worker applications; Agency issuing regulation: DOL/Employment and 
Training Administration.

Commenter: LPA, Inc; Regulation at issue: Overtime compensation under 
the Fair Labor Standards Act; Agency issuing regulation: DOL/Wage and 
Hour Division.

Commenter: EPF/National Partnership for Women and Families; Regulation 
at issue: Record keeping and notification regulations under the Family 
and Medical Leave Act; Agency issuing regulation: DOL/Wage and Hour 
Division.

Commenter: American Chemistry Council; Regulation at issue: Mixture and 
derived from rule under the Resource Conservation and Recovery Act; 
Agency issuing regulation: EPA.

Commenter: City of Austin; Regulation at issue: Drinking water 
regulations under the Safe Drinking Water Act; Agency issuing 
regulation: EPA.

Commenter: American Petroleum Institute; Regulation at issue: 
Notification of substantial risk under the Toxic Substances Control 
Act; Agency issuing regulation: EPA.

Source: OMB.

[End of table]

In its December 2002 report, OIRA noted that several commenters 
questioned the 2001 comment process because the Mercatus Center 
provided a majority of the recommendations for reform. OIRA said it 
believed that, if there was a problem with that process, "it was not 
that the Mercatus Center was too active but that other potential 
commenters were silent." An OIRA representative told us during this 
review that the Mercatus Center had systematically tried to analyze and 
comment on a wide range of rules, and it simply submitted the analyses 
that it had done. A Mercatus Center official told us that the center 
had submitted nominations regarding all of the rules on which it had 
commented since 1997.[Footnote 71]

How High Priority Review Selections Were Made:

Although OIRA identified the source and ranking of each of the 
suggestions that it received, the office did not fully explain in its 
report to Congress how it decided that 23 of the suggestions merited 
high priority review. During our review, OIRA representatives told us 
that those determinations were made through a very informal, "bottom-
up" process, with OIRA staff initially looking at the nominations with 
which they were most familiar and making some preliminary decisions 
that were then reviewed by the branch chiefs and others. They said the 
OIRA Administrator made the final decision regarding which rules should 
be in the high priority category.

In its December 2002 final report, OIRA noted that 8 of the 23 high-
priority nominations listed in the December 2001 report addressed EPA 
rules, and another 5 addressed rules that could be considered 
environmental in nature. However, OIRA said "an examination of OIRA's 
decision-making process reveals no implicit or explicit intent to 
target environmental rules for scrutiny. In fact, the distribution of 
nominated rules by agency reflects the concerns raised by public 
comments, not the interests of OIRA." OIRA noted that only 13 of 33 
environmental rules that were nominated were rated as a high priority 
for review and said some of these 13 rules had already been established 
as an administration priority for review.

Status of Rules Selected for High Priority Review:

As of May 2003, the status of the rules that were the subject of the 23 
high-priority suggestions varied. OIRA said in its December 2002 final 
report that, in some cases, the agencies had "convinced us that reform 
is unnecessary or not appropriate at this time." For example, OIRA 
noted that EPA had decided not to modify its rule on arsenic in 
drinking water, and DOL had decided that changes in the Davis-Bacon 
regulations were not appropriate at that time. However, as the 
following examples illustrate, in many cases the responsible agencies 
took action on the suggestions or were in the process of taking action:

* One of the nominations focused on a Department of Energy rule issued 
in January 2001 that would have required that the energy efficiency of 
new central air conditioners be increased by 30 percent. The commenter 
said that the department did not adequately consider differences among 
consumers and may have overstated projected energy savings. In May 
2002, DOE withdrew the rule and issued a new rule requiring a 20 
percent increase in energy efficiency. The new rule's effective date 
was August 2002.

* EPA's July 2000 final rule regarding allowable amounts of pollution 
in water ("total maximum daily load") was also the subject of a 
suggested change. Specifically, the commenter said the revisions to the 
program in that rule were overly prescriptive and could prove costly to 
the states. In October 2001, EPA published a notice delaying the 
effective date of the rule until April 2003. In March 2003, EPA 
published a final rule withdrawing the July 2000 rule. By May 2003, a 
draft of a new proposed rule was undergoing informal interagency 
review.

* Another commenter questioned the assumptions underlying a May 2000 
proposed rule that would alter the hours of service for motor carrier 
drivers (e.g., trucks and buses). In April 2003, FMCSA published the 
final rule that changed the scope and the requirements from the 
proposal. For example, the final rule exempts buses from its coverage. 
Most of the final rule's provisions were scheduled to take effect in 
June 2003.

* One commenter expressed concerns about Department of Education 
regulations under Title IV of the Higher Education Act, indicating that 
the rules were redundant and placed "inappropriate administrative 
burdens on institutions of higher learning." In November 2002, the 
department published a final rule amending regulations under the Higher 
Education Act, and said the amendments were designed to "reduce 
administrative burden for program participants, and to provide them 
with greater flexibility to serve students and borrowers." The rules 
were generally scheduled to take effect in July 2003.

In these and many other cases, it is impossible to know whether the 
changes that the agencies made and were making to rules were initiated 
or affected by their designation as an item for high priority review. 
However, OIRA representatives noted that some of the changes that 
agencies were making to their rules began as a consequence of the 
administration's Card memorandum review in January 2001--not their 
later designation as an item for high priority review. Appendix IV 
provides information on the status of each of the 23 high priority 
rules as of May 2003.

Second Round of Nominations Was Different:

Section 624 of the Treasury and General Government Appropriations Act 
of 2001, also known as the "Regulatory Right-to-Know Act," required 
OIRA to include "recommendations for reform" in its cost-benefit report 
each year. Therefore, in its March 2002 draft report, OIRA repeated its 
solicitation of public comments on regulations or regulatory programs 
in need of reform. However, OIRA's second effort to identify rules for 
further review differed from its 2001 effort in the following respects.

* In the 2001 effort, OIRA asked the public to identify "regulations 
that could be rescinded or changed that would increase net benefits to 
the public by either reducing costs and/or increasing benefits." 
However, in the 2002 effort OIRA asked the public to nominate reforms 
to specific rules that would increase net benefits to the public, 
including not just the elimination or modification of existing rules 
but also "extending or expanding existing regulatory programs." OIRA 
also specifically requested comments on regulations affecting small 
businesses, and invited comments on agencies' practices regarding 
guidance documents.

* Whereas OIRA received only 71 nominations in 2001, primarily from one 
commentor, in the December 2002 report OIRA said it received comments 
on 267 regulations and 49 guidance documents from approximately 1,700 
individuals, firms, trade organizations, and others. Many of the 23 
items that OIRA designated for high priority review during the 2001 
process were again nominated. Although most of the nominations sought 
modifications that would increase regulatory flexibility or rescind 
rules, more than a quarter of them suggested making rules more 
stringent or developing new rules.

* In the first effort, OIRA reviewed the nominations and decided which 
ones merited high priority review. In the second effort, OIRA indicated 
that the agencies would be responsible for initially reviewing and 
prioritizing the suggested items. OIRA said it did so because of the 
large volume of nominations, and because the agencies could bring to 
bear "their extensive knowledge and resources, which will provide a 
basis for selecting reform priorities in consultation with OIRA.":

* As noted previously, OIRA did not fully explain in its report to 
Congress regarding the 2001 review how it decided which rules merited 
high priority review. However, in the December 2002 report OIRA 
discussed in some detail how it processed the nominations and suggested 
three criteria that the agencies should use to conduct their 
evaluations: (1) efficiency (reforms that can maximize net benefits, 
including improvements to the economy, environment, and public health 
and safety), (2) fairness (nominations with the potential for desirable 
distributive impacts and process considerations), and (3) practicality 
(nominations that are more important than others and that can be 
implemented under existing statutory authority).

OIRA asked the Small Business Administration's Office of Advocacy to 
review all of the nominations and identify those that it believes could 
reduce unjustified regulatory burdens on small businesses. OIRA asked 
that agencies complete their initial review of the nominations and 
discuss them with OIRA by the end of February 2003. An OIRA 
representative told us that the office met with the agencies that had 
the most nominated rules (i.e, EPA, HHS, DOT, and DOL) in January and 
February 2003 and emphasized that the final decisions on which 
suggestions to pursue would be up to the agencies.

[End of section]

Chapter 5: Conclusions and Recommendations:

Conclusions:

OIRA has been reviewing agencies' draft rules for more than 20 years, 
and those reviews have become an established and important part of the 
federal rulemaking process. While OIRA reviews clearly have an 
analytical component (e.g., ensuring compliance with legal and 
procedural requirements and conformance with principles of economic 
analysis), they are also a way to ensure that the agencies' regulatory 
programs are consistent with administration priorities (within 
applicable legislative constraints). OIRA is part of the Executive 
Office of the President, and the President is OIRA's chief client. 
Because it represents the President and because it reviews hundreds of 
significant rules each year from dozens of federal agencies, OIRA can 
have a major influence on the direction of a wide range of public 
policies.

Our review documented OIRA's direct influence with regard to more than 
two dozen rules in which it suggested significant changes that were 
ultimately adopted by the rulemaking agencies. OIRA's presence in the 
rulemaking process may also have a subtler, more indirect effect on 
agencies' decision making--discouraging them from submitting rules that 
OIRA is unlikely to find acceptable and encouraging them to make the 
case for the regulations that they do submit more carefully. However, 
the OIRA regulatory review process is not well understood or 
documented, and the effect that OIRA's reviews have on individual rules 
is not always easy to determine.

Agency and OIRA Documentation Not Always Clear:

Concerns about the effect that OIRA was having on agencies' rules led 
to the adoption of transparency requirements in section 6 of Executive 
Order 12866. For nearly 10 years the executive order has required 
agencies to identify for the public the substantive changes in 
regulatory actions that were made between the drafts submitted to OIRA 
and the actions subsequently announced, and to identify the changes 
made to the drafts at the suggestion or recommendation of OIRA. Some of 
the agencies that we focused on in our review (EPA's Office of Water, 
FDA, and FMCSA) had what we considered to be "best practices" of 
documenting these changes, although their methods of documentation 
varied considerably. However, in other agencies the documentation of 
the changes made to their rules was either unavailable or unclear, 
making it difficult for us to determine what effect OIRA's review had 
on their rules. For example:

* Some agencies did not comply with the executive order's transparency 
requirements at all (FAA) or did not put the required information in 
the agencies' public dockets (OSHA). In a few cases, the agencies did 
not put the information in the dockets until months after the rules had 
been published (i.e., not until we asked for the files as part of this 
review). The agencies correctly noted that neither the executive order 
nor OIRA guidance establishes a time limit by which the documentation 
had to be provided.

* In many cases, it was unclear whether the documentation that the 
agencies provided was complete (e.g., the agencies provided multiple 
drafts, "change pages," and/or memoranda identifying alterations that 
had been made to their rules, but there was no indication that the 
changes identified represented all of the substantive changes made to 
the rules).

* In some cases, it was unclear which changes that the agencies 
identified were suggested by OIRA and which were suggested by others 
(e.g., the rulemaking agencies themselves).

* In other cases, it appeared that the agencies focused their efforts 
on documenting changes that had been suggested by OIRA but did not 
clearly document whether others had initiated substantive changes in 
the rules during the OIRA review period.

* The agencies also differed in what they considered a "substantive" 
change that required documentation. Some of the agencies identified all 
changes made to their rules during OIRA's review, regardless how small. 
However, other agencies said they only considered changes to the text 
of the rule as it appears in the Code of Federal Regulations to be 
"substantive." Our review indicated that some changes made to the 
preambles of the agencies' rules (e.g., suggestions that agencies 
solicit comments on particular issues) could affect their application, 
and therefore appeared to us to be "substantive.":

The executive order also places certain transparency requirements on 
OIRA. For example, the order requires OIRA to disclose any substantive 
communications it has with outside parties regarding rules under 
review, and the status of all regulatory actions under review. After a 
regulatory action that it reviewed has been issued, OIRA is required to 
disclose all documents exchanged between OIRA and the agency during the 
review. However, in some cases the documentation that OIRA provided 
regarding the rules it reviewed did not clearly illustrate what 
occurred. For example,

* OIRA's descriptions of its contacts with outside parties sometimes 
did not clearly indicate what rule was being discussed or what 
organizations those parties represented.

* OIRA's coding of some of the outcomes of its reviews made our review 
more difficult. In particular, the "consistent with change" code 
included any type of change made to a rule, regardless of its 
significance or source. As a result, an agency's action to correct a 
legal citation or a misspelling is coded the same as a significant 
change to the text of a rule that was suggested by OIRA. Also, OIRA's 
use of an outcome code of "deadline case" for some rules provided no 
information on whether the reviews of such rules were completed with or 
without changes. The usefulness of that outcome code is also 
questionable, given that OIRA's database already has a separate field 
to identify rules with legal deadlines.

* As interpreted by OIRA, the requirement that OIRA disclose documents 
exchanged with the agencies only applies to documents exchanged by 
staff at the branch chief level and above. Therefore, under this 
interpretation, OIRA is not required to disclose any documents that are 
e-mailed or faxed between OIRA desk officers and regulatory agency 
personnel--the level at which such exchanges are most likely to occur. 
Nevertheless, during our review we sometimes discovered staff-level e-
mails and other documentation in the agencies' or OIRA's dockets, and 
that information was very useful in explaining what had happened to 
rules undergoing OIRA review. We have no way of knowing how often other 
documents were exchanged at the staff level and not disclosed.

There also appears to be a gap in the transparency requirements 
applicable to OIRA regulatory reviews. If OIRA returns a rule to the 
rulemaking agency for reconsideration, the executive order requires 
OIRA to explain in writing why the rule was returned. If a rule is 
substantively changed while under review at OIRA, the executive order 
requires the agency to identify those changes for the public. However, 
neither the rulemaking agencies nor OIRA are required to disclose why 
rules are withdrawn from review. Our review indicated that withdrawals 
can be initiated by the agencies, can be requested by OIRA, or can be a 
joint decision. If a rule is withdrawn and not subsequently published, 
the agencies may not create a docket into which any explanation for the 
withdrawal could be disclosed. Therefore, in those instances, OIRA may 
be the most logical site for any withdrawal disclosure--just as it is 
for returns. If the withdrawn rule is subsequently published, the 
agencies could document the reasons for the withdrawals in the 
rulemaking docket.

Opportunity to Build on Improvements in Transparency:

The current OIRA Administrator has made several notable improvements in 
the transparency of the office's regulatory reviews. For example, by 
placing information about the rules under review and OIRA's contacts 
with outside parties on the office's Web site, the Administrator has 
made that information much more accessible to the public than it had 
been previously. Also, recognizing that outside parties were 
increasingly contacting OIRA during the informal review periods that 
sometimes precede formal submission, the Administrator changed the 
trigger for the disclosure requirements applicable to OIRA's 
interactions with outside parties from the start of the formal review 
period to the start of any informal review period. As a result, OIRA 
now discloses substantive communications (e.g., phone calls, meetings, 
and correspondence) with outside parties involving specific rules that 
occur any time after OIRA receives a draft rule from the agency or 
begins substantive discussions with an agency about the provisions of a 
draft rule. Disclosing the office's interactions with outside parties 
at this stage of the rulemaking process can go a long way toward 
eliminating what the Administrator referred to as "the culture of 
secrecy and mystery" that has surrounded OIRA for more than 20 years.

However, another result of this change in policy is that the trigger 
for the transparency requirements applicable to OIRA regarding its 
interaction with outside parties (the start of informal review) is now 
inconsistent with the trigger for the transparency requirements 
applicable to OIRA and the agencies regarding their interactions with 
each other (the start of formal review). We agree with the 
Administrator that it is useful and important that the public know 
about OIRA contacts with outside parties while rules are undergoing 
informal review. However, we also believe that it is at least as 
important for the public to know whether substantive changes were made 
to agencies' draft rules during this period, and in particular, whether 
those changes were suggested by OIRA.

The transparency requirements in Executive Order 12866 were intended to 
allow the public to understand what changes had been made to agencies' 
rules during OIRA's review and at OIRA's suggestion. During our review 
we discovered that formal OIRA review periods can be as short as 1 day, 
but informal review periods can go on for weeks or even months in 
advance of formal reviews. Therefore, restricting the transparency 
requirements in Executive Order 12866 only to a brief period of formal 
review seems antithetical to the intent of those requirements. We also 
discovered that agencies sometimes provided the public with 
documentation of changes occurring during informal OIRA reviews--even 
though they were not required to do so. In several cases that 
documentation helped us to identify significant changes that had been 
suggested by OIRA and to better understand how the published rule was 
developed. Based on that documentation and other evidence that was 
available, we concluded that OIRA's reviews appeared to have had a 
significant effect on 25 of the 85 rules that we examined. However, 
because neither OIRA nor the rulemaking agencies are required to 
document the changes during informal review, we do not know whether 
there were other "consistent with change" rules (or even rules coded as 
"consistent with no change") that were significantly altered at the 
suggestion of OIRA.

In several speeches during the past 2 years the OIRA Administrator has 
emphasized the importance of transparency, describing the establishment 
of a climate of openness at OIRA as his "first priority" and stating 
that "more openness at OMB about regulatory review will enhance public 
appreciation of the value and legitimacy of a centralized analytical 
approach to regulatory policy." Also, on more than one occasion, OIRA 
has said that it can have its most significant effect on agencies' 
draft rules before they are formally submitted to OIRA for review. 
Therefore, it is not clear why OIRA believes that the executive order's 
transparency requirements should not cover the part of the review 
period when the most important changes can occur. Real transparency 
about the effects of OIRA's reviews would require either OIRA or the 
rulemaking agencies to disclose the changes made to agencies' draft 
rules during informal review. Under OIRA's current interpretation of 
the executive order's requirements, the public might never know about 
some of the most significant changes that are made to agencies' rules.

We recognize that there are limits to what should be disclosed 
regarding OIRA's interactions with the rulemaking agencies. OIRA and 
the agencies should be able to discuss regulatory matters in general 
without having to document and disclose those communications. However, 
if the published version of a rule reflects substantive changes that 
OIRA recommended to the draft rule, even if those changes were 
recommended during informal review, we believe that the agencies should 
document the changes so that the public can understand how the rule was 
developed. We also recognize that it may not always be clear when 
informal reviews begin (e.g., when "substantive" discussions with 
agencies have begun regarding draft rules). However, OIRA must make 
that determination now regarding the disclosure of its contacts with 
outside parties. Also, although OIRA representatives indicated that 
postpublication disclosure of communications between OIRA and the 
agency that occur prior to formal rule submission could have a 
"chilling effect" on those communications in the future, that effect 
does not appear to have taken place in those agencies that already 
disclose those communications. Further, our interactions with the 
agencies and OIRA during this review indicated that a requirement that 
substantive changes be disclosed during any part of OIRA's review would 
not pose practical difficulties for either party. Both OIRA and the 
agencies know what substantive changes are made to agencies' rules 
during the review period (whether formal or informal) and the source of 
those changes.

Although the current Administrator has substantively improved the 
ability of the public to understand the OIRA regulatory review process, 
we believe that there are several additional initiatives that OIRA can 
undertake to further improve the transparency of the review process 
without sacrificing the confidentiality of OIRA-agency consultations.

Recommendations:

We recommend that the Director of the Office of Management and Budget:

* Define the transparency requirements applicable to the agencies and 
OIRA in section 6 of Executive Order 12866 in such a way that they 
include not only the formal review period but also the informal review 
period when OIRA says it can have its most important impact on 
agencies' rules. Doing so would make the trigger for the transparency 
requirements applicable to OIRA's and the agencies' interaction 
consistent with the trigger for the transparency requirements 
applicable to OIRA regarding its communications with outside parties.

* Change OIRA's database to clearly differentiate within the 
"consistent with change" outcome category which rules were 
substantively changed at OIRA's suggestion or recommendation and which 
rules were changed in other ways and for other reasons.

* Improve the implementation of the transparency requirements in the 
executive order that are applicable to OIRA. Specifically, the 
Administrator should take the following actions:

* More clearly indicate in the OIRA meeting log which regulatory action 
was discussed and the affiliations of the participants in those 
meetings.

* Because most of the documents that are exchanged while rules are 
under review at OIRA are exchanged between agency staff and OIRA desk 
officers, OIRA should reexamine its current policy that only documents 
exchanged by OIRA branch chiefs and above need to be disclosed.

* Establish procedures whereby either OIRA or the agencies disclose the 
reasons why rules are withdrawn from review.

* Improve the implementation of the transparency requirements in the 
executive order that are applicable to agencies. Specifically, the 
Administrator should:

* Define the types of "substantive" changes during the OIRA review 
process that agencies should disclose as including not only changes 
made to the regulatory text but also other, noneditorial changes that 
could ultimately affect the rules' application (e.g., explanations 
supporting the choice of one alternative over another and suggestions 
that agencies solicit comments on the estimated benefits and costs of 
regulatory options).

* Instruct agencies to put information about changes made to rules 
after submission for OIRA's review and at OIRA's suggestion or 
recommendation in the agencies' public rulemaking dockets, and to do so 
within a reasonable period after the rules have been published.

* Encourage all agencies to use "best practice" methods of 
documentation that clearly describe the changes made to agencies' rules 
(e.g., like those practices used by FDA, EPA's Office of Water, or 
FMCSA).

Agency Comments and Our Evaluation:

On August 8, 2003, we provided a draft of this report to the Director 
of OMB for his review and comment. We also provided a draft to APHIS, 
FDA, DOL, DOT, and EPA for technical review. We received several 
technical suggestions from these agencies, which we incorporated as 
appropriate. For example, at the request of certain agencies, some of 
the entries in appendix II now provide both the title of the rule as 
submitted to OIRA and the title as published in the Federal Register. 
We also made minor changes to the body of the report clarifying why 
certain rules were changed or withdrawn.

On September 2, 2003, the Administrator of OIRA provided written 
comments on the draft report. (See app. V for a copy of these 
comments.) The Administrator said OIRA believed the "factual 
foundations of the report are well grounded," and was particularly 
pleased that the report noted improvements in the timeliness of OIRA's 
reviews and the transparency of the review process. He also said that 
OIRA plans to review its implementation of the transparency 
requirements and, in particular, would work to improve the clarity of 
its meeting log. However, the Administrator said OIRA did not agree 
with all of the recommendations in the draft report, and did not 
believe that the report had demonstrated the need or desirability of 
changing the agency's existing "unprecedented" level of transparency. 
He then discussed several specific issues, describing why he disagreed 
with the recommendations. The bullets below summarize his concerns and 
present our response.

* The Administrator said that OIRA did not believe that disclosure of 
"deliberations" that occur during informal review of rules would 
improve the rulemaking process. He also said that Congress and the 
courts have recognized the importance of confidentiality during the 
deliberative process and said it would not be appropriate for OIRA to 
waive the "deliberative privilege" for rulemaking agencies. However, we 
did not recommend that OIRA's deliberations with the agencies be 
disclosed. Our recommendation was that, after a rule has been published 
in the Federal Register, agencies disclose any substantive changes made 
to draft rules--whether those changes were made during the formal 
review process or an informal review. As we said in the draft report, 
real transparency regarding the substantive changes made to agencies' 
draft rules during OIRA's review requires disclosure of those changes 
whenever they occurred. Excluding the portion of the review process 
when OIRA has said it can have its most significant effect seems to 
seriously call into question the transparency of that process. The 
desirability of such disclosure was clearly demonstrated during our 
review when agencies disclosed substantive changes made to their rules 
during informal review at the suggestion or recommendation of OIRA. 
Those disclosures greatly facilitated our understanding of the extent 
to which OIRA affected the rules at issue.

* The Administrator said that the draft report does not explain why 
changes are needed to the "longstanding practice" of limiting the 
disclosure of documents exchanged during the review process to only 
documents that were exchanged at the OIRA branch chief level and above. 
In our draft report, we recommended that OIRA reexamine that policy 
because our review of OIRA's and the rulemaking agencies' files 
indicated that most of the documents exchanged occurred below the 
branch chief level. Therefore, only requiring disclosure of documents 
exchanged at a level at which they rarely are exchanged seems 
inconsistent with the spirit of transparency.

* The Administrator indicated that the draft report does not explain 
why agencies or OIRA should disclose why rules are withdrawn from 
review, again noting that nondisclosure has been a "longstanding 
practice." He also indicated that rules are withdrawn at the request of 
the rulemaking agency and that OIRA does not believe it is appropriate 
for it to "waive the deliberative privilege" by disclosing why rules 
are withdrawn. However, as we noted in our report, the executive order 
already requires disclosure regarding rules that are changed or 
returned to the agencies. Withdrawals are the only substantive action 
that can be taken without explanation or documentation. Further, our 
review indicated that OIRA sometimes initiates these withdrawals (even 
though they were technically "requested" by the agencies).

* The Administrator noted that the draft report recommended that OIRA 
differentiate within the "consistent with change" category in its 
database those rules that were substantively changed at OIRA's 
suggestion or recommendation and those rules that were changed in other 
ways and for other reasons. He then referred to the former 
Administrator's response to our 1998 report, indicating that OIRA 
continues to believe that it is better to provide the public with 
copies of the draft regulations reviewed by OIRA than to clearly 
delineate which changes were substantive. First of all, we did not 
address the issue of the "consistent with change" category in our 1998 
report. Further, we concluded during this review that it is extremely 
difficult to determine what changes had been made in different versions 
of draft rules that sometimes were hundreds of pages in length--much 
less to determine which of those changes were substantive. The 
executive order requires rulemaking agencies to identify for the public 
the substantive changes made to draft rules "in a complete, clear, and 
simple manner." It does not place the responsibility on the public to 
identify changes made to agency rules. Also, simply providing copies of 
the rules as they entered and exited OIRA does not necessarily identify 
changes made at OIRA's suggestion or recommendation.

* Finally, the Administrator indicated that he disagreed with our 
recommendation that OIRA encourage agencies to use "best practices" in 
disclosing changes made to their rules and said that OIRA would defer 
to the agencies on this issue (as it did during the previous 
administration). He also said OIRA expected that many of the 
differences in agencies' documentation practices that we identified 
should be eliminated by the administration's e-rulemaking initiative 
(which would consolidate each agency's public docket into a single 
governmentwide docket).[Footnote 72] Our examination of agencies' 
rulemaking dockets during this review indicated that the documentation 
of changes made during OIRA's review was often confusing and, at times, 
totally absent. Also, section 2(b) of the executive order states "to 
the extent permitted by law, OMB shall provide guidance to agencies" 
and that OIRA "is the repository of expertise concerning regulatory 
issues, including methodologies and procedures that affect more than 
one agency." Therefore, we believe that OIRA has a responsibility under 
the executive order to instruct agencies regarding the order's 
transparency requirements (just as it has done with regard to other 
issues). Further, the consolidation of the agencies' dockets in the 
administration's e-rulemaking initiative will not address the 
deficiencies that we observed regarding the contents of some of those 
dockets. The confusing documentation (or the absence of documentation) 
will just be more accessible to the public.

Overall, we continue to believe that improvements can and should be 
made to improve the transparency of the OIRA review process. We 
recognize and applaud the improvements that the current Administrator 
has made in this area. However, the difficulties that we experienced 
during this review clearly demonstrated that OIRA's reviews are not 
always transparent to the public. Weaknesses were apparent regarding 
both the coverage and the implementation of the requirements placed on 
both OIRA and the rulemaking agencies. Our review also indicated that, 
when OIRA and the rulemaking agencies disclosed changes and 
communications beyond what is currently required, those practices 
greatly enhanced our (and the public's) ability to understand how rules 
are made.

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology:

This appendix presents more detailed information about our reporting 
objectives, the scope and methods used to address each of the 
objectives and subobjectives, and the most significant limitations of 
our findings and analyses.

Objectives:

The general purpose of this engagement was to examine and report on how 
the Office of Management and Budget's Office of Information and 
Regulatory Affairs (OIRA) conducts its regulatory review function and 
the outcomes of those reviews. Specifically, we were asked to:

1. Describe OIRA's current regulatory review policies and processes and 
determine whether, and if so how, those policies and processes have 
changed in recent years.

2. Identify the rules issued by selected agencies that were reviewed by 
OIRA between July 1, 2001, and June 30, 2002, and that were either 
significantly changed at OIRA's direction, returned by OIRA for further 
consideration by the agencies, or withdrawn by the agencies at OIRA's 
suggestion. For each such rule, (a) describe the changes made by OIRA, 
the reasons why the rule was returned or withdrawn, and any subsequent 
activity regarding the rule, (b) describe, to the extent possible, the 
effects of the changes, returns, and withdrawals on the rule's original 
benefits and costs, and (c) determine whether there are any indications 
that the actions OIRA took were traceable to suggestions offered by 
regulated entities or outside parties and, if so, whether OIRA publicly 
disclosed their involvement.[Footnote 73] We also examined OIRA's and 
the agencies' application of the transparency requirements in Executive 
Order 12866 and related guidance.

3. Describe how OIRA determined that certain existing rules listed in 
its reports to Congress on the costs and benefits of federal 
regulations merited high priority review. With regard to OIRA's 2001 
report, our specific objectives were to determine (a) which 
organizations or persons suggested that the rules be reviewed, (b) what 
process OIRA used to select and prioritize the nominations, (c) the 
extent to which OIRA publicly disclosed its selection and priority-
setting process, and (d) the current status of those rules. Another 
specific objective was to compare that 2001 effort to the process OIRA 
used regarding a second round of nominations for OIRA's 2002 report.

Scope and Methodology:

Objective 1:

Under the first objective, our primary focus was on describing OIRA's 
regulatory review policies and processes in place as of June 2002 or 
later. To determine whether and to what extent those policies and 
processes have changed in recent years, we focused mainly on 
identifying changes that may have occurred since the previous 
administration. However, to provide additional context on the evolution 
of the OIRA review processes, we also identified the major changes that 
have occurred since OIRA began carrying out a regulatory review 
function in 1981.

To describe the policies and processes used by OIRA to conduct 
regulatory reviews, we reviewed relevant primary documents, such as 
executive orders, legislation, OMB guidance, and memoranda, speeches, 
and documents from the OIRA administrator describing aspects of the 
review process. We also reviewed other historical and secondary 
documents that provided background and context on the framework for 
OIRA's regulatory reviews. We interviewed current and former OIRA 
officials to provide additional information on the changes, if any, in 
the agency's regulatory review policies and processes. We supplemented 
the documentary and testimonial evidence obtained from OIRA with 
interviews and document reviews at selected regulatory agencies that 
are subject to OIRA's regulatory reviews.

For this objective, and the other two objectives, we also interviewed 
officials and staff from outside (nonfederal) groups representing 
public interest groups and regulated entities that are actively 
involved in observing and commenting on the federal regulatory process. 
Participants in these meetings included representatives of the American 
Bakers Association, American Road and Transportation Builders 
Association, Center for Regulatory Effectiveness, Exxon/Mobil, 
Mercatus Center, National Association of Home Builders, National 
Association of Manufacturers, National Federation of Independent 
Business Research Foundation, Natural Resources Defense Council, 
National Roofing Contractors Association, OMB Watch, Public Citizen, 
and United States Chamber of Commerce.

Objective 2:

With regard to the second objective, we used OIRA's Executive Order 
Review database to identify the draft regulatory actions that agencies 
had submitted for OIRA's review during the 1-year time period (July 1, 
2001, through June 30, 2002) specified in the congressional request. 
Because a given draft regulatory action could have been submitted for 
OIRA's review more than once before final publication or disposition, 
our unit of analysis was each separate submission to OIRA, which is 
what OIRA's database reflects, rather than each rule. However, to 
simplify reporting, we refer to these submissions as rules in this 
report.

Out of the total of 642 draft items submitted for OIRA's review during 
the 1-year time period, we identified 393 draft rules from 81 agencies 
and offices for which OIRA's database had coded the outcome of the 
review as "returned," "withdrawn," or "consistent with change." Because 
we could not devote the time and resources that would have been 
necessary to search dockets for all of these rules at all of the 
agencies, we limited our efforts to selected rules and agencies, 
focusing on the agencies with the largest numbers of affected rules, as 
discussed and agreed to in consultation with the requesters. 
Specifically, we agreed to focus our efforts on the rules submitted for 
OIRA regulatory reviews that met the following criteria:

* The submission to OIRA was a draft health, safety, or environmental 
rule.

* The rule was submitted to OIRA as a proposed, interim final, or final 
rule (i.e., we did not include other items, such as prerules and white 
papers, that agencies also sometimes submitted for OIRA's review).

* OIRA completed its review of the rule between July 1, 2001, and June 
30, 2002.

* The rule was returned to the rulemaking agency by OIRA, withdrawn 
from OIRA's review by the agency, or changed after its submission to 
OIRA.

* The rule was from an agency or subagency that OIRA's Executive Order 
Review database indicated had five or more rules returned, withdrawn, 
or changed during the time period in scope for this objective.

We identified 85 draft regulatory actions that met these criteria. The 
85 rules were submitted for OIRA's review from nine agencies--the 
Animal Plant and Health Inspection Service (APHIS), the Food and Drug 
Administration (FDA), the Occupational Safety and Health Administration 
(OSHA), the Department of Transportation's (DOT) Federal Aviation 
Administration (FAA), Federal Motor Carrier Safety Administration 
(FMCSA), and National Highway Traffic Safety Administration (NHTSA), 
and the Environmental Protection Agency's (EPA) Office of Air and 
Radiation, Office of Solid Waste and Emergency Response, and Office of 
Water. We generally did not question the rule dispositions used in the 
OIRA database. However, we included one rule from EPA's Office of Air 
and Radiation in the "consistent with change" category that had been 
coded as a "deadline case" in the database because publicly available 
information indicated that the rule had been changed in response to 
OIRA's review.[Footnote 74] It is unclear whether other rules with 
"deadline case" outcome codes in the database were also changed by 
OIRA, or why other rules that we reviewed with statutory or legal 
deadlines were not coded as deadline cases.[Footnote 75] We also 
dropped one rule from EPA's Office of Solid Waste and Emergency 
Response that had a "consistent with change" outcome code in OIRA's 
database because it had not been published in the Federal Register at 
the time of our review. (See app. II for information on each of the 
selected submissions.):

We were asked to address three specific topics regarding the selected 
rules: (1) the nature of the changes attributed to OIRA or the reasons 
that rules were withdrawn or returned at OIRA's initiation, (2) the 
effect of OIRA's actions on the costs and/or benefits of the rules, and 
(3) contact with OIRA by external parties regarding these rules. 
Because Executive Order 12866 also imposes certain documentation 
requirements on agencies and OIRA regarding OIRA's regulatory review 
process, we also addressed compliance with those requirements as a 
fourth part of our analysis of the 85 rules.

In general, to address these four areas we reviewed the available 
documents in both agency and OIRA rule dockets. We also interviewed 
officials at the agencies and OIRA to obtain information about the 
regulatory review process for the individual rules included in our 
scope. We then used an iterative process to develop summary findings 
and determinations on each rule. Multiple reviewers from our team 
independently examined and coded the information and materials that had 
been collected. We then held a series of meetings to discuss and reach 
consensus on the coding and description of results for each rule. We 
vetted these preliminary results with OIRA and the agencies to address 
outstanding questions and obtain their feedback on the accuracy of our 
findings and determinations. We incorporated their comments as 
appropriate before developing our official draft report for formal 
agency comments. The analysis and coding process for each of the four 
areas also had some unique aspects, as described below.

Nature and significance of OIRA's effects on rules:

The review outcome categories used in the OIRA database are broader 
than the specific types of rules targeted by our second objective--
those that were significantly affected by OIRA. Therefore, we had to 
gather additional information on each of the 71 changed, 9 returned, 
and 5 withdrawn rules to determine which ones had been significantly 
affected by OIRA and, therefore, met our more specific criteria.

First, we used a variety of information sources (e.g., agency and OIRA 
docket materials and interviews with agency officials) to place each of 
the 71 rules that had been changed after submission to OIRA into one of 
three categories, based on the most significant changes attributed to 
either OIRA or OMB.[Footnote 76] Our three coding categories were:

1. Significant changes--This category included rules in which the most 
significant changes attributed to OIRA or OMB affected the scope, 
impact, or estimated costs and benefits of the rules as originally 
submitted to OIRA. Usually, these significant changes were made to the 
regulatory language that would ultimately appear in the Code of Federal 
Regulations.

2. Other material changes--This category covered rules in which the 
most significant changes attributed to OIRA or OMB resulted in the 
addition or deletion of material in the explanatory preamble section of 
the rule. For example, OIRA may have recommended that agencies provide 
better explanations for certain rulemaking actions and/or suggested 
that agencies ask the public to comment on particular aspects of the 
rules.

3. Minor or no OIRA/OMB changes--We used this category to identify 
rules in which the most significant changes attributed to OIRA's or 
OMB's suggestions resulted in editorial or other minor revisions, or 
rules in which changes occurred prior to publication but not at the 
suggestion of OIRA or OMB. Where no OIRA/OMB changes were made, the 
changes that caused the rule to be coded "consistent with change" in 
OIRA's database could have been initiated by the regulatory agency 
itself or by another federal agency (e.g., the Office of the Federal 
Register). Because the executive order does not require agencies to 
document nonsubstantive changes, three of the rules we included in this 
category were ones in which it was clear that all the changes were 
minor, but the source of the changes (i.e., whether they were made at 
the suggestion of OIRA/OMB) could not be identified.

Identifying returned rules significantly affected by OIRA and OIRA's 
rationale for the returns was more straightforward. When OIRA returns a 
rule to an agency for reconsideration, section 6(b)(3) of Executive 
Order 12866 requires the OIRA Administrator to provide the issuing 
agency with a written explanation delineating the pertinent section of 
the order on which OIRA is relying. OIRA has posted copies of its 
return letters, including those relevant to rules within the scope of 
our engagement, on the OMB Web site. OIRA identified other rules that 
were returned for nonsubstantive reasons as "improper submissions" in 
its database.

There are no documentation requirements on agencies or OIRA covering 
withdrawn rules, so we relied primarily on testimonial evidence from 
agency officials to determine whether OIRA, rather than the submitting 
agency, had initiated the withdrawal. In one case, however, a withdrawn 
rule from FAA that was subsequently resubmitted to OIRA and published, 
the agency docket included a written chronology for the rulemaking 
process that attributed the withdrawal to OIRA's action.

Effect of OIRA's reviews on costs and benefits:

We considered two types of actions attributed to OIRA or OMB as 
potential evidence that OIRA directly affected the costs and/or 
benefits of the rule compared to those expected under the draft version 
of the rule submitted for OIRA's review. These were when (1) OIRA or 
OMB suggested changes to a draft rule's regulatory text that could 
reasonably be expected to affect the potential costs and/or benefits of 
the regulations (e.g., changing the proposed federal share of an 
indemnity payment) and (2) OIRA specifically commented on and requested 
changes in the agencies' analyses of the economic impacts of the draft 
regulations. With regard to the first type of action, we believed that 
it was reasonable to assume that OIRA-suggested elimination or delay of 
certain regulatory provisions in the text of draft rules as submitted 
to OIRA would also eliminate or delay the expected costs and/or 
benefits associated with those provisions. We also identified and 
reported on other changes suggested by OIRA that, while not directly 
affecting regulatory provisions or cost-benefit estimates, otherwise 
revised, clarified, or requested comments on issues relevant to the 
agencies' discussion of potential costs and/or benefits of a rule. We 
consulted with our Chief Economist in making our determinations and 
describing the potential effects of OIRA's actions.

Evidence of outside contacts regarding rules under OIRA review:

Another part of this objective was to determine whether there was any 
evidence that the actions that OIRA took (e.g., to suggest significant 
changes to rules or to return them to the agencies for reconsideration) 
were traceable to suggestions offered by regulated entities or other 
parties outside of the federal government. It is not possible to 
independently determine what motivated OIRA's actions with regard to 
any of the rules that it reviewed. However, as part of our review, we 
checked whether OIRA had direct contact with such outside parties 
regarding rules that OIRA significantly affected. We defined "direct 
contact" as taking the form of either oral communications with OIRA 
(meetings or phone calls) or written communications (correspondence) 
sent directly to OIRA officials before or during the period of OIRA's 
review. In some OIRA files, we found evidence that OIRA had reviewed 
copies of substantive comments on previous versions of the draft rule 
currently under review. Because these were public docket materials 
previously submitted to the regulatory agencies, not OIRA, we did not 
consider them as evidence of direct contact with OIRA by outside 
parties. If there was evidence that outside parties had contacted OIRA, 
we also examined whether there were similarities between the actions 
that OIRA suggested or recommended to the agencies and those advocated 
to OIRA by external parties through those direct contacts.

Transparency of agencies' and OIRA's documentation of reviews:

Our primary focus with regard to agencies' compliance with 
documentation requirements of Executive Order 12866 was on determining 
whether the agencies had publicly documented changes made in rules 
between submission for OIRA's review and publication in the Federal 
Register. Section 6(a)(3)(E)(ii) of the order states that agencies must 
"identify for the public, in a complete, clear, and simple manner, the 
substantive changes between the draft submitted to OIRA for review and 
the action subsequently announced." However, neither the executive 
order nor OIRA's October 1993 guidance on its implementation defines 
what the term "substantive changes" means. Section 6(a)(3)(E)(iii) of 
the order requires agencies to "identify for the public those changes 
in the regulatory action that were made at the suggestion or 
recommendation of OIRA." OIRA's October 1993 guidance on the 
implementation of the order considers the second requirement to be a 
subset of the first. Therefore, under this interpretation, the agencies 
are only required to disclose the changes made at OIRA's suggestion or 
recommendation after formal submission of the rule to OIRA--not during 
any informal review period that precedes formal submission.

To determine agencies' compliance with these documentation 
requirements, we considered the required information to have been 
"identified for the public" if it was available in the agencies' public 
docket for the relevant rule. We coded the level of documentation in 
the agencies' dockets for each changed rule into one of four 
categories, reflecting whether (1) all changes were clearly documented, 
(2) changes were identified but it was not clear that all changes had 
been documented or at whose initiative, (3) no changes were documented 
in the public docket, or (4) the Executive Order 12866 documentation 
requirements were not applicable.[Footnote 77] The first requirement is 
not applicable when there were no changes made to the rule during 
OIRA's review that the agencies considered "substantive." Even if there 
were substantive changes made during OIRA's review, the second 
requirement is not applicable if those changes were not made at the 
suggestion or recommendation of OIRA. We made our determinations 
regarding agencies' compliance with these requirements solely on the 
basis of the information that would be available to a member of the 
public if he/she had reviewed the docket for a given rule.[Footnote 78] 
Further, because the executive order places responsibility to document 
changes on the agencies rather than OIRA, our determinations only 
reflect material available in the regulatory agencies' dockets, not 
materials in OIRA's public files.[Footnote 79] However, we did use 
information from the OIRA files to identify rule changes that agencies 
should have documented.

Our primary focus with regard to OIRA's compliance with documentation 
requirements was to see if (1) when returning rules to agencies for 
reconsideration, the OIRA Administrator provided the issuing agency 
with a written explanation delineating the pertinent section of the 
order on which OIRA relied in returning the rule, as required by 
section 6(b)(3) of the executive order, and (2) OIRA had documented 
written and oral communications with outside parties regarding rules 
under review by OIRA, as required by section 6(b)(4) of the order. To 
address the first item, we confirmed that OIRA had prepared a return 
letter for each of the rules it returned to agencies for 
reconsideration of substantive issues. To address the second item, we 
reviewed OIRA's docket files, meeting logs (both the paper-based and 
on-line versions), and phone logs. We also checked other potential 
sources of information on contacts with outside parties regarding the 
85 rules, especially the agencies' regulatory docket files on these 
rules.

Objective 3:

Our work to address the third objective focused on the particular 
rules, and OIRA's processes for selecting and ranking those rules, 
identified for high priority review in the 2001 and 2002 versions of 
OMB's annual report to Congress on the costs and benefits of federal 
regulations. In order to address the third objective, we reviewed any 
available documentation describing the process that OIRA used to select 
certain rules for high priority review. We also interviewed OIRA 
officials and officials in other relevant agencies and organizations to 
determine how the classifications were made, and reasons why the 
particular selected rules were designated as high priority.

Limitations:

The most important limitations to our engagement were related to the 
second objective. In particular:

* Our analysis of individual rules submitted for OIRA's review was 
limited to the 85 rules and 9 agencies or offices that met specific 
selection criteria. We did not review all 393 rules from all 81 
agencies or offices that OIRA's database indicated had rules changed, 
returned, or withdrawn during the 1-year period from July 1, 2001, 
through June 30, 2002.

* Some types of OIRA's influence on rules may not be reflected in the 
documentation we relied on in this review. For example, DOT officials 
told us in 1996 that they will not even propose certain regulatory 
provisions because they know that OIRA will not find them acceptable. 
Also, the documentation that we reviewed generally did not reflect the 
OIRA-suggested changes that were not adopted by the agencies.

* We cannot be sure that we have identified all changes to the selected 
rules that were made at the suggestion or recommendation of OIRA (e.g., 
changes made as a result of informal OIRA reviews that were not 
documented). Neither can we be sure to have identified all the effects 
of such changes on the rules or all instances in which an external 
party may have influenced OIRA's actions.

* Given the available documentation, we were not able to clearly 
attribute all changes or actions taken regarding the selected rules to 
OIRA or to the actions or influence of outside parties. We cannot 
attribute any cause-effect relationships in those instances where both 
OIRA's comments or changes regarding a particular rule and the 
suggestions of an external party on that same rule were similar. 
Likewise, any identified changes in the benefits and costs of selected 
rules after OIRA's reviews may not be attributable in whole or in part 
to changes made at OIRA's suggestion.

* Characterizing the nature of changes made to the rules, particularly 
the extent to which they are "significant," is inherently subjective. 
We attempted to mitigate this limitation by (1) establishing criteria 
to generally categorize the nature of changes, (2) using multiple 
reviewers for each rule, and (3) obtaining views of agency and OIRA 
officials on whether we had accurately identified and characterized the 
nature of OIRA's effect on each rule.

* Our knowledge of OIRA contacts by outside parties, such meetings or 
correspondence, was generally limited to what OIRA or the agencies 
disclosed in their files. Although in one case we found documented 
evidence of such contact through materials posted by a trade group--
evidence that did not appear in either the OIRA or agency files--we do 
not know whether there were other meetings with outside parties or 
other letters from those parties about rules in our review that did not 
come to our attention.

[End of section]

Appendix II: Summary Information on Selected Rules Submitted to OIRA 
for Executive Order Review between July 2001 and June 2002:

This appendix contains three tables that summarize GAO's findings and 
determinations regarding 85 health, safety, or environmental rules 
submitted for OIRA's review by nine selected agencies (APHIS, FDA, 
OSHA, DOT-FAA, DOT-FMCSA, DOT-NHTSA, EPA-Office of Air and Radiation, 
EPA-Office of Solid Waste and Emergency Response, and EPA-Office of 
Water) that we examined to address our second reporting objective. The 
three tables present information on, respectively, rules that were 
changed after being submitted for OIRA's review (table 7), rules that 
OIRA returned to the agencies (table 8), and rules that were withdrawn 
after having been submitted for OIRA's review (table 9).

Explanation of Table Contents:

The following paragraphs identify the analytical contents of each table 
and provide definitions of the codes we used. In general, for each 
analytical category, we used a process of separate coding by each GAO 
team member, followed by a discussion to reconcile any differences and 
reach consensus on the most appropriate code. We then shared our 
preliminary findings and determinations with OIRA and the regulatory 
agencies to obtain a "fact check" on the descriptive information and 
also solicited their comments or clarifications regarding our coding 
determinations.

Table 7: Summary of Findings and Determinations for Changed Rules:

* GAO ID - This column provides a unique GAO case identification number 
for each executive order submission to OIRA that we reviewed to address 
our second reporting objective. Note that our unit of analysis was the 
submission of a draft regulation for OIRA's review, not the rule 
itself. Therefore, a given draft regulation could have been submitted 
to OIRA more than once with more than one outcome. In such cases, each 
separate submission that fell within the scope of our review would 
appear under a different GAO ID.

* Executive order review submission - This column provides general 
information about the draft regulation submitted for OIRA's review. As 
noted above, our unit of analysis was the submission to OIRA, so the 
titles presented here are those that appear in OIRA's data base on the 
submissions it has received, not the titles of the rules as published 
in the Federal Register. We also identify the draft rule's Regulation 
Identifier Number (RIN),[Footnote 80] its type (proposed, final, or 
interim final rule), the time 
period for OIRA's formal review of the rule, and when and where the 
cleared version of the rule was published in the Federal 
Register.[Footnote 81]

* Nature of OMB/OIRA changes - This column represents GAO's 
interpretation of the nature of the changes suggested by OMB or OIRA, 
in particular whether the changes made to the rule in response to OMB 
or OIRA significantly affected the draft rule. We used any available 
information to categorize and describe the changes attributed to OMB or 
OIRA (e.g., agency docket materials, OIRA files, interviews with agency 
officials, and any memos or e-mails on the changes that agency 
officials specifically prepared to address this GAO engagement). We 
characterized the nature of the changes for each of the changed rules 
using three categories, with a code assigned to each rule for the most 
significant level of change observed. The three categories were:

1. Significant changes - We used this category for rules in which 
changes attributed to OMB or OIRA resulted in a revision to the scope, 
impact, or estimated costs and benefits of the rule compared to the 
draft version originally submitted to OIRA. Most often, these were 
rules in which changes were made to the regulatory language of the 
draft regulation (i.e., amendments to the Code of Federal Regulations).

2. Other material changes - We used this category for changes that did 
not have as significant an effect as "significant changes," but did 
result in adding or deleting material to the original text. Most often, 
these changes were in the preambles of the rules, rather than the 
regulatory text, and involved clarifying an agency's explanation of 
certain provisions in the rule, clarifying the agency's basis for 
decisions made about regulatory options or assumptions, better 
explaining the potential impact of different options, and requesting 
public comments and/or data on regulatory options or costs.

3. Minor editorial changes or no OMB or OIRA changes - This category 
was used both for rules with changes that, at best, represented 
editorial corrections and revisions (e.g., rearranging existing text, 
correcting spelling, word choice changes, and adding or correcting 
boilerplate language, such as where to submit comments) and rules in 
which no changes were made at the suggestion or recommendation of OMB 
or OIRA.

* Evidence that OMB/OIRA changes affected the potential costs or 
benefits of the submitted rule - We usually only assigned a "yes" code 
under this topic if documentation of OMB or OIRA changes to a rule 
specifically showed that cost-benefit, cost-effectiveness, Paperwork 
Reduction Act burden estimates, or similar information on regulatory 
impacts had been edited or changed at the suggestion of OMB or OIRA. 
However, in the case of rules with substantive changes (additions or 
deletions) in the regulatory language, we assumed that adding or 
deleting entire provisions would have at least some effect on the 
potential costs or benefits of the rule, compared to the draft version 
submitted to OIRA.

* Evidence that outside parties contacted or met with OMB/OIRA 
regarding the submitted rule - A "yes" code under this topic indicates 
that we found documentation that an outside (nonfederal government) 
party or parties had directly contacted OMB or OIRA regarding a 
particular rule before or during OIRA's formal review period for that 
rule. Direct contacts were either through a meeting or 
correspondence.[Footnote 82] Most often, this evidence came from OIRA's 
files and logs, but sometimes the documentation came from a regulatory 
agency's docket on that rule.

Table 8: Summary of Findings and Determinations for Returned Rules:

* GAO ID and Executive Order Review Submission - (Columns as described 
under table 7, except that information about the publication of the 
rule, if applicable, appears under a separate column on subsequent 
activity.):

* Reason for OIRA's return of the rule - For each rule, we summarized 
the information presented in OIRA's return letter or, for the 
"improper" submissions with no return letters, cited the classification 
from OIRA's regulatory review database. In some cases, we supplemented 
these descriptions with additional information provided by regulatory 
agency officials.

* Evidence that outside parties contacted or met with OIRA regarding 
this submission - (As described under table 7.):

* Evidence of subsequent activity regarding this submission - Our focus 
under this topic was identifying information regarding resubmission and 
publication of the rule after OIRA had returned it. If an agency 
provided information that the rule has not yet been resubmitted and/or 
published, we also report that.

Table 9: Summary of Findings and Determinations for Withdrawn Rules:

* GAO ID and Executive Order Review Submission - (As described under 
table 7, except that information about the publication of the rule, if 
applicable, appears under a separate column on subsequent activity.):

* Reasons for withdrawal of the submitted rule - For each rule, we 
report the explanation provided by the regulatory agency and/or OIRA 
regarding the withdrawal of the rule. Our primary focus under this 
item, per our congressional request, was on identifying whether the 
rule had been withdrawn at the suggestion of OIRA.

* Evidence that outside parties contacted or met with OIRA regarding 
this submission - (As described under table 7.):

* Evidence of subsequent activity regarding this submission - (As 
described under table 8.):

Table 7: Findings and Determinations for Rules Changed after Submission 
to OIRA:

GAO ID: APHIS.

GAO ID: 1; Executive order review submission: Mexican Hass 
Avocado Import Program; Proposed rule; RIN 0579-AB27; OIRA review 
period: 06/13/2001 to 07/05/2001; Published 07/13/2001 (66 FR 
36892); Nature of most significant OMB/OIRA changes: Other 
material changes; Information was added to the preamble regarding 
several topics--e.g., a previous amendment to Hass avocado regulations, 
an APHIS review of the Hass avocado import program, a study on fruit 
flies, responses to commenter concerns, and a new section summarizing 
the regulatory impact analysis. Also, there were minor rewording 
changes throughout. An APHIS official characterized most OIRA changes 
to the rule as minor editorial comments but said that other changes 
strengthened the agency's explanation for the rule. There were no 
substantive changes to the regulatory language; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 2; Executive order review submission: Karnal Bunt; 
Compensation for the 1999-2000 and Subsequent Crop Seasons; Final 
rule; RIN 0579-AA83; OIRA review period: 07/26/2001 to 07/31/2001; 
Published 08/06/2001 (66 FR 40839); Nature of most significant OMB/
OIRA changes: Minor editoral changes or no changes; Changes 
were limited to minor clarifications and a sentence change in the 
Paperwork Reduction Act section in the preamble. There were no changes 
in the regulatory language; Evidence that OMB/OIRA changes affected 
costs or benefits: No; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 3; Executive order review submission: Importation 
Prohibitions Because of Bovine Spongiform Encephalopathy (BSE); 
Interim final rule; RIN 0579-AB26; OIRA review period: 04/18/2001 
to 07/27/2001; Published 08/14/2001 (66 FR 42595); Nature of most 
significant OMB/OIRA changes: Other material changes; A 
section was added to the preamble noting that APHIS would obtain BSE 
risk factor data from trading partners and, if significant risk was 
indicated, APHIS would take action to restrict animal product imports 
from the risky areas; Evidence that OMB/OIRA changes affected costs or 
benefits: No; Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 4; Executive order review submission: Scrapie in Sheep 
and Goats; Interstate Movement Restrictions and Indemnity Program; 
(Listed in OIRA's database as: Interstate Movement of Sheep and Goats 
From States That Do Not Quarantine Scrapie-Infected and Source Flocks); 
Final rule; RIN 0579-AA90; OIRA review period: 04/18/2001 to 08/
07/2001; Published 08/21/2001 (66 FR 43964); Nature of most 
significant OMB/OIRA changes: Other material changes; OMB 
suggested several changes to the preamble that added or clarified 
descriptions of issues such as (a) the increase in paperwork burden 
caused by this rule, (b) how to calculate animal and human health risks 
associated with scrapie, and (c) how to estimate the effectiveness of 
indemnity as an incentive. OMB also suggested that APHIS clarify how 
much of the rule's activities could be funded from currently projected 
agency budgets and how much would require additional funds. According 
to APHIS, these additional discussions caused no significant changes to 
the scope of the rule or the benefits it provided. The regulatory 
language was not changed; Evidence that OMB/OIRA changes affected 
costs or benefits: No; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 5; Executive order review submission: Phytosanitary 
Certificates for Imported Fruits and Vegetables; Proposed rule; RIN 
0579-AB18; OIRA review period: 03/21/2001 to 08/15/2001; Published 
08/29/2001 (66 FR 45637); Nature of most significant OMB/OIRA changes: 
Other material changes; In a memo prepared for GAO, APHIS 
identified eight specific changes that OMB requested, all in the 
preamble. These changes mainly provided more specific information, 
additional examples, and expanded discussions about the economic 
impacts of this rule; Evidence that OMB/OIRA changes affected costs or 
benefits: No; The actual costs and benefits did not appear to 
change as a result of the revisions made at the request of OMB, but the 
revisions did provide more information on and support for APHIS' 
analysis of the economic impacts of the rule; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 6; Executive order review submission: Plant Pest 
Regulations; Update of Current Provisions; Proposed rule; RIN 0579-
AA80; OIRA review period: 03/21/2001 to 09/26/2001; Published 10/
09/2001 (66 FR 51340); Nature of most significant OMB/OIRA changes: 
Other material changes; APHIS identified five main changes 
that OMB requested to the preamble of the rule, such as adding 
explanations and soliciting comments and alternatives on certain 
issues, all focused on improving the clarity of the rule. There were no 
changes to the regulatory language; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Although the paperwork burden 
estimates were revised downward in the final version, there is no 
indication that OIRA was the source of the revisions; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 7; Executive order review submission: Mexican Hass 
Avocado Import Program; Final rule; RIN 0579-AB27; OIRA review 
period: 10/23/2001 to 10/29/2001; Published 11/01/2001 (66 FR 
55530); Nature of most significant OMB/OIRA changes: Other 
material changes; Numerous changes were made to the preamble of the 
rule, especially regarding responses to public comments on the proposed 
rule and explanations of the agency's actions. APHIS characterized 
these as changes to make the final rule "more defensible and internally 
consistent." There were no changes to the regulatory language; 
Evidence that OMB/OIRA changes affected costs or benefits: No; 
Evidence that outside parties contacted OMB/OIRA: No; However, 
OIRA focused many of its comments on suggesting revisions or expansions 
of the APHIS responses to public comments on the proposed rule, and the 
OIRA docket included copies of adverse comments submitted on the 
proposed rule.

GAO ID: 8; Executive order review submission: Interstate 
Movement of Swine Within a Production System; Final rule; RIN 0579-
AB28; OIRA review period: 09/25/2001 to 12/11/2001; Published 12/
20/2001 (66 FR 65598); Nature of most significant OMB/OIRA changes: 
Other material changes; There were inserts in the Federalism 
and Paperwork Reduction Act sections of the preamble. Inserts in the 
Paperwork Reduction Act section added information about changes made 
from proposed rule in terms of paperwork and information collection 
requirements; Evidence that OMB/OIRA changes affected costs or 
benefits: No; Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 9; Executive order review submission: Chronic Wasting 
Disease in Cervids; Payment of Indemnity; (Listed in OIRA's database 
as: Chronic Wasting Disease in Elk; Interstate Movement Restrictions 
and Payment of Indemnity); Interim final rule; RIN 0579-AB35; 
OIRA review period: 01/07/2002 to 02/04/2002; Published 02/08/2002 
(67 FR 5925); Nature of most significant OMB/OIRA changes: 
Significant changes; The most significant change made at the 
suggestion of OMB affected the cost-sharing formula, limiting the 
federal indemnity payment to 95 percent. Other changes made in response 
to OMB were related to cost, benefit, and risk data. Both the preamble 
and the CFR section of the rule were affected by OMB-suggested 
changes; Evidence that OMB/OIRA changes affected costs or benefits: 
Yes; OMB changed the 100-percent reimbursement that APHIS had 
proposed for the indemnity to be 95 percent. OMB also asked APHIS to 
avoid citing the possible avoidance of a human disease caused by 
chronic wasting disease as a benefit of this rule because this 
possibility was considered remote by a Harvard risk analysis; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 10; Executive order review submission: Animals Destroyed 
Because of Tuberculosis; Payment of Indemnity; Interim final rule; 
RIN 0579-AB29; OIRA review period: 11/13/2001 to 02/11/2002; 
Published 02/20/2002 (67 FR 7583); Nature of most significant OMB/OIRA 
changes: Other material changes; Changes were made to the 
preamble for clarification, particularly regarding APHIS's cost-
sharing policy. However, no changes were made to the regulatory 
language in the CFR amendments section of the rule; Evidence that OMB/
OIRA changes affected costs or benefits: No; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 11; Executive order review submission: Infectious Salmon 
Anemia; Payment of Indemnity; Interim final rule; RIN 0579-AB37; 
OIRA review period: 03/08/2002 to 04/02/2002; Published 04/11/2002 
(67 FR 17605); Nature of most significant OMB/OIRA changes: 
Other material changes; OMB requested changes related to future 
(post-2002) funding for the infectious salmon anemia indemnity and a 
control and eradication program (e.g., clarifying that the 
administration was examining how the costs of program activities, 
including the payment of indemnity, are shared among the federal 
government and others and, therefore, that in the future the indemnity 
rate provided under this rule might change). OMB further requested that 
APHIS make clear that all potential indemnity payments were subject to 
the availability of funding; (An APHIS official also noted that, 
before the formal review period for this action, OIRA and APHIS agreed 
to make the federal share of the indemnity 60 percent. Whether this 
share is any different from what would have been stated in the rule 
without OIRA's input is not known.); Evidence that OMB/OIRA changes 
affected costs or benefits: Unclear; The preamble changes 
suggest that indemnity rates and program funding in a second indemnity/
program year might change; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 12; Executive order review submission: Foot-and-Mouth 
Disease; Payment of Indemnity; (Listed in OIRA's database as: Foot-
and-Mouth Disease, Pleuropneumonia, Rinderpest, and Certain Other 
Communicable Diseases of Livestock or Poultry; Payment of Indemnity); 
Proposed rule; RIN 0579-AB34; OIRA review period: 01/17/2002 to 
04/16/2002; Published 05/01/2002 (67 FR 21934); Nature of most 
significant OMB/OIRA changes: Significant changes; The most 
substantive changes attributed to OMB affected the regulatory language 
in the Code of Federal Regulations (CFR) amendments section--
specifically, eliminating language in the original version of the rule 
that would have provided compensation for care and feeding of "official 
vaccinates" (livestock vaccinated as part of a foot-and-mouth 
eradication program) and compensation "relating to cleaning and 
disinfecting non-susceptible animals." OMB suggested other changes in 
the preamble that generally provided additional justifications for the 
rule and added explanations in the Regulatory Flexibility Act and 
Executive Order 12866 sections. OMB also requested substantial changes 
to the economic analysis and APHIS's approach in evaluating the 
proposed rule's impact; Evidence that OMB/OIRA changes affected costs 
or benefits: Yes; APHIS made substantial changes to the 
economic analysis in response to OIRA's suggestion. Further, limiting 
compensation by not covering the care and feeding of official 
vaccinates or the cleaning and disinfection of non-susceptible animals 
lowered the potential costs to the government of the indemnity 
program; However, according to an APHIS official (and as explained 
in the preamble of the proposed rule), removing these compensation 
provisions could impede eradication efforts and, thus, reduce overall 
benefits to society. This is because official vaccinates may be used as 
a "fire wall" to prevent the spread of the disease beyond infected 
animals, and owners would not be compensated for the costs of 
maintaining the vaccinated animals for the time that might be 
necessary, and because non-susceptible animals could spread foot-and-
mouth disease even if they cannot themselves become infected; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: FDA.

GAO ID: 13; Executive order review submission: Exports; 
Notification and Recordkeeping Requirements; Final rule; RIN 0910-
AB16; OIRA review period: 08/28/2001 to 11/27/2001; Published 12/
19/2001 (66 FR 65429); Nature of most significant OMB/OIRA changes: 
Other material changes; Some of the OMB-suggested changes in 
the preamble added or revised information to clarify FDA's responses to 
public comments on the proposed rule. There were no changes to the 
regulatory language in the CFR section of the rule; Evidence that OMB/
OIRA changes affected costs or benefits: No; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 14; Executive order review submission: Additional 
Criteria and Procedures for Classifying Over-the-Counter Drugs as 
Generally Recognized as Safe and Effective and Not Misbranded; Final 
rule; RIN 0910-AA01; OIRA review period: 09/27/2001 to 12/21/2001; 
; Published 01/23/2002 (67 FR 3060); Nature of most significant OMB/
OIRA changes: Other material changes; Most changes were minor 
editorial revisions in the preamble, but some more substantive changes 
included (a) repeating information from the analysis of impacts section 
at the end of the rule on page 2, (b) inserting clarifying material 
about the General Agreement on Tariffs and Trade and the World Trade 
Organization to a response to comments on the proposed rule, and (c) 
inserting a sentence to note that, over the next several years, FDA 
expects to be able to accept electronic submissions. There were no 
changes in the regulatory language of the CFR section; Evidence that 
OMB/OIRA changes affected costs or benefits: No; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 15; Executive order review submission: Records and 
Reports Concerning Experience with Approved New Animal Drugs; Interim 
Final Rule; (Listed in OIRA's database at time of GAO's review as: 
New Animal Drug Approval Process; Implementation of Title I of the 
Generic Animal Drug and Patent Term Restoration Act (GADPTRA)); 
Interim final rule; RIN 0910-AA02; OIRA review period: 11/29/2001 
to 01/08/2002; Published 02/04/2002 (67 FR 5046); Nature of most 
significant OMB/OIRA changes: Other material changes; Some of 
the changes to the preamble that were attributed to OMB added new 
clarifying information or examples to the original text. OMB also 
revised some of the text on the estimated reporting and recordkeeping 
burdens, specifically characterizing two sections of the rule as posing 
new information collection requirements over the existing requirements. 
The changes attributed to OMB in the regulatory language of the CFR 
section appeared to be mainly editorial in nature, although the 
language in one provision on reporting requirements was changed from 
"must" to "should." (Note: this rule was previously withdrawn. See GAO 
ID 82.); Evidence that OMB/OIRA changes affected costs or benefits: 
Unclear; Updated information on the estimated reporting and 
recordkeeping burdens was included in the revised version of the rule 
(replacing data from 1999 fiscal year submission reports with data from 
2000 fiscal year reports), but the source of this change is not clear 
in the documentation. FDA, rather than OIRA, might have initiated this 
change; Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 16; Executive order review submission: Requirements for 
Submission of Labeling for Human Prescription Drugs and Biologics in 
Electronic Format; Proposed rule; RIN 0910-AB91; OIRA review 
period: 12/14/2001 to 03/05/2002; Published 05/03/2002 (67 FR 
22367); Nature of most significant OMB/OIRA changes: Other 
material changes; The changes made in response to OIRA included (a) 
how electronic signatures would be handled and how this would be 
described in the rule and (b) the treatment and description of the 
onetime capital costs associated with the reporting burden for this 
rule. There were also some clarifying changes to the proposed 
regulatory language in the CFR section; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Although the OIRA changes 
affected the categorization and description of the costs of this rule-
-identifying them as onetime capital costs associated with the 
reporting burdens of this proposal, where FDA's original text had said 
there were no capital costs associated with this information 
collection--this re-categorization did not change FDA's estimate of 
total costs; Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 17; Executive order review submission: Food Additives: 
Food Contact Substances Notification System; Final rule; RIN 0910-
AB94; OIRA review period: 02/19/2002 to 05/14/2002; Published 05/
21/2002 (67 FR 35724); Nature of most significant OMB/OIRA changes: 
Minor editoral changes or no changes; Only a few minor changes 
were attributed to OMB, such as rewording an introductory paragraph 
regarding comments received on the proposed rule and inserting one 
sentence in an illustration of how FDA expected its review of 
notifications to proceed in the future. The Executive Order 12866 
statement in the rule was also revised to note that it was a 
significant regulatory action that was reviewed by OMB, rather than the 
original statement that it was not. All of these changes were in the 
preamble; OMB requested no changes in the regulatory language; 
(However, a substantive FDA change is reflected in the documentation.); 
Evidence that OMB/OIRA changes affected costs or benefits: No; 
Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 18; Executive order review submission: Efficacy Evidence 
Needed for Products To Be Used Against Toxic Substances When Human 
Studies Are Unethical or Unfeasible; Final rule; RIN 0910-AC05; 
OIRA review period: 03/07/2002 to 05/21/2002; Published 05/31/2002 
(67 FR 37988); Nature of most significant OMB/OIRA changes: 
Other material changes; Additional material was inserted in the 
preamble to better explain the legal authority and rationale for taking 
this regulatory action. Other changes were made to FDA's response to 
some public comments on the proposed version of this rule. However, no 
changes were made to the regulatory language; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 19; Executive order review submission: Investigational 
New Drugs; Export Requirements for Unapproved New Drug Products; 
Proposed rule; RIN 0910-AA61; OIRA review period: 03/07/2002 to 
05/29/2002; Published 06/19/2002 (67 FR 41642); Nature of most 
significant OMB/OIRA changes: Other material changes; The only 
changes attributed to OMB were (a) expanding the citations of relevant 
legal authority in the background section of the preamble and (b) 
updating references to a previous Federal Register notice with a 
related record keeping requirement--and noting that this particular 
rule, therefore, would not contain any new record keeping requirements. 
There were no changes at OMB's request in the regulatory language; 
Evidence that OMB/OIRA changes affected costs or benefits: No; 
Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: OSHA.

GAO ID: 20; Executive order review submission: Occupational 
Injury and Illness Recording and Reporting Requirements; Final rule; 
RIN 1218-AC00; OIRA review period: 09/24/2001 to 10/04/2001; 
Published 10/12/2001 (66 FR 52031); Nature of most significant OMB/OIRA 
changes: Minor editoral changes or no changes; OIRA did not 
suggest or recommend any substantive changes to this rule; (However, 
OSHA initiated a substantive change to delay the effective date of 
Section 1904.29(b)(7)(vi), and new language was included in the 
preamble and regulatory text to accomplish this change.); Evidence that 
OMB/OIRA changes affected costs or benefits: No; No changes 
were suggested by OIRA; Evidence that outside parties contacted OMB/
OIRA: No.

GAO ID: 21; Executive order review submission: Procedures for 
Handling of Discrimination Complaints Under Section 519 of the Wendal 
H. Ford Aviation Investment and Reform Act for the 21[ST] Century; 
Interim final; RIN 1218-AB99; OIRA review period: 12/21/2001 to 
03/20/2002; Published 04/01/2002 (67 FR 15454); Nature of most 
significant OMB/OIRA changes: Other material changes; Three 
sets of changes were attributed to OIRA. In the preamble of the rule, 
the changes included (a) adding information and a request for public 
comment regarding the whistle-blower model that OSHA chose for this 
rule and (b) identifying this rule as a significant regulatory action 
(originally labeled "not significant" by OSHA). In the CFR section, 
language was added to three provisions to clarify that certain 
procedures would be triggered at the "request of the named person" (the 
person alleged to have violated the act); Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 22; Executive order review submission: Safety Standards 
for Signs, Signals, and Barricades; Final rule; RIN 1218-AB88; 
OIRA review period: 12/31/2001 to 03/07/2002; Published 04/15/2002 
(67 FR 18145); Nature of most significant OMB/OIRA changes: 
Minor editoral changes or no changes; The only changes attributed to 
OMB affected two sentences regarding EO 12866 in the preamble--
identifying this as a significant regulatory action that was reviewed 
by OMB, but also noting that the rule was not an economically 
significant action within the meaning of the executive order; Evidence 
that OMB/OIRA changes affected costs or benefits: No; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 23; Executive order review submission: Occupational 
Injury and Illness Recording and Reporting Requirements; Occupational 
Hearing Loss; Final rule; RIN 1218-AC06; Economically 
significant; OIRA review period: 05/24/2002 to 06/25/2002; 
Published 07/01/2002 (67 FR 44037); Nature of most significant OMB/OIRA 
changes: Other material changes; OIRA requested an additional 
explanation of OSHA's method of estimating the number of recordable 
hearing loss cases. OSHA added a section in the preamble in response to 
OIRA's request; Evidence that OMB/OIRA changes affected costs or 
benefits: No; However, the substantive insert in the preamble 
explained OSHA's estimation of recordable hearing loss cases; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 24; Executive order review submission: Occupational 
Injury and Illness Recording and Reporting Requirements; Proposed 
rule; RIN 1218-AC06; Economically significant; OIRA review 
period: 05/24/2002 to 06/25/2002; Published 07/01/2002 (67 FR 
44124); Nature of most significant OMB/OIRA changes: Minor 
editoral changes or no changes; OIRA did not suggest or recommend any 
substantive changes to this rule; (OSHA initiated the only 
substantive change made to the rule after it was submitted for OIRA's 
review, deleting a section on state occupational safety and health 
plans in the preamble. A section on state plans was later reinserted in 
the version of the rule that was published in the Federal Register. 
Documentation in the OIRA file for this rule showed that OSHA had 
informed OIRA before reinserting the state plans section before 
publication.); Evidence that OMB/OIRA changes affected costs or 
benefits: No; No changes were suggested by OIRA; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: DOT-FAA.

GAO ID: 25; Executive order review submission: Fees for FAA 
Services for Certain Flights; Final rule; RIN 2120-AG17; OIRA 
review period: 08/01/2001 to 08/06/2001; Published 08/20/2001 (66 FR 
43680); Nature of most significant OMB/OIRA changes: Minor 
editoral changes or no changes; No substantive changes were made to 
this rule; Evidence that OMB/OIRA changes affected costs or benefits: 
No; Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 26; Executive order review submission: Flight 
Operational Quality Assurance Program; Final rule; RIN 2120-AF04; 
OIRA review period: 07/30/2001 to 08/28/2001; Published 10/31/2001 
(66 FR 55042); Nature of most significant OMB/OIRA changes: 
Minor editoral changes or no changes; The only changes made to this 
rule were minor editorial revisions, such as changing section 
headings; Evidence that OMB/OIRA changes affected costs or benefits: 
No; Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 27; Executive order review submission: Traffic Alert 
Collision Avoidance System; Proposed rule; RIN 2120-AG90; OIRA 
review period: 08/01/2001 to 10/18/2001; Published 11/01/2001 (66 FR 
55506); Nature of most significant OMB/OIRA changes: Other 
material changes; FAA officials provided evidence that indicates that 
OIRA suggested clarification to the cost-benefit section to be more 
explicit on how the benefits were determined. Direct questions from 
OIRA indicate that OIRA wanted the regulation evaluation to be more 
explicit regarding the rule's likely benefits. According to FAA 
officials, changes made to the rule were not major, although the rule 
did receive a postreview letter; Evidence that OMB/OIRA changes 
affected costs or benefits: No; (However, OIRA did suggest 
that DOT develop a more transparent analysis of the benefits of the 
proposal.); Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 28; Executive order review submission: Certification of 
Pilots, Aircraft, and Repairmen for the Operation of Light Sport 
Aircraft; Proposed rule; RIN 2120-AH19; OIRA review period: 12/
17/2001 to 01/03/2002; Published 02/05/2002 (67 FR 5368); Nature of 
most significant OMB/OIRA changes: Other material changes; In 
response to issues raised by OIRA, FAA added a footnote to this rule 
that explained consumer surplus benefits and also clarified that 
specific accident data were not counted more than once. FAA officials 
characterized these changes as clarifications; (Note that a previous 
version of this rule was returned by OIRA to FAA for reconsideration 
[see GAO ID 73 in the table on returned rules].); Evidence that OMB/
OIRA changes affected costs or benefits: No; (However, in 
response to OIRA's review, FAA added information to clarify and explain 
some of the information on benefits discussed in the rule.); Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 29; Executive order review submission: Reduced Vertical 
Separation Minimum in Domestic United States Airspace; Proposed rule; 
RIN 2120-AH63 (in the published rule); RIN 2120-AH68 (in OIRA's list 
of reviewed rules); OIRA review period: 04/12/2002 to 05/03/2002; 
Published 05/10/2002 (67 FR 31920); Nature of most significant OMB/OIRA 
changes: Minor editoral changes or no changes; According to 
FAA officials, only one paragraph was changed in the regulatory 
evaluation, and FAA officials could not determine whether that change 
was due to OIRA's suggestion. Further, the one change to the rule was 
not substantive; it broke out components of a cost estimate without 
changing the estimate itself; Evidence that OMB/OIRA changes affected 
costs or benefits: No; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: DOT-FMCSA.

GAO ID: 30; Executive order review submission: Revision of 
Regulations and Application Form for Mexican-Domiciled Motor Carriers 
to Operate in U.S. Municipalities and Commercial Zones on the U.S.-
Mexico Border; Final rule; RIN 2126-AA33; OIRA review period: 
01/15/2002 to 03/01/2002; Published 03/19/2002 (67 FR 12652); Nature 
of most significant OMB/OIRA changes: Minor editoral changes or 
no changes; FMCSA considered the OIRA-suggested changes to be 
primarily editorial or clarifying in nature and not substantive (such 
as substituting numbers for percentages in a discussion of the cost-
effectiveness of this rule). However, there were substantive changes 
made by FMCSA; Evidence that OMB/OIRA changes affected costs or 
benefits: No; (However, FMCSA made changes to the burden-hour 
estimates for the information collection associated with this rule.); 
Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 31; Executive order review submission: Application by 
Certain Mexican Motor Carriers to Operate Beyond U.S. Municipalities 
and Commercial Zones on the U.S.-Mexico Border; Interim final rule; 
RIN 2126-AA34; OIRA review period: 01/15/2002 to 03/1/2002; 
Published 03/19/2002 (67 FR 12702); Nature of most significant OMB/OIRA 
changes: Other material changes; OIRA suggested some revisions 
or clarifications to descriptions in the preamble and regulatory 
language of this rule, including noting the applicability of 
immigration law, revising the rationale in some of FMCSA's explanations 
or responses to public comments, and clarifying that, under the North 
American Free Trade Agreement Annex, Mexican-domiciled motor carriers 
may not provide point-to-point transportation services, including 
express delivery services, within the United States, other than 
international cargo. Other OIRA-suggested changes were largely minor 
editorial changes, such as correcting the title of an application form 
and substituting numbers for percentages in a discussion of the cost-
effectiveness of this rule; Evidence that OMB/OIRA changes affected 
costs or benefits: No; (However, FMCSA initiated changes to 
the Paperwork Reduction Act section of the preamble after submission of 
the draft to OIRA. FMCSA's changes slightly reduced the estimated 
burden of the information collection associated with this rule.); 
Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 32; Executive order review submission: Safety Monitoring 
System and Compliance Initiative for Mexico-Domiciled Motor Carriers 
Operating in the United States; Interim final rule; RIN 2126-AA35; 
OIRA review period: 01/15/2002 to 03/1/2002; Published 03/19/2002 
(67 FR 12758); Nature of most significant OMB/OIRA changes: 
Other material changes; Although most of the changes OIRA suggested 
were minor (e.g., word choice), one change in the preamble appeared to 
be material. At OIRA's suggestion, FMCSA added Appendix A to Part 385 
for clarification. This new appendix informed Mexico-domiciled motor 
carriers of the evaluation criteria that FMCSA would use to ensure 
compliance with the requirements of this rule. A statement in the 
original draft that the statute requires an examination of each Mexico-
domiciled carrier's drivers upon entry was also revised to say that the 
examination of drivers resulting from the statute provision would allow 
inspection of each Mexico carrier's drivers upon entry. Changes to the 
CFR that were attributed to OIRA appeared to be minor, editorial 
changes (e.g., replacing "oversight program" with "monitoring system"), 
as well as rewording and reordering of sentences; Evidence that OMB/
OIRA changes affected costs or benefits: No; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 33; Executive order review submission: Certification of 
Safety Auditors, Safety Investigators, and Safety Inspectors; Interim 
final rule; RIN 2126-AA64; OIRA review period: 01/15/2002 to 03/
01/2002; Published 03/19/2002 (67 FR 12776); Nature of most 
significant OMB/OIRA changes: Minor editoral changes or no 
changes; The two changes attributed to OIRA were not substantive as 
they dealt with minor corrections to the rule. One of the suggested 
changes deleted a redundant statement, and the other corrected the 
citation of a relevant executive order (changing the citation from 
Executive Order 12866 to Executive Order 13211); Evidence that OMB/
OIRA changes affected costs or benefits: No; OIRA did not 
suggest or recommend any substantive changes to this rule; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 34; Executive order review submission: Parts and 
Accessories Necessary for Safe Operation; Certification of Compliance 
with Federal Motor Vehicle Safety Standards (FMVSS); Proposed rule; 
RIN 2126-AA69; OIRA review period: 01/15/2002 to 03/01/2002; 
Published 03/19/2002 (67 FR 12782); Nature of most significant OMB/OIRA 
changes: Minor editoral changes or no changes; The only change 
that was attributed as being made at the request of OIRA was the 
deletion of a redundant statement in the preamble-regarding the 
boilerplate section on the National Environmental Policy Act; Evidence 
that OMB/OIRA changes affected costs or benefits: No; Evidence 
that outside parties contacted OMB/OIRA: No.

GAO ID: 35; Executive order review submission: New Entrant 
Safety Assurance Process; Interim final rule; RIN 2126-AA59; 
Economically significant; OIRA review period: 04/12/2002 to 05/06/
2002; Published 05/13/2002 (67 FR 31978); Nature of most significant 
OMB/OIRA changes: Other material changes; The changes 
attributed to requests by OIRA in the draft rule or the regulatory 
evaluation included (1) requesting comments on the resource cost to the 
economy of denying permanent registration, the effect on safety of 
denying registration, and the assumptions FMCSA made regarding crash 
rate reductions, (2) attributing designation that this was an 
economically significant rule to OMB rather than FMCSA, and (3) adding 
a statement on reimbursement to states of the costs incurred in 
conducting safety audits (80 percent). There were no changes to the 
regulatory language; Evidence that OMB/OIRA changes affected costs or 
benefits: No; Although the OIRA changes added several requests 
for comments on the potential economic effects and benefits of this 
rule and also clarified that FMCSA would reimburse states 80 percent of 
costs incurred conducting safety audits, the changes did not affect the 
costs or benefits of the rule; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: DOT-NHTSA.

GAO ID: 36; Executive order review submission: Tire Pressure 
Monitoring Systems; Proposed rule; RIN 2127-AI33; Economically 
significant; OIRA review period: 07/05/2001 to 07/23/2001; 
Published 07/26/2001 (66 FR 38982); Nature of most significant OMB/OIRA 
changes: Significant changes; Changes identified in the 
material found in the NHTSA docket indicate that OIRA suggested changes 
to discussions of cost and benefit estimates in the proposed rule, in 
particular (a) adding statements to the preamble regarding unquantified 
benefits and costs that might exist, (b) adding estimates of total 
estimated costs of the two regulatory alternatives in the proposal 
(original draft only provided estimates of average cost per vehicle), 
(c) inserting additional information about the calculation of some 
benefit estimates (e.g., range of injuries and deaths prevented, 
stopping distance effects, and average tire life increases), and (d) 
adding a discussion regarding the effect of human factors on the 
benefits of tire pressure monitoring systems. Many of the OIRA-
suggested inserts included a request for public comments. At OIRA's 
suggestion, NHTSA also deleted draft material about potential 
unquantified environmental benefits; Evidence that OMB/OIRA changes 
affected costs or benefits: Yes; At OIRA's suggestion, 
statements were added that unquantified benefits and costs may exist 
due to this rule, and public comments were requested on this issue. 
OIRA also suggested the insertion of (a) additional estimates of some 
costs and benefits, (b) added clarification or explanation of some 
economic effects, and (c) requests for public comments on benefits and 
costs of the proposed regulatory alternatives; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 37; Executive order review submission: Light Truck 
Average Fuel Economy Standard Model Year 2004; Proposed rule; 2127-
AI68; Economically significant; OIRA review period: 01/10/2002 to 
01/17/2002; Published 01/24/2002 (67 FR 3470); Nature of most 
significant OMB/OIRA changes: Other material changes; OIRA 
suggested the addition of an Energy Impact section. Although NHTSA did 
not consider the addition of this section to be a substantive change, 
it met our criteria for classifying the nature of the change in this 
rule to be an "other material change."; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 38; Executive order review submission: Federal Motor 
Vehicle Improved Tire Safety Standards; Proposed rule; RIN 2127-
AI54; Economically significant; OIRA review period: 12/17/2001 to 
02/22/2002; Published 03/05/2002 (67 FR 10050); Nature of most 
significant OMB/OIRA changes: Minor editoral changes or no 
changes; NHTSA officials could not recall any changes, substantive or 
nonsubstantive, to this rule during OIRA's review; Evidence that OMB/
OIRA changes affected costs or benefits: No; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 39; Executive order review submission: Automotive Fuel 
Economy Manufacturing Incentives for Dual Fuel Vehicles; Proposed 
rule; RIN 2127-AI41; Economically significant; OIRA review 
period: 12/19/2001 to 02/22/2002; Published 03/11/2002 (67 FR 
10873); Nature of most significant OMB/OIRA changes: Other 
material changes; Additional information was added to the 
introduction and background sections of the preamble referring to the 
Energy Task Force and additional public comments. There were also minor 
editorial changes throughout the revised draft; Although NHTSA did 
not consider OIRA's suggested changes to be substantive, we classified 
the changes made to this rule as an "other material change" to Other 
material changesbe consistent with our coding of the level of changes 
observed in other rules; Evidence that OMB/OIRA changes affected costs 
or benefits: No; Evidence that outside parties contacted OMB/
OIRA: No.

GAO ID: 40; Executive order review submission: Federal Motor 
Vehicle Safety Standards; Child Restraint Systems; Proposed rule; 
RIN 2127-AI34; OIRA review period: 02/26/2002 to 04/08/2002; 
Published 05/01/2002 (67 FR 21806); Nature of most significant OMB/OIRA 
changes: Minor editoral changes or no changes; NHTSA officials 
confirmed that OIRA only suggested editorial changes on two or three 
pages; Evidence that OMB/OIRA changes affected costs or benefits: 
No; Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: EPA-Office of Air and Radiation.

GAO ID: 41; Executive order review submission: Control of 
Emissions From Nonroad Large Spark-Ignition Engines and Recreational 
Engines (Marine and Land-Based); Proposed rule; RIN 2060-AI11; 
Economically significant; OIRA review period: 08/01/2001 to 09/14/
2001; Published 10/05/2001 (66 FR 51098); Nature of most significant 
OMB/OIRA changes: Significant changes; There were substantive 
comments and changes from OMB on the preamble, CFR section, and 
regulatory support document for this rule. The most substantive issue/
change was "OMB's desire to not move forward with the marine and 
highway motorcycle portions of the proposal."; Evidence that OMB/OIRA 
changes affected costs or benefits: Yes; Deleting some of the 
regulatory scope from the original version of this rule--covering 
regulation of highway motorcycles and marine engines--would reduce the 
potential total costs and benefits of the rule as originally submitted 
for OMB's review; (Note, however, that EPA then covered those 
engines in a separate rule--see GAO ID 54.); Evidence that outside 
parties contacted OMB/OIRA: Yes; Many outside parties 
contacted OIRA regarding this rule, including representatives of 
several environmental organizations (Natural Trails and Waters 
Coalition, PIRG, Sierra Club, Bluewater Network, National Parks 
Conservation Association - meeting held 08/29/2001); the National 
Marine Maritime Association (meeting held 08/31/2001); the snowmobile 
industry (Polaris Industries, Arctic Cat, Bombadier, and International 
Snowmobile Manufacturers Association --meeting held 09/06/2001); and 
the Motorcycle Riders Association (letter of 09/14/2001; meeting held 
10/25/2001); (Representatives of the Vice President's Office, the 
White House Council of Economic Advisors, and the Small Business 
Administration also attended these meetings.).

GAO ID: 42; Executive order review submission: National Ambient 
Air Quality Standard for Ozone; Proposed Response to Remand; Proposed 
rule; RIN 2060-ZA11; Economically significant; OIRA review 
period: 08/27/2001 to 10/25/2001; Published 11/14/2001 (66 FR 
57268); Nature of most significant OMB/OIRA changes: Minor 
editoral changes or no changes; There were only three minor changes 
in the preamble attributed to OMB. All three changes appeared to be 
rewording (rather than deleting or adding information) of statements in 
the submitted version regarding EPA's views about effects "using 
plausible but highly uncertain assumptions."; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 43; Executive order review submission: Regulation to 
Establish New Date Receipt of Summer Grade Reformulated Gasoline at 
Terminals; Proposed rule; RIN 2060-AJ79; OIRA review period: 10/
24/2001 to 11/16/2001; Published 12/03/2001 (66 FR 60163); Nature of 
most significant OMB/OIRA changes: Other material changes; 
Changes were made to the preamble, CFR section, and regulatory support 
document, although the CFR changes would probably not be considered 
substantive even using a "possibly substantive" definition. In the 
preamble, material was added regarding (a) the dates when terminals can 
receive summer grade reformulated gasoline (RFG), (b) explanations of 
the costs of producing more summer grade and less winter grade RFG, (c) 
an explanation of the requirement to petition EPA for approval to 
transfer dirty blendstocks (with a request for comment on the issue), 
(d) classification of this rule as a significant regulatory action 
under EO 12866, and (e) reporting burden comments from the National 
Petrochemical and Refiners Association in response to a related EPA 
information collection request. Original material regarding 
requirements for transferring blendstocks was deleted from the 
preamble. In the CFR section the only changes were incorporation by 
reference of a standard test method and some minor edits. The technical 
support document was changed to specify dates when terminals are 
required to receive summer grade RFG and to add explanatory details on 
the costs of producing more summer grade RFG; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 44; Executive order review submission: National Emission 
Standards for Hazardous Air Pollutants: Organic Liquid Distribution 
(Non-Gasoline); Proposed rule; RIN 2060-AH41; OIRA review 
period: 06/18/2001 to 09/19/2001; Published 04/02/2002 (67 FR 
15674); Nature of most significant OMB/OIRA changes: Other 
material changes; Changes attributed to OMB in the preamble of the 
rule included (a) a new section regarding Executive Order 13211, 
discussing energy effects of the rule, (b) new language reflecting the 
rule's impact on organic liquid distribution sources, and (c) a request 
for comments from the public regarding the accuracy of EPA's cost 
impact estimates. There were also minor editorial changes throughout 
the preamble. There were no changes to the regulatory language in the 
CFR section of the proposed rule; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 45; Executive order review submission: National Emission 
Standards for Hazardous Air Pollutants: Miscellaneous Organic Chemical 
Manufacturing and Miscellaneous Coating Manufacturing; Proposed rule; 
; RIN 2060-AE82; OIRA review period: 06/18/2001 to 09/21/2001; 
Published 04/04/2002 (67 FR 16154); Nature of most significant OMB/OIRA 
changes: Minor editoral changes or no changes; EPA docket 
materials appeared to identify many changes suggested by the Small 
Business Administration's (SBA) Office of Advocacy, but the only 
evidence of a change suggested by OMB was an e-mail message suggesting 
a rewrite of two explanatory sentences in the preamble; (A side-by-
side comparison of the submitted and cleared versions of this rule in 
OIRA's files indicated that there were many changes but without 
attribution of the sources of those changes.); Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No; Although there was no evidence 
of OMB/OIRA contacts with outside parties during the formal review 
period for this proposal, the EPA docket files did document a 
presentation by industry representatives to OMB and SBA's Office of 
Advocacy (not attended by EPA) in August 2000.

GAO ID: 46; Executive order review submission: NESHAP: Petroleum 
Refineries; Catalytic Cracking Units, Catalytic Reforming Units and 
Sulfur Recovery Units; Final rule; RIN 2060-AF28; OIRA review 
period: 08/29/2001 to 11/27/2001; Published 04/11/2002 (67 FR 
17762); Nature of most significant OMB/OIRA changes: Minor 
editoral changes or no changes; The EPA docket had an OMB review 
cover sheet indicating "no substantive changes." The person in charge 
of developing this rule confirmed that OMB's review resulted in only a 
few very minor editorial changes; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 47; Executive order review submission: National Emission 
Standards for Hazardous Air Pollutants; Surface Coating of Metal 
Furniture (Surface Coating); Proposed rule; RIN 2060-AG55; OIRA 
review period: 06/18/2001 to 10/24/2001; Published 04/24/2002 (67 FR 
20206); Nature of most significant OMB/OIRA changes: Other 
material changes; Changes in the preamble to address OMB comments 
primarily inserted material for clarification and to request comments. 
For example, language was added to ask for comments on EPA's maximum 
achievable control technology (MACT) floor, EPA's conclusion that the 
creation of subcategories was not warranted for these standards, EPA's 
decision to reject regulatory options more stringent than the MACT 
floor, and whether there were alternative means of monitoring 
performance for add-on controls at source facilities that would be as 
effective and less expensive than the proposed requirements. In 
response to OMB's comments, EPA also asked that commenters provide 
information in support of their comments. More detailed explanations 
were added regarding (a) the subcategories issue, (b) a requirement to 
determine the mass of organic hazardous air pollutants in coatings, 
thinners, and cleaning materials, (c) monitoring systems, and (d) the 
explanation of the equation for calculating hazardous air pollutant 
emissions; Changes in the CFR section to address OMB comments 
included modifying (a) the applicability section of the rule to clarify 
applicability where a potential overlap may exist with EPA's wood 
furniture rule and (b) the equation for calculating hazardous air 
pollutant emissions; (Note that there was also a substantive change 
regarding the proposed emission limits--which, in turn, affected the 
estimated costs and benefits of the rule--but the materials in EPA's 
docket indicated that the change was due to EPA's own reanalysis of 
emissions data received from firms.); Evidence that OMB/OIRA changes 
affected costs or benefits: No; (Substantive changes to the 
potential costs and benefits of the rule were not attributed to a 
change suggested by OMB but rather to a change EPA made to the proposed 
emission limits after reanalysis of emissions data submitted by 
facilities. The revised limits were less stringent than originally 
proposed, leading to lower costs and lower projected emission 
reductions.); Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 48; Executive order review submission: Revisions to 
Regional Haze Rule to Incorporate Sulfur Dioxide Milestones and 
Backstop Emissions Trading Program for Nine Western States and Eligible 
Indian Tribes; Proposed rule; RIN 2060-AJ50; OIRA review period: 
11/29/2001 to 02/22/2002; Published 05/06/2002 (67 FR 30418); Nature 
of most significant OMB/OIRA changes: Other material changes; 
There were only a few changes in the preamble--for example, deleting 
some requests for comments and an explanatory section on why EPA was 
deferring to the Western Regional Air Partnership's (WRAP) judgment on 
the issue of critical mass and inserting a footnote in response to 
issues raised in a meeting with the Center for Energy and Economic 
Development (CEED). There were no changes in the CFR section; (WRAP 
is a collaborative effort of tribal governments, state governments, and 
various federal agencies to implement the Grand Canyon Visibility 
Transport Commission's recommendations and develop tools to comply with 
EPA's regional haze regulations. CEED is a national, nonprofit 
organization formed by the nation's coal-producing companies, 
railroads, a number of electric utilities, equipment manufacturers, and 
related organizations that advocates on behalf of the long-term 
viability of coal-based electricity generation in America.); Evidence 
that OMB/OIRA changes affected costs or benefits: No; Evidence 
that outside parties contacted OMB/OIRA: Yes; WRAP and CEED 
sent letters to OIRA on this rule, and CEED requested an EO 12866 
meeting with OMB on the rule. The EPA docket included a copy of a 02/
05/2002 CEED letter to Dr. Graham (not found in the OIRA files) and an 
e-mail from OIRA to EPA noting that a meeting had been scheduled at 
CEED's request on that date (no record found in OIRA's files). A 02/15/
2002 letter from WRAP to Dr. Graham appeared in OIRA's docket.

GAO ID: 49; Executive order review submission: Control of 
Emissions of Air Pollution From New Marine Compression Ignition Engines 
At or Above 30 Liters/Cylinder; Proposed rule; RIN 2060-AJ89; 
OIRA review period: 04/15/2002 to 04/30/2002; Published 05/29/2002 
(67 FR 37548); Nature of most significant OMB/OIRA changes: 
Significant changes; Docket materials indicated that EPA moved from 
proposing to considering second tier emission standards. Specifically, 
OIRA edits systematically suggested changing language regarding certain 
emission [Tier 2] standards from statements "proposing" the adoption of 
these standards to statements that EPA was only "considering" adoption 
of the standards; Evidence that OMB/OIRA changes affected costs or 
benefits: Unclear; Material in the OIRA files indicated that, 
although the regulatory support document was amended, the revisions did 
not affect the estimates of costs and benefits for this proposed rule. 
However, it seems that a shift from actually proposing to just 
considering adoption of particular emission standards should have had 
some effect on the rule's potential costs and benefits; Evidence that 
outside parties contacted OMB/OIRA: No.

GAO ID: 50; Executive order review submission: Consolidated 
Emissions Reporting Rule; Final rule; RIN 2060-AH25; OIRA review 
period: 08/27/2001 to 11/26/2001; Published 06/10/2002 (67 FR 
39602); Nature of most significant OMB/OIRA changes: Significant 
changes; Per review of the Paperwork Reduction Act portion of this 
rule, OMB raised concerns about one portion of the Information 
Collection Request (ICR). In response, EPA elected to delay compliance 
with that portion of the ICR, rather than delay the compliance date of 
the rule. With this change, states would not have to commence reporting 
point source emissions for two types of emissions until 06/01/2004, or 
later, if EPA fails to publish an approved revised ICR; Evidence that 
OMB/OIRA changes affected costs or benefits: Unclear; Delaying 
commencement of reporting for one subsection of the rule might have a 
marginal effect on the projected costs and benefits of states' 
reporting on emissions; Evidence that outside parties contacted OMB/
OIRA: No.

GAO ID: 51; Executive order review submission: National Emission 
Standards for Hazardous Air Pollutants; Surface Coating for Wood 
Building Products; Proposed rule; RIN 2060-AH02; OIRA review 
period: 09/07/2001 to 12/07/2001; Published 06/21/2002 (67 FR 
42400); Nature of most significant OMB/OIRA changes: Significant 
changes; Changes were made in both the preamble and CFR sections of 
the proposal. The most substantive change attributed to a request from 
OMB was in the CFR section--delaying the compliance dates in two 
provisions from 2 years to 3 years after the date of publication of the 
final rule; At OMB's request, language also was inserted throughout 
the preamble requesting specific comments on various aspects of 
products and activities EPA selected for coverage in this rule. 
Requests were also inserted for data on potential costs and burdens of 
the rule and how they might differ by subcategories of emission 
sources; Evidence that OMB/OIRA changes affected costs or benefits: 
Yes; The most substantive change in the proposed regulatory 
language would delay compliance dates for two of the rule's 
provisions; (Note also that some of the changes in the preamble 
raised questions and solicited comments about the cost-effectiveness of 
elements of this proposal.); Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 52; Executive order review submission: Proposed Rule for 
Compliance Program Fees for Light-Duty Vehicles and Engines; Heavy-Duty 
Vehicles and Engines; and Nonroad Engines and Motorcycles; Proposed 
rule; RIN 2060-AJ62; OIRA review period: 02/01/2002 to 04/22/2002; 
; Published 08/07/2002 (67 FR 51402); Nature of most significant OMB/
OIRA changes: Significant changes; Lengthy inserts were made 
to the preamble and the regulatory language in the CFR section. The 
most substantive change appeared to be the insertion of an entire new 
section on how to qualify for reduced fees within the regulatory 
provisions of the CFR section. The changes that appeared to be most 
substantive in the preamble included: (a) inserting requests for 
comments regarding many aspects of the proposed fee system (e.g., on 
minimum fees, alternative ways to adjust fees for inflation, various 
process questions, and EPA's cost analysis), (b) adding material on 
special provision fee payments and applications for certain types of 
manufacturers (and deleting the previous version of the basis for fee 
schedules), (c) adding clarifying material defining how to calculate a 
vehicle's average retail value, and (d) adding a Paperwork Reduction 
Act section; Evidence that OMB/OIRA changes affected costs or 
benefits: No; The changes primarily affected the explanations 
of fee payments and application processes, including clarification of 
how to qualify for reduced fees, but did not change EPA's estimated 
costs of the proposed rule; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 53; Executive order review submission: Proposed Non-
Conformance Penalties for 2004 and Later Model Year Emission Standards 
for Heavy-Duty Diesel Engines and Heavy-Duty Diesel Vehicles; 
Proposed rule; RIN 2060-AJ73; OIRA review period: 12/10/2001 to 
12/20/2001; Published 08/08/2002 (67 FR 51464); Nature of most 
significant OMB/OIRA changes: Significant changes; The most 
significant comments and edits conveyed from OIRA to EPA on this rule 
addressed: (a) rewriting a section about an additional adjustment to 
"level the playing field" and the assumptions used by EPA (OIRA's 
position was that this secondary adjustment was not necessary), (b) 
discount rate (OIRA's position was that, per OMB Circular A-94, it was 
more appropriate to use a discount rate of 7 percent consistently 
throughout the rule and regulatory impact analysis--in some instances 
EPA had used a 3 percent discount rate, citing a recommendation by 
EPA's Science Advisory Board), (c) fuel prices (OIRA's position was 
that the estimated fuel price EPA used in its draft was excessive, and 
OIRA suggested that EPA instead use a 3-to 5-year average of nationwide 
fuel prices), (d) significance of this proposed rule (OIRA's position 
was that the proposed rule was significant and potentially economically 
significant in light of the estimated nonconformance penalties), and 
(e) cost estimation (OIRA's position was that the basis for the cost 
estimates was unclear, among other issues, and OIRA suggested that EPA 
clarify and explicitly discuss its estimation method); (The proposed 
rule as published solicited comments on use of discount rate other than 
7 percent and on using a 5-year average of fuel prices. In the final 
rule, EPA based its analysis on use of a 7 percent discount rate and a 
5-year average for the price of fuel.); Evidence that OMB/OIRA changes 
affected costs or benefits: Unclear; Overall, the actual 
economic impact of the rule (and any changes made to it) is unclear 
because the use of nonconformance penalties by manufacturers is 
optional. According to EPA, manufacturers are likely to choose whether 
or not to use nonconformance penalties based on their ability to comply 
with emissions standards. Nevertheless, changes regarding the discount 
rate and fuel price could have an effect on the potential costs and 
benefits of this rule. (A higher discount rate reduces the present 
value of future costs and benefits compared to more immediate costs and 
benefits.) In particular, the discount rate changes appeared to result 
in a slight decrease in the penalty amounts cited in the rule once the 
discount rate is changed to 7 percent; (As noted in the revised 
version of the Technical Support Document section, "Penalty Sensitivity 
to Discount Rate" the net effect of using a smaller discount rate would 
generally be penalties that were higher.); Evidence that outside 
parties contacted OMB/OIRA: Yes; OIRA was contacted before the 
formal review period by industry representatives from Cummins Inc. 
(letters to OIRA on 09/13/2001, 10/12/2001, and 11/07/2001; meeting 
with OIRA on 10/01/2001) and Caterpillar Inc. (letter on 10/25/2001 and 
meeting on 11/14/2001), but there was no evidence of outside contacts 
within the formal review period for this proposed rule; (There were 
also many other documents on outside contacts in the dockets for this 
rulemaking, but they were dated during OIRA's formal review period for 
the final version of the rule.).

GAO ID: 54; Executive order review submission: Control of 
Emissions from Spark Ignition Marine Vessels and Highway Motorcycles; 
Proposed rule; RIN 2060-AJ90; OIRA review period: 01/16/2002 to 
04/16/2002; Published 08/14/2002 (67 FR 53050); Nature of most 
significant OMB/OIRA changes: Significant changes; There were 
substantive changes in the preamble and the regulatory support 
document, along with minor editorial changes. However, there did not 
appear to be any substantive changes in the regulatory language of the 
CFR section; Substantive changes were made in the regulatory support 
document regarding some of the cost-benefit, and cost-effectiveness 
estimates (e.g., cost per motorcycle, cost increases, and fuel savings 
rates). In the preamble, the sections on regulatory flexibility 
alternatives and the Paperwork Reduction Act were expanded, while 
original language was deleted regarding (a) previous standards 
accomplishing little more than a phase-out of two-stroke engines, (b) 
the contributions of motorcycles and marine engines to total U.S. 
emissions, (c) use of catalysts and safety concerns for marine engines, 
(d) a request for comment on whether banking or trading emission 
credits should be incorporated into the program, (e) total increased 
costs per motorcycle, (f) a statement that fuel savings offset cost of 
emission controls, and (g) a conclusion regarding cost per ton of 
emission reduction; Evidence that OMB/OIRA changes affected costs or 
benefits: Yes; The docket materials identified changes in 
cost-benefit and cost-effectiveness estimates for this rule. In 
aggregate, the estimated annual cost to manufacturers was reduced by $4 
million per year and the estimated annual fuel savings was increased by 
$4.3 million per year; Evidence that outside parties contacted OMB/
OIRA: Yes; Although there was no evidence of direct contact 
from outside parties during the formal review period for this rule, OMB 
had meetings with and received letters from several groups 
(representing both industry and environmental interests) on a previous 
related rule--GAO ID 41, from which this rule was spun off.

GAO ID: EPA-Office of Solid Waste and Emergency Response.

GAO ID: 55; Executive order review submission: Hazardous Waste 
Management System; Standardized Permit Corrective Action; and Financial 
Responsibility for RCRA Hazardous Waste Management Facilities; 
Proposed rule; RIN 2050-AE44; OIRA review period: 05/10/2001 to 
07/19/2001; Published 10/12/2001 (66 FR 52192); Nature of most 
significant OMB/OIRA changes: Other material changes; Among 
the revisions attributed to OMB in the preamble were (a) adding several 
inserts requesting comments on various aspects of the rule (e.g., on 
ways to reduce the burden and cost of the permitting process), (b) 
adding a statement that storage of hazardous waste military munitions 
should continue under the individual permitting program, (c) deleting a 
short section proposing that "the regulatory agency may itself choose 
to initiate your conversion to a standardized permit," (d) adding an 
explanation of current regulatory responsibilities if a generator sends 
waste off-site for land disposal, (e) adding several paragraphs 
explaining the option of not requiring a closure plan, (f) deleting 
much of a paragraph discussing differences between closure cost 
estimates prepared using EPA's methodology and the estimates from 
owners and operators (but leaving in a request for actual cost data and 
a discussion of six options EPA considered for developing cost 
estimates), (g) adding a reference to an estimation option that has a 
larger reduction of burden associated with cost estimating but tends to 
produce higher cost estimates, and (h) adding a paragraph regarding the 
level of detail required for compliance audits. In the CFR section, the 
only material change was adding language to clarify which parts of 
Title 40 CFR section 124.10 apply to the Resource Conservation and 
Recovery Act (RCRA) standardized permit. There were also minor 
editorial changes throughout the revised rule; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 56; Executive order review submission: Identification 
and Listing of Hazardous Waste; Addition of Manganese to Appendix VIII; 
Inorganic Chemical Manufacturing Waste; and CERCLA Hazardous Substance 
Designation and Reportable Quantities; Final rule; RIN 2050-AE49; 
OIRA review period: 09/26/2001 to 10/31/2001; Published 11/20/2001 
(66 FR 58258); Nature of most significant OMB/OIRA changes: 
Significant changes; Substantive changes were made throughout the 
preamble and CFR section of the notice in response to OMB's comments. 
Specifically, the rule as cleared by OMB deferred final action on all 
elements of the original proposal related to the waste constituent 
manganese (e.g., adding manganese as a regulated hazardous 
constituent); Evidence that OMB/OIRA changes affected costs or 
benefits: Yes; Deferring regulatory action on manganese would 
also defer potential costs and benefits of the regulatory actions 
originally proposed by EPA; Evidence that outside parties contacted 
OMB/OIRA: Yes; OIRA was contacted by industry representatives 
from the Steel Manufacturers Association and American Iron and Steel 
Institute (sent letters 09/28/2001 and 10/19/2001; met with OIRA 10/16/
2001), Cookson Group (sent letters 09/26/2001 and 10/18/2001), and 
Eastman (sent letter 10/08/2001); The OIRA files also indicated that 
OIRA reviewed materials sent by some of these groups to the RCRA 
Information Center. Cookson Group also requested a meeting with OIRA.

GAO ID: 57; Executive order review submission: Resource 
Conservation and Recovery Act Burden Reduction Initiative; Office of 
Solid Waste Burden Reduction Project; Proposed rule; RIN 2050-AE50; 
; OIRA review period: 08/02/2001 to 10/15/2001; Published 01/17/2002 
(67 FR 2518); Nature of most significant OMB/OIRA changes: Minor 
editoral changes or no changes; EPA told us they made no substantive 
changes to the rule. The sensitivity analysis requested by OMB also did 
not result in any changes to the rule; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 58; Executive order review submission: Amendments to the 
Corrective Action Management Unit [CAMU] Rule; Final rule; RIN 
2050-AE77; OIRA review period: 11/14/2001 to 12/19/2001; Published 
01/22/2002 (67 FR 2962); Nature of most significant OMB/OIRA changes: 
Other material changes; The changes attributed to OMB in the 
redline/strikeout document were all in the preamble of the rule. In 
addition to several minor editorial changes (e.g., correcting 
spelling), changes attributed to OMB included (a) adding a couple of 
sentences to a paragraph discussing differences between generic minimum 
national design and operation standards for disposal units and 
requirements for site-specific clean-ups, (b) rewording and clarifying 
some statements and responses to public comments regarding a proposed 
"discretionary kickout provision," (c) clarifying in one sentence, as 
stated previously in the same section, that the final regulation covers 
both listed and characteristic wastes, and (d) deleting some of the 
text explaining why EPA was not further extending the comment period; 
; (Note that the most substantive change from the original draft to the 
published version of the rule--adding a new provision about allowing 
disposal of "CAMU-eligible wastes" in off-site hazardous waste 
landfills--was not attributed to OMB.); Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 59; Executive order review submission: NESHAPS: 
Standards for Hazardous Air Pollutants for Hazardous Waste Combustors; 
; Interim final rule; RIN 2050-AE79; OIRA review period: 01/09/
2002 to 01/18/2002; Published 02/13/2002 (67 FR 6792); Nature of most 
significant OMB/OIRA changes: Minor editoral changes or no 
changes; The only changes marked were in the preamble, and all 
appeared to be minor. There were no changes in the CFR section of the 
rule; Evidence that OMB/OIRA changes affected costs or benefits: 
No; Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 60; Executive order review submission: NESHAPS: 
Standards for Hazardous Air Pollutants for Hazardous Waste Combustors; 
; Final rule; RIN 2050-AE79; OIRA review period: 01/09/2002 to 01/
18/2002; Published 02/14/2002 (67 FR 6968); Nature of most 
significant OMB/OIRA changes: Minor editoral changes or no 
changes; The only two changes clearly marked in the redline/strikeout 
document were in the preamble and appeared to be minor. There were no 
changes in the CFR section of the rule; Evidence that OMB/OIRA changes 
affected costs or benefits: No; Evidence that outside parties 
contacted OMB/OIRA: No.

GAO ID: 61; Executive order review submission: Gasification of 
Hazardous Oil-Bearing Secondary Materials from the Petroleum Refining 
Industry to Produce Synthesis Gas Fuel; Proposed rule; RIN 2050-
AE78; OIRA review period: 10/17/2001 to 01/15/2002; Published 03/
25/2002 (67 FR 13684); Nature of most significant OMB/OIRA changes: 
Other material changes; There were changes on most of the 
pages in the revised version of the rule. All of the substantive 
changes were in the preamble, including sizeable insertions of text 
that provided explanatory information not in the original version of 
the rule. In particular, there were lengthy inserts requesting comments 
on a variety of issues and options and also new text regarding the 
potential economic impacts. There were also many minor editorial 
changes throughout the preamble and some rewording in the CFR section; 
Evidence that OMB/OIRA changes affected costs or benefits: No; 
The changes regarding potential economic impacts just provided more 
explanation of the potential benefits of this rule. The estimated costs 
and benefits did not change; Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: 62; Executive order review submission: Hazardous Waste 
Management System; Modification of the Hazardous Waste Program; Cathode 
Ray Tubes and Mercury-Containing Equipment; Proposed rule; RIN 
2050-AE52; OIRA review period: 12/21/2001 to 02/13/2002; Published 
06/12/2002 (67 FR 40508); Nature of most significant OMB/OIRA changes: 
Minor editoral changes or no changes; According to EPA, the 
only change made at the suggestion of OMB was that EPA solicited 
comments on extending the speculative accumulation time of used, broken 
CRTs to "two or more years" instead of just "two years." A line-by-line 
comparison of the revised and original versions of the rule in the OIRA 
docket confirmed only minor changes in the preamble and no changes 
evident in the CFR section of this rule; Evidence that OMB/OIRA 
changes affected costs or benefits: No; Evidence that outside 
parties contacted OMB/OIRA: No.

GAO ID: 63; Executive order review submission: Oil Pollution 
Prevention Regulation: Non-Transportation-Related Onshore and Offshore 
Facilities; Revisions; Final rule; RIN 2050-AC62; OIRA review 
period: 04/27/2001 to 10/15/2001; Published 07/17/2002 (67 FR 
47042); Nature of most significant OMB/OIRA changes: Other 
material changes; The following changes were attributed to OMB in the 
preamble of the rule: (a) added two sentences to note that EPA will 
continue to evaluate and intends to request additional data and 
comments on the issue of modifying secondary containment requirements 
for small electrical and other types of equipment that use oil for 
operating purposes, (b) deleted a total of 10 sentences in a section 
about discretionary provisions in the rule--all appeared to be related 
to wording changes or additional clarifications in response to 
comments, (c) expanded a paragraph regarding appropriate methods of 
secondary containment (e.g., factors to consider in determining whether 
to install double-walled piping), (d) added a few sentences to a 
paragraph in which EPA withdrew a proposed 72-hour impermeability 
standard that was in the proposed rule, (e) added two sentences 
explaining an editorial change made to one of the rule's provisions 
(deleting unnecessary words), and (f) added sentences in a response to 
public comments to note that EPA will continue to evaluate whether 
provisions for secondary containment found in section 112.7(h)(1) 
should be modified or revised and that EPA intends to publish a notice 
asking for additional data and comment on this issue. The only two 
changed sentences in the CFR section appeared to reflect minor 
editorial wording changes; Evidence that OMB/OIRA changes affected 
costs or benefits: No; (However, the docket materials did show 
that EPA provided OIRA supplemental cost analyses as part of the 
revised version of the rule.); Evidence that outside parties contacted 
OMB/OIRA: No.

GAO ID: EPA-Office of Water.

GAO ID: 64; Executive order review submission: National Primary 
Drinking Water Regulations: Arsenic and Clarifications to Compliance 
and New Source Contaminant Monitoring; Proposed rule; RIN 2040-
AB75; OIRA review period: 06/22/2001 to 07/13/2001; Published 07/
19/2001 (66 FR 37617); Nature of most significant OMB/OIRA changes: 
Other material changes; The significant OMB changes identified 
by the EPA memo were all in the preamble. (There was no regulatory 
language associated with this proposal.) EPA made changes to the 
following seven aspects of the preamble as a result of discussions with 
OMB: (1) changed questions in the requests for comments to be identical 
to the language used in the charges to the three review panels, (2) 
expanded the description of uncertainties in risk analysis, (3) 
included information specific to the recommendations from the Science 
Advisory Board on treatment technologies and from a Science Advisory 
Board advisory committee on latency and income adjustments, (4) 
expanded the description of latency and other income adjustments, (5) 
included several clearly worded references to the health date relating 
primarily to arsenic research at levels above 50 parts per billion 
(ppb), and the extent to which that affects uncertainties associated 
with benefits of reducing arsenic below 50 ppb, (6) made editorial 
changes to the small system section to clearly indicate that EPA 
identified affordable technologies, so small system variances will not 
be an option, and (7) included additional wording about providing a 
small government agency plan under section 203 of the Unfunded Mandates 
Reform Act.); Evidence that OMB/OIRA changes affected costs or 
benefits: No; Evidence that outside parties contacted OMB/OIRA: 
No; (However, the OMB docket did include copies of letters and 
comments dated prior to the publication of the previous related 
rulemaking on 01/22/2001.).

GAO ID: 65; Executive order review submission: Minimizing 
Adverse Environmental Impact From Cooling Water Intake Structures at 
New Facilities Under Section 316(b) of the Clean Water Act, Phase I; 
Final rule; RIN 2040-AC34; OIRA review period: 09/10/2001 to 11/
08/2001; Published 12/18/2001 (66 FR 65256); Nature of most 
significant OMB/OIRA changes: Significant changes; Five major 
changes to the rule were attributed to OIRA, all of which appeared to 
provide greater flexibility and more alternatives to compliance with 
requirements and standards in the original draft of the rule. OIRA's 
five main changes were to (a) add criteria that would allow more 
facilities to qualify for lower performance standards, (b) change 
requirements so that facilities withdrawing between 2 million gallons 
per day (MGD) and 10 MGD did not have to reduce intake flow to a 
minimum level commensurate with that attained by a closed-cycle 
recirculating cooling water system, (c) change a requirement so that 
facilities only needed to use screens to minimize impingement mortality 
of fish and shellfish if certain criteria were met, (d) add an 
exception to intake flow requirements regarding cooling water intake 
structures located in a lake or reservoir, and (e) add "restoration 
measures" as a compliance alternative under the "Track II" compliance 
alternative so that intake structure operators may implement measures 
that "result in increases in fish and shellfish."; Evidence that OMB/
OIRA changes affected costs or benefits: Yes; OIRA's changes 
would likely reduce the costs of the rule by providing regulated 
entities more flexibility and alternatives to compliance with the 
original standards and requirements of the rule. Their effect on 
potential benefits is not clear. Changes to the cost estimates were 
evident in the published version of the rule; Evidence that outside 
parties contacted OMB/OIRA: Yes; OMB met with Riverkeeper on 
09/27/2001, and with representatives from Edison Electric Institute and 
EOP Group) on 10/29/2001.

GAO ID: 66; Executive order review submission: National Primary 
Drinking Water Regulations: Long-Term 1 Enhanced Surface Water 
Treatment Rule; Final rule; RIN 2040-AD18; OIRA review period: 
06/13/2001 to 09/24/2001; Published 01/14/2002 (67 FR 1812); Nature 
of most significant OMB/OIRA changes: Significant changes; 
Although the EPA docket memo first stated that OMB had no significant 
comments on this rule, it went on to a long discussion about two major 
policy issues raised by OMB concerning (a) special primacy requirements 
for states and (b) the valuation of the cost of Cryptospirdiosis used 
in the economic analysis accompanying the final rule. The memo noted 
that both of these issues were elevated to Dr. Graham (OIRA) and Tracy 
Mehan (EPA Office of Water). OMB agreed to remove their objections to 
the special primacy requirements in this rule, but indicated intent to 
raise this issue in subsequent Safe Drinking Water Act regulatory 
packages. To address OMB's concerns about the valuation issue, the 
Office of Water and OMB agreed to expand this rule's benefit range by 
using two cost-of-illness values instead of one. The memo stated that 
other OMB comments were editorial in nature; (Note that the redline/
strikeout document also shows many other changes in the preamble. It 
was not clear whether these were changes that were not made at the 
suggestion of OMB or whether the author of EPA's Executive Order 12866 
compliance memo did not consider changes to the preamble to be 
substantive.); Evidence that OMB/OIRA changes affected costs or 
benefits: Yes; In response to OMB's concern about EPA's 
valuation of the cost of Cryptospirdiosis used in the economic 
analysis, OMB and the Office of Water agreed to expand the rule's 
benefit range by using two cost-of-illness values instead of one. This 
second COI estimate that was added was lower and only valued lost work 
time and medical costs associated with Cryptospirdiosis. The other 
estimate remained the same as EPA's original and valued all loss 
categories included in the original published study used by EPA 
(valuing losses for medical costs, work time, productivity, and leisure 
time); Evidence that outside parties contacted OMB/OIRA: No.

GAO ID: 67; Executive order review submission: Effluent 
Guidelines and Standards for the Meat Products Point Source Category 
(Revisions); Proposed rule; RIN 2040-AD56; OIRA review period: 
12/21/2001 to 01/28/2002; Published 02/25/2002 (67 FR 8582); Nature 
of most significant OMB/OIRA changes: Other material changes; 
OMB and SBA suggested changes in two sections of the preamble of the 
proposed rule. In response to those suggestions, EPA: (a) revised the 
pretreatment discussion in the preamble to restate the results from 
EPA's preliminary data collection on meat and poultry product indirect 
dischargers and related POTW interference events and (b) added a 
lengthy paragraph in response to OMB's and SBA's request to provide a 
more thorough explanation of how EPA developed four different 
production size classifications for each meat and poultry product 
subcategory; Evidence that OMB/OIRA changes affected costs or 
benefits: No; Evidence that outside parties contacted OMB/OIRA: 
No.

GAO ID: 68; Executive order review submission: National 
Pollutant Discharge Elimination System: Proposed Regulations to 
Establish Requirements for Large Cooling Water Intake Structure at 
Existing Power Generating Facilities; Proposed rule; RIN 2040-AD62; 
; Economically significant; OIRA review period: 12/28/2001 to 02/28/
2002; Published 04/09/2002 (67 FR 17122); Nature of most significant 
OMB/OIRA changes: Significant changes; EPA identified major 
changes made at the suggestion or recommendation of OIRA in both the 
preamble and CFR sections of the proposed rule. Overall, these OIRA 
changes lowered the performance standard in the rule and made 
compliance requirements more flexible by allowing, among other things, 
options for a site-specific approach to minimizing environmental harm. 
The changes also broadened a restoration option, whereby firms may 
restore environmental harm rather than comply with the designated 
performance standard; Many changes to the proposed rule language in 
eight sections of the proposed CFR amendments were attributed to OIRA. 
The most extensive changes were to sections 125.94 (10 of 14 major 
changes in this section were attributed to OIRA) and 125.95 (previously 
125.96 - all 7 major changes identified in this section were attributed 
to OIRA). For example OIRA suggested removing a requirement that 
facilities in estuaries and tidal waters withdrawing greater than 1 
percent of the tidal excursion volume, and oceans withdrawing greater 
than 500 MGD meet performance standards for reducing mortality and 
entrainment based on reducing flow commensurate with a closed-cycle, 
recirculating cooling system and replaced it with a requirement for all 
facilities in estuaries, tidal rivers, and oceans (regardless of flow) 
to reduce both impingement mortality and entrainment based on the 
performance of fish return systems and fine mesh screens; OIRA also 
suggested broadening the scope of restoration measures to allow use 
under all compliance alternatives, adding language that allows 
restoration measures to be used in lieu of design and construction 
technologies and operational measures to meet performance requirements 
of the rule; Evidence that OMB/OIRA changes affected costs or 
benefits: Yes; OIRA recommended that EPA select a regulatory 
alternative that OIRA believed would yield substantially greater net 
benefits. The approach that EPA originally proposed would have cost an 
estimated $610 million per year, with estimated benefits of $890 
million per year, yielding net benefits of $280 million. However, OIRA 
recommended that EPA select another approach that, while having 
estimated benefits of $735 million, was expected to cost only $280 
million, yielding net benefits of $455 million; Evidence that outside 
parties contacted OMB/OIRA: Yes; Industry groups, such as 
Edison Electric Institute, EOP Group, and Cinergy, sent letters and 
provided materials to OIRA. Representatives of those groups and Public 
Service Electric and Gas, TXU, Progress Energy, Teco Energy, 
Constellation Energy Group, Allegheny Energy, Minnesota Power, and 
Migrant Corp. met with OIRA on 02/08/2002. Riverkeeper (an 
environmental interest group) met with OMB on 02/07/2002.

GAO ID: 69; Executive order review submission: Final Revisions 
to the Clean Water Act Regulatory Definition of "Fill Material" and 
"Discharge of Fill Material"; Final rule; RIN 2040-AD51; OIRA 
review period: 05/01/2002 to 05/02/2002; Published 05/09/2002 (67 FR 
31129); (Note that this was a joint rulemaking of the Department of 
the Army's Corps of Engineers and EPA.); Nature of most significant 
OMB/OIRA changes: Significant changes; The most substantive 
change attributed to OIRA in the preamble and regulatory language of 
the rule revised the definition of fill material as follows - "The term 
fill material does not include trash, or garbage, or similar materials 
unless such materials are to be used to create any structure or 
infrastructure in waters of the United States, such as an artificial 
reef or berm. (According to an EPA official, the impact of the change 
was to make the definition clearer so that fill material permit 
applicants could not ask to use trash or garbage as fill material in 
creating a structure or infrastructure.) Many of the other OIRA-
suggested changes revised discussions of relevant court actions and 
decisions related to this rulemaking; Evidence that OMB/OIRA changes 
affected costs or benefits: Unclear; Revising original 
regulatory language to exclude the possible use of trash, garbage, or 
similar materials as fill material for some purposes might affect 
potential costs and environmental benefits; Evidence that outside 
parties contacted OMB/OIRA: No; There was no evidence of 
contact before or during OIRA's formal review. However, in a joint 
letter dated 05/03/2002, one day after OIRA cleared this rule, 10 
environmental groups--American Rivers, Clean Water Action, 
Earthjustice, Friends of the Earth, League of Conservation Voters, 
Mineral Policy Center, National Audubon Society, National Wildlife 
Federation, Natural Resources Defense Council, and the Sierra Club--
contacted Dr. Graham regarding this rule; (The OIRA files also 
included a newspaper article that referred to a meeting between the 
National Mining Association and OMB on 04/06/2001. However, meeting 
records we reviewed indicated only that EPA attended a meeting with the 
National Mining Association on that date; there was no mention of 
whether anyone from OMB also participated.).

GAO ID: 70; Executive order review submission: Effluent 
Limitation Guidelines and New Source Performance Standards for the 
Construction and Development Category; Proposed rule; RIN 2040-
AD42; Economically significant; OIRA review period: 03/01/2002 to 
05/15/2002; Published 06/24/2002 (67 FR 42644); Nature of most 
significant OMB/OIRA changes: Significant changes; There were 
substantive changes in both the proposed regulatory options in the CFR 
amendments and the preamble discussion of those regulatory options. At 
the suggestion or recommendation of OIRA, the proposed regulation no 
longer included the storm water management or postconstruction 
regulatory options from the original draft. Also, the active 
construction options were changed to identify and discuss the following 
three regulatory options: (1) inspection and certification of 
construction site erosion and sediment controls, for sites one acre or 
larger, (2) codification of the Construction General permit plus 
inspection and certification requirements, for sites five acres or 
larger, and (3) no regulation. The revisions to the regulatory proposal 
required corresponding revisions to the preamble; Evidence that OMB/
OIRA changes affected costs or benefits: Unclear; The memo in 
EPA's docket regarding OIRA changes did not directly address whether 
there were changes in the potential costs and benefits of the rule. The 
EPA docket did not include sufficient information to allow for a 
detailed comparison of revised cost and benefit data. However, the 
nature of the changes made to the regulatory options should have had 
some effect on the proposed rule's potential costs and benefits; 
Evidence that outside parties contacted OMB/OIRA: Yes; The 
OIRA files on this rulemaking included a document from the ELG Working 
Group (a coalition of interested trade associations) entitled "Issues 
Raised By The Construction and Development Effluent Limitations 
Guidelines Working Group Before the White House Office of Management 
and Budget Office of Information and Regulatory Affairs" (dated 02/04/
2002 - about 1 month prior to the formal review period).

GAO ID: 71; Executive order review submission: Effluent 
Limitations Guidelines, Pretreatment Standards, and New Source 
Performance Standards for the Iron and Steel Manufacturing Point Source 
Category; Final rule; RIN 2040-AC90; OIRA review period: 03/29/
2002 to 04/30/2002; Published 10/17/2002 (67 FR 64216); Nature of 
most significant OMB/OIRA changes: Significant changes; At the 
suggestion of OMB, EPA revised the regulation and supporting preamble 
discussion for the "water bubble" provision (a voluntary regulatory 
flexibility mechanism to allow for trading of identical pollutants at 
any single steel facility with multiple compliance points). This change 
eliminated an existing minimum net reduction provision that had applied 
if facilities used the water bubble alternative; Evidence that OMB/
OIRA changes affected costs or benefits: Unclear; As described 
in the existing regulation that this rule was amending, the water 
bubble provision had a minimum net reduction provision--if a facility 
used this tool, the amount of the pollutant discharges pursuant to the 
bubble had to be 10 percent to 15 percent less than the discharges 
otherwise authorized by the rule without the bubble. At the suggestion 
of OMB, the revised final rule eliminated this minimum net reduction 
provision; However, the net effect on costs and benefits of this 
rule are unclear. While this change eliminated a requirement for 
additional reductions in pollutant discharges if the water bubble tool 
is used, it also provided greater flexibility for facilities to use 
this tool to achieve the overall pollutant reductions required by 40 
CFR 420 at the least cost; Evidence that outside parties contacted 
OMB/OIRA: Yes; Representatives of industry groups contacted 
OIRA prior to OIRA's formal review period for this rulemaking. On 03/
04/2002, representatives of the Steel Manufacturers Association and the 
Specialty Steel Industry of North America sent a letter to Dr. Graham 
with comments and a request for a meeting. On 03/19/2002, OIRA held a 
meeting with steel industry representatives (including those who 
requested the meeting on March 4); (Note also that the OIRA files on 
its review of this rule indicated that OIRA had reviewed the 
substantive comments from the proposed rule stage. The water bubble 
provision was the subject of some of the public comments on the 
proposed rule, with industry groups generally supportive of expansions 
of the water bubble flexibilities and environmental groups supportive 
of restrictions on the water bubble.).

Source: GAO analysis.

[End of table]

Table 8: Findings and Determinations for Rules Returned to Agency after 
Submission to OIRA:

GAO ID: DOT-FAA.

GAO ID: 72; Executive order review submission: Part 145 
Review: Repair Stations; Final rule; RIN 2120-AC38; OIRA review 
period: 07/13/2001 to 07/20/2001; Reason for OIRA's return: 
OIRA cited concerns from other federal agencies and unease about 
complicating relations with other countries in its rationale for 
returning the rule; DOT officials confirmed that the Department of 
State voiced concerns about the wording of certain provisions. However, 
they pointed out that FAA had worked out wording changes with the 
Department of State prior to submitting the rule for OIRA's review. 
They believed that OIRA's request that FAA withdraw the rule (see GAO 
ID 84) and OIRA's subsequent return of the resubmitted rule (this case) 
were based on an OIRA misunderstanding that the Department of State's 
concerns had not been addressed; Evidence that outside parties 
contacted or met with OIRA regarding this submission: Yes; 
On 07/09/2001--2 days before FAA withdrew the original submission of 
this rule--the Aeronautical Repair Station Association, the Airline 
Suppliers Association and other business representatives sent a letter 
to the OMB Director with a copy to OIRA asking that OIRA send the rule 
back to FAA with instructions to prepare a Supplemental Notice of 
Proposed Rulemaking; On 07/26/2001--about 1 week after OIRA returned 
the rule to FAA and FAA resubmitted to rule to OIRA--OIRA met with 
representatives from the Aeronautical Repair Station Association, 
Aerospace Industries Association, Air Transport Association of America, 
Aircraft Electronics Association, Aircraft Owners and Pilots 
Association, Airline Suppliers Association, General Aviation 
Manufacturers Association, National Air Carrier Association, National 
Air Transport Association, Professional Aviation Maintenance 
Association, The Boeing Company, General Electric Aircraft Engines, 
Goodrich, Honeywell, Rockwell Collins, and United Technologies 
Corporation; Evidence of subsequent activity regarding this 
submission: There were a series of activities regarding this 
rule both before and after this return. On 07/02/2001, FAA submitted a 
draft of this rule for OIRA's review. On 07/11/2001, FAA withdrew the 
rule (at OIRA's suggestion according to FAA officials.) (This 
withdrawal is covered by GAO ID 84.); On 07/13/2001, FAA resubmitted 
the rule for OIRA's review, and OIRA returned it on 07/20/2001 (the 
sequence covered by this particular case). That same day FAA 
resubmitted the rule to OIRA; On 07/30/2001, OIRA completed its 
review of the rule (with the outcome coded "consistent with no 
change"). The rule was published on 08/06/2001 (66 FR 41088).

GAO ID: 73; Executive order review submission: Certification 
of Pilots, Aircraft and Repairmen for the Operation of Light Sport 
Aircraft; Proposed rule; RIN 2120-AH19; OIRA review period: 07/
06/2001 to 08/09/2001; Reason for OIRA's return: OIRA returned 
this rule because of concerns that the regulatory analysis did not 
adequately support the rule. OIRA noted that FAA used a baseline with 
which to compare the rule that assumed that, in the absence of this 
rule, FAA would propose a more stringent set of standards than in the 
proposal. Although OIRA had no objection to FAA analyzing an 
alternative that was more stringent than the proposal, OIRA believed 
that the benefits of the proposal should be compared with a status quo 
that did not include the artificial "baseline" assumption of increased 
stringency. OIRA also suggested that, as part of an improved analysis 
of alternatives, FAA could also consider means of improved compliance 
and enforcement of regulations currently in place; Given these 
concerns, OIRA suggested that DOT publish an advanced notice of 
proposed rulemaking before publishing the specific proposal and 
returned the rule to DOT for reconsideration; Evidence that outside 
parties contacted or met with OIRA regarding this submission: 
No; Evidence of subsequent activity regarding this submission: 
FAA reexamined its regulatory evaluation and resubmitted the rule to 
OIRA on 12/17/2001; OIRA completed its review of the resubmitted 
rule on 01/03/2002 (outcome code "consistent with change") (see GAO ID 
28); The proposed rule was published on 02/05/2002 (67 FR 5368).

GAO ID: 74; Executive order review submission: Corrosion 
Control Plan; Proposed rule; RIN 2120-AE92; OIRA review period: 
03/02/2001 to 09/18/2001; Reason for OIRA's return: OIRA 
returned this rule because of concerns about the agency's regulatory 
analysis, primarily related to the cost-benefit analysis. Many of these 
same concerns applied to the analysis of a related FAA rule on aging 
aircraft. (See related rule at GAO ID 76.) Although FAA responded to 
some of these concerns in a revised regulatory evaluation on 07/27/
2001, OIRA suggested that a concurrent review of this rule and the 
aging aircraft rule would help resolve OIRA's concerns and assist in 
determining the most cost-effective way to detect and correct problems 
affecting the safety of aging aircraft. Because resolution of these 
concerns would take additional time, OIRA returned the two rules to DOT 
and FAA for reconsideration; Evidence that outside parties contacted 
or met with OIRA regarding this submission: No; Evidence of 
subsequent activity regarding this submission: On 06/18/2002, 
FAA resubmitted this rule to OIRA; On 09/16/2002, OIRA completed its 
review of the resubmitted rule (outcome code "consistent with no 
change"); The proposed rule was published on 10/03/2002 (67 FR 
62142).

GAO ID: 75; Executive order review submission: Retrofit of 
Improved Seats in Air Carrier Transport Category Airplanes; Proposed 
rule; RIN 2120-AC84; OIRA review period: 05/14/2002 to 05/16/2002; 
Reason for OIRA's return: According to the OIRA database, this 
rule was returned to FAA because it was an improper submission; 
However, FAA officials disputed that characterization. They stated that 
OIRA "had a slew of questions" to which FAA gave a 12-page response. 
They said that, after the return and an exchange of OIRA suggestions 
and FAA's response, FAA added language to further explain the plan for 
improving the seat certification process; Evidence that outside 
parties contacted or met with OIRA regarding this submission: 
No; Evidence of subsequent activity regarding this submission: 
On 06/17/2002, FAA resubmitted this rule for OIRA's review; OIRA 
completed its review of the resubmitted version on 09/24/2002 (outcome 
code "consistent with change"); The proposed rule was published on 
10/04/2002 (67 FR 62294).

GAO ID: 76; Executive order review submission: Aging Airplane 
Safety; Final rule; RIN 2120-AE42; OIRA review period: 07/27/
2001 to 09/18/2001; Reason for OIRA's return: OIRA returned 
this rule due to concerns about the regulatory analysis. Many of these 
same concerns applied to the analysis of a related FAA corrosion 
control plan rule (GAO ID 74). Although FAA responded to some of these 
concerns in a revised regulatory evaluation on 07/27/2001, OIRA 
believed that a concurrent review of this rule and the corrosion 
control plan rule would help resolve OIRA's concerns and assist in 
determining the most cost-effective way to detect and correct problems 
affecting the safety of aging aircraft. Because resolution of these 
concerns would take additional time, OIRA returned the two rules to 
DOT-FAA for reconsideration; Evidence that outside parties contacted 
or met with OIRA regarding this submission: No; Evidence of 
subsequent activity regarding this submission: On 06/18/2002, 
FAA resubmitted this rule to OIRA; On 09/24/2002, OIRA completed its 
review (outcome code "consistent with change"). According to FAA, the 
changes were to issue this as an interim final rule with a request for 
comment, instead of as a final rule, and to expand the benefit analysis 
in the regulatory evaluation; The interim final rule was published 
on 12/06/2002 (67 FR 72726).

GAO ID: 77; Executive order review submission: Revision of 
Digital Flight Data Recorder Regulations for Boeing 737 Airplanes and 
for Part 125 Operators; Final rule; RIN 2120-AG87; OIRA review 
period: 06/14/2001 to 09/18/2001; Reason for OIRA's return: 
OIRA returned this rule due to concerns about the relative cost-
effectiveness of requiring additional flight data recorder parameters, 
in light of additional steps that would be proposed in a related notice 
of proposed rulemaking on general flight recorder improvements; 
Evidence that outside parties contacted or met with OIRA regarding this 
submission: No; Evidence of subsequent activity regarding this 
submission: The final rule is still pending, according to FAA 
officials.

GAO ID: DOT-NHTSA.

GAO ID: 78; Executive order review submission: Tire Pressure 
Monitoring Systems; Final rule; RIN 2127-AI33; Economically 
significant; OIRA review period: 12/17/2001 to 02/12/2002; Reason 
for OIRA's return: OIRA returned this rule because it did not 
believe the analysis performed by NHTSA adequately demonstrated that 
the agency selected the best available alternative; Specifically, 
OIRA returned the rule for reconsideration of two analytic concerns 
related to safety. First, OIRA identified a regulatory alternative that 
NHTSA had not explicitly analyzed--considering the impact of regulatory 
alternatives on the availability of anti-lock brake systems. Second, 
OIRA said that the technical foundation for NHTSA's estimates of safety 
benefits needed to be better explained and subjected to sensitivity 
analysis; Evidence that outside parties contacted or met with OIRA 
regarding this submission: Yes, prior to the formal review 
period; On 10/26/2001, OIRA and DOT officials met with 
representatives of the Alliance of Automobile Manufacturers and various 
member companies, including Daimler-Chrysler, Ford, Toyota, and VW of 
America; (There was also a meeting after the formal review period - 
on 02/21/2002 - with the Rubber Manufacturers' Association.); Evidence 
of subsequent activity regarding this submission: On 05/28/
2002, NHTSA submitted a final rule to OIRA that contained the changes 
suggested by OIRA in the return letter; OIRA completed its review of 
the rule on 05/29/2002 (outcome code "consistent with no change"); 
The final rule was published on 06/05/2002 (67 FR 38704); The U.S. 
Court of Appeals recently held that the rule was contrary to the intent 
of the tire safety legislation and arbitrary and capricious under the 
APA. Public Citizen, Inc. v. Mineta, No. 02-4237 (2d Cir. Aug. 6, 
2003).

GAO ID: EPA-Office of Air and Radiation.

GAO ID: 79; Executive order review submission: FY 2000 Report 
to Congress on EPA's Implementation of the Waste Isolation Pilot Plant 
Land Withdrawal Act; Proposed rule; RIN 2060-ZA12; OIRA review 
period: 09/13/2001 to 10/17/2001; Reason for OIRA's return: 
OIRA returned this item because it was an improper submission; 
Evidence that outside parties contacted or met with OIRA regarding this 
submission: No; Evidence of subsequent activity regarding this 
submission: N/A.

GAO ID: EPA-Office of Water.

GAO ID: 80; Executive order review submission: Federal Water 
Quality Standards for Indian Country and Other Provisions Regarding 
Federal Water Quality Standards; Proposed rule; RIN 2040-AD46; 
OIRA review period: 06/29/2001 to 10/02/2001; Reason for OIRA's 
return: OIRA's return letter cited a number of concerns about 
this rule. In particular, the return letter noted that EPA did not 
provide a quantitative analysis of the costs and benefits that would 
result from this action. OIRA pointed out that the preamble identified 
nearly 300 point sources on tribal lands that would be directly 
affected by the rule and that there might be substantial numbers of 
nonpoint sources and point sources upstream of tribal lands that could 
also be affected. OIRA therefore stated that the rule could benefit 
from further analysis of costs and benefits in order to support 
informed public comment. OIRA was also concerned with EPA's conclusion 
that this proposed rule did not have federalism implications. OIRA 
noted that some of the impacts of this rule on states were likely to be 
significant (e.g., affecting state permitting activities in upstream 
waters), but the rule did not appear to contain any requirements for 
consultation with states. OIRA was also concerned that the rule 
appeared to establish for the first time EPA jurisdiction over waters 
whose Indian country status is in dispute; Evidence that outside 
parties contacted or met with OIRA regarding this submission: 
No; Evidence of subsequent activity regarding this submission: 
No; According to an EPA official, EPA has not resubmitted this rule 
to OIRA.

Source: GAO analysis.

[End of table]

Table 9: Findings and Determinations for Rules Withdrawn after 
Submission to OIRA:

GAO ID: APHIS.

GAO ID: 81; Executive order review submission: Importation of 
Clementines From Spain; Proposed rule; RIN 0579-AB40; OIRA review 
period: 04/26/2002 to 05/21/2002; Did the agency withdraw this 
submission at the suggestion or recommendation of OIRA?: The 
withdrawal was characterized by APHIS as a mutual decision by APHIS and 
OIRA; Reason for withdrawal of the submitted rule: According to 
APHIS, OIRA and APHIS mutually decided to withdraw this rule to avoid 
violating the 90-day limit on reviews under Executive Order 12866; 
Evidence that outside parties contacted or met with OIRA regarding this 
submission: No; Evidence of subsequent activity regarding this 
submission: APHIS resubmitted the rule to OIRA on 06/28/2002; 
OIRA completed review of the rule on 07/05/2002 (outcome code 
"consistent with change"). According to APHIS, OIRA had some changes to 
better explain the basis for the rule and to address concerns by 
Spanish clementine exporters. APHIS also noted that some changes were 
made to the regulatory language in response to the U.S. Trade 
Representative's Office; The rule was published on 07/11/2002 (67 FR 
45922).

GAO ID: FDA.

GAO ID: 82; Executive order review submission: Records and 
Reports Concerning Experience with Approved New Animal Drugs; Final 
Rule; (Listed in OIRA's database at time of GAO's review as: Records 
and Reports Concerning Experience with Approved New Animal Drugs; 
Implementing of Title I of the Generic Animal Drug and Patient [sic] 
Term Restoration Act); Final rule; RIN 0910-AA02; OIRA review 
period: 08/28/2001 to 11/26/2001; Did the agency withdraw this 
submission at the suggestion or recommendation of OIRA?: FDA 
characterized the withdrawal as a mutual decision by FDA and OIRA; 
Reason for withdrawal of the submitted rule: According to FDA, 
OIRA and FDA made a mutual decision to withdraw the original final rule 
and reissue it as an interim final rule. Issuing this rule as an 
interim final rule with an opportunity for public comment was a 
compromise decision to address OMB's concerns regarding the length of 
time since publication of the proposed rule (12/17/1991) while not 
further delaying the rule by reproposing it; Evidence that outside 
parties contacted or met with OIRA regarding this submission: 
No; Evidence of subsequent activity regarding this submission: 
FDA resubmitted the rule to OIRA on 11/29/2001; OIRA completed 
review of the rule on 01/08/2002 (outcome code "consistent with 
change"). According to FDA, OIRA had some clarifying comments, but 
these were not substantive (see GAO ID 15 in this appendix for 
additional details); An interim final rule was published on 02/04/
2002 (67 FR 5046). (The interim final rule was published again on 07/
31/2002, delaying the effective date indefinitely in order to address 
Paperwork Reduction Act of 1995 requirements and comments received on 
the interim final rule.).

GAO ID: 83; Executive order review submission: Current Good 
Manufacturing Practice in Manufacturing, Packing, or Holding Dietary 
Ingredients and Dietary Supplements; Proposed rule; RIN 0910-AB88; 
; Economically significant; OIRA review period: 03/28/2001 to 12/19/
2001; Did the agency withdraw this submission at the suggestion or 
recommendation of OIRA?: No; The Department of Health and 
Human Services (HHS) withdrew the rule; Reason for withdrawal of the 
submitted rule: According to FDA, this rule previously had been 
submitted to OIRA for review but was initially withdrawn in response to 
the Card memo. Although FDA then resubmitted this rule to OIRA in March 
2001, new policy makers in HHS wanted to reconsider the rule. 
Therefore, HHS decided to again withdraw the rule from OIRA's review; 
Evidence that outside parties contacted or met with OIRA regarding this 
submission: No; Evidence of subsequent activity regarding this 
submission: FDA resubmitted a version of this rule to OIRA on 
10/04/2002; OIRA completed review of the resubmitted rule on 01/16/
2003 (outcome code "consistent with change"); The proposed rule was 
published on 03/13/2003 (68 FR 12158).

GAO ID: DOT-FAA.

GAO ID: 84; Executive order review submission: Part 145 Review: 
Repair Stations; Final rule; RIN 2120-AC38; OIRA review period: 
07/02/2001 to 07/11/2001; Did the agency withdraw this submission at 
the suggestion or recommendation of OIRA?: Yes; According to 
FAA, the agency withdrew the rule at OIRA's suggestion; Reason for 
withdrawal of the submitted rule: FAA officials stated that OIRA 
suggested the withdrawal due to "concerns from industry and the State 
department."; Evidence that outside parties contacted or met with OIRA 
regarding this submission: Yes; On 07/09/2001--2 days before 
the withdrawal--the Aeronautical Repair Station Association, the 
Airline Suppliers Association, and other business representatives sent 
a letter to OMB Director with a copy to OIRA asking that it send the 
rule back to FAA with instructions to prepare a Supplemental Notice of 
Proposed Rulemaking; (On 07/26/2001--after the withdrawal and also 
after OIRA's 07/20/2001 return of this draft rule--OIRA met with these 
business representatives.); Evidence of subsequent activity regarding 
this submission: (See chronology presented under GAO ID 72, 
which covers the version of this rule that was returned by OIRA for 
reconsideration by DOT-FAA.).

GAO ID: DOT-NHTSA.

GAO ID: 85; Executive order review submission: Light Truck 
Average Fuel Economy Standard Model Year 2004; Final rule; RIN 
2127-AI68; Economically significant; OIRA review period: 11/29/
2001 to 12/12/2001; Did the agency withdraw this submission at the 
suggestion or recommendation of OIRA?: No; NHTSA withdrew the 
rule; Reason for withdrawal of the submitted rule: According to 
NHTSA officials, they withdrew the rule because the agency did not want 
to promulgate fuel economy standards under the congressional freeze 
imposed when the rule was drafted, as it appeared that the freeze would 
soon be lifted (as it was on 12/18/2001); Evidence that outside 
parties contacted or met with OIRA regarding this submission: 
No; Evidence of subsequent activity regarding this submission: 
NHTSA resubmitted a proposed rule to OIRA on 01/10/2002; OIRA 
completed review of the proposed rule on 01/17/2002 (outcome code 
"consistent with change" - see GAO ID 37 in this appendix for 
additional information); The proposed rule was published on 01/24/
2002. A final rule was published on 04/04/2002 (67 FR 16052).

Source: GAO analysis.

[End of table]

[End of section]

Appendix III: Case Studies on Significantly Affected Rules With 
Evidence That OIRA Was Contacted by External Parties:

The case studies described in this appendix include significantly 
affected rules that also had evidence of external party contact with 
OIRA during the review process. For each case, a description of the 
rule as submitted to OIRA, external party contact with OIRA, and 
changes ultimately made at OIRA's suggestion are included.

Control of Emissions from Nonroad Large Spark Engines:

GAO ID 41 Agency: EPA RIN: 2060-AI11 Rulemaking stage at time of 
review: Proposed Date submitted to OMB for review: August 1, 2001 
Date OMB review completed: September 14, 2001 Result of review: 
Consistent with change:

Rule as Submitted to OIRA:

On August 2, 2001, OIRA formally received a draft rule from EPA that 
proposed emission standards for several groups of nonroad engines. 
These engines include large spark-ignition engines, such as those used 
in forklifts and airport tugs; recreational vehicles using spark-
ignition engines, such as off-highway motorcycles, all-terrain 
vehicles, and snowmobiles; and recreational marine diesel and highway 
motorcycle engines.

Outside Parties' Contacts with OIRA:

In communications with OIRA, marine and highway motorcycle industry 
representatives objected to being covered by the proposed rule 
standards. The Motorcycle Riders Foundation sent a letter (dated 
September 14, 2001) to the OIRA Administrator stating that EPA should 
defer the proposed rule's coverage of highway motorcycles. According to 
the letter, "there is no court-ordered deadline for this part of the 
regulation, and the EPA isn't otherwise under pressure to rush to 
regulation." The National Marine Manufacturers Association (NMMA) 
expressed similar concerns. A memo summarizing a meeting with OIRA and 
EPA on August 31, 2001, indicated that "the key issues raised by NMMA 
were a federal commitment to delay action on exhaust standards coupled 
with working with NMMA, Coast Guard and California on catalyst 
technology.":

Changes Made to Rule at OIRA's Suggestion:

A redline/strikeout version of the rule in EPA's docket containing 
"edits representing discussions between EPA and OMB on September 14" 
reflects deletions of language covering marine vessels with spark 
engines and highway motorcycles. Language in the published proposed 
rule states: "We intended to include in this proposal emission 
standards for two additional vehicle categories: new exhaust emission 
standards for highway motorcycles and new evaporative emission 
standards for marine vessels powered by spark-ignition engines. 
Proposals for these two categories are not included in the September 14 
deadline mandated by the courts, as is the case for the remaining 
contents that appear in today's proposed rule. We are committed to 
issue proposals regarding these categories within the next two to three 
months.":

The proposed rule was published in the Federal Register October 5, 
2001. The marine and highway motorcycle portions of the proposal were 
covered in a later proposed rulemaking, which was published in the 
Federal Register August 14, 2002.

Proposed Nonconformance Penalties for 2004 and Later Model Year 
Emission Standards for Heavy-duty Diesel Engines and Heavy-duty Diesel 
Vehicles:

GAO ID 53 Agency: EPA RIN: 2060-AJ73 Rulemaking stage at time of 
review: Proposed Date submitted to OMB for review: December 10, 2001 
Date OMB review completed: December 20, 2001 Result of Reviews: 
Consistent With Change:

Rule as Submitted to OIRA:

On at least four occasions EPA sent versions of the proposed rule 
preamble to OIRA previous to OIRA's formal review period. The exchanges 
began October 30, 2001, and OIRA's official review period was logged as 
beginning December 10, 2001. In the first draft rule sent to OIRA, EPA 
proposed that nonconformance penalties (NCP) be made available for the 
2004 and later model year nonmethane hydrocarbons and nitrogen oxides 
standard for heavy-duty diesel engines and vehicles. According to the 
proposal, the availability of NCPs allows a manufacturer of heavy-duty 
engines or heavy-duty vehicles whose engines or vehicles fail to 
conform with certain applicable emission standards, but do not exceed a 
designated upper limit, to be issued a certificate of conformity upon 
payment of a monetary penalty. In the technical support document 
accompanying the rule preamble, EPA originally used a 3 percent 
discount rate in calculating certain compliance and fuel costs which 
were then used in calculating NCP amounts.

Outside Parties' Contacts with OIRA:

Regulated parties sent comments to OIRA and met with OIRA officials on 
several occasions before OIRA's official review of this rule began. 
From what is available in the OIRA meeting logs, some of the 
discussions concerned whether the rule would advantage or disadvantage 
certain engine manufacturers. (Available documents do not indicate that 
regulated parties suggested OIRA's primary revision to the rule--an 
increase in the discount rate used in the regulatory impact analysis.) 
OIRA's contact with external parties regarding the proposed version of 
this rule is described below.

On September 13, 2001, Cummins Inc. sent a letter to the OIRA 
Administrator requesting a meeting "to discuss an important regulation 
which has very serious competitive ramifications for our Company - the 
2004 Nonconformance Penalty for Heavy Duty Engines." On October 1, 
2001, OIRA, EPA, DOE met with Cummins Inc. to discuss the rule. Several 
days later (on October 12, 2001) Cummins Inc. sent a letter to the OIRA 
Administrator thanking him for the October 1, 2001, meeting and 
requested that the rule not harm engine manufacturers that produce 
compliant engines. On October 25, 2001, another engine manufacturer 
(Caterpillar) requested a meeting with OIRA regarding the heavy-duty 
diesel engine rule; the meeting was held November 14, 2001. On November 
7, 2001 Cummins sent additional comments on the rule to the OIRA 
Administrator urging "expeditious review" of the rule.

Changes Made to Rule at OIRA's Suggestion:

OIRA initiated an increase (from 3 percent to 7 percent) in the 
discount rate used in parts of the regulatory impact analysis for this 
rule. Some members of EPA's Environmental Economics Advisory Council 
recommended use of the 3 percent rate. OIRA's suggested change lowered 
the NCPs levied in the rule from the amounts originally proposed by 
EPA.

Most of OIRA's suggested changes to the discount rate occurred before 
OIRA's official review period. However, EPA did not completely switch 
to the 7 percent discount rate before the official review period began. 
In a draft submitted December 4, 2001, (about one week before OIRA's 
official review period began), the 3 percent discounted values remained 
and a table was added showing certain values if a 7 percent discount 
rate were used. Additional language also requested comment on which 
discount rate would be more appropriate.

OIRA's rationale for increasing the discount rate is offered in the 
following correspondence with EPA: "We believe that it is more 
appropriate to use a discount rate of 7% (see OMB circular A-94) 
consistently throughout the rule, representing the opportunity cost of 
capital. Since the EPA NCP Cost Survey instructs respondents to 
discount by 3% and report net present value estimates for the fixed 
costs, hardware cost, warranty cost, and maintenance/operating cost, 
please discuss the necessary adjustments used in presenting NPB 
estimates, in the first version of the proposal, for these cost 
categories using the 7% discount rate." The rationale for a 7 percent 
discount rate is also included in a separate fax sent to EPA. By the 
time the proposed rule was published in the Federal Register, all 
discount rate discussion in the rule used a 7 percent rate. However, 
the following language is included in the rule regarding potential use 
of a different rate for portions of the impact analysis and an example 
of nonconformance penalty parameters using a 3 percent discount rate is 
included in the technical support document:

" there is evidence in other contexts that users might apply a 
different discount rate than seven percent when considering future 
operating costs during a purchase decision. We request comment on 
whether there is evidence to support the application of such an 
alternative discount rate to operating costs in the various segments of 
the heavy duty engine market. Your comments in support of an 
alternative discount rate (a higher or lower value) should include a 
discussion of the supporting economic and business rationale for the 
alternative rate. We have included an example of the impact on the NCP 
parameters from using a smaller discount rate (three percent) in the 
draft Technical Support Document for this proposal.":

Identification and Listing of Hazardous Waste (Manganese):

GAO ID 56 Agency: EPA RIN: 2050-AE49 Rulemaking stage at time of 
review: Final Date submitted to OMB for review: September 26, 2001 Date 
OMB review completed: October 31, 2001 Result of review: Consistent 
with change:

Rule as Submitted to OIRA:

On September 26, 2001, EPA submitted a draft final rule to OIRA for 
review listing manganese and two other wastes generated from inorganic 
chemical manufacturing processes as "hazardous constituents." EPA said 
in the draft rule that it was adding manganese to the list "based on 
scientific studies demonstrating that manganese has toxic effects on 
humans." The agency said manganese had long been known to cause 
neurological effects in occupational settings, a "continuum of 
dysfunction" with low levels of exposure, and a danger to individuals 
with a hepatic insufficiency. EPA also cited evidence from 
epidemiological studies that point to negative health impacts of low-
level exposure to manganese in drinking water. After considering public 
comments on the proposed rule, the agency refuted commenters' claims 
that manganese is not hazardous and said "we continue to believe that 
manganese is toxic and clearly poses significant risk to human health." 
EPA also said that, "based on consultations with individuals 
knowledgeable in hazardous waste treatment and corrective action, a 
review of the chemical properties of manganese, and review of Resource 
Conservation and Recovery Act (RCRA) regulations, the Agency does not 
believe that there are significant, incremental costs or economic 
impacts associated with adding manganese to [the list of hazardous 
constituents].":

Outside Parties' Contacts with OIRA:

Also on September 26, 2001, legal counsel for the Cookson Group (an 
international materials technology organization) sent a letter to OIRA 
stating that the cost of the final rule to Cookson would be 
significantly higher than EPA estimated. The letter indicated that 
Cookson was obligated to manage and dispose of slag materials at a 
Laredo, Texas smelter that it once owned, and that the rule would 
classify this slag as hazardous waste--thereby costing the company an 
additional $29 million to $36 million. The letter also indicated that 
the "Laredo slag constitutes well over 90 percent of the material that 
will likely be subject to this rulemaking over the next 30 years." 
Later, on October 18, 2001, the counsel for the Cookson Group sent 
another letter to OMB requesting a meeting to discuss the "significant 
impact of the [rule] on Cookson at a former facility in Laredo, TX, 
which impact was not known to and considered by EPA when formulating 
the rule.":

On September 28, 2001, counsel for the Steel Manufacturers Association 
and the American Iron and Steel Institute requested a meeting with the 
OIRA Administrator to discuss "the failure of [EPA] to conduct any 
analysis of the impact of the proposal on the steel industry, the 
country's largest consumer and user of manganese." On October 16, 2001, 
OIRA and EPA officials met with the organizations' counsels. Three days 
later, the counsel sent a letter to an OIRA official thanking him for 
the meeting and stating that listing manganese as hazardous could harm 
the steel industry due to increased costs for treating manganese-
contaminated waste.[Footnote 83]

On October 8, 2001, the Eastman chemical company sent a letter to the 
OIRA Administrator stating that the company "strongly opposes adding 
manganese to [the listing of hazardous constituents] because of its 
very low toxicity and the substantial costs it would impose on 
facilities outside the inorganic chemicals industry, with no resultant 
environmental or health benefits.":

Changes Made to Rule at OIRA's Suggestion:

On October 31, 2001, OIRA's review of the rule ended, and the rule was 
coded as "consistent with change." A memo dated the same day was placed 
in the EPA docket submitting a "redline/strikeout" version of the rule 
showing the changes made "in response to comments from OMB." All 
language in the rule related to listing manganese as hazardous had been 
deleted. The following language was inserted in the text.

"We received numerous comments related to the risk associated with 
manganese and the economic impact to many industries, including the 
steel industry, of adding manganese to the Universal Treatment 
Standards requirements and to 40 CFR 261. Appendix VIII. Although we 
continue to believe that manganese poses significant issues that 
ultimately should be resolved, the court ordered schedule under which 
we are operating provides us with no flexibility to take additional 
time to explore these topics more fully. As a result, we have chosen to 
defer final action on [manganese].":

The final rule was published in the Federal Register on November 20, 
2001. As of May 30, 2003 EPA had not published a rule regarding 
manganese.

Minimizing Adverse Environmental Impact from Cooling Water Intake 
Structures at New Facilities:

GAO ID 65 Agency: EPA RIN: 2040-AC34 Rulemaking stage at time of 
review: Final Date submitted to OMB for review: September 10, 2001 Date 
OMB review completed: November 8, 2001 Result of review: Consistent 
with change:

Rule as Submitted to OIRA:

The draft version of the rule submitted to OIRA on September 10, 2001, 
implemented section 316 (b) of the Clean Water Act for new facilities 
(primarily electric power plants) that use water withdrawn from rivers, 
streams, lakes, reservoirs, estuaries, oceans or other waters of the 
U.S. for cooling purposes. The draft rule established national 
technology-based performance requirements applicable to the location, 
design, construction, and capacity of cooling water intake structures 
at new facilities. The national requirements also established the best 
technology available (referred to as a "closed-cycle recirculating 
cooling water system") for minimizing adverse environmental impacts 
associated with the use of these structures. The primary adverse 
environmental impact due to these structures is casualties among 
aquatic life forms (e.g., fish and shellfish).

The draft rule used a two-track approach to achieve technology based 
performance requirements. Track I established national intake capacity 
and velocity requirements as well as location-and capacity-based 
requirements to reduce intake flows to certain levels. This performance 
standard was to be commensurate with that produced by a closed-cycle 
recirculating cooling water system. Track II allowed permit applicants 
to conduct site-specific studies to demonstrate that alternatives to 
Track I would result in the same level of reduction of impingement and 
entrainment at the cooling water intake structure as would be achieved 
under Track I.

Outside Parties' Contacts with OIRA:

Riverkeeper met with OIRA and EPA officials on September 27, 2001, 
regarding the rule and advocated "dry-cooling" as the technology basis 
for the final rule.

On October 29, 2001, industry representatives (from EOP Group and 
Edison Electric Institute) met with OIRA and EPA officials. The 
industry representatives recommended that the final rule: (1) use the 
level of harm reduction in impingement and entrainment as the "point of 
departure to compare Track I and II," (2) allow different impingement 
and entrainment performance if the system minimizes total adverse 
environmental impacts, (3) eliminate the proposal for additional design 
and construction technologies, (4) allow alternative systems if 
achieving the Track I system performance is not a cost-effective 
reduction in adverse environmental impacts.

Changes Made to Rule at OIRA's Suggestion:

Five substantive changes were made to the rule due to OIRA's 
suggestions.

* As originally written, EPA allowed facilities to qualify for 
alternative performance requirements that were less stringent than 
those required by the rule. OIRA suggested adding one additional 
criterion allowing qualification for less stringency if full compliance 
"would result in significant adverse impacts on local air quality, 
significant adverse impacts on local water resources not addressed 
under Section 125.84 (d) (1) (i), or significant adverse impacts on 
local energy markets." This additional criterion could have the effect 
of allowing more facilities to qualify for lower performance standards.

* As originally written, facilities withdrawing between 2 million 
gallons per day (MGD) and 10 MGD had to meet the performance 
requirements imposed on facilities with higher MGD withdrawal amounts. 
OIRA suggested changing the requirements so that facilities withdrawing 
between 2 MGD and 10 MGD did not have to reduce intake flow to a 
minimum level commensurate with that attained by a closed-cycle 
recirculating cooling water system. However, all other specifications 
remained applicable (e.g., through-screen intake velocities and total 
design intake flow requirements remained the same despite the OIRA 
change).

* As originally written, intake structures were required to use screens 
in order to minimize impingement mortality of fish and shellfish. OIRA 
suggested changing the requirement so that the facilities only needed 
to use the screens if certain criteria were met (e.g., if there are 
threatened or endangered species or habitat for these species within 
the hydraulic zone of the intake structure, if species of interest to 
fishery management agencies pass through the hydraulic zone, or if the 
primary performance requirements of the rule would not sufficiently 
ease stress on protected species or habitat.):

* As originally written, one of the intake flow requirements specified 
by EPA stated that "for cooling water intake structures located in a 
lake or reservoir, the total design intake flow must not alter the 
natural thermal stratification or turnover pattern of the source 
water." OIRA suggested adding an exception to this requirement by 
inserting the following language: "except in cases where the 
disruption is determined to be beneficial to the management of 
fisheries for fish and shellfish by any fishery management agency 
(ies).":

* As originally written, EPA offered "Track II" compliance measures 
that allowed facility operators to comply with the performance standard 
of the rule through means other than a closed-cycle recirculating 
cooling water system. OIRA suggested adding "restoration measures" as a 
compliance alternative under the "Track II" compliance alternative so 
that intake structure operators may implement measures that "result in 
increases in fish and shellfish.":

The final rule was published in the Federal Register December 18, 2001. 
Subsequently, on December 26, 2002, EPA published a direct final rule 
in order to make "minor changes to EPA's final rule published December 
18, 2001." However, on March 24, 2003, EPA withdrew the direct final 
rule "due to adverse comments.":

National Pollutant Discharge Elimination System (Existing Intake 
Structures):

GAO ID 68 Agency: EPA RIN: 2040-AD62 Rulemaking stage at time of 
review: Proposed Date submitted to OMB for review: December 28, 2001 
Date OMB review completed: February 28, 2002 Result of review: 
Consistent with change:

Rule as Submitted to OIRA:

The proposed rule would have implemented section 316(b) of the Clean 
Water Act for certain existing power producing facilities that employ a 
cooling water intake structure and that withdraw 50 million gallons per 
day or more of water from rivers, streams, lakes, reservoirs, 
estuaries, oceans, or other waters of the U.S. for cooling purposes. 
According to the legislative history, section 316(b) "requires the 
location, design, construction, and capacity of cooling water intake 
structures of steam-electric generating plants to reflect the best 
technology available for minimizing any adverse environmental 
impacts.":

As submitted to OIRA on December 28, 2001, the draft proposed rule 
required that large facilities in estuaries and tidal rivers meet a 
uniform, national performance standard commensurate with a closed-
cycle, recirculating cooling system that would reduce impingement 
mortality and entrainment.

Outside Parties' Contacts with OIRA:

On January 15, 2002, EPA provided OIRA with a copy of slides from a 
presentation that the Public Service Electric and Gas (PSEG) Company 
made to EPA on January 3, 2002, regarding the section 316(b) 
rulemaking. The slides recommend a "streamlined site-specific approach" 
for the rule instead of uniform, national standards.

On January 23, 2002, Riverkeeper (an environmental group) sent a letter 
to the OIRA Administrator requesting a meeting on the rule. February 7, 
2002, OIRA and EPA officials met with officials from Riverkeeper, who 
said Congress mandated that best technology available standards be 
nationally uniform and technology based--not set on a cases-by-case 
basis or related to the quality of the water involved. They also said 
that the use of site-specific best technology available determinations 
had perpetuated "the most destructive 'once-through' technology." 
Finally, they argued that leaving best technology available 
determinations to a case-by-case, site-specific determination "puts a 
tremendous burden on State regulatory agencies, as well as 
environmental and citizens groups.":

On January 28, 2002, OIRA received an e-mail indicating "PSEG has 
prepared draft language for implementing Section 316(b) on a site-
specific basis." The draft posited that permittees could demonstrate 
compliance with section 316(b) in any of three ways: (1) a 
demonstration based on a prior Section 316(b) determination, (2) a 
demonstration based on a site-specific evaluation of the best 
technologies or other measures for minimizing adverse effects, or (3) a 
demonstration to determine the presence of any adverse environmental 
effects. The draft concluded by saying that "voluntary restoration or 
conservation measures may be used, in conjunction with or instead of 
technologies, to demonstrate that a [cooling water intake structure] is 
not causing (adverse environmental impact)." On January 31, 2002, OIRA 
received a fax from the EOP Group (a consulting company) containing 
identical draft section 316(b) regulations "for Site-Specific Permit 
Renewal Options for Existing Sources.":

In February 2002, the Edison Electric Institute prepared a paper 
advocating a site-specific approach to regulating intake structures 
that are managed by states. (We discovered the document in the OIRA 
docket for the rule, although it is not clear how the paper was 
submitted to OIRA).

On January 31, 2002, Cinergy Corporation sent a letter to the OIRA 
Administrator requesting a meeting with him on the proposed rule. The 
Edison Electric Institute sent a similar letter on February 4, 2002. On 
February 8, 2002, OIRA and EPA officials met with officials from a 
number of regulated parties, including "TXU" (meaning unclear), 
Cinergy, Public Service Enterprise Group, Edison Electric Institute, 
Progress Energy, Teco Energy, Constellation Energy Group, Allegany 
Energy, Minnesota Power, and Mirant Corporation. Documents submitted at 
the meeting advocate a "site-specific approach" as "the best means for 
ensuring cost-effective environmental protection." The documents also 
indicated that the uniform technology standards "would be based upon 
performance standards that could only be met by retrofitting to closed 
cycle cooling for some or all power plants covered under the Phase II 
rule." In addition, the documents indicated that retrofitting 40 
percent of existing open cycle capacity would cost $40 billion, that 
wide-scale construction outages could affect regional power supplies, 
and increased air emissions could result from lower-efficiency closed-
cycle systems.

On February 27, 2002, OIRA received a fax from the EOP Group forwarding 
letters that EPA had received from the states and others on the section 
316(b) rule. The letters were signed by representatives from the 
Pennsylvania Department of Environmental Protection, the Marine Mammal 
Commission, the Texas Natural Resource Conservation Commission, the 
Office of the Governor of the State of North Carolina, and the Illinois 
Environmental Protection Agency.

Changes Made to Rule at OIRA's Suggestion:

On February 14, 2002, EPA submitted a summary of the revised regulatory 
proposal to OMB. The summary stated that permittees could chose one of 
three alternatives for establishing the best technology for minimizing 
adverse environmental impact at its facility--(1) demonstrate that 
existing technologies and measures meet regulatory performance 
standards, (2) demonstrate that technologies and measures selected by 
the permittee will meet performance standards, and (3) demonstrate that 
a site-specific determination of best technology available is 
appropriate. The summary went on to say that restoration could be used 
in lieu of or in combination with intake technologies and operational 
measures if the results could be shown to be comparable to the results 
obtained from compliance with the regulatory standards.

In its summary of changes made during interagency review, one of the 
changes that EPA identified as having been suggested by OIRA was "added 
new regulatory framework that provides three compliance alternatives 
for the Phase II existing facility rule.":

On February 28, 2002, OIRA approved the rule as revised. The rule was 
published in the Federal Register on April 9, 2002.

Effluent Limitation Guidelines and New Source Performance Standards for 
the Construction and Development Category:

GAO ID 70 Agency: EPA RIN: 2040-AD42 Rulemaking stage at time of 
review: Proposed Date submitted to OMB for review: March 1, 2002 Date 
OMB review completed: May 15, 2002 Result of review: Consistent with 
change:

Rule as Submitted to OIRA:

As originally submitted to OIRA, the draft proposed rule would have 
established effluent limitations for 150,000 construction firms. The 
draft contained a number of regulatory options to control discharges 
from active construction sites of one acre or larger (temporary erosion 
and sediment controls applicable to construction sites while land is 
being disturbed - three options) and long-term storm water discharges 
(postconstruction, long-term storm water management options intended as 
permanent storm water controls - three options). EPA's preferred option 
combination contained two major provisions. For active construction 
sites, it would have codified EPA's current construction general 
permit, along with a design goal of 80 percent reduction in total 
suspended solids (TSS) discharged from sites and a series of enhanced 
inspection and certification requirements to improve 
compliance.[Footnote 84] EPA's preferred option for management of 
postconstruction storm water run-off would have established a design 
goal of an 80 percent reduction in TSS discharge from finished projects 
and a requirement to maintain peak runoff levels at pre-construction 
levels.

Outside Parties' Contacts with OIRA:

ELG Working Group (an industry association) met with OIRA and EPA on 
February 4, 2002 and argued that additional storm water regulations for 
the construction and development industry are "unnecessary and 
unwarranted" because construction and development activities "have been 
subject to federal, state and often local regulations for controlling 
storm water discharges since 1990." In a document prepared for the 
meeting, the ELG Working Group suggested that the federal government 
should encourage state and local flexibility to address water quality 
issues.

Changes Made to Rule at OIRA's Suggestion:

In a memo regarding interagency review, dated May 22, 2002 with no 
author listed, changes to the rule while under OIRA review are 
identified, including a change that dropped the postconstruction 
requirements from the proposed rule. The memo stated that "given the 
requirement to address postconstruction runoff in the Phase I and Phase 
II municipal stormwater program, EPA determined that it would be more 
appropriate to support local communities in developing tailored 
programs that could better reflect regional and local conditions, and 
be better integrated into broader local planning efforts.":

According to a June 10, 2002, memo (the memo author was not 
identified), the agency made several changes to the proposed regulation 
at the suggestion or recommendation of OIRA. The proposed regulation no 
longer included the storm water management, or postconstruction, 
regulatory options. Also, the active construction options changed. 
These changes consisted of identifying and discussing three regulatory 
options: (1) inspection and certification of construction site erosion 
and sediment controls, for sites one acre or larger, (2) codification 
of the Construction General Permit, plus inspection and certification 
requirements, for sites five acres or larger, and (3) no regulation. 
These revisions to the regulatory proposal required corresponding 
revisions to the preamble.

On June 24, 2002, the proposed rule was published in the Federal 
Register.

Effluent Limitations Guidelines for the Iron and Steel Manufacturing 
Point Source Category:

GAO ID 71 Agency: EPA RIN: 2040-AC90 Rulemaking stage at time of 
review: Final Date submitted to OMB for review: March 29, 2002 Date 
OMB review completed: April 30, 2002 Result of review: Consistent with 
change:

Rule as Submitted to OIRA:

The draft rule as submitted to OIRA for review revised technology-based 
effluent limitations guidelines and standards for certain wastewater 
discharges associated with metallurgical cokemaking, sintering, and 
ironmaking operations. In its original form, the rule would have 
retained an existing minimum net reduction provision in regulations 
regarding use of a "water bubble" mechanism. According to the rule 
preamble, the "water bubble" is a regulatory flexibility mechanism that 
allows trading of identical pollutants at any single steel facility 
with multiple compliance points to realize cost savings and/or to 
facilitate compliance. Under the existing regulations, facilities that 
used the water bubble mechanism were required to reduce the amount of 
their pollutant discharges pursuant to the bubble to 10 percent to 15 
percent less than the discharges otherwise authorized by the 
regulations without use of the bubble. This additional reduction was 
referred to as the "minimum net reduction" provision throughout the 
rule.

Outside Parties' Contacts with OIRA:

Counsel for Steel Manufacturers Association and Specialty Steel 
Industry of North America met with OIRA and EPA officials to discuss 
this rulemaking on March 19, 2002. In the letter requesting a meeting, 
the industry counsel argued that "revised effluent limitation 
guidelines are not technically, economically, or legally justified." 
The counsel further specified aspects of EPA's cost-benefit analysis 
that were believed to be flawed, said that the actual cost-benefit 
ratio for this rule was at least 100:1, and asserted that the rule 
would be the "most cost-ineffective ELG [effluent limitation guideline] 
ever promulgated.":

Changes Made to Rule at OIRA's Suggestion:

The major change in this final rule that was attributed to a request 
from OIRA eliminated the existing minimum net reduction provision that 
applied if facilities used a "water bubble" alternative. Because of the 
elimination of this minimum net reduction provision, facilities that 
trade pollutants in accordance with the water bubble mechanism are not 
required to reduce pollutant discharges to be 10 percent to 15 percent 
less than the discharges otherwise authorized by the rule without use 
of the water bubble (as had been required by the existing provision). 
This water bubble provision was the subject of public comments on EPA's 
proposed rule, with industry groups generally supportive of the water 
bubble flexibilities and environmental groups advocating restrictions 
on the water bubble. The OIRA files on its review of this draft final 
rule indicated that OIRA had reviewed the substantive comments EPA 
received on the proposed rule.

On October 17, 2002, the final rule was published in the Federal 
Register.

Tire Pressure Monitoring Systems:

GAO ID 78 Agency: DOT-National Highway Traffic Safety Administration 
(NHTSA) RIN: 2127-AI33 Rulemaking stage at time of review: Final Date 
submitted to OMB for review: December 17, 2001 Date OMB review 
completed: February 12, 2002 Result of Review: Returned:

Rule as Submitted to OIRA:

As submitted to OIRA for review, the draft final rule would have 
established a standard under which all new vehicles would be required 
to have a tire pressure monitoring system (TPMS). The rule would have 
allowed automobile manufacturers to use either of two types of systems 
until October 31, 2006 --a "direct" system that measures the pressure 
in each tire or an "indirect" system that uses a vehicle's antilock 
brake system to sense tire pressure differences by monitoring the speed 
of tire revolution. However, after October 31, 2006, the rule would 
have required manufacturers to use only the direct monitoring systems.

Outside Parties' Contacts with OIRA:

On October 26, 2001--3 months after the Notice of Proposed Rulemaking 
was published in the Federal Register and almost 2 months before the 
draft final rule was submitted to OIRA for review--OIRA and NHTSA 
officials met with representatives from the Alliance of Automobile 
Manufacturers and representatives from individual auto manufacturers 
(Toyota, Ford, Volkswagen, and Daimler Chrysler). According to a 
summary of the meeting prepared by NHTSA and placed in the DOT docket, 
most of the comments presented by the industry representatives were 
similar to those in their filed written comments concerning such issues 
as legislative intent, assumptions about costs and benefits, the 
validity of test data on stopping distance, the number of vehicles 
operating with more than one significantly underinflated tire, and the 
safety benefits of antilock braking systems. In its March 23, 2001, 
comments on the proposed rule, the Alliance of Automobile Manufacturers 
said it "believes that both wheel-speed based [indirect] and pressure-
sensor based [direct] TPMS have merit, and should be permitted under 
pending requirements. Our proposal will allow the further development 
of both types of systems.":

On October 31, 2001, the Alliance sent letter to the OIRA Administrator 
reiterating views regarding the draft final rule. The Alliance 
expressed concern that the structure of the final rule would have the 
effect of eliminating indirect tire pressure monitoring systems as a 
compliance option. According to the letter:

"The Alliance has seen no evidence in the rulemaking record to suggest 
that real world safety benefits that may accrue from tire pressure 
monitoring systems will be noticeably different between systems using 
indirect and direct sensing technologies. Absent such evidence, the 
Alliance believes that the final rule should be carefully structured to 
allow, at a minimum, current systems employing either type of sensing 
technology - indirect or direct - to be used as compliance options. As 
additional field experience is developed through the implementation of 
this mandate, NHTSA may in the future exercise its long-standing 
authority to initiate rulemaking to enhance the performance 
requirements for tire pressure monitoring systems as may be warranted 
by valid engineering and performance data. The rule should also be 
structured to assure the timely and orderly implementation by providing 
a reasonable phase-in period.":

OIRA officials also met with representatives from the Rubber 
Manufacturers Association regarding the rule on February 21, 2002--9 
days after OIRA returned the rule for reconsideration. However, because 
NHTSA officials did not attend the meeting because of agency policy, 
there is no summary of the meeting available. An e-mail attached to the 
OIRA meeting log stated that, according to an OIRA branch chief, "this 
is not an (Executive Order 12866) meeting, since the rule is no longer 
here for review." Nevertheless, OIRA listed the meeting on its Web 
site.

Changes Made to Rule at OIRA's Suggestion:

According to the February 12, 2002, return letter, OIRA said "NHTSA 
needs to provide a stronger analysis of the safety issues and benefits, 
including a formal analysis of a regulatory alternative that would 
permit indirect systems after the phase-in period. Moreover, NHTSA 
could analyze an option that would defer a decision about the ultimate 
fate of indirect systems for several more years, until the potential 
impact on installation of anti-lock brake systems is better 
understood.":

According to a July 24, 2002, NHTSA memo, the agency changed the draft 
rule at OIRA's suggestion to "permit vehicle manufacturers to use 
current indirect TPMSs as their means of complying with the standard." 
The new draft final rule established two compliance options for a 
period beginning November 1, 2003, and ending October 31, 2006. During 
this period, automobile manufacturers would be allowed to use either 
direct or indirect TPMSs. Meanwhile, NHTSA said that it would conduct 
additional studies and would leave the rulemaking docket open for the 
submission of new data and analysis. NHTSA said the second part of the 
rule will be issued by March 1, 2005, and will set performance 
standards to become effective November 1, 2006. Depending on the data 
developed during the first period, the performance standards issued in 
2005 could require direct monitoring systems (as in the draft final 
rule as submitted to OIRA), or they could reach some other 
determination (e.g., continue to allow the use of indirect systems).

On May 28, 2002, NHTSA resubmitted the draft final rule for OIRA 
review. The next day, OIRA approved the rule "consistent with no 
change." On June 5, 2002, the final rule was published in the Federal 
Register.[Footnote 85]

Part 145 Review: Repair Stations:

GAO IDs 84 and 72 Agency: DOT-FAA RIN: 2120-AC38 Rulemaking stage at 
time of review: Final Dates submitted to OMB for review: July 2, 2001; 
resubmitted July 13, 2001; resubmitted July 20, 2001 Dates OMB review 
completed: July 11, 2001 (withdrawn); July 20, 2001 (returned); July 
30, 2001 (consistent with no change) Result of Reviews: Withdrawn, 
returned, consistent with no change:

Rule as Submitted to OIRA:

As submitted to OIRA on July 2, 2001, the rule updated and revised the 
regulations for repair stations. Specifically, the rule reorganized the 
requirements applicable to repair stations to reduce duplication of 
regulatory language and eliminate obsolete information. In addition, 
the rule established new definitions applicable to repair stations and 
updated requirements relating to repair station certification; housing, 
facilities, equipment, materials, and data; personnel; and operations. 
The rule also eliminated, where practicable, distinctions between 
repair stations based on geographical location.

Outside Parties' Contacts with OIRA:

On July 9, 2001, the Aeronautical Repair Station Association (ARSA) and 
other industry representatives sent a letter to the Director of OMB 
(with copies to the Deputy Administrator of OIRA and other OIRA 
officials and staff) requesting that OIRA send the Part 145 rule back 
to FAA "with instructions to prepare a Supplemental Notice of Proposed 
Rulemaking (SNPRM) to address all of the issues needed to modernize 
Part 145.":

On July 26, 2001, ARSA and other industry representatives met with OIRA 
officials and an official from the Department of Commerce (but no one 
from FAA) to discuss the Part 145 rule. (DOT officials told us that 
they generally do not attend meetings with industry representatives at 
OMB.) In their presentation to OIRA, the industry representatives 
repeated their request that a supplemental notice of proposed 
rulemaking be issued instead of the final rule. They also requested 
that guidance material be issued at the same time that the final rule 
is issued and that a more realistic compliance date be set.

Actions Taken at OIRA's Suggestion:

On July 11, 2001, FAA withdrew the rule from OIRA review. An FAA 
chronology of the rulemaking process stated that OMB "asked FAA to 
withdraw the final (rule)." That same day, counsel to ARSA testified 
before the House Subcommittee on Aviation on the FAA rulemaking 
process, and attached the above-mentioned July 9, 2001, letter to his 
statement. During our review, the counsel told us that he did not know 
whether OIRA had requested that FAA withdraw the Part 145 rule, but 
said any such action on OIRA's part "had nothing to do with us.":

On July 13, 2001, FAA resubmitted the rule to OIRA for review. FAA 
officials told us that the resubmitted rule was identical to the rule 
submitted to OIRA on July 2, 2001. On July 20, 2001, OIRA returned the 
rule to FAA for reconsideration. In his return letter, the Deputy 
Administrator of OIRA said that the Department of State and the Office 
of the United States Trade Representative indicated that certain 
language in the rule could be read by other governments as a "needs 
test" for foreign repair stations that would "raise a significant issue 
of our compliance with applicable international trade agreements." 
However, FAA officials told us that they had already addressed the 
Department of State's concerns. Therefore, they said FAA resubmitted 
the rule to OIRA (unchanged from its previous submission) on the same 
day as the return letter--July 20, 2001.

On July 30, 2001, OIRA approved the rule as "consistent with no 
change," and did not suggest that FAA make the changes that the 
industry representatives recommended. On August 8, 2001, FAA published 
the final rule in the Federal Register.

[End of section]

Appendix IV: Status of 23 High Priority Review Rules:

In its May 2001 draft report on the costs and benefits of federal 
regulations, the Office of Information and Regulatory Affairs (OIRA) 
within the Office of Management and Budget requested that the public 
provide it with "suggestions on specific regulations that could be 
rescinded or changed that would increase net benefits to the public by 
either reducing costs and/or increasing benefits." In its December 2001 
final report, OIRA said it had received 71 suggestions in response to 
its request. The report also indicated that OIRA had completed an 
initial review of the suggestions and placed each of the suggestions 
into one of three categories: (1) "high priority," meaning that OIRA 
was inclined to agree with and look into the suggestion, (2) "medium 
priority," meaning that OIRA needed more information about the 
suggestion, or (3) "low priority," meaning that OIRA was not convinced 
that the suggestion had merit. OIRA listed 23 of the suggestions in the 
first category, and said a "prompt letter" might be sent to the 
responsible agency for its "deliberation and response.":

In its December 2002 report, OIRA reported on the status of these 23 
high priority suggestions. We used that information and supplemented it 
with additional information from published sources to determine the 
status of each of the regulations or issues that were the subject of 
the 23 suggestions as of May 2003. We then asked OIRA to review our 
descriptions and provide us with any additional information available. 
The consolidated information is presented in the table below for each 
of the 23 suggestions.

Table 10: Status of the 23 High Priority Review Suggestions Identified 
in OIRA's December 2001 Report on the Costs and Benefits of Federal 
Regulations:

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that the Department of Energy's analysis for its central air 
conditioner and heat pump energy conservation standards did not 
adequately consider key differences among consumers and may overstate 
projected energy savings; Status: As published in January 2001, a 
Department of Energy final rule would have required that the energy 
efficiency of new central air conditioners and heat pumps be increased 
by 30 percent by January 2006. However, in May 2002, the department 
withdrew the rule and issued a new final rule raising minimum energy 
efficiency by 20 percent. The department said the withdrawn rule, which 
never became effective, was "not economically justified under the 
Energy Policy and Conservation Act.".

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said Department of Health and Human Services (HHS) rule on standards 
for privacy of individually identifiable health information imposed a 
costly approach to medical privacy protections while failing to offer 
tangible benefits; Status: In August 2002, the department published 
final revisions to a December 2000 medical privacy rule, clarifying 
some aspects and modifying others. For example, instead of mandating 
that direct treatment providers obtain prior written consent to use 
protected health information before treating a patient, the final rule 
required them to make a good faith effort to obtain a patient's written 
acknowledgement that the patient received a notice of privacy rights 
and practices. The department said the changes were intended to, in 
part, relieve "unintended administrative burdens created by the Privacy 
Rule.".

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that the Food and Drug Administration's (FDA) proposed rule on 
trans fatty acids in nutrition labeling misled the public by treating 
trans fats as a subset of saturated fat; Status: In September 2001, 
the OIRA administrator sent HHS a prompt letter on the trans fatty acid 
content of foods, encouraging the agency to give the issue greater 
priority. FDA submitted the draft final rule to OIRA for review in May 
2003.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said the costs of the Department of the Interior's (DOI) Bureau of Land 
Management (BLM) rule on hardrock mining outweighed the benefits; 
Status: In March 2001, BLM published a proposed rule to suspend the 
hardrock mining regulations that took effect in January 2001. In 
October 2001, BLM published a final rule removing certain provisions 
and returning others to those in effect before January 2001. For 
example, the final rule removed a provision granting federal land 
managers more authority to deny hardrock mining permits and deleted 
enhanced performance standards for groundwater and site remediation. 
BLM said the new rule "balances the nation's need to maintain reliable 
sources of strategic and industrial minerals, while ensuring protection 
of the environment and natural resources on public lands.".

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that DOI's National Park Service's rule prohibiting snowmobile use 
in Rocky Mountain National Park did not allow for different types of 
users to enjoy the park; Status: In its December 2002 report, OIRA 
stated that the January 2001 DOI proposed rule on at issue in this 
suggestion was undergoing internal departmental review. As of May 2003 
no final rule had been issued. However, in response to a lawsuit 
involving a separate January 2001 final rule that restricted snowmobile 
use in other parks in the Rocky Mountains, the National Park Service 
initiated an environmental impact statement that, when completed in 
February 2003, suggested allowing the use of snowmobiles with access 
restrictions and limitations on the types of engines. In March 2003, 
the Park Service approved a record of decision selecting that 
alternative. Legislation has been introduced in both the House and the 
Senate that would, if enacted, reinstate the ban on snowmobile use in 
the parks.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said the Department of Labor's (DOL) regulations on "helpers" under the 
Davis-Bacon Act should attempt to conform to private sector practices. 
Specifically, Mercatus questioned the department's definition of a 
"helper," which it said "constrains private sector practices and 
innovation."; Status: In November 2000, DOL published a final rule 
allowing contractors on federal and federally assisted construction 
projects to use "helpers" when that practice prevails in a locality. In 
December 2002, OIRA noted in its final report on the costs and benefits 
of regulations that DOL decided that changes to the Davis-Bacon 
regulations were not appropriate at that time.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said the Department of Transportation (DOT) did not present data 
supporting its conclusions in its rule on the hours of service of 
drivers that driver fatigue contributes to highway fatalities or that 
its proposal would address those issues; Status: In May 2000, DOT's 
Federal Motor Carrier Safety Administration (FMCSA) published a 
proposed rule to alter the hours of service for truck and other motor 
carrier drivers. The agency received more than 50,000 comments on the 
proposal, which it later characterized as "generally unfavorable." The 
fiscal year 2002 appropriations bill prohibited the department from 
moving to a final rule that year. In April 2003, FMCSA published a 
final rule that changed the scope and certain requirements from the 
proposal. For example, the final rule exempted buses from its 
coverage.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that revisions to the Environmental Protection Agency's (EPA) 
total maximum daily loads program were overly prescriptive and could 
cost the states billions of dollars; Status: EPA's July 2000 final 
rule on the program was intended to resolve issues concerning the 
identification of impaired waterbodies and to address other issues. 
However, in an amendment to a fiscal year 2000 appropriations bill, 
Congress prohibited EPA from implementing the rule. In October 2001 EPA 
published a notice delaying the effective date of the agency's July 
2000 rule until April 2003. In March 2003, EPA published a final rule 
withdrawing the July 2000 rule. According to OIRA, as of May 2003, a 
draft of a new proposed rule was undergoing informal interagency 
review.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
recommended changes to EPA's guidance on states' use of economic 
incentive programs to achieve air quality standards; Status: In its 
December 2002 report, OIRA said it would "consider further review of 
the guidance after the States have further experience with the current 
guidelines.".

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that EPA's new source review program was a deterrent to investment 
in new oil refinery and power generation capacity, and that even 
relatively modest modifications that improve environmental performance 
could trigger the reviews; Status: In December 2002, EPA published a 
final rule revising the Clean Air Act's new source review program that 
provides industrial facilities with alternatives to the program's 
requirements to install modern pollution controls whenever they make 
major modifications that significantly increase emissions. EPA asserts 
that the rule will remove obstacles to investments in cleaner and more 
efficient processes, and provide greater certainty and administrative 
flexibility. Certain environmental groups and state and local 
governments petitioned EPA to reconsider specific aspects of the rule, 
and EPA has agreed to reconsider and take public comment on several of 
the issues raised by these parties. Also in December 2002, EPA 
published a proposed rule that would revise an exemption from the rule 
for projects involving routine maintenance, repair, and replacement.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that while concentrated animal feeding operations are a problem in 
some areas, the benefits of a national rule establishing effluent 
guidelines do not justify the costs; Status: In January 2001, EPA 
published a proposed rule changing the Clean Water Act permitting 
requirements for concentrated animal feeding operations and 
strengthening the effluent guidelines for those facilities. In February 
2003, EPA published a final rule that OIRA said had been significantly 
scaled back from the proposal, but would still more than triple the 
number of operations that would have to obtain permits. However, 
environmental groups said the new rule weakened the existing standard 
and said they were considering a lawsuit.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
and the Association of Metropolitan Water Agencies said the benefits of 
EPA's rule on arsenic in drinking water did not justify the costs; 
Status: EPA's January 2001 final rule lowered the allowable level of 
arsenic in drinking water from 50 parts per billion to 10 parts per 
billion. In May 2001, EPA delayed the rule's implementation to review 
the science and cost factors associated with changing the standard. In 
September 2001, the National Academy of Sciences published a report 
indicating that low levels of arsenic can result in higher incidences 
of cancer. In October 2001, EPA announced that it would publish a final 
standard at the 10 parts per billion level.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said that the Department of Agriculture's Forest Service rule on 
roadless area conservation would cause unnecessary economic and 
environmental costs; Status: A January 2001 Forest Service final rule 
prohibited road construction, reconstruction, and timber harvesting in 
inventoried roadless areas on nearly 60 million acres of National 
Forest System land. In May 2001, the Idaho District Court granted a 
preliminary injunction enjoining the Forest Service from implementing 
all aspects of the rule. According to OIRA, in December 2002, the U.S. 
Court of Appeals for the Ninth Circuit lifted the injunction and 
remanded the decision to the District Court. As of May 2003 its 
decision was pending. Also, in July 2003, the Wyoming District Court 
granted a permanent injunction enjoining the Forest Service from 
implementing this rule.

Regulation/issue and concern (as reported by OIRA): The Mercatus Center 
said the Forest Service's planning procedures polarize the public and 
are a drain on Forest Service resources; Status: In December 2002, the 
Forest Service published a rule proposing changes to its November 2000 
rule on forest planning. A review conducted at the direction of the 
Office of the Secretary concluded that the 2000 rule was "neither 
straightforward nor easy to implement," and "did not clarify the 
programmatic nature of land and resource planning." The new proposed 
rule would, among other things, allow federal land managers to 
disregard previously established scientific requirements for wildlife 
protection and expedite the environmental review process when 
developing plans. According to OIRA, a final rule is expected in the 
fall of 2003.

Regulation/issue and concern (as reported by OIRA): Notre Dame 
University said the Department of Education's regulations under title 
IV of the Higher Education Act are redundant and place inappropriate 
administrative burden on institutions of higher education; Status: In 
November 2002, the Department of Education published a final rule 
amending the department's regulations under the Higher Education Act 
and other statutes. According to the department, the amendments were 
designed to "reduce administrative burden for program participants, and 
to provide them with greater flexibility to serve students and 
borrowers.".

Regulation/issue and concern (as reported by OIRA): The Equal 
Employment Advisory Council said that DOL's Office of Federal Contract 
Compliance Programs' (OFCCP) equal opportunity survey is excessively 
burdensome and ineffective in targeting contractors for compliance 
audits; Status: In January 2003, the Employment Standards 
Administration within DOL announced a "preclearance consultation 
program" in which the public was allowed to provide comment on the 
equal opportunity survey. Comments were due by the end of March 2003. 
The announcement indicated that OFCCP had engaged an outside contractor 
to study the survey submissions, and that the study would be completed 
in 2004. In addition, OFCCP requested a 2-year extension to its 
authorization for the survey under the Paperwork Reduction Act (until 
the end of March 2005).

Regulation/issue and concern (as reported by OIRA): The EEAC said the 
Equal Employment Opportunity Commission's (EEOC) Uniform Guidelines on 
Employee Selection Procedures should establish a standard definition of 
a "job applicant" that does not impose undue burden on employers to 
solicit race and gender information; Status: DOL said it and the other 
signatories to the Uniform Guidelines (EEOC, the Department of Justice, 
and the Office of Personnel Management) have been meeting for more than 
3 years on the applicant redefinition issue, particularly as it relates 
to recordkeeping and reporting requirements. The department also said 
that reauthorization responsibility rests with EEOC in consultation 
with the other signatory agencies, and said OMB has requested 
resolution of this issue by the end of September 2003.

Regulation/issue and concern (as reported by OIRA): The Employment 
Policy Foundation (EPF) said that regulations affecting most 
employment-based immigration cause needless effort and delays, and 
recommended replacing the certification process with a simpler 
attestation procedure; Status: In May 2002, the Employment and 
Training Administration within DOL published a proposed rule that 
would, among other things, amend its regulations governing the filing 
and processing of labor certification applications for the permanent 
employment of aliens in the United States. In December 2002, OIRA 
indicated that DOL was in the process of addressing comments and 
finalizing the rule.

Regulation/issue and concern (as reported by OIRA): LPA, Inc. said DOL 
requirements regarding overtime compensation are a disincentive for 
providing bonuses; Status: OIRA indicated in its December 2002 report 
that DOL was considering whether revisions to these regulations would 
be appropriate.

Regulation/issue and concern (as reported by OIRA): EPF and the 
National Partnership for Women and Families said record keeping and 
notification regulations under the Family Medical Leave Act are 
burdensome and ambiguous; Status: In December 2002, OIRA said that DOL 
was considering whether revisions to these regulations would be 
appropriate. In February 2003, the Employment Standards Administration 
within DOL announced that it was conducting a preclearance consultation 
program (allowing the public and federal agencies to comment) regarding 
information collections under the Family and Medical Leave Act. The 
department said it was particularly interested in, among other things, 
"whether the proposed collection of information is necessary for the 
proper performance of the functions of the agency.".

Regulation/issue and concern (as reported by OIRA): The American 
Chemistry Council said that EPA's "mixture and derived from" rule under 
the Resource Conservation and Recovery Act is necessarily inclusive, 
and recommended exempting certain waste streams resulting from the 
treatment of hazardous waste from the requirements; Status: In April 
2003, EPA published a proposed rule adding two chemicals--benzene and 
2-ethoxyelthanol--to the list of solvents that can be mixed with 
wastewater without causing it to be defined as hazardous waste. The 
proposed rule also would provide flexibility in the way compliance is 
determined, and would make additional listed hazardous wastes eligible 
for the de minimus exemption.

Regulation/issue and concern (as reported by OIRA): The City of Austin 
said EPA needed to improve its cost-benefit estimates for drinking 
water regulations under the Safe Drinking Water Act in three areas 
(overly conservative assumptions, inappropriate discount rates, and 
inadequate consideration of latency) and should change the way fatal 
risk reduction is valued; Status: In its December 2002 report, OIRA 
indicated that it was addressing the issues raised in this suggestion 
in its new analytic guidance. (See chapter 2 of this report for a 
discussion of that guidance.).

Regulation/issue and concern (as reported by OIRA): The American 
Petroleum Institute said EPA needed to make several changes to its 
requirements regarding the notification of substantial risk under 
section 8(e) of the Toxic Substances Control Act (e.g., limit reporting 
to information that truly meets the statutory standard of substantial 
risk); Status: In its December 2002 report, OIRA said EPA was 
considering several options to address this issue and said EPA had 
established a new web page that contains guidance, previous 
submissions, and new submissions posed within 2 weeks of receipt. OIRA 
also said that EPA was working on a package that would make policy 
clarifications.

[End of table]

Source: OIRA and GAO analysis of published information.

[End of section]

Appendix V: Comments from the Office of the Information and Regulatory 
Affairs:

ADMINISTRATOR:

OFFICE OF INFORMATION AND REGULATORY AFFAIRS:

EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET 
WASHINGTON, D.C. 20503:

SEP 2 2003:

MT. Victor Rezendes Managing Director Strategic Issues Team U.S. 
General Accounting Office 441 G Street, NW Washington, DC 20548:

Dear Mr. Rezendes:

Thank you for this opportunity to comment on the General Accounting 
Office's (GAO) draft report on the Office of Management and Budget's 
(OMB) Office of Information and Regulatory Affairs' (OIRA) regulatory 
review process:

("RULEMAKING: OMB's Role and Transparency of Reviews of Agencies' Draft 
Rules").

We appreciate GAO's extensive effort to provide a factual analysis of 
OIRA's regulatory review process. Overall, OIRA believes that the 
factual foundations of the report are well-grounded. In particular, we 
are pleased that the draft report takes note of two changes that 1 have 
made in the regulatory review process - ensuring that OIRA completes 
its review of draft rules in a timely manner and increasing the 
transparency of the regulatory review process.

Regarding the timeliness of OIRA's review, Executive Order No. 12866 
(E.O. 12866) states that OIRA's review should generally take no longer 
than 90 days. However, as GAO notes in its draft report, OIRA during 
the latter part of the prior Administration (in the late 1990s and in 
2000) routinely had many dozens of draft rules pending beyond the 90-
day period. One of the first steps that I took, upon becoming OIRA 
Administrator, was to emphasize to OIRA staff and to the rulemaking 
agencies the importance of adhering to the 90-day timetable. As I made 
clear, OIRA reviews should rarely, if ever, extend beyond 90 days. As a 
result, the number of draft rules pending beyond 90 days quickly 
plummeted and, as GAO notes in the draft report, OIRA's review has 
extended past 90 days in only a very few instances during my tenure. We 
think it is important to note that this dramatic decline in post-90-day 
rules is not attributable to OIRA's increasing use of "return letters." 
That is because, as GAO's draft report confirms, the decrease in the 
number of post-90-day rules far exceeds the number of OIRA return 
letters (nor is the increasing timeliness of OIRA review due to an 
increase in the number of agency withdrawals of draft rules; again, the 
decline in post-90-day-rules far exceeds the number of withdrawals). 
Instead, this increase in timeliness is due to our commitment to 
identifying issues that require interagency discussion, and resolving 
those issues, more expeditiously.

We are also pleased that the draft report identifies the unprecedented 
level of transparency that OIRA has implemented during my tenure as 
OIRA Administrator. OIRA is committed to ensuring that the public 
understands the regulatory review process, and we have increased the 
transparency of that process under E.O. 12866.	(In this regard, we 
believe that the draft GAO report provides an excellent overview of the 
regulatory review process, which Members of Congress, their staffs, and 
the public should find helpful and informative.):

Specifically, OMB has made much greater use of the Internet to increase 
transparency in its regulatory and paperwork review processes. While 
certain materials new on the OIRA web page were available previously in 
OIRA's docket library, this material was difficult to access and, for 
individuals outside the Washington D.C. area, not accessible at all 
(other than through the Freedom of Information Act). OIRA's increasing 
use of the Internet to disseminate information about the regulatory 
review process has provided the public with quick and easy access to a 
tremendous amount of material that was previously not available to the 
public, or not available in one place, or not readily accessible. 
Information currently provided on OMB's website includes:

* lists of the draft regulations under review (this list is updated 
daily),

* monthly statistical summaries on reviews completed by OMB,

copies of review-related letters from OMB-OIRA to agencies (including 
"prompt" letters, "return" letters, and "post-clearance" letters),

information on meetings with outside parties concerning draft rules 
that are under formal or informal OIRA review,

* a list of written correspondence received from outside parties on 
rules under OIRA review, and:

* copies of important policy communications such as the OIRA 
Administrator's memoranda to the President's Management Council.

In addition, the OIRA Administrator's testimony and speeches are also 
available on OMB's website.

As GAO notes in its draft report, one of the increases in transparency 
that OIRA has made during my tenure is not simply to make information 
that was previously available in OIRA's docket library much more easily 
available by posting it on OMB's website. Instead, with respect to 
meetings that outside parties request with OIRA concerning draft rules, 
OIRA has increased the categories of information that OIRA publicly 
disseminates. Previously, OIRA's disclosure procedures applied only to 
the meetings with outside parties that occurred during OIRA's formal 
review of a draft rule.

Soon after I became OIRA Administrator, I extended the disclosure 
requirements to cover meetings with outside parties that occur when a 
draft rule is being "informally" reviewed by OIRA. Such meetings had 
never before been subject to OIRA's disclosure procedures, but I 
concluded that this increase in transparency was warranted, and we are 
pleased that GAO's draft report has acknowledged this change.

OMB has also been making great strides in integrating regulatory and 
paperwork reviews with OMB's E-government policies, which will further 
increase the transparency of the regulatory review process. OIRA is 
developing a new computerized tracking 
system for OIRA's review of both regulations (under E.O. 12866) and 
information collection requests (under the Paperwork Reduction Act). 
The new system will replace an outmoded 20-year old tracking system 
with electronic capabilities for submission of public comments and 
dissemination of OIRA documents. The system will allow the public to 
search for and view information about transactions under review and to 
review records as they are made public.

OMB continues to explore ways to improve the public's understanding of 
OIRA's regulatory review process and appreciates GAO's specific 
recommendations. As GAO recommends in the draft report, we plan to 
review OIRA's implementation of the transparency requirements. In 
particular, in accordance with the draft report's recommendation, we 
will work to indicate more clearly in our meeting log which regulatory 
action was discussed and the affiliations of the participants in those 
meetings.

We do not concur with all the recommendations in the report and are 
concerned that some of them are not well-grounded in the reports' 
factual foundation. For example, the draft GAO report recommends that 
OIRA implement additional disclosure 
requirements that would go beyond the unprecedented level of disclosure 
that OIRA has already put into place during my tenure. We appreciate 
GAO's suggestions in this area, but we do not believe that GAO has 
demonstrated the need or desirability of such changes to the existing - 
and, again, unprecedented - transparency requirements.

GAO's draft report recommends that OMB disclose changes that the 
rulemaking agencies make to their draft rules during OIRA's "informal" 
review of a draft rule. Such disclosures are not required by statute 
and have not been required by E.O. 12866 or its predecessor, Executive 
Order No. 12291 (E.O. 12291). We do not believe that it would improve 
the rulemaking process to disclose these deliberations. As the courts 
have noted repeatedly over the years, and as Congress recognized in the 
Freedom of Information Act's protection for deliberative information 
(in FOIA Exemption 5), it is important for the deliberative process 
that Executive Branch officials and staff do not operate "in a 
fishbowl" but instead can explore options and carry on discussions in a 
confidential manner. Moreover, we do not believe it would be 
appropriate for OIRA to take it upon itself to waive the deliberative 
privilege for the rulemaking agencies regarding the draft rules that 
those agencies are developing.

Similarly, the draft report recommends that we should reexamine the 
Executive Branch's longstanding practice under E.O. 12866 (and its 
predecessor, E.O. 12291) that 
its disclosure requirements apply to those documents exchanged between 
the rulemaking agency and OIRA's branch chiefs and higher-level 
officials. This practice has been followed consistently since the 
regulatory review disclosure procedures were first put into place in 
the 1980s; in particular, this practice was followed throughout the 
prior Administration. The draft GAO report does not explain why this 
longstanding practice should now be changed, and we continue to believe 
that the longstanding practice is appropriate.

The draft report also recommends that OIRA or the agencies should 
disclose the reasons why a rulemaking agency has decided to withdraw 
its draft rule from OIRA review. Draft rules that are withdrawn are 
done so at the request of the rulemaking agency. The longstanding, 
consistent practice under E.O. 12866 (and its predecessor, E.O. 12291) 
is that agencies do not disclose the reasons why they have decided at 
some particular point in time to submit a draft rule to OIRA for 
review, and similarly, agencies have not (at least to our knowledge) 
disclosed the reasons why they have decided to withdraw a draft rule 
from OIRA review. The draft GAO report does not explain why this 
longstanding practice should now be changed, and we continue to believe 
that the longstanding practice is appropriate. In any event, we do not 
believe it would be appropriate for OIRA to waive the deliberative 
privilege for the rulemaking agencies regarding the reasons why they 
have decided to withdraw a draft rule.

Another draft recommendation concerns the different categories by which 
OIRA records the outcomes of its reviews. The draft report recommends 
that OIRA change one of the categories, "consistent with change," so 
that it differentiates between draft rules 
that were "substantively" changed at OIRA's suggestion or 
recommendation and those draft rules that were changed in other ways 
and for other reasons. Similarly, the draft report reiterates an issue 
that GAO raised several years ago in its 1998 report (GAO/GGD-98-31); 
this issue concerns the disclosures that a rulemaking agency makes 
under E.O. 12866 relating to the "substantive" changes to the draft 
rule that were made during OIRA review. As OIRA Administrator Sally 
Katzen explained in her letter of November 10, 1997 (at pages 26-31 of 
the GAO report), attempting to define what qualifies as a "substantive" 
change is very difficult and not very helpful. As Administrator Katzen 
noted: "The same word in the same rule may be viewed by some members of 
the public as substantive, while others may view it as not 
substantive." That is why, as did Administrator Katzen, we believe it 
is better to provide the public with "copies of the various draft 
regulations reviewed by OIRA"; this enables the person to "identify the 
changes of interest to that person, and evaluate the nature and 
importance of the change on its own merits.":

Finally, the draft GAO report provides specific recommendations aimed 
at disclosures that are made by the rulemaking agencies. GAO states in 
the draft report that it found that rulemaking agencies vary in how 
they handle their public rulemaking 
dockets, and GAO encourages agencies to follow "best practices" 
regarding their documentation. As with the prior set of draft 
recommendations, this one also appears to reiterate a GAO 
recommendation from its 1998 report. In her comments on a draft 
recommendation that OMB issue guidance to agencies on how they should 
organize their 
rulemaking dockets, Administrator Katzen stated that each rulemaking 
agency had developed its own administrative practices and procedures to 
fit its own statutes and programs, and she stated that OMB deferred to 
these rulemaking agency practices. We continue to defer to the 
rulemaking agencies on this point. We should note, though, that we 
expect that many of the differences that GAO has identified should be 
eliminated by the E-Rulemaking project, one of this Administration's 24 
E-Government initiatives. When fully implemented by the rulemaking 
agencies, the initiative will consolidate each agency's public docket 
into a government-wide docket easily accessible by the public. 
Ultimately, the system may save as much as $100 million and make it 
easier for businesses and the public to access the rulemaking process.

Thank you again for this opportunity to comment on the draft report. As 
1 noted earlier, the report provides an excellent overview of the 
regulatory review process and a careful factual review of how OIRA is 
operating differently in this Administration.

John D. Graham, Ph.D. 
Administrator:

Signed by John D. Graham: 

[End of section]

(450138):

FOOTNOTES

[1] U.S. General Accounting Office, Regulatory Reform: Changes Made to 
Agencies' Rules Are Not Always Clearly Documented, GAO/GGD-98-31 
(Washington, D.C.: Jan. 8, 1998).

[2] Our unit of analysis was technically the submission of a rule to 
OIRA for Executive Order 12866 review, rather than the rule itself, 
because some of the rules were reviewed by OIRA more than once (e.g., 
submitted, reviewed, and withdrawn, then resubmitted, reviewed again, 
and published). However, for simplicity we refer to these executive 
order submissions as rules in this report.

[3] OIRA defines outside parties as "persons not employed by the 
executive branch."

[4] The Mercatus Center is an education, research, and outreach 
organization affiliated with George Mason University. The Center's 
Regulatory Studies Program includes a public interest comment project, 
which analyzes agencies' regulatory proposals during the public comment 
process, before the rules become final. The Regulatory Studies Program 
is headed by Dr. Wendy Lee Gramm, Administrator of OIRA from 1985 to 
1988. 

[5] Most of other agencies that submitted five or more such rules 
submitted rules that involved transfer payments (e.g., reimbursement 
rates to doctors' medical services in rules submitted by the Centers 
for Medicare and Medicaid Services within the Department of Health and 
Human Services).

[6] NHTSA revised the final rule to address OIRA's concerns. However, 
the U.S. Court of Appeals recently held that the rule was contrary to 
the intent of the tire safety legislation and arbitrary and capricious 
under the Administrative Procedure Act. Public Citizen, Inc. v. Mineta, 
No. 02-4237 (2d Cir. Aug. 6, 2003).

[7] For a discussion of these offices, see U.S. General Accounting 
Office, Office of Management and Budget: Changes Resulting From the OMB 
2000 Reorganization, GAO/GGD/AIMD-96-50 (Washington, D.C.: Dec. 29, 
1995).

[8] We previously reported that about half of all final rules published 
during 1997 were published without a notice of proposed rulemaking. See 
U.S. General Accounting Office, Federal Rulemaking: Agencies Often 
Published Final Actions Without Proposed Rules, GAO/GGD-98-126 
(Washington, D.C.: Aug. 31, 1998). 

[9] See, for example, Erik D. Olson, "The Quiet Shift of Power: Office 
of Management & Budget Supervision of Environmental Protection Agency 
Rulemaking Under Executive Order 12291," Virginia Journal of Natural 
Resources Law, 4 (Fall 1984), 1-80.

[10] The order defined a "major rule" as any regulation likely to 
result in (1) an annual effect on the economy of $100 million or more, 
(2) a major increase in costs or prices for consumers or others, or (3) 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or international competitiveness. 

[11] For a discussion of OIRA's review process under this order, see 
U.S. General Accounting Office, Regulatory Review: Information on OMB's 
Review Process, GAO/GGD-89-101FS (Washington, D.C.: July 14, 1989). 

[12] National Academy of Public Administration, Presidential Management 
of Rulemaking in Regulatory Agencies (January 1987). 

[13] The National Academy of Public Administration and the American Bar 
Association have also recognized the potential value of presidential 
regulatory review. However, they too recommended reforms such as 
improved transparency and better communication between OIRA and agency 
staff. 

[14] For a discussion of the differences between the transparency 
requirements under Executive Order 12291 and Executive Order 12866, see 
William D. Araiza, "Judicial and Legislative Checks on Ex Parte OMB 
Influence Over Rulemaking," Administrative Law Review, 54 (Spring 
2002), 611-630, and Peter M. Shane, "Political Accountability in a 
System of Checks and Balances: The Case of Presidential Review of 
Rulemaking," Arkansas Law Review, 48 (1995), 161-214.

[15] GAO/GGD-98-31.

[16] As used in this report, a rulemaking "docket" is the official 
repository for documents or information related to an agency's 
rulemaking activities and may include any public comments received and 
other information used by agency decisionmakers. 

[17] These nine agencies submitted a total of 102 proposed, final, or 
interim final rules to OIRA during this 1-year period. Another EPA rule 
that met these criteria was dropped from our review because, although 
OIRA had cleared the submitted rule with changes, it has not yet been 
publicly announced due to homeland security issues.

[18] U.S. General Accounting Office, Regulatory Reform: Implementation 
of the Regulatory Review Executive Order, GAO/T-GGD-96-185 (Washington, 
D.C.: Sept. 25, 1996). 

[19] Representatives of OIRA told us that the agency occasionally 
reviews other material, such as agencies' guidance documents or 
notices, reports and budget information shared with OIRA by resource 
management officers on the budget side of OMB, and draft legislation. 
However, these materials are not covered by the executive order's 
review requirements. 

[20] OIRA also reviews some rules at the Advance Notice of Proposed 
Rulemaking stage.

[21] As discussed in detail later in this report, more than 70 percent 
of draft rules submitted to OIRA in recent years have been coded as 
either "consistent with change" or "consistent with no change." At 
most, only about 3 percent of the rules were coded as "returned." 

[22] For example, the memorandum indicated that peer reviewers should 
(1) be selected primarily on the basis of necessary technical 
expertise, (2) disclose to agencies any prior positions on the issues 
at hand, and (3) disclose to agencies their sources of personal and 
institutional funding.

[23] OIRA representatives said the Administrator's personal involvement 
in a review depends on a variety of factors, such as whether the rule 
involves an issue of interest to him or whether it is likely to be 
controversial. 

[24] The agency officials that we talked with during our review 
generally indicated that they attended these meetings but sometimes did 
not participate. However, DOT considers these meetings "ex parte 
communications," and generally does not attend. (In fact, DOT has a 
written policy of not attending these meetings.) 

[25] Office of Management and Budget, "Making Sense of Regulation: 2001 
Report to Congress on the Cost and Benefits of Regulations and Unfunded 
Mandates on State, Local and Tribal Entities," (December 2001).

[26] Rebecca Adams, "Regulating the Rule-Makers: John Graham at OIRA," 
CQ Weekly, 60 (Feb. 23, 2002), 520-526.

[27] Testimony before the Senate Committee on Governmental Affairs, 
September 25, 1996.

[28] William Niskanen, "Clinton's Regulatory Record: Policies, Process, 
and Outcomes," Regulation (1996), 27-28. 

[29] Office of Management and Budget, "Stimulating Smarter Regulation: 
2002 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities," (December 2002).

[30] Others have also noted the salience of presidential priorities in 
OIRA's operations. See, for example, Susan E. Dudley and Angela 
Antonelli, "Congress and the Clinton OMB: Unwilling Partners in 
Regulatory Oversight?," Regulation (Fall 1997), 17-23. The authors 
noted "OIRA is supposed to simultaneously provide independent and 
objective analysis, and report to the president on the progress of 
executive policies and programs. When those functions conflict, the 
presidential agenda will most certainly prevail over independent and 
objective analysis." 

[31] The executive order actually says review periods can be extended 
only if the agency requests an extension and the OMB Director provides 
written permission. However, an OIRA representative said that 
extensions have been provided if either condition is met. 

[32] OIRA listed two items on the "prompt letters" page of its Web site 
that did not appear to be prompt letters--a June 2002 EPA press release 
regarding an EPA-OIRA collaboration and a January 2003 memorandum to 
the heads of selected independent agencies asking them to consider 
recommendations for reform that OIRA had received from the public. 

[33] See Elena Kagan, "Presidential Administration," Harvard Law 
Review, 114 (2001): 2,245-2,385, who asserted that recent presidents 
have increasingly made agencies' regulatory activity into an extension 
of their own policy and political agendas. She said President Clinton 
did so primarily by "exercising directive authority over these 
agencies," using formal directives to the heads of executive agencies 
to "set the terms of administrative action and prevent deviation from 
his proposed course." 

[34] The October 2001 transparency memorandum indicates that covered 
telephone calls and correspondence must be logged and/or sent to the 
rulemaking agency within 10 working days. An OIRA representative told 
us that meetings are typically logged within 3 or 4 days. He also said 
that materials provided to OIRA at meetings are only available in hard 
copy in the OIRA docket, not electronically.

[35] An OIRA representative told us that the office had not made this 
information available electronically during previous administrations 
because of resource constraints. 

[36] However, in practice we found evidence that such communications 
are, at least in some cases, disclosed. OIRA's docket for several of 
the rules that we examined in chapter 3 of this report contained e-
mails and faxes between the OIRA desk officer and agency staff about 
rules under review. 

[37] Agency officials told us that if a rule is withdrawn after having 
been formally proposed, an agency may publish a "withdrawal" notice in 
the Federal Register. If the rule is withdrawn before being proposed, 
they said the only documentation may be a notation in the "completed 
action" section of the Unified Agenda of Federal Regulatory and 
Deregulatory Actions. However, OIRA's involvement may not be revealed 
in either form of documentation. 

[38] The other meetings were with representatives of state, local, or 
tribal governments (11 meetings), Members of Congress (2 meetings), or 
individuals/organizations that could not be readily identified (8 
meetings). 

[39] OIRA's FTE total includes a number of positions that are not 
regularly involved in the review of rules under Executive Order 12866, 
including staff within the Information Policy and Technology branch and 
the Statistical and Science Policy branch, and administrative staff 
within the office. As of July 2003, 22 full-time OIRA analysts were 
primarily responsible for the regulatory and paperwork reviews of all 
federal agencies.

[40] Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk 
Regulation (Cambridge, Mass.: Harvard University Press, 1993). 

[41] In August 2002, the President signed Executive Order 13272, which 
also urged agencies to give proper consideration to small entities in 
their rulemaking. 

[42] U.S. General Accounting Office, Regulatory Flexibility Act: Status 
of Agencies' Compliance, GAO/GGD-94-105 (Washington, D.C.: Apr. 27, 
1994). 

[43] The 1996 best practices document was modified and issued as 
guidance in 2000.

[44] "Valuing Health: An OMB Perspective," speech given before the 
Conference on Valuing Health Outcomes: An Assessment of Approaches 
(Feb. 13, 2003).

[45] The Administrator noted that EPA's most recent VSLY estimates were 
$434,000 per life-year saved for persons over age 65 and $172,000 per 
life year saved for those under age 65. 

[46] U.S. General Accounting Office, Chemical Risk Assessment: Selected 
Federal Agencies' Procedures, Assumptions, and Policies, GAO-01-810 
(Washington, D.C.: Aug. 6, 2001). 

[47] For a copy of these guidelines, see 67 Fed. Reg. 8452 (Feb. 22, 
2002).

[48] Shortly before the publication of this report, on August 29, 2003, 
OIRA proposed a standard analytical process by which all "significant 
regulatory information" that federal agencies intend to disseminate 
would be peer reviewed.

[49] Our unit of analysis was technically the submission of a rule to 
OIRA for Executive Order 12866 review, rather than the rule itself, 
because some of the rules were reviewed by OIRA more than once. 
However, for simplicity we refer to these executive order submissions 
as rules in this report.

[50] See appendix I for a more detailed description of our objectives, 
scope, and methodology, and appendix II for information about each of 
the 85 submissions. 

[51] See, for example, Arthur Allen, "Where the Snowmobiles Roam," 
Washington Post Magazine (Aug. 18, 2002).

[52] OIRA's database has a separate field, separate from the field on 
reviews' outcomes, that identifies submissions with legal deadlines. 
Twenty-two of the 85 rules that we reviewed were coded in OIRA's 
database as having a statutory or judicial deadline. 

[53] The agencies sometimes attributed suggested changes to OMB and 
sometimes specifically to OIRA. In a few instances, OMB staff outside 
of OIRA suggested the changes. 

[54] Because the executive order does not require agencies to document 
nonsubstantive changes, three of the rules we included in this category 
were ones in which it was clear all the changes were minor, but the 
source of the changes (i.e., whether they were made at the suggestion 
of OMB/OIRA) could not be identified.

[55] For example, after submitting its rule on emission standards for 
surface coating of metal furniture to OIRA, EPA reanalyzed data from 
the covered industry and revised the emission limits to be less 
stringent than those originally proposed--what we would have considered 
a "significant" change if suggested by OIRA (ID 47). However, because 
the most significant OIRA-suggested change was the addition of text to 
the preamble clarifying the agency's analysis and requesting comments 
on a particular provision, we coded this rule as having had "other 
material changes." 

[56] The marine and motorcycle engines provisions later resurfaced as a 
separate rule (ID 54).

[57] FAA resubmitted the rule, with no revisions, on the same day that 
it was returned. Ten days later, OIRA completed its review of the 
resubmitted version "consistent with no change."

[58] This was the same rule that was subsequently resubmitted, returned 
to FAA by OIRA, resubmitted yet again, and ultimately completed OIRA 
review with no changes.

[59] We performed a statistical analysis using Fisher's exact test to 
determine if there was a statistically significant association between 
whether the rules reviewed by OIRA were economically significant and 
whether the rules were significantly affected by OIRA. The test results 
(p = 0.43) did not support a hypothesis that a statistically 
significant association exists.

[60] Official vaccinates are livestock vaccinated as part of a foot-
and-mouth eradication program. 

[61] In some OIRA files, we found evidence that OIRA had reviewed 
copies of substantive comments on previous versions of the draft rule 
currently under review. Because these were public docket materials 
previously submitted to the regulatory agencies, not OIRA, we did not 
consider them as evidence of direct contact with OIRA by external 
parties. Also, there was evidence that external parties contacted OIRA 
after the formal review period regarding two other substantively 
changed submissions, but such postreview contacts could not have 
affected the outcome of OIRA's reviews in those cases.

[62] The two FAA submissions were actually the same Part 145 repair 
station regulation. One of the submissions resulted in a withdrawal and 
one resulted in a return (IDs 84 and 72, respectively). 

[63] Direct tire pressure monitoring systems have a tire pressure 
sensor in each tire that transmits pressure information to a receiver. 
Indirect systems do not have tire pressure sensors. Current indirect 
systems rely on the wheel speed sensors in an anti-lock braking system 
to detect and compare differences in the rotational speed of a 
vehicle's wheels, which can correlate to differences in tire pressure.

[64] The Center for Energy and Economic Development is a nonprofit 
organization formed by coal-producing companies, railroads, a number of 
electric utilities, and related organizations.

[65] We conducted a similar exercise in our previous GAO report on this 
subject. See GAO/GGD-98-31.

[66] In many cases, the agencies prepared supplementary memoranda or 
summaries for us that provided additional information and explanations 
regarding the changes made in various rules. In those cases, we used 
the supplementary information to address other elements of our review-
-such as the nature of changes attributed to OIRA--but did not consider 
the materials specifically prepared for our review to be public 
documents within the dockets.

[67] It is notable that these dockets sometimes contained information 
that the agencies were not required to disclose under OIRA's 
interpretation of the executive order--and that information frequently 
provided valuable insights to our determinations regarding the nature 
of OIRA's changes. For example, the agencies sometimes disclosed 
changes that were not "substantive," and sometimes disclosed changes 
that OIRA made to rules before they were formally submitted to OIRA. 

[68] As table 5 shows, the executive order's documentation requirements 
were not applicable in three of the five FAA changed rules we reviewed 
because only minor (nonsubstantive) changes had been made to those 
rules. 

[69] The other Office of Water docket included an annotated "redline/
strikeout" version of the revised rule. The Corps of Engineers prepared 
the docket for one rule jointly issued by the Corps and EPA's Office of 
Water and similarly included an annotated "redline/strikeout" version 
of the revised rule.

[70] For a discussion of this memorandum and the rules delayed, see 
U.S. General Accounting Office, Regulatory Review: Delay of Effective 
Dates of Final Rules Subject to the Administration's January 20, 2001, 
Memorandum, GAO/02-370R (Washington, D.C.: Feb. 15, 2002).

[71] She said that the Mercatus Center actually submitted a total of 58 
suggestions for reform. However, several of the suggestions were about 
the same rule, so OIRA's report only listed the 44 comments that were 
about different rules.

[72] For an examination of the first module of this initiative, see 
U.S. General Accounting Office, Electronic Rulemaking: Efforts to 
Facilitate Public Participation Can Be Improved, GAO-03-901 
(Washington, D.C.: Sept. 17, 2003).

[73] OIRA defines outside parties as "persons not employed by the 
executive branch."

[74] See, for example, Arthur Allen, "Where the Snowmobiles Roam," 
Washington Post Magazine (Aug. 18, 2002).

[75] OIRA's database has a separate field, separate from the field on 
reviews' outcomes, that identifies submissions with legal deadlines. 
Twenty-two of the 85 rules that we reviewed were coded in OIRA's 
database as having a statutory or judicial deadline. 

[76] The agencies sometimes attributed changes to OMB and sometimes 
specifically to OIRA. In a few instances, OMB staff outside of OIRA 
suggested the changes. There were also rules in which the regulatory 
agencies initiated more significant changes during the period of OIRA's 
review than did OIRA.

[77] We conducted a similar exercise in our previous GAO report on this 
subject. See GAO/GGD-98-31.

[78] In many cases, the agencies prepared supplementary memos or 
summaries for us that provided additional information and explanations 
regarding the changes made in various rules. In those cases, we used 
the supplementary information to address other elements of our review-
-such as the nature of changes attributed to OIRA--but did not consider 
the materials specifically prepared for our review to be public 
documents within the dockets.

[79] It is notable that these dockets sometimes contained information 
that the agencies were not technically required to disclose--and that 
information frequently provided valuable insights to our determinations 
regarding the gravity of OIRA's changes. For example, the agencies 
sometimes disclosed changes that were not "substantive," and sometimes 
disclosed changes that OIRA made to rules before they were formally 
submitted to OIRA. 

[80] The RIN is assigned by the Regulatory Information Service Center 
to identify each rulemaking cycle listed in The Regulatory Plan and the 
Unified Agenda of federal agencies, as directed by Executive Order 
12866. Also, OMB has asked agencies to include RINs in the headings of 
their Rule and Proposed Rule documents when publishing them in the 
Federal Register to make it easier for the public and agency officials 
to track the publication history of regulatory actions throughout their 
development.

[81] In addition to the date of publication, we provide the location of 
the published rule using the Federal Register's standard format (e.g., 
66 FR 55530 indicates that the rule was published starting on page 
55530 of volume 66).

[82] We also checked OIRA's phone logs regarding calls related to 
Executive Order 12866 reviews, but found no evidence of such calls 
before or during OIRA's formal review periods of the rules within our 
scope. 

[83] This letter was not in the EPA docket for the rule, but did appear 
in the OIRA docket.

[84] TSS are characterized by EPA as conventional pollutants. The 
primary TSS of concern in this rulemaking is sediment.

[85] The U.S. Court of Appeals recently held that the rule was contrary 
to the intent of the tire safety legislation and arbitrary and 
capricious under the APA. Public Citizen, Inc. v. Mineta, No. 02-4237 
(2d Cir. Aug. 6, 2003).

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