Questions on the Administration's Global Climate Change Policy Actions

IMPLEMENTATION WITHOUT RATIFICATION

“We have no intention through the back door or anything else. without Senate
confirmation, of trying to impose or take any steps to impose what would be
binding restrictions on our companies, on our industry, on our business, on our
agriculture, on our comerce, or on our country, until and unless, the Senate of
the United States says so.”

Statement of the Honorable Stuart E. Eizenstat

Under Secretary of State for Economic, Business, and
Agricultural Affairs

Before the U.S. Senate Committee on Foreign Relations,
February 1998

“Whether there is an agreement in Kyoto or not, the United States is prepared,
under President Clinton's leadership, to unilaterally take steps that we believe
should be taken in order to deal with this problem.”

Statement of Vice President Gore
December 1997

Unilateral Executive Actions on a Global Issue.

1. Given that the Kyoto Protocol seeks to address a global issue, isn’t it harmful to U.S.
interests to proceed without the full participation of developing countries?

2. Besides being unconstitutional, isn’t it also premature and possibly counterproductive for
the United States to take unilateral executive branch action, without ratification, when the
Administration has characterized the Protocol as a “work in progress”?

A Budget Request without Justification or Ratification,

3. How can the Administration claim that its proposed Climate Change Technology
Initiative (CCTD is not intended to implement the Kyoto Protocol, when this initiative has been
made an integral part of the President's Global Climate Change Initiative, and the initiative is
specifically designed to alter market behavior in furtherance of the treaty's emissions reductions
targets?

4a. "In ahearing before the Senate Foreign Relations Committee on February 11, 1998, Under
Secretary of State Eizenstat testified that the tax incentives and research funding that the

President requested in his Fiscal Year (FY) 1999 Budget proposal are necessary to place the U.S.
in a “position where we will be further down the road and won't have to make the kind of drastic


123

Question 94. Since the Secretary did not request funds for climate change and since HUD says
that PATH is not a global warming program, why does the President's initiative request $10
million for HUD's PATH program for climate change?

efficiency of our Nation's housing is a core component of PATH’s overall strategic mission.
However, PATH’s mission — defined in response to input from the home building industry and
from PATH’s Federal agency partners -- extends well beyond energy concerns to address a full
range of issues of housing affordability, durability, performance, and quality. These issues are of
direct concem to the builders, developers, and product manufacturers who make up PATH’s core
constituency.

Because the PATH program will, if successful, substantially reduce energy consumption, the
Administration considers it to be a component of the President's overall climate change
technology strategy. However, in addition to improving the energy efficiency of homes, PATH
seeks to enhance affordability, durability, safety, and comfort. This is the broader missions
embraced by PATH’s industry partners, a mission fully consistent with HUD's ongoing effort to
expand homeownership and affordable housing opportunities.

Question 10. The Chief Counsel for Special Matters replied for the Department of Commerce
that “The NIST mission does not specifically include efforts to study the global climate:
however, its laboratories have performed standards and measurement research to improve
climate observations, improve energy efficiency, and identify greenhouse gas alternatives”
(emphasis added).

Question 10A. Since Commerce did not receive prior funding from FY 93 through FY 98 under
the Climate Change Action Plan and is newly included in CCTI for FY 99, under what authority
is NIST requesting its share of the CCTI funding and is this request consistent with NIST’s
Principal statutory mission?

Response. NIST’s portion of the Climate Change Technology Initiative would fund NIST
research and development yielding basic scientific measurements and data on emerging
technologies and materials that hold potential for reducing greenhouse gas emissions. Such
activities are entirely consistent with NIST's existing statutory authority under 15 U.S.C. 272-
273, NIST has broad authority to assist in the development of new or improved industrial
technologies; develop measurement and testing methods; study physical constants and
Properties; and invent new measurement devices that serve national needs. In conducting this
work and disseminating its results, NIST may work with Federal agencies, the private sector,
state and local government, educational institutions, and other organizations interested in
‘manufacturing, standards, or measurement. The relevant sections of 15 U.S.C 272-273 are
shown below.



