a

GAO

United States Government Accountability Office

Testimony

Before the Subcommittee on Regulatory Affairs, 

Committee on Government Reform, House of 

Representatives

For Release on Delivery 

Expected at 10:00 a.m. EDT

Wednesday, July 27, 2005

REGULATORY REFORM

Prior Reviews of Federal 

Regulatory Process 

Initiatives Reveal 

Opportunities for 

Improvements

Statement of J. Christopher Mihm

Managing Director, Strategic Issues

GAO-05-939T
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-939T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact J. Christopher 

Mihm at (202) 512-6806 or mihmj@gao.gov. 

Highlights of GAO-05-939T, a testimony 

before the Subcommittee on Regulatory 

Affairs, Committee on Government 

Reform, House of Representatives 

July 27, 2005

REGULATORY REFORM 

Prior Reviews of Federal Regulatory 

Process Initiatives Reveal Opportunities 

for Improvements 

GAO’s evaluations of regulatory reform initiatives indicate that some of 

these initiatives have yielded mixed results. Among the goals of the 

initiatives are reducing regulatory burden, requiring more rigorous 

regulatory analysis, and enhancing oversight. The initiatives have been 

beneficial in a number of ways, but they also were often less effective than 

anticipated. GAO’s reviews suggest at least four overall strengths or benefits 

associated with existing initiatives: (1) increasing the attention directed to 

rules and rule making, (2) increasing expectations regarding the analytical 

support for proposed rules, (3) encouraging and facilitating greater public 

participation in rule making, and (4) improving the transparency of the rulemaking process. On the other hand, at least four recurring reasons help 

explain why reform initiatives have not been more effective: (1) limited 

scope and coverage of various requirements, (2) lack of clarity regarding key 

terms and definitions, (3) uneven implementation of the initiatives’ 

requirements, and (4) a predominant focus on just one part of the regulatory 

process, agencies’ development of rules. 

As Congress develops its regulatory reform agenda, the lessons and 

opportunities identified by GAO’s body of work suggest two avenues that 

might provide a useful starting point. The first would be to broadly revisit 

the procedures, definitions, exemptions, and other provisions of existing 

initiatives to determine whether changes are needed to better achieve their 

goals. As a second avenue to explore, GAO’s reviews found that the 

regulatory process could benefit from more attention to evaluations of 

existing regulations, although recognizing some of the difficulties associated 

with carrying out such evaluations. The lessons that could be learned from 

retrospective reviews could help to keep the regulatory process focused on 

results and inform future action to meet emerging challenges. 

This is a particularly timely point to be reviewing the regulatory process. 

The long-term fiscal imbalance facing the United States, along with other 

significant trends and challenges, establishes the case for change and the 

need to reexamine the base of the federal government and all of its existing 

programs, policies, functions, and activities. No single approach or reform 

can address all of the questions and program areas that need to be revisited. 

However, federal regulation is a critical tool of government, and regulatory 

programs play a key part in how the federal government addresses many of 

the country’s needs. Therefore, reassessing the regulatory framework must 

be part of that long-term effort to transform what the federal government 

does and how it does it. 

 

Federal regulation is a basic tool of 

government. Agencies issue 

thousands of rules and regulations 

each year to achieve goals such as 

ensuring that workplaces, air 

travel, and foods are safe; that the 

nation’s air, water and land are not 

polluted; and that the appropriate 

amount of taxes are collected. The 

costs of these regulations are 

estimated to be in the hundreds of 

billions of dollars, and the benefits 

estimates are even higher. Over 

the past 25 years, a variety of 

congressional and presidential 

regulatory reform initiatives have 

been instituted to refine the federal 

regulatory process. 

This testimony discusses findings 

from the large number of GAO 

reports and testimonies prepared at

the request of Congress to review 

the implementation of regulatory 

reform initiatives. Specifically, 

GAO discusses common strengths 

and weaknesses of existing reform 

initiatives that its work has 

identified. GAO also addresses 

some general opportunities to 

reexamine and refine existing 

initiatives and the federal 

regulatory process to make them 

more effective. GAO’s prior 

reports and testimonies contain a 

variety of recommendations to 

improve particular reform 

initiatives and aspects of the 

regulatory process. 
Page 1 GAO-05-939T 

Madam Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss reform initiatives that have been 

instituted over the years to improve the federal regulatory process. 

Congress has often asked GAO to evaluate the effectiveness of procedures 

and requirements established by certain initiatives. Our work included 

reviews of agencies’ compliance with the initiatives and provided us 

opportunities to examine the outcomes of various reforms. My remarks 

today are based on this broad body of regulatory work and some of the 

significant common themes and lessons that have emerged.

In brief, over the last 25 years Congresses and Presidents initiated a 

number of regulatory reforms for a variety of purposes, such as reducing 

regulatory burdens or improving the information available to decision 

makers and the public about proposed rules. Our reviews indicated that 

some of these initiatives have yielded mixed results. There have been 

benefits associated with the initiatives, but they were often less effective 

than intended. Time and again we noted how features such as the limited 

scope of the initiatives, unclear definitions, and broad exemptions affected 

the results of these reforms. Also, while many of these initiatives added 

more requirements at the beginning of the regulatory process, fewer of 

their provisions have focused on evaluating the actual benefits and costs of 

rules once implemented and using such information to revise existing 

regulations and inform future action.

For these reasons, as this subcommittee begins to develop its regulatory 

reform agenda, we suggest two avenues that might provide a useful starting 

point. First, the subcommittee might wish to broadly revisit the 

procedures, definitions, exemptions, and other provisions of existing 

initiatives to determine whether changes are needed to better achieve their 

goals. Second, to keep the regulatory process focused on results meeting 

emerging challenges, we found that the process could benefit from more 

attention on evaluations of existing regulations and the lessons that could 

be learned from such retrospective reviews. This is a particularly timely 

point to reexamine the regulatory process because the long-term fiscal 

imbalance facing the United States, along with other significant trends and 

challenges, establishes the case for change and the need to reexamine the 

base of the federal government and all of its existing programs, policies,
Page 2 GAO-05-939T 

functions, and activities.1 Reassessing the regulatory framework must be 

part of that discussion.

Regulatory Reform 

Initiatives Reveal Some 

Common Strengths and 

Weaknesses

Federal regulation is a basic tool of government. Agencies issue thousands 

of rules and regulations each year to implement statutes enacted by 

Congress. The public policy goals and benefits of regulations include, 

among other things, ensuring that workplaces, air travel, foods, and drugs 

are safe; that the nation’s air, water and land are not polluted; and that the 

appropriate amount of taxes is collected. The costs of these regulations 

are estimated to be in the hundreds of billions of dollars, and the benefits 

estimates are even higher.2

 Given the size and impact of federal regulation, 

it is no surprise that Congresses and Presidents have taken a number of 

actions to refine and reform the regulatory process within the past 25 

years.3

 One goal of such initiatives has been to reduce regulatory burdens 

on affected parties, but other purposes have also played a part. Among 

these are efforts to require more rigorous analyses of proposed rules and 

thus provide better information to decision makers, to enhance oversight 

of rule making by Congress and the President, and to promote greater 

transparency and participation in the process.

Over the last decade, at the request of Congress, GAO has released over 60 

reports and testimonies reviewing the implementation of various 

regulatory reform initiatives.4

 Some initiatives, such as the Paperwork 

Reduction Act (PRA), Regulatory Flexibility Act (RFA), Unfunded 

Mandates Reform Act (UMRA), and Executive Order 12866 on Regulatory 

1

See GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: Feb. 2005), and 21st Century Challenges: Transforming 

Government to Meet Current and Emerging Challenges, GAO-05-830T (Washington, D.C.: 

July 13, 2005).

2

In terms of quantified and monetized annual benefits and costs, the Office of Management 

and Budget reported that the estimated annual benefits of major federal regulations it 

reviewed from October 1994 through September 2004 range from $68.1 billion to 

$259.6 billion, while estimated annual costs range from $34.8 billion to $39.4 billion. See 

Office of Management and Budget, Draft 2005 Report to Congress on the Costs and 

Benefits of Federal Regulations (Washington, D.C.: Mar. 9, 2005). 

3

See app. I for summary descriptions of major regulatory reform initiatives implemented 

since 1980.

4

Attached to this statement are the highlights pages from some of those reports and 

testimonies.
Page 3 GAO-05-939T 

Planning and Review, have undergone repeated scrutiny. While our 

reviews identified specific strengths and weaknesses of individual 

initiatives, it may be more worthwhile to focus on crosscutting strengths 

and weaknesses. The common strengths we identified largely mirror the 

general purposes of various reform initiatives. The common weaknesses 

reflect issues associated with both the design and implementation of the 

initiatives.

Initiatives Increase 

Attention on Proposed 

Rules and Raise 

Expectations of the RuleMaking Process

Our reviews suggest at least four overall strengths or benefits that have 

been associated with existing regulatory reform initiatives: (1) increasing 

the attention directed to rules and rule making, (2) increasing expectations 

regarding the analytical support for proposed rules, (3) encouraging and 

facilitating greater public participation in rule making, and (4) improving 

the transparency of the rule-making process.

First, the simple fact that such initiatives bring added attention to rules and 

the rule-making process is an important benefit. As we have pointed out in 

prior reports, oversight of agencies’ rule making can result in useful 

changes to rules.5

 Furthermore, awareness of this added scrutiny may 

provide an important indirect effect. For example, in a previous GAO 

review, Department of Transportation officials told us that they will not 

even propose certain regulatory provisions because they know that the 

Office of Management and Budget (OMB), which reviews significant 

agency draft rules under Executive Order 12866, will not find them 

acceptable.6

 Similarly, there is evidence that the focus placed on potential 

mandates under UMRA may have helped to discourage or limit the costs of 

federal mandates.7

Second, several of the reform initiatives have increased the analytical 

requirements and expectations in the regulatory process. These initiatives 

have raised the bar for agencies regarding the information and analysis 

5

See GAO, Rulemaking: OMB’s Role in Reviews of Agencies’ Draft Rules and the 

Transparency of Those Reviews, GAO-03-929 (Sept. 22, 2003), and Regulatory Reform: 

Procedural and Analytical Requirements in Federal Rulemaking, GAO/T-GGD/OGC-00-

157 (Washington, D.C.: June 8, 2000).

6

GAO, Regulatory Reform: Implementation of the Regulatory Review Executive Order, 

GAO/T-GGD-96-185 (Washington, D.C.: Sept. 25, 1996).

7

GAO, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637 (Washington, 

D.C.: May 12, 2004).
Page 4 GAO-05-939T 

needed to support policy decisions underlying regulations. Simply put, the 

initiatives call for more analysis of the effects—both benefits and costs—of 

proposed regulations before they are implemented. Whether imposed by 

statute or executive order, these initiatives seek to answer a basic question, 

“What are the consequences of this rule?” Closely related are other 

requirements that encourage agencies to identify and consider alternatives 

when developing regulations. Executive Order 12866, for example, asks 

agencies to first identify and assess available alternatives to direct 

regulation. Initiatives such as RFA and UMRA ask agencies to identify 

regulatory alternatives that will be less burdensome to regulated parties.

Third, some of the reform initiatives have encouraged and facilitated 

greater public participation and consultation in rule making. Initiatives 

such as the E-Government Act and the Government Paperwork Elimination 

Act encourage agencies to allow the public to communicate with them by 

electronic means. Other initiatives require additional consultation by 

agencies with the parties that might be affected by rules under 

development. These initiatives ask that agencies seek input earlier in the 

process, rather than waiting for the public to comment on proposals 

published in the Federal Register.

A final shared strength of many of these initiatives, and one closely 

connected to the three previous items, is that they help to improve the 

transparency of the regulatory process. In prior work, we have cited 

transparency as a regulatory best practice.8

 By providing more information 

about potential effects and alternatives, requiring more documentation and 

justification of agencies’ decisions, and facilitating public access to and 

queries about such information, regulatory reform initiatives can help 

make the process more open. We recommended that more could be done 

to increase transparency, and we have also highlighted the value of 

transparency when agencies had particularly clear and complete 

documentation supporting their rule making. As the Administrator of 

OMB’s Office of Information and Regulatory Affairs (OIRA) pointed out, 

openness can help to “transform the public debate about regulation to one 

of substance ... rather than process.”9

8

GAO, Certification Requirements: New Guidance Should Encourage Transparency in 

Agency Decisionmaking, GAO/GGD-99-170 (Washington, D.C.: Sept. 24, 1999).

9

See GAO-03-929.
Page 5 GAO-05-939T 

Some Recurring 

Weaknesses Might Explain 

Why Reform Initiatives 

Have Not Been More 

Effective

Despite these strengths, the overall results and effectiveness of regulatory 

reform initiatives have often been mixed. This may be particularly true 

when results of the initiatives are compared to the goals and purposes 

originally established for them. For example, despite the goals set for the 

reduction of paperwork burdens under PRA, we have repeatedly testified 

about the growth in burden hours imposed by federal information 

collections.10 We similarly reported that initiatives such as UMRA, the 

executive order on federalism, and requirements imposed under Section 

610 of RFA for reviews of existing rules, have had little impact on agencies’ 

rule making. Our reviews have identified at least four general reasons that 

might explain why reform initiatives have not been more effective: (1) the 

limited scope and coverage of various requirements, (2) lack of clarity 

regarding key terms and definitions, (3) uneven implementation of the 

initiatives’ requirements, and (4) a predominant focus on just one part of 

the regulatory process, agencies’ development of rules.

First, we have pointed out significant limits in the scope and coverage of 

certain reform initiatives. UMRA provides one example of the effect of 

definitional limitations, exceptions, and thresholds on restricting an 

initiative’s coverage. As we noted in a report last year, part of the reason 

for the relatively small number of rules identified as containing mandates 

under UMRA could be traced to 14 different restrictions on the 

identification of federal mandates under the Act. Furthermore, our 

analysis of all 122 major or economically significant rules (generally, rules 

with an impact of $100 million or more) published in 2001 and 2002 also 

showed that more than one of these restrictions applied to 72 percent of 

the 65 rules that were not identified as containing federal mandates under 

UMRA but nonetheless appeared to result in significant financial effects on 

nonfederal parties.11 

UMRA, along with RFA, also illustrates the potential domino effect of 

building reform requirements on other procedural requirements. Both acts 

only apply to rules for which an agency publishes a notice of proposed rule 

making. However, agencies can publish final regulatory actions without 

notices of proposed rule making using either good cause, categorical, or 

10However, the total paperwork burden shrank slightly in fiscal year 2004, according to OMB 

estimates. See GAO, Paperwork Reduction Act: Burden Reduction May Require a New 

Approach, GAO-05-778T (Washington, D.C.: June 14, 2005).

11GAO-04-637.
Page 6 GAO-05-939T 

statute-specific exceptions to the Administrative Procedure Act’s notice 

and comment requirements.12 In one of our prior reports, we estimated 

that about half of all final regulatory actions published by agencies were 

issued without going through the proposed rule stage.13 Although many 

final rules without proposed rules were minor actions, in both that analysis 

and our recent UMRA review there were major rules that did not have 

notices of proposed rule making.14

Another recurring message in our reports has been the effect of unclear 

terms and definitions that affect the applicability of requirements. 

Combined with the discretion given rule-making agencies to interpret the 

requirements in reform initiatives, it is not surprising that we have 

observed uneven implementation across agencies. In particular, we have 

often cited the need to clarify key terms in the Regulatory Flexibility Act.15 

RFA requires analyses and other actions to help address concerns about 

the impact of regulations on small entities, but the requirements do not 

apply if the agency head certifies that the agency’s rule will not have a 

“significant economic impact on a substantial number of small entities.” 

However, the Act neither defines this key phrase nor places clear 

responsibility on any party to define it consistently across government. As 

a result, we found that agencies had different interpretations of RFA’s 

requirements. We said in a series of reports that, if Congress wanted to 

strengthen the implementation of RFA, it should consider amending the Act 

to define the key phrases or provide some other entity with clearer 

authority and responsibility to interpret RFA’s provisions. To date, 

Congress has not acted on our recommendations. Again, there is a domino 

12The basic process by which federal agencies develop and issue regulations is spelled out in 

the Administrative Procedure Act. 5 U.S.C. § 553.

13GAO, Federal Rulemaking: Agencies Often Published Final Actions Without Proposed 

Rules, GAO/GGD-98-126 (Washington, D.C.: Aug. 31, 1998).

14For the analysis in GAO/GGD-98-126, 11 of 61 final major rules did not have proposed 

rules. For the analysis in GAO-04-637, 28 of the subset of 65 major rules mentioned above 

did not have proposed rules.

15See GAO, Regulatory Flexibility Act: Clarification of Key Terms Still Needed, GAO-02-

491T (Washington, D.C.: Mar. 6, 2002); Regulatory Flexibility Act: Key Terms Still Need to 

Be Clarified, GAO-01-669T (Washington, D.C.: Apr. 24, 2001); Regulatory Flexibility Act: 

Implementation in EPA Program Offices and Proposed Lead Rule, GAO/GGD-00-193

(Washington, D.C.: Sept. 20, 2000); Regulatory Flexibility Act: Agencies’ Interpretations of 

Review Requirements Vary, GAO/GGD-99-55 (Washington, D.C.: Apr. 2, 1999); and 

Regulatory Flexibility Act: Status of Agencies’ Compliance, GAO/GGD-94-105

(Washington, D.C.: Apr. 27, 1994).
Page 7 GAO-05-939T 

effect associated with this uncertainty, because other reform initiatives, 

such as the requirement for agencies to review existing rules under Section 

610 of RFA and a requirement to provide compliance assistance guides to 

regulated entities, only apply if an agency has determined the rule will have 

a significant economic impact on a substantial number of small entities.

Sometimes, though, it might not be uncertainty over the provisions of an 

initiative that help to limit its effectiveness, but rather an agency’s 

implementation of the requirements. For example, as noted in our recent 

report on the Paperwork Reduction Act, one of the provisions aimed at 

helping to achieve the goals of minimizing burden while maximizing utility 

is a requirement for chief information officers (CIO) to review and certify 

information collections.16 However, our analysis of case studies showed 

that CIOs provided these certifications despite often missing or inadequate 

support from the program offices sponsoring the collections. We 

recommended that OMB clarify the kinds of support it asks agency CIOs to 

provide for certifications and that heads of certain agencies direct 

responsible CIOs to strengthen agency support for CIO certifications, 

including with regard to the necessity of collection, burden reduction 

efforts, and plans for the use of information collected. 

Our reports over the years have also highlighted issues regarding agencies’ 

implementation of analytical requirements, such as the economic analyses 

that support regulations. Although the economic performance of some 

federal actions is assessed prospectively, few federal actions are monitored 

for their economic performance retrospectively. In addition, our reviews 

have found that economic assessments that analyze regulations 

prospectively are often incomplete and inconsistent with general economic 

principles.17 Moreover, the assessments are not always useful for 

comparisons across the government, because they are often based on 

different assumptions for the same key economic variables. In our recent 

report on UMRA, we noted that parties from various sectors expressed 

concerns about the accuracy and completeness of agencies’ cost estimates, 

and some also emphasized that more needed to be done to address the 

16GAO, Paperwork Reduction Act: New Approach May Be Needed to Reduce Government 

Burden on Public, GAO-05-424 (Washington, D.C.: May 20, 2005).

17See GAO, Regulatory Reform: Agencies Could Improve Development, Documentation, 

and Clarity of Regulatory Economic Analyses, GAO/RCED-98-142 (Washington, D.C.: 

May 26, 1998), and Clean Air Act: Observations on EPA’s Cost-Benefit Analysis of Its 

Mercury Control Options, GAO-05-252 (Washington, D.C.: Feb. 28, 2005). 
Page 8 GAO-05-939T 

benefits side of the equation.18 Our reviews have found that not all benefits 

are quantified and monetized by agencies, partly because of the difficulty in 

estimation.

Finally, although not an explicit finding in any of our reports, it is clear 

when stepping back to look at the big picture presented by the set of 

reform initiatives and our body of regulatory work that these initiatives 

primarily target one particular phase of the regulatory process, agencies’ 

development of rules. While rule making is clearly an important point in 

the process when the specific substance and impact of regulations are most 

open to public debate, other phases also help determine the effectiveness 

of regulation. Few of the reform initiatives contain major requirements or 

processes that address those other phases in the life cycle of regulations—

from the underlying statutory authorizations, through effective 

implementation and monitoring of compliance with regulatory provisions, 

to evaluation and revision of existing rules. For example, only UMRA 

explicitly addresses the potential effect of legislative proposals in creating 

mandates that would ultimately be implemented through regulations, and 

that element of UMRA has generally been viewed as among its most 

effective elements. We have reported that agencies sometimes have little 

rule-making discretion, so in some cases concerns raised about 

burdensome regulations are traceable to the statutes underlying the 

regulations, rather than a failure of an agency to comply with rule-making 

requirements.19 With regard to other phases in the regulatory process, RFA 

is unique among statutory requirements in having a provision (Section 610) 

for reviews of existing rules, although it is limited to rules with significant 

effects on small entities. Executive Order 12866 also includes some 

provisions to encourage agencies to review and revise existing rules. It is 

not clear, however, that either the Section 610 or the executive order look 

back provisions have been consistently and effectively implemented.20 

18GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and 

Options for Improvement, GAO-05-454 (Washington, D.C.: Mar. 31, 2005).

19GAO, Regulatory Burden: Some Agencies’ Claims Regarding Lack of Rulemaking 

Discretion Have Merit, GAO/GGD-99-20 (Washington, D.C.: Jan. 8, 1999).

20See also, GAO, Regulatory Reform: Agencies’ Efforts to Eliminate and Revise Rules Yield 

Mixed Results, GAO/GGD-98-3 (Washington, D.C.: Oct. 2, 1997).
Page 9 GAO-05-939T 

Opportunities Exist to 

Refine Existing Reform 

Initiatives and Explore 

New Ways to 

Transform the 

Regulatory Process

As this subcommittee begins to develop its regulatory reform agenda, our 

body of work on regulatory issues, and also on results-oriented government 

management, suggests two general avenues of effort you may want to 

consider as useful starting points. One avenue is to revisit the procedures, 

definitions, exemptions, and other provisions of existing initiatives to 

determine whether changes might be needed to better achieve their goals. 

Second, the subcommittee may wish to explore options to more effectively 

and productively evaluate existing regulations and the results they have 

generated. Not only could such retrospective evaluations help to inform 

Congress and other policymakers about ways to improve the design of 

regulations and regulatory programs, but they could play a part in the 

overall reexamination of the base of the federal government that we have 

recommended in our recent work on addressing 21st century challenges.

With respect to the first avenue, my testimony to this point indicates that 

there are ample opportunities to revisit and refine existing regulatory 

reform initiatives. Although progress has been made to implement 

recommendations and matters for consideration we have raised in our 

prior reports, there are still unresolved issues. In particular, Congress may 

want to consider whether some provisions of existing statutory initiatives 

need to be amended to make those initiatives more effective. We still 

believe, for example, that Congress should clarify key terms and definitions 

in RFA or provide another entity with the authority and responsibility to do 

so. 

We also believe there is some value to taking a broader look at how all of 

the pieces of existing initiatives have, or have not, contributed to achieving 

the purposes intended. For example, we suggested in our recent review of 

PRA that a new approach might be required to address burden reduction. 

As illustrated by our work on lessons learned about UMRA in the 10 years 

since it was enacted, such reviews can reveal opportunities and options for 

both reinforcing the strengths and addressing the weaknesses that have 

emerged in practice.21 The options can take a number of different 

directions. For example, in our work on UMRA, concerns about the scope 

of coverage were most frequently raised by the many knowledgeable 

parties we consulted, but issues and options were also identified regarding 

enforcement, consultation, and the analytic framework, among other 

topics. In undertaking reviews of existing initiatives, it will be important to 

21GAO-05-454.
Page 10 GAO-05-939T 

also revisit the reasons why particular limitations and exceptions were 

included in the initiatives to begin with. As pointed out in the UMRA work, 

this probably needs to be an inclusive effort to be successful, involving all 

affected parties in the debate to find common ground if changes are to be 

accepted.

The second broad avenue I would suggest the subcommittee consider in its 

reform agenda would be to explore using retrospective evaluations of 

existing regulations. Such evaluations could help to keep the regulatory 

process focused on results and identify ways to better meet emerging 

challenges. Among the potential benefits of more retrospective analysis of 

federal regulations are that it could enable policymakers to better gauge 

actual benefits and costs and whether regulations are achieving their 

desired goals, bring additional accountability to the regulatory process, 

identify opportunities to revise existing regulations, and provide 

information that could lead to better decisions regarding future 

regulations. 

In our work this year on both UMRA and economic performance measures, 

we clearly heard from the experts we consulted that they believe more 

retrospective analysis is needed and, further, that there are ways to 

improve the quality and credibility of the analyses that are done. In the 

UMRA work, parties had particularly strong views about the need for better 

evaluation and research of federal mandates, including those imposed by 

regulations. The most frequently suggested option to address this issue 

was to do more postimplementation evaluation of existing mandates or 

“look backs” at their effectiveness. As one of the parties pointed out, 

retrospective evaluation of regulations is useful because rules can change 

people’s behavior in ways that cannot be predicted prior to 

implementation. In our recent workshop where we obtained the views of 

experts about the use of economic performance measures, such as a 

comparison of benefits and costs (net benefits) and cost-effectiveness, 

participants identified several gaps in the application of these measures to 

analyze federal regulations and programs.22 For example, while some 

agencies have done retrospective economic performance assessments, the 

participants said that in general federal agencies often do not assess the 

performance of regulations or existing programs retrospectively, even 

though this information could be useful in managing programs. However, 

22GAO, Economic Performance: Highlights of a Workshop on Economic Performance 

Measures, GAO-05-796SP (Washington, D.C.: July 18, 2005).
Page 11 GAO-05-939T 

there are also challenges to effectively implementing retrospective 

evaluations. For example, we previously identified some of the difficulties 

regulatory agencies face in demonstrating the results of their work, such as 

identifying and collecting the data needed to demonstrate results, the 

diverse and complex factors that affect agencies’ results (for example, the 

need to achieve results through the actions of third parties), and the long 

time period required to see results in some areas of federal regulation.23 

There is also a potential balance concern because, as I noted earlier, it may 

be more difficult to quantify the benefits of regulations than it is to quantify 

the costs.

Finally, I want to emphasize that this is a particularly timely point to be 

reviewing the regulatory process because of the long-term fiscal imbalance 

facing the United States, along with other significant trends and challenges. 

The 21st century challenges that we have been highlighting this year 

establish the case for change and the need to reexamine the base of the 

federal government and all of its existing programs, policies, functions, and 

activities. We recognize that a successful reexamination of the base of the 

federal government will entail multiple approaches over a period of years. 

No single approach or reform can address all of the questions and program 

areas that need to be revisited. However, federal regulation is a critical tool 

of government, and regulatory programs play a key part in how the federal 

government addresses many of the country’s needs. Asking the questions 

necessary to begin reexamining the federal regulatory process is an 

important first step in the long-term effort to transform what the federal 

government does and how it does it.

Madam Chairman, this concludes my prepared statement. Once again, I 

appreciate the opportunity to testify on these important issues. I would be 

pleased to address any questions you or other members of the 

subcommittee might have at this time. 

If additional information is needed regarding this testimony, please contact 

J. Christopher Mihm, Managing Director, Strategic Issues, at (202) 512-6806 

or mihmj@gao.gov. 

23GAO, Managing for Results: Regulatory Agencies Identified Significant Barriers to 

Focusing on Results, GAO/GGD-97-83 (Washington, D.C.: June 24, 1997).
Page 12 GAO-05-939T 

Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980 ApendxiI

Congresses and Presidents have taken a number of actions to refine and 

reform the regulatory process within the past 25 years. The following 

paragraphs summarize the general purpose, applicability, and requirements 

imposed by some of those regulatory reform initiatives.

Paperwork Reduction Act 

(PRA) 

PRA1 was originally enacted in 1980, then amended in 1986 and 1995.2 PRA 

requires agencies to justify any collection of information from the public in 

order to minimize the paperwork burden they impose and to maximize the 

practical utility of the information collected.3

 The Act applies to 

independent and nonindependent regulatory agencies. Under PRA, 

agencies are required to submit all proposed information collections to the 

Office of Management and Budget (OMB) for approval. In their 

submissions, agencies must establish the need and intended use of the 

information, estimate the burden that the collection will impose on 

respondents, and show that the collection is the least burdensome way to 

gather the information. 

PRA also established the Office of Information and Regulatory Affairs 

(OIRA) within OMB to provide central agency leadership and oversight of 

government efforts to reduce unnecessary paperwork and improve the 

management of information resources. Subsequent reform initiatives, 

including amendments of PRA, have added responsibilities for OIRA, such 

as making the office responsible for overseeing and reporting on agencies’ 

compliance with new regulatory requirements. PRA of 1995, for example, 

included a requirement that OIRA, in consultation with agency heads, set 

annual governmentwide goals for the reduction of information collection 

burdens.

1

44 U.S.C. §§ 3501-3520.

2

PRA was originally enacted into law in 1980, Pub. L. No. 96-511, 94 Stat. 2812 (Dec. 11, 

1980). It was reauthorized with minor amendments in 1986, Pub. L. No. 99-591, 100 Stat. 3341 

(Oct. 30, 1986) and was reauthorized a second time with more significant changes in 1995, 

Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995). 

3

PRA generally defines a “collection of information” as the obtaining or disclosure of facts 

or opinions by or for an agency from 10 or more nonfederal persons. 44 U.S.C. § 3502(3). 

Many information collections, recordkeeping requirements, and third-party disclosures are 

contained in or are authorized by regulations as monitoring or enforcement tools, while 

others appear in separate written questionnaires. 
Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980

Page 13 GAO-05-939T 

Regulatory Flexibility Act of 

1980 (RFA) and Small 

Business Regulatory 

Enforcement Fairness Act 

(SBREFA) 

RFA4 was enacted in response to concerns about the effect that federal 

regulations can have on small entities. RFA requires independent and 

nonindependent regulatory agencies to assess the impact of their rules on 

“small entities,” defined as including small businesses, small governmental 

jurisdictions, and certain small not-for-profit organizations. Under RFA an 

agency must prepare an initial regulatory flexibility analysis at the time 

proposed rules are issued unless the head of the agency determines that the 

proposed rule would not have a “significant economic impact upon a 

substantial number of small entities.” The Act also requires agencies to 

ensure that small entities have an opportunity to participate in the rulemaking process and requires the Chief Counsel of the Small Business 

Administration’s Office of Advocacy to monitor agencies’ compliance. 

Further, Section 610 of RFA requires agencies to review existing rules 

within 10 years of promulgation that have or will have a significant impact 

on small entities to determine whether they should be continued without 

change or amended or rescinded to minimize their impact on small entities.

Congress amended RFA in 1996 with SBREFA.5

 SBREFA made certain 

agency actions under RFA judicially reviewable. Other provisions in 

SBREFA added new requirements. For example, SBREFA requires 

agencies to develop one or more compliance guides for each final rule or 

group of related final rules for which the agency is required to prepare a 

regulatory flexibility analysis, and the Act requires agencies to provide 

small entities with some form of relief from civil monetary penalties. 

SBREFA also requires the Environmental Protection Agency and the 

Occupational Safety and Health Administration to convene advocacy 

review panels before publishing an initial regulatory flexibility analysis.

Unfunded Mandates Reform 

Act of 1995 (UMRA) 

UMRA6 was enacted to address concerns about federal statutes and 

regulations that require nonfederal parties to expend resources to achieve 

legislative goals without being provided funding to cover the costs. UMRA 

generates information about the nature and size of potential federal 

mandates but does not preclude the implementation of such mandates. 

UMRA applies to proposed federal mandates in both legislation and 

4

5 U.S.C. §§ 601-612.

5

5 U.S.C. § 601 note, 15 U.S.C. § 657. 

6

2 U.S.C. §§ 658-658(g), 1501-1571. 
Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980

Page 14 GAO-05-939T 

regulations, but it does not apply to rules published by independent 

regulatory agencies. With regard to the regulatory process, UMRA requires 

federal agencies to prepare written statements containing a “qualitative and 

quantitative assessment of the anticipated costs and benefits” for any rule 

for which a proposed rule was published that includes a federal mandate 

that may result in the expenditure of $100 million or more in any 1 year by 

state, local, and tribal governments in the aggregate, or by the private 

sector.7

 For such rules, agencies are to identify and consider a reasonable 

number of regulatory alternatives and from those select the least costly, 

most cost-effective, or least burdensome alternative that achieves the 

objectives of the rule (or explain why that alternative was not selected). 

UMRA also includes a consultation requirement that agencies develop a 

process to permit elected officers of state, local, and tribal governments (or 

their designees) to provide input in the development of regulatory 

proposals containing significant intergovernmental mandates. 

Congressional Review Act 

(CRA)

CRA8 was enacted as part of SBREFA in 1996 to better ensure that 

Congress has an opportunity to review, and possibly reject, rules before 

they become effective. CRA established expedited procedures by which 

members of Congress may disapprove agencies’ rules by introducing a 

resolution of disapproval that, if adopted by both Houses of Congress and 

signed by the President, can nullify an agency’s rule. CRA applies to rules 

issued by nonindependent and independent regulatory agencies. CRA 

requires agencies to file final rules with both Congress and GAO before the 

rules can become effective.9

 GAO’s role under CRA is to provide Congress 

with a report on each major rule (for example, rules with a $100 million 

impact on the economy) including GAO’s assessment of the issuing 

agency’s compliance with the procedural steps required by various acts and 

executive orders governing the rule-making process.10

7

The dollar thresholds in UMRA are in 1996 dollars and are adjusted annually for inflation.

8

5 U.S.C. §§ 801-808.

9

The joint resolution process has been used only once. In Pub. L. No. 107-5, 115 Stat. 7 

(Mar. 20, 2001) Congress disapproved the Department of Labor's rule on ergonomics.

10As of July 22, 2005, GAO has reviewed and reported to Congress on 576 rules under CRA.
Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980

Page 15 GAO-05-939T 

Government Paperwork 

Elimination Act (GPEA)

Congress enacted GPEA11 in 1998, and the Act promoted the expansion of a 

trend in the federal government toward using e-government applications to 

collect and disseminate information and forms. GPEA requires federal 

agencies to provide the public, when practicable, the option of submitting, 

maintaining, and disclosing required information—such as employment 

records, tax forms, and loan applications—electronically, instead of on 

paper. GPEA also requires agencies to guard the privacy and protect 

documents from being altered and encourages federal government use of a 

range of electronic signature alternatives when practicable.

Truth in Regulating Act 

(TIRA)

In 2000, Congress enacted TIRA12 to provide a mechanism for Congress to 

obtain more information about certain rules. TIRA contemplated a 3-year 

pilot project during which GAO would perform independent evaluations of 

“economically significant” agency rules when requested by a chairman or 

ranking member of a committee of jurisdiction of either House of 

Congress. The independent evaluation would include an evaluation of the 

agency’s analysis of the potential benefits, potential costs, and alternative 

approaches considered during the rule-making proceeding.13 Under TIRA, 

GAO was required to report on its evaluations within 180 calendar days 

after receiving a committee request. Section 6(b) of the Act, however, 

provided that the pilot project would continue only if, in each fiscal year, a 

specific annual appropriation was made. During the 3-year period 

contemplated for the pilot project, Congress did not enact any specific 

appropriation to cover TIRA evaluations, and the authority for the 3-year 

pilot project expired on January 15, 2004. Congress has considered 

reauthorizing TIRA, and we have strongly urged that any reauthorization of 

TIRA continue to contain language requiring a specific annual 

appropriation before we are required to undertake independent evaluations 

of major rule makings. We have also recommended that TIRA evaluations 

be conducted under a pilot project basis.

1144 U.S.C. §3504 note.

12Pub. L. No. 106-312, 114 Stat. 1248 (Oct. 17, 2000); 5 U.S.C. § 801 note.

13TIRA defines an “independent evaluation” as a “substantive evaluation of the agency’s 

data, methodology, and assumptions used in developing the economically significant rule, 

including - - (A) an explanation of how any strengths or weaknesses in those data, 

methodology, and assumptions support or detract from conclusions reached by the agency; 

and (B) the implications, if any, of those strengths or weaknesses for the rulemaking.” Pub. 

L. No. 106-312, §3(3).
Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980

Page 16 GAO-05-939T 

Information Quality Act 

(IQA)

Enacted in Section 515 of the Treasury and General Government 

Appropriations Act of 2001, the Information Quality Act14 directed OMB to 

issue governmentwide guidelines to ensure and maximize the quality, 

objectivity, utility, and integrity of information (including statistical 

information) disseminated by federal agencies. The Act requires OMB to 

issue guidelines directing all agencies to issue their own guidelines within 1 

year and to establish administrative mechanisms allowing affected persons 

to seek and obtain correction of information maintained and disseminated 

by the agency. The Act also requires agencies to report periodically to the 

Director of OMB on the number and nature of complaints received and how 

such complaints were handled by the agency.

E-Government Act The E-Government Act15 was intended to enhance the management and 

promotion of electronic government services and processes. With regard 

to the regulatory process, the Act requires agencies, to the extent 

practicable, to accept public comments on proposed rules by electronic 

means. The Act also requires agencies to ensure that publicly accessible 

federal Web sites contain electronic dockets for their proposed rules, 

including all comments submitted on the rules and other relevant 

materials. The E-Government Act also established an Office of Electronic 

Government within OMB, headed by an administrator appointed by the 

President.

Related Executive Orders 

and Initiatives

In addition to congressional regulatory reform initiatives enacted in 

statutes, it is important to also recognize the key role that presidential 

initiatives have in the regulatory process. Centralized review of agencies’ 

regulations within the Executive Office of the President has been part of 

the rule-making process for more than 30 years. The formal process by 

which OIRA currently reviews agencies’ proposed rules and final rules is 

essentially unchanged since Executive Order 12866 was issued in 1993.16 

Under Executive Order 12866, OIRA reviews significant proposed and final 

14IQA is also known as the Data Quality Act. Pub. L. No. 106-554 § 515, 114 Stat. 2763 

(Dec. 12, 2001).

1531 U.S.C. § 507, 40 U.S.C. § 11331, 44 U.S.C. §§ 3541-3549, 3601-3606. 

16Exec. Order No. 12866, 58 Fed. Reg. 51,735 (Sept. 30, 1993).
Appendix I

Summary of Regulatory Reform Initiatives 

Implemented since 1980

Page 17 GAO-05-939T 

rules from all agencies, other than independent regulatory agencies, before 

they are published in the Federal Register. 

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). Among other principles, the executive order 

encourages agencies to tailor regulations to impose the least burden on 

society needed to achieve the regulatory objectives. The executive order 

also established agency and OIRA responsibilities in the review of 

regulations, including transparency requirements. OIRA provides guidance 

to federal agencies on implementing the requirements of the executive 

order, such as guidance on preparing economic analyses required for 

significant rules. 

There are also other orders that impose requirements on agencies during 

rule making, such as Executive Order 13132 on federalism that requires 

agencies to prepare a federalism summary impact statement for actions 

that have federalism implications.17 Also, in January 2005, OMB published 

a final bulletin on peer review that establishes minimum standards for 

when peer review is required for scientific information, including stricter 

minimum standards for the peer review of “highly influential” scientific 

assessments, and the types of peer review that should be considered by 

agencies in different circumstances.18 The selection of an appropriate peer 

review mechanism is left to the agency’s discretion.

More detailed information about these various initiatives is available in the 

related GAO products listed at the end of this testimony.

17Exec. Order No. 13132, 64 Fed. Reg. 43,255 (Aug. 4, 1999).

1870 Fed. Reg. 2664 (Jan. 14, 2005).
Page 18 GAO-05-939T 

Related GAO Products

Economic Performance: Highlights of a Workshop on Economic 

Performance Measures. GAO-05-796SP. Washington, D.C.: July 2005.

Paperwork Reduction Act: New Approach May Be Needed to Reduce 

Government Burden on Public. GAO-05-424. Washington, D.C.: May 20, 

2005.

Unfunded Mandates: Views Vary About Reform Act’s Strengths, 

Weaknesses, and Options for Improvement. GAO-05-454. Washington, 

D.C.: March 31, 2005.

21st Century Challenges: Reexamining the Base of the Federal 

Government. GAO-05-325SP. Washington, D.C.: February 2005.

Electronic Government: Federal Agencies Have Made Progress 

Implementing the E-Government Act of 2002. GAO-05-12. Washington, 

D.C.: December 10, 2004.

Unfunded Mandates: Analysis of Reform Act Coverage. GAO-04-637. 

Washington, D.C.: May 12, 2004.

Paperwork Reduction Act: Agencies’ Paperwork Burden Estimates Due to 

Federal Actions Continue to Increase. GAO-04-676T. Washington, D.C.: 

April 20, 2004.

Rulemaking: OMB’s Role in Reviews of Agencies’ Draft Rules and the 

Transparency of Those Reviews. GAO-03-929. Washington, D.C.: 

September 22, 2003.

Electronic Rulemaking: Efforts to Facilitate Public Participation Can Be 

Improved. GAO-03-901. Washington, D.C.: September 17, 2003.

Civil Penalties: Agencies Unable to Fully Adjust Penalties for Inflation 

Under Current Law. GAO-03-409. Washington, D.C.: March 14, 2003.

Regulatory Flexibility Act: Clarification of Key Terms Still Needed. GAO02-491T. Washington, D.C.: March 6, 2002.

Regulatory Reform: Compliance Guide Requirement Has Had Little 

Effect on Agency Practices. GAO-02-172. Washington, D.C.: December 28, 

2001.
Related GAO Products

Page 19 GAO-05-939T 

Federal Rulemaking: Procedural and Analytical Requirements at OSHA 

and Other Agencies. GAO-01-852T. Washington, D.C.: June 14, 2001.

Regulatory Reform: Implementation of Selected Agencies’ Civil Penalties 

Relief Policies for Small Entities. GAO-01-280. Washington, D.C.: 

February 20, 2001.

Regulatory Flexibility Act: Implementation in EPA Program Offices and 

Proposed Lead Rule. GAO/GGD-00-193. Washington, D.C.: September 20, 

2000.

Electronic Government: Government Paperwork Elimination Act 

Presents Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.: 

September 15, 2000.

Regulatory Reform: Procedural and Analytical Requirements in Federal 

Rulemaking. GAO/T-GGD/OGC-00-157. Washington, D.C.: June 8, 2000.

Federalism: Previous Initiatives Have Little Effect on Agency 

Rulemaking. GAO/T-GGD-99-131. Washington, D.C.: June 30, 1999.

Regulatory Accounting: Analysis of OMB’s Reports on the Costs and 

Benefits of Federal Regulation. GAO/GGD-99-59. Washington, D.C.: 

April 20, 1999.

Regulatory Flexibility Act: Agencies’ Interpretations of Review 

Requirements Vary. GAO/GGD-99-55. Washington, D.C.: April 2, 1999.

Regulatory Burden: Some Agencies’ Claims Regarding Lack of 

Rulemaking Discretion Have Merit. GAO/GGD-99-20. Washington, D.C.: 

January 8, 1999.

Federal Rulemaking: Agencies Often Published Final Actions Without 

Proposed Rules. GAO/GGD-98-126. Washington, D.C.: August 31, 1998.

Regulatory Management: Implementation of Selected OMB 

Responsibilities Under the Paperwork Reduction Act. GAO/GGD-98-120. 

Washington, D.C.: July 9, 1998.

Regulatory Reform: Agencies Could Improve Development, 

Documentation, and Clarity of Regulatory Economic Analyses. 

GAO/RCED-98-142. Washington, D.C.: May 26, 1998.
Related GAO Products

Page 20 GAO-05-939T 

Regulatory Reform: Implementation of Small Business Advocacy Review 

Panel Requirements. GAO/GGD-98-36. Washington, D.C.: March 18, 1998.

Congressional Review Act: Implementation and Coordination. GAO/TOGC-98-38. Washington, D.C.: March 10, 1998.

Regulatory Reform: Agencies’ Section 610 Review Notices Often Did Not 

Meet Statutory Requirements. GAO/T-GGD-98-64. Washington, D.C.: 

February 12, 1998.

Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ 

Rulemaking Actions. GAO/GGD-98-30. Washington, D.C.: February 4, 1998.

Regulatory Reform: Changes Made to Agencies’ Rules Are Not Always 

Clearly Documented. GAO/GGD-98-31. Washington, D.C.: January 8, 1998.

Regulatory Reform: Agencies’ Efforts to Eliminate and Revise Rules Yield 

Mixed Results. GAO/GGD-98-3. Washington, D.C.: October 2, 1997.

Managing for Results: Regulatory Agencies Identified Significant 

Barriers to Focusing on Results. GAO-GGD-97-83. Washington, D.C.: 

June 24, 1997.

Regulatory Burden: Measurement Challenges and Concerns Raised by 

Select Companies. GAO/GGD-97-2. Washington, D.C.: November 18, 1996.

Regulatory Reform: Implementation of the Regulatory Review Executive 

Order. GAO/T-GGD-96-185. Washington, D.C.: September 25, 1996.

Regulatory Flexibility Act: Status of Agencies’ Compliance. GAO/GGD-94-

105. Washington, D.C.: April 27, 1994.

(450435)
What Participants Said

United States Government Accountability Office

Why GAO Convened This 

Workshop

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-796SP.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Nancy R. 

Kingsbury at (202) 512-2700 or 

kingsburyn@gao.gov. 

Highlights of GAO-05-796SP

July 2005

ECONOMIC PERFORMANCE 

Highlights of a Workshop on Economic 

Performance Measures 

Workshop participants identified a number of issues regarding the use of 

economic performance analysis—benefit-cost or cost-effectiveness 

analysis—in evaluating federal program performance. They generally said 

the following: 

• The quality of the economic performance assessment of federal 

programs has improved but is still highly variable and not sufficient to 

adequately inform decision makers. 

• The gaps in applying economic performance measures are that they are 

not widely used, mechanisms for revisiting a regulation or program are 

lacking, retrospective analyses are often not done, and homeland 

security regulations present additional challenges and typically do not 

include economic analysis. 

• Barriers include agencies’ lack of resources and only limited demand 

from decision makers for benefit-cost analysis. In addition, some 

participants stated that organizational barriers called stovepipes or silos 

hinder communication. 

• Some analytical issues that affect the application of economic 

performance measures are limited guidance on assessing unquantifiable 

benefits, equity, and distributional effects of federal actions; lack of 

agreement on some values for key assumptions; and lack of guidance on 

tools that do not monetize outcomes, such as multiobjective analysis. 

• Opportunities to expand the use of measures include evaluation of 

existing programs retrospectively and application to homeland security 

issues. 

• Ways to improve the general economic principles and guidance that 

economic performance analysis is based upon include developing a 

minimum set of principles and abbreviated guidelines for economic 

performance analysis, developing one-page summaries and scorecards of

analysis results, standardizing some key values for assumptions, and 

creating an independent and flexible organization to provide guidance 

and develop standards. 

Improving the economy and 

efficiency of federal programs has 

long been a key objective of the 

Government Accountability Office 

(GAO). To this end, GAO held a 

workshop on December 17, 2004, 

to discuss the use of economic 

analysis, such as benefit cost or 

cost effectiveness, for helping to 

measure the performance of 

federal programs. The workshop’s 

purpose was to 

• discuss the present state of 

economic performance 

measures and identify gaps in 

their application and the 

barriers and analytical issues 

that limit their use in helping 

assess the performance of 

federal programs and 

• identify opportunities for the 

federal government and 

professional and academic 

institutions to improve (1) the 

use of economic performance 

measures for evaluating 

federal programs and 

(2) the general economic 

principles and guidance on 

which economic performance 

analysis is based. 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-424.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Koontz at 

(202) 512-6240 or koontzl@gao.gov. 

Highlights of GAO-05-424, a report to 

congressional requesters 

May 2005

PAPERWORK REDUCTION ACT

New Approach May Be Needed to Reduce 

Government Burden on Public 

Governmentwide, agency CIOs generally reviewed information collections 

and certified that they met the standards in the act. However, GAO’s analysis 

of 12 case studies at the Internal Revenue Service (IRS) and the Departments 

of Veterans Affairs, Housing and Urban Development, and Labor showed 

that CIOs certified collections even though support was often missing or 

partial (see table). For example, in nine of the case studies, agencies did not 

provide support, as the law requires, for the standard that the collection was 

developed by an office with a plan and resources to use the information 

effectively. Because OMB instructions do not ask explicitly for this support, 

agencies generally did not address it. Further, although the law requires 

agencies both to publish notices in the Federal Register and to otherwise 

consult with the public, agencies governmentwide generally limited 

consultation to the publication of notices, which generated little public 

comment. Without appropriate support and public consultation, agencies 

have reduced assurance that collections satisfy the standards in the act. 

Processes outside the PRA review process, which are more rigorous and 

involve greater public outreach, have been set up by IRS and the 

Environmental Protection Agency (EPA), whose missions involve numerous 

information collections and whose management is focused on minimizing 

burden. For example, each year, IRS subjects a few forms to highly detailed, 

in-depth analyses, including extensive outreach to the public affected and 

the information users. IRS reports that this process—performed on forms 

that have undergone CIO review and received OMB approval—has reduced 

burden by over 200 million hours since 2002. In contrast, for the 12 case 

studies, the CIO review process did not reduce burden. Without rigorous 

evaluative processes, agencies are unlikely to achieve the PRA goal of 

minimizing burden while maximizing utility. 

Support Provided by Agencies for Paperwork Reduction Act Standards in 12 Case Studies 

 Support provided 

Standards: The information collection— Totala

Yes Partial No

Is necessary for the proper performance of agency functions. 12 6 60

Avoids unnecessary duplication. 11 2 27

Reduces burden on the public, including small entities. 12 5 70

Uses language that is understandable to respondents. 12 1 0 11

Will be compatible with respondents’ recordkeeping practices. 12 3 09

Indicates period for which records must be retained. 6 3 30

Gives required information (e.g., whether response is mandatory). 12 4 80

Was developed by an office with necessary plan and resources. 11 2 09

Uses appropriate statistical survey methodology (if applicable). 1 1 00

Makes appropriate use of information technology. 12 8 40

Total 101 35 30 36

Source: Paperwork Reduction Act, Pub. L. 104-13, 109 Stat. 173-4, sec. 3506(c)(3). 

a

The total is not always 12 because not all certifications applied to all collections. 

Americans spend billions of hours 

each year providing information to 

federal agencies by filling out 

information collections (forms, 

surveys, or questionnaires). A 

major aim of the Paperwork 

Reduction Act (PRA) is to balance 

the burden of these collections 

with their public benefit. Under the 

act, agencies’ Chief Information 

Officers (CIO) are responsible for 

reviewing information collections 

before they are submitted to the 

Office of Management and Budget 

(OMB) for approval. As part of this 

review, CIOs must certify that the 

collections meet 10 standards set 

forth in the act (see table). 

GAO was asked to assess, among 

other things, this review and 

certification process, including 

agencies’ efforts to consult with the 

public. To do this, GAO reviewed a 

governmentwide sample of 

collections, reviewed processes 

and collections at four agencies 

that account for a large proportion 

of burden, and performed case 

studies of 12 approved collections. 

What GAO Recommends

GAO recommends that OMB and 

the agencies take steps to improve 

review processes and compliance 

with the act. Also, the Congress 

may wish to consider mandating 

pilot projects to target some 

collections for rigorous analysis 

that includes public outreach. In 

commenting on a draft of this 

report, OMB and the agencies 

agreed with parts of the report and 

disagreed with others. 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-454.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Orice M. 

Williams at (202) 512-5837, or 

williamso@gao.gov. 

Highlights of GAO-05-454, a report to the 

Chairman, Subcommittee on Oversight of 

Government Management, the Federal 

Workforce and the District of Columbia, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

March 2005

UNFUNDED MANDATES 

Views Vary About Reform Act’s 

Strengths, Weaknesses, and Options 

for Improvement 

The parties GAO contacted provided a significant number of comments 

about UMRA, specifically, and federal mandates, generally. Their views often 

varied across and within the five sectors we identified (academic/think tank, 

public interest advocacy, business, federal agencies, and state and local 

governments). Overall, the numerous strengths, weaknesses and options for 

improvement identified during the review fell into several broad themes, 

including UMRA-specific issues such as coverage and enforcement, among 

others, and more general issues about the design, funding, and evaluation of 

federal mandates. First, UMRA coverage was, by far, the most frequently 

cited issue by parties from the various sectors. Parties across most sectors 

that provided comments said UMRA’s numerous definitions, exclusions, and 

exceptions leave out many federal actions that may significantly impact 

nonfederal entities and should be revisited. Among the most commonly 

suggested options were to expand UMRA’s coverage to include a broader set 

of actions by limiting the various exclusions and exceptions and lowering 

the cost thresholds, which would make more federal actions mandates under

UMRA. However, a few parties, primarily from the public interest advocacy 

sector, viewed UMRA’s narrow coverage as a strength that should be 

maintained. 

Second, parties from various sectors also raised a number of issues about 

federal mandates in general. In particular, they had strong views about the 

need for better evaluation and research of federal mandates and more 

complete estimates of both the direct and indirect costs of mandates on 

nonfederal entities. The most frequently suggested option to address these 

issues was more post-implementation evaluation of existing mandates or 

“look backs.” Such evaluations of the actual performance of mandates could 

enable policymakers to better understand mandates’ benefits, impacts and 

costs among other issues. In turn, developing such evaluation information 

could lead to the adjustment of existing mandate programs in terms of 

design and/or funding , perhaps resulting in more effective or efficient 

programs. 

Going forward, the issue of unfunded mandates raises broader questions 

about assigning fiscal responsibilities within our federal system. Federal and 

state governments face serious fiscal challenges both in the short and longer 

term. As GAO reported in its February 2005 report entitled 21st Century 

Challenges: Reexamining the Base of the Federal Government 

(GAO-05-325SP), the long-term fiscal challenges facing the federal budget 

and numerous other geopolitical changes challenging the continued 

relevance of existing programs and priorities warrant a national debate to 

review what the government does, how it does business and how it finances 

its priorities. Such a reexamination includes considering how responsibilities 

for financing public services are allocated and shared across the many 

nonfederal entities in the U.S. system as well. 

The Unfunded Mandates Reform 

Act of 1995 (UMRA) was enacted to

address concerns about federal 

statutes and regulations that 

require nonfederal parties to 

expend resources to achieve 

legislative goals without being 

provided federal funding to cover 

the costs. UMRA generates 

information about the nature and 

size of potential federal mandates 

on nonfederal entities to assist 

Congress and agency decision 

makers in their consideration of 

proposed legislation and 

regulations. However, it does not 

preclude the implementation of 

such mandates. 

At various times in its 10-year 

history, Congress has considered 

legislation to amend various 

aspects of the act to address 

ongoing questions about its 

effectiveness. Most recently, GAO 

was asked to consult with a diverse 

group of parties familiar with the 

act and to report their views on 

(1) the significant strengths and 

weaknesses of UMRA as the 

framework for addressing mandate 

issues and (2) potential options for 

reinforcing the strengths or 

addressing the weaknesses. To 

address these objectives, we 

obtained information from 

52 organizations and individuals 

reflecting a diverse range of 

viewpoints. GAO analyzed the 

information acquired and organized 

it into broad themes for analytical 

and reporting purposes. 

GAO makes no recommendations 

in this report. 
www.gao.gov/cgi-bin/getrpt?GAO-05-12.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda D. 

Koontz at (202) 512-6240 or 

koontzl@gao.gov. 

Highlights of GAO-05-12, a report to 

congressional requesters 

December 2004

ELECTRONIC GOVERNMENT 

Federal Agencies Have Made Progress 

Implementing the E-Government Act of 

2002 

The E-Government Act (E-Gov Act) 

of 2002 was enacted to promote the 

use of the Internet and other 

information technologies to 

improve government services for 

citizens, internal government 

operations, and opportunities for 

citizen participation in government. 

The act directs the Office of 

Management and Budget (OMB) 

and federal agencies to take 

specific actions to promote 

electronic government. GAO was 

asked to review the 

implementation status of major 

provisions from Titles I and II of 

the act, which include provisions 

covering a wide range of activities 

across the federal government. 

GAO is making recommendations 

to OMB regarding implementation 

of the act in the areas of 

e-government approaches to crisis 

preparedness, contractor 

innovation, and federally funded 

research and development, to help 

ensure that the act’s objectives are 

achieved. 

In commenting on a draft of this 

report, officials from the 

Department of Homeland Security, 

General Services Administration, 

and OMB generally agreed with its 

content and recommendations. 

In most cases, OMB and federal agencies have taken positive steps toward 

implementing provisions of Titles I and II of the E-Gov Act that GAO 

reviewed. For example, OMB established the Office of E-Government, 

designated its Assistant Director for Information Technology (IT) and 

E-Government as the office’s Administrator in April 2003, and published 

guidance to federal agencies on implementing the act in August 2003. Apart 

from general requirements applicable to all agencies (which GAO did not 

review), in most cases, OMB and designated federal agencies have taken 

action to address the act’s requirements within stipulated time frames. For 

example, OMB established the Interagency Committee on Government 

Information in June 2003, within the deadline prescribed by the act. The 

committee is to develop recommendations on the categorization of 

government information and public access to electronic information. 

Similarly, in most cases where deadlines are not specified, OMB and 

designated federal agencies have either fully implemented the provisions or 

demonstrated positive action toward implementation. For example, in May 

2003, the E-Government Administrator issued a memorandum detailing 

procedures for requesting funds from the E-Government Fund, although the 

act did not specify a deadline for this action. As stipulated by the act, the 

E-Government Fund is to be used to support projects that enable the federal 

government to expand its ability to conduct activities electronically. 

Although the government has made progress in implementing the act, the 

act’s requirements have not always been fully addressed. In several cases, 

actions taken do not satisfy the requirements of the act or no significant 

action has been taken. In particular, OMB has not ensured that specified 

activities have taken place regarding e-government approaches to crisis 

preparedness (a study and follow-up response), contractor innovation 

(establishment of a program), and federally funded research and 

development (support of an information repository and Web site). In these 

cases, either the actions OMB has taken do not fully address the act’s 

provisions, or OMB has not yet made key decisions that would allow actions 

to take place. Until these issues are addressed, the government may be at 

risk of not fully achieving the objective of the E-Government Act to promote 

better use of the Internet and other information technologies to improve 

government services and enhance opportunities for citizen participation in 

government. 
www.gao.gov/cgi-bin/getrpt?GAO-04-637.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Patricia A. 

Dalton at (202) 512-6806 or 

daltonp@gao.gov. 

Highlights of GAO-04-637, a report to the 

Chairman, Senate Subcommittee on 

Oversight of Government Management, 

the Federal Workforce, and the District of 

Columbia 

May 2004

UNFUNDED MANDATES 

Analysis of Reform Act Coverage 

UMRA generally requires congressional committees and the Congressional 

Budget Office (CBO) to identify and estimate the costs of federal mandates 

contained in proposed legislation and federal agencies to do so for federal 

mandates contained in their rules. Identification of mandates is a complex 

process with multiple definitions, exclusions, and cost thresholds. Also, 

some legislation and rules may be enacted or issued via procedures that do 

not trigger UMRA reviews. 

In 2001 and 2002, 5 of 377 statutes enacted and 9 of 122 major or 

economically significant final rules issued were identified as containing 

federal mandates at or above UMRA’s thresholds. Of the other federal 

actions in those 2 years, at least 43 statutes and 65 rules contained new 

requirements on nonfederal parties that might be perceived as “unfunded 

mandates.” For 24 of those statutes and 26 of those rules, CBO or federal 

agencies had determined that the estimated direct costs or expenditures 

would not meet or exceed applicable thresholds. For the remaining 

examples of statues, most often UMRA did not require a CBO review prior to 

their enactment. The remaining rules most often did not trigger UMRA 

because they were issued by independent regulatory agencies. Despite the 

determinations made under UMRA, some statutes and rules not triggering 

UMRA’s thresholds appeared to have potential financial impacts on affected 

nonfederal parties similar to those of the actions that were identified as 

containing mandates at or above the act’s thresholds. 

Proposed Legislation Must Pass Multiple Steps to Be Identified as Containing Federal 

Mandates at or Above UMRA’s Cost Thresholds 

Provision is an enforceable duty on state, local, or tribal governments or the 

private sector, and it is not an UMRA exception.

Direct cost estimate is feasible.

Direct cost estimate for all provisions in legislation meets or 

exceeds threshold.

Provision is contained in authorizing legislation reported by an authorizing committee and 

not added after initial CBO UMRA review.

Automatic CBO Review

Provision is not one of seven UMRA exclusions.

Source: GAO. 

The Unfunded Mandates Reform 

Act of 1995 (UMRA) was enacted to

address concerns about federal 

statutes and rules that require 

state, local, and tribal governments 

or the private sector to expend 

resources to achieve legislative 

goals. UMRA generates 

information about the nature and 

size of potential federal mandates 

to assist Congress and agency 

decision makers in their 

consideration of proposed 

legislation and rules. However, 

concerns about actual or perceived 

federal mandates continue. To 

provide information and analysis 

regarding UMRA’s implementation, 

GAO was asked to (1) describe the 

applicable procedures, definitions, 

and exclusions under UMRA for 

identifying federal mandates in 

statutes and rules, (2) identify 

statutes and final rules that 

contained federal mandates under 

UMRA, and (3) provide examples 

of statutes and final rules that were 

not identified as federal mandates, 

but that affected parties might 

perceive as “unfunded mandates,” 

and the reasons these statutes and 

rules were not federal mandates 

under UMRA. GAO focused on 

statutes enacted and final rules 

issued in 2001 and 2002 to address 

the second and third objectives. 
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 OIRA’s 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 office’s role 

in the rulemaking process—from “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 

Agency’s rules were most often significantly changed, and almost all of the 

returned rules were from the Department of Transportation. OIRA’s 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 OIRA’s recommendations were similar to those of the outside parties, 

but we could not determine whether those contacts influenced OIRA’s actions. 

The agencies’ docket files did not always provide clear and complete 

documentation of the changes made during OIRA’s review or at OIRA’s 

suggestion, as required by the executive order. However, some agencies clearly 

documented these changes, sometimes including changes suggested during 

OIRA’s 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. OIRA’s 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). 

Under Executive Order 12866, the 

Office of Management and Budget’s 

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 

OIRA’s 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 

OIRA’s suggestion, and (3) describe 

how OIRA decided that certain 

existing rules merited high priority 

review. 

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 OIRA’s 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 

agency’s existing level of 

transparency. 

www.gao.gov/cgi-bin/getrpt?GAO-03-929.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Victor 

Rezendes at (202) 512-6806, or 

rezendesv@gao.gov. 

Highlights of GAO-03-929, a report to 

congressional requesters 

September 2003

RULEMAKING

OMB’s Role in Reviews of Agencies’ Draft 

Rules and the Transparency of Those 

Reviews 
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