25

Mr. McINTOsH. Thank you for that summary, Mr. DeSeve. Let
me start with the last point you made. We may have responses, but
they are not responsive and I understand that we still have not re-
ceived from OMB a statement that we have received all of the doc-
uments that are relevant to those inquiries. Is that correct?

Mr. DESEVE. I believe you sent us an additional letter, I am
going to say it was May 27, it might have been May 29. We're in
the process of responding to that letter right now, where you asked
for additional information.

Mr. McINTOSH. My understanding is that the letter clarified that
the earlier response was not adequate on the initial request and we
still haven't received all of the documents. When will we receive
those?

Mr. DESEVE. The only documents I know of that you have not
received were those that were by OMB and CEQ deemed to be re-
lated to White House affairs and they are with the general counsel
of the White House, Chuck Ruff. You'll have to ask him about the
timing of those. They are not within our possession.

Mr. MCINTOSH. You don’t have a copy of those?

Mr. DESEVE. I don’t have a copy of those. I don’t run the legisla-
tive clearance process. All of the documents that we had in our files
that were deemed relevant were, as I understand it, were turned
over to counsel. I don’t have a copy of those documents myself.

Mr. McINTOSH. OMB does not?

Mr. DESEVE. I don’t know the answer to that.

Mr. McInTosH. OK, I’d like to know that since, if we don’t re-
ceive them, we'll be requesting a subpoena from Chairman Burton
and we'll need to know who to address it to.

Mr. DESEVE. We'll certainly answer that question for the record.

Mr. McINTOSH. Are you saying that the White House counsel is
asserting executive privilege with respect to those?

Mr. DESEVE. That’s not my understanding, but you’d have to talk
to the White House counsel.

Mr. MCINTOSH. As I understand it, unless they are planning to
do that, we’re insisting they send the documents, so it’s just an-
other stall tactic.

Mr. DESEVE. I think it is appropriate to ask the White House
counsel that question.

Mr. McINTOSH. We would like to know if you have copies of
those. With respect to the budget on the global climate change, my
staff has identified and told me about several errors that they’ve
worked with OMB on. For example, the differences between the
published tables on the science and technology chapter and the en-
vironment chapter for the requested climate change funding. How
is it that OMB expects us to fund these programs when the pub-
lished information is not accurate?

Mr. DESEvE. I’m not familiar with the question you raise, I’m

sorry.

Mr. McINTOsH. OK. There are two different numbers there and
the resolution was that one of them was closed out and they
wouldn’t correct it before they printed the budget. What’s being
done to make sure that the numbers are accurate on the budget
justifications?


149

nose writzen cocuments tai ere ceneratec in the course of deliverations on a
regulatory issue are pre-decisional and deliberative in nature. Disclosure of these
communications wouid diminish the candor of those participating in the process and
‘eretore injure the quality of agency decision making. It is Administration policy
at these tyoes of communications are not disclosed except in extreordinary
circumstances. However, if the subcommittee has specific questions concerning
particular regulatory issues, the Council will seek to provide resgonsive information.

When the Council reviews regulations and receives communications from outside
parties during that review, are the factual communications inctuded in the rulemaking
docket? Are the Council’s own comments to the regulatory agency included in the
docket? If not, why not?

It should be emphasized that the Council itself does not engage in rulemaking.
Insxead, it assists in the coordination af the Administration’s review of regulations
being promuigated by Executive Branch agencies and departments. The agencies
and depariments invoived retain the statutory responsibility for making their decisions
based uoon the record that is developed. Tne Council works with them to ensure
comoliance witn ail of the relevant provisions of the Administrative Procedure Act
what are required for implementing regulations. Where meetings with outside parties
are invoived as a result of the Vice President‘s policy to be availeole to ail members
of the public wna wish ta communicate with him or his stat on poiicy matters,
Council stati is evailabie to work with the agency. This neios ensure that the rules
issued by the agency are bDesed on information and data placed in the rulemaking
docket where required as of the cate of promuigation.

to invite the rulemaking agency to all meetings that OMB staff has

OMB’s practice ii
ice? If not, why not?

with outside interests. Does the Council follow this pra

‘Ne aractice of :ne Council is <0 invite staff of the suiemaking agency to participate
in getiberations when the acency has an interest in tne reguiatory agency being
ciscussed. When Council stat mests with persons outside of government, they may
or may not invite rearesentatives from various agencies. Agency representatives
may not be invited on some occasions simply because it would be inconvenient or
inapprooriate. This practice is consistent with the general poiicy foilowed for ail
meetings in the Office of the Vice President.



COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Mlinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
CHRISTOPHER COX, California EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN M. McHUGH, New York GARY A. CONDIT, California
STEPHEN HORN, California CAROLYN B. MALONEY, New York
JOHN L. MICA, Florida THOMAS M. BARRETT, Wisconsin
THOMAS M. DAVIS, Virgini ELEANOR HOLMES NORTON, Washington,
DAVID M. McINTOSH, India DC
MARK E. SOUDER, Indiana CHAKA FATTAH, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
JOHN B. SHADEGG, Arizona DENNIS J. KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
L “MARK” SANFORD, South DANNY K. DAVIS, Illinois

Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MICHAEL PAPPAS, New Jersey HAROLD E. FORD, Jr., Tennessee
VINCE SNOWBARGER, Kansas —
BOB BARR, Georgia BERNARD SANDERS, Vermont
DAN MILLER, Florida (Independent)

RON LEWIS, Kentucky
Kevin BINGER, Staff Director
Dantet R. MOLL, Deputy Staff Director
Davip A. Kass, Deputy Counsel and Parliamentarian
dupitH McCoy, Chief Clerk
PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND
REGULATORY AFFAIRS

DAVID M. MCINTOSH, Indiana, Chairman

JOHN E. SUNUNU, New Hampshire JOHN F. TIERNEY, Massachusetts
J. DENNIS HASTERT, Illinois BERNARD SANDERS, Vermont
JOE SCARBOROUGH, Florida HAROLD E. FORD, JRr., Tennessee
JOHN B. SHADEGG, Arizona PAUL E. KANJORSKI, Pennsylvania
STEVEN C. LATOURETTE, Ohio GARY A. CONDIT, California
VINCE SNOWBARGER, Kansas CHAKA FATTAH, Pennsylvania
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
PETE SESSIONS, Texas

Ex OFFICIO
DAN BURTON, Indiana HENRY A. WAXMAN, California

MILDRED WEBBER, Staff Director
SEAN CUNNINGHAM, Counsel
BARBARA KAHLOW, Professional Staff Member
ANDREW WILDER, Clerk
ELIZABETH MUNDINGER, Minority Counsel

ap


119

response to the May 27, 1998, letter. While we believe that the information we have provided
fully justifies the President's FY 1999 Budget, we expect to have improved measures in the FY
2000 Budget.

Question 2D. Since the agencies do not have data for the 1990 base year, what is OMB doing to
ensure that data are available for the 1990 base year for each of the government-wide and
agency-specific program performance measures?

Response. We will be working with the Department of Energy and the Environmental Protection
‘Agency in the coming year to develop more comprehensive performance information for the
‘climate change initiative. In the interim, the U.S. Climate Action Report -- 1997, is the best
‘evaluation of the progress made to date in reducing greenhouse gas emissions to 1990 levels by
the year 2000 through the programs in the President's Climate Change Action Plan.

Question 3. OMB has yet to answer fully our March requests regarding the President's requests
for FY 99 funding for climate change. For example, OMB has still not answered our request for
historical budget authority for climate change programs that are not part of the $6.3 billion that
the President has identified as the Climate Change Technology Initiative (CCT, such as part of
the $1.9 billion U.S. Global Change Rescarch Program.

Question 3A. Why has OMB been unable and/or unwilling for over 3 months to provide
‘complete answers to our legitimate oversight questions?

‘Response. OMB has responded in good faith to the Subcommittee’s numerous requests for
funding information on climate change through three separate letters, We regret that even with
all of the time and effort OMB has devoted to providing the Subcommittee with information, you
do not consider our responses to be adequate. OMB has used very considerable time and
resources responding to the Committees requests.

Question 3B. When will Congress receive complete replies so that we can fully evaluate the
President's requested funding for climate change, including not only CCTI but also other
requested funding for climate change, some of which are very substantial, such as the Agency for
International Development (AID), which is requesting $250 million in FY 99 for grants,
contracts, loans and loan guarantees for climate change activities? This amount even exceeds the
$205 million requested for EPA.

Besponse. OMB has provided the Subcommittee through three separate letters budget
information related to climate change programs that is in our possession. We understand that
many agencies with climate change programs, like AID, have also provided the Subcommittee
‘with budget information. We hope that the Subcommittee can appreciate the amount of work at
‘OMB and the agencies that is going into providing it with the volumes of budget information

3


68

10

39a, Even assuming that effective rules and procedures can be developed for an international
emissions trading system and for joint implementation projects and that key developing countries
agree to participate, isn't there a real risk that these mechanisms could effect an enormous
transfer of wealth and jobs out of this country overseas, especially to the countries of the former
Soviet Union and emerging countries (ic., that this system would be essentially a foreign aid
program)? Some studies have estimated that more than 50% of our reductions would have to be
purchased from other countries.

39b. Please provide and document estimates of the percentage of U.S. emissions
reductions that might have to be purchased from other countries to minimize the costs of
reducing emissions and which countries likely would be the beneficiaries.


152

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ioe career son “ONE HUNDRED FIFTH CONGRESS

Saas «=» Congress of the United States

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June 16, 1998

‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs
B-377 Rayburn House Office Building
‘Washington, DC 20515

Dear Chairman McIntosh

Lam writing in response to your June 5, 1998, letter. I regret that you did not address my
main point, which is that the Council of Economic Advisors under this Administration has been
‘much more responsive to requests for information than the Council on Competitiveness was under
the Bush Administration.

Moreover, you are simply wrong when you assert that the documents made available by
CEA to the Subcommittee on Energy and Power are not responsive to your Subcommittee’s
request. While itis trie that you have asked for some information not provided to the
‘Subcommittee on Energy and Power. the fact is that there is substantial overlap between the
information you seek and the information sought and provided to the Energy and Power
Subcommittee - and made available to you. For example, the Subcommittee on Energy and
Power requested analysis and documentation that supported Dr. Yellen's testimony regarding the
‘cost of complying with the Kyoto Protocol. Similarly, the main thrust of your request is for back-
‘up and documentation of the economic conclusions reached by CEA.

On May 18, 1998, CEA provided responses to questions 1-7 of your request and they are
continuing to respond to your Subcomumittee's request. It thus seems clear that their cooperative
fort stands in contrast to the precedent followed by the White House Coun on
Competitiveness during the Bush Administration
| incerely,
4
aye
Ranking Minority Member
cc; Members of the Subcommittee on National Economic Growth,
‘Natural Resources and Regulatory Affairs

10)


719

requests. Please provide the information requested in this letter not later than noon on Friday,
June 5, 1998 to the Subcommittee staff in Room B-377 Raybum House Office Building.

‘Thank you in advance for your attention to this request.
‘Sincerely,
i Montane
David M. McIntosh
Chairman
‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

ce: The Honorable Dan Burton
‘The Honorable John Tierney


15

distributed to OTRA staff to answer these questions and to share with agency staff if they so

desired. [ have attached a copy of each of these memoranda at the end of this written statement,

In addition, because OIRA does not review the regulations

sued by the independent
regulatory agencies under Executive Order 12866, OIRA had to design a process to determine
whether the final rule of an independent regulatory agency is “major” within the meaning of the
statute, Therefore, OIRA invited regulatory contacts from the independent regulatory agencies
(those not subject to Executive Order 12866 review) to a meeting on April 12, 1996, to discuss
OIRA’s April 2 memorandum and how they could best coordinate regarding OIRA’s
determination of “major.” After this meeting, the independent regulatory agencies began sending
OIRA summaries of their upcoming final regulations to allow OIRA to decide whether or not
these rules were “major.” Initially, there was a flurry of staff discussions. This process for the

“independents” has now become routine.

For those agencies whose regulations are subject to review under Executive Order 12866,
the OIRA Administrator asked OIRA staff to ensure that the agencies understood which rules
were “major.” The term, as defined in the statute, is similar, but not identical, to the category
covered under section 3(0)(1) of Executive Order 12866 for "economically significant” rules.
The statutory definition of “major” was taken from a predecessor Order, Executive Order 12291
(signed February 17, 1981, and revoked September 30, 1993). Accordingly, OIRA staff were
told to use the same interpretation that they had relied on when carrying out their regulatory

reviews under Executive Order 12291

It is now routine for OIRA to implement the CRA as it reviews rules under Executive
Order 12866. OIRA staff determine whether or not the draft rules should be considered “major”
in the course of their reviews. They also review the various analyses agencies perform to

determine whether they meet the appropriate standards,


128

Ouesti 0 -

. The National Science Foundation (NSF) volunteered that OMB deleted specific
Foding evel (5 iin) in is imended vp ts our pron Instead, the revised reply merely
stated “There are, however, some significant activities supported — at the National Center for
Atmospheric Research (NEAR) for example - which are directed exclusively at climate change,
that were not reported in the summary.”

Question 134. Why did OMB remove the specific funding level information?

Response. OMB did not remove specific finding level information. OMB staff work with
various offices in Federal agencies in clearing material for release to Congress and other parties.
In this case, preliminary material was prepared by the program office within the National Science
Foundation. OMB, the U.S. Global Change Research Program office, and the NSF Office of
Legislative and Public Affairs worked to clarify the information that was developed by the
program office. Following these discussions, NSF decided to remove the reference to specific
funding levels, because identifying funding levels associated exclusively with climate change is
arbitrary and misleading.

Question 14. NSF's reply revealed that it was “directed by the Office of Management and
Budget to transfers funds” ($1,366,000) to assist developing countries and countries with
economies in transition to formulate their climate change policies.

Question 144. Were other agencies also directed by OMB to transfer funds to assist developing,
and/or other countries with climate change? If so, which agencies and for how much funding?

Were other agencies directed by OMB to transfer funds for any other climate change purpose? If
80, which agencies, for what purpose, and for how much funding?

‘Response. 1 am not aware of any directive by OMB to other agencies to transfer funds to assist
developing countries with climate change.

‘to our question for historical climate change funding, the Tennessee
Sates nctorin’s TVA) solid tat Ournvesignon determined Ua TVA has not been
correctly updating its original budget estimates to actual expenditures.”
Question 15A. When did OMB become aware of this problem?
Response. TVA notified OMB staff in early July and have provided the correct information. If
‘TVA had submitted their response to OMB for clearance like most of the other agencies, the
error might have been discovered before it was sent to the Subcommittee.

Question 15B. Are the “actuals” reported by any other agency for climate change also in error?
Has OMB checked to be sure?

Response. OMB staff are not aware of similar problems with other agencies’ numbers.

12-


184

16c. Emissions trading among a subset of Annex I countries (for example, the United
States, Australia, Canada, New Zealand, and Russia) “can reduce costs by an estimated 60-70
percent.” Also, based on the estimates presented in Dr. Yellen's testimony, please explain and
fully document how more limnited trading among this subset of countries would produce greater
cost reductions than from either trading among all Annex { countries or trading with the Full
participation of non-Annex I countries.

16d. The Clean Development Mechanism “might shave costs by roughly another 20 to
25 percent.”

16c. Overall costs “would reach roughly one tenth of one percent of projected GDP in
2010" (resource costs of achieving Kyoto targets for emissions reductions were estimated to be
‘$7 to $12 billion per year in 2008 to 20012). Also, please explain bow it is possible that
compliance with the Kyoto Protocol, which has been projected by independent economists to be
the most expensive environmental undertaking ever, could cost less than compliance with the
recently issued U.S. air quality rules for particulate matter and ozone (the final Regulatory Impact
Analysis for those rules estimated costs of $46 billion).

16f. The assumption that the rate of improvement in energy efficiency (Autonomous
Energy Efficiency Index) will be 1.0 percent per year (which is greater than that assumed by the
Energy Information Administration). In particular, please reconcile this assumption with the
statement of the Council of Economic Advisers in its 1998 Annual Report that, “{unti an
emissions cap and trading system are in place, however, the economic incentive to use
[technologies supported by the Administration's budget) may be low.” Is the Administration
assuming that such a system will be put into place in the short-term?

16g. ‘The estimated effect on energy prices will range from “$14 to $23 per ton of carbon
equivalent.”

16h. “In energy-intensive sectors some employment reduction could occur, although
given the very small predicted change in energy prices, impacts in most such sectors are apt to be
minimal. Furthermore, a large umber of jobs will be created in other sectors—many of them
high-tech jobs paying high wages."

16i, As to each analysis, please indicate who prepared the analysis and provide all
records of comments from other federal agencies,

17. Please provide any and all analyses that support the Administration's estimate that benefits
relating to traffic congestion, highway accideats, and air pollution unrelated to climate change
“could offset approximately a quarter of the resource cost ofthe climate change policy.” As to
each analysis, please indicate who prepared the analysis and provide all records of comments
from other federal agencies.


14

to accommodate last minute changes for programs located in different sections of the budget.
‘The figures in Table 7-2 are correct.

Question 2C. For each agency with funding in FY 97, please provide evidence of any
accomplishments from the FY 97 funding. Also, for each agency requesting funding in FY 99,
please indicate any program performance measures for the requested funding and, for each such
‘measure, please provide annual data for the most recent three-year period for which data
available.

Response. Attachment 6 is a summary of key accomplishments of the U.S. Global Change
Research Program for FY 1997, and performance goals for FY 1999. This information will be
published later this year in the report entitled “Our Changing Planet.” We also expect that
agencies will focus more on their performance plans as we continue to implement the
requirements of the Government Performance and Results Act (GPRA). Some agencies already
include performance measures for their programs (e.g. the Earth Science Enterprise within
NASA).

Question 3. Please provide a table with FY89-FY99 historical budget authority, on an agency-
by-agency basis, for any other components of the Administration's climate change program
in addition to those included in answers to questions 1 and 2). For each component, please
indicate each specific budget account and a brief description of the program.

Response. The major budget components of the Administration’s climate change program are
provided in the answers to questions 1 and 2. Attachment 7 is a report on Federal climate change
expenditures transmitted by the President to the Congress on March 10, 1998, pursuant to
Scction $80 of Public Law 105-118, “Foreign Operations, Export Financing, and Related
Agencies Appropriations Act of FY 1998" that includes the international programs directly
related to climate change.

Question 4. Since the Government-wide Performance Plan for FY 1999 does not include any

measures for the Administration's Climate Change proposal, please identify all
government-wide and agency-specific performance measures for the Administration's Climate
‘Change proposal, including data for at least FY 97, FY 98, and FY 99.

Response. The attached Febmuary 2, 1998, budget briefing paper on the Climate Change
Technology Initiative included as Attachment 3, provides some performance measures related to
specific programs in the initiative. Attachment 8 includes a brief discussion of performance
‘measures for DOE's energy conservation program and its solar and renewable program — key
programs in the Climate Change Technology Initiative -- from the Government-wide
Performance Plan for FY 1999. More specific details on performance measures are included in
agency budget justifications provided to the Committees on Appropriations. We will be working
with the agencies to develop more comprehensive performance measures for the initiative to be
included in future reports to Congress.



32

Mr. DESEVE. I don’t know. We try to let the witness testify
and——

Mr. McINTOsSH. Flounder on his own. I find that incredible——

Mr. TIERNEY. That you didn’t allow the witnesses to testify?

Mr. MCINTosH. No, no. I’m letting him ask them right now, but
he doesn’t want to and he doesn’t know——

Mr. TIERNEY. Well, I don’t blame him, I mean——

Mr. MCINTOSH. Well, the way I figure it, what he is saying that
$200,000 that his agency was specifically appropriated for a specific
purpose, he has no idea where the money went. Are you willing to
make that back to the taxpayers yourself because it’s been mis-
managed?

Mr. DESEVE. No, I'll be very happy to supply the full detail of
the OIRA budget and I’ll be happy to look at the full appropriations
history——

Mr. MCINTOSH. And you came up here without any clue as to
what those are today? That is outrageous.

Mr. DESEVE [continuing]. To see whether that is an earmark in
the appropriation or whether it was additional funding. I just don’t
know; I don’t have that information——

Mr. McINnTosH. I remember it was additional funding of
$200,000.

Mr. DESEVE [continuing]. That wasn’t specific to the hearing
today.

Mr. McINTOSH. Wait a second. This is an oversight hearing of
OIRA——

Mr. DESEVE. Right.

Mr. MCINTOSH [continuing]. And OMB’s performance on the Con-
gressional Review Act, which is done by OJRA, and you're telling
me you don’t know their budget? And you don’t want to ask one
of your staff what their budget-——

Mr. TIERNEY. Can I just interject a question here, Mr. Chairman?
Wasn’t the language that $200,000 was for all of their activities,
including OIRA, not specifically and limited only to OIRA?

Mr. MCINTOSH. The report language made it clear that it was for
implementation of CRA.

Mr. TIERNEY. Including CRA, but it covered the gamut——

Mr. McINTosH. Right, but what I want to know——

Mr. TIERNEY. So you want to know where every dime went——

Mr. DESEVE. The confusion that you and Mr. Tierney are having
is precisely what I want to check and report back. I just don’t know
the answer in that context. I know there was additional funding
specified in report language. I’m happy to get back to you with a
full history of that.

Mr. McInTosH. Has OIRA done anything to, since that appro-
priation, to define what a rule is under the Congressional Review
Act?

Mr. DESEVE. Not to my knowledge.

Mr. MCINTOSH. How about the definition of a good cause exemp-
tion?

Mr. DESEVE. Not to my knowledge.

Mr. McINTosu. Is it any wonder that the agencies have difficulty
implementing this when OIRA, which is the central clearing agen-


103

Questions about Other Agencies

Q13. The National Science Foundation (NSF) volunteered that OMB deleted specific funding
level ($5 million) in its intended reply to our question. Instead, the revised reply merely stated
"There are, however, some significant activities supported — at the National Center for
‘Atmospheric Research (NCAR) for example ~- which are directed exclusively at climate change,
that were not reported in the summary."

‘+ Why did OMB remove the specific funding level information?
‘+ For which other agencies, did OMB remove specific funding level information?

Q14. NSF's reply revealed that it was “directed by the Office of Management and Budget to
transfer funds” (51,366,000) to assist developing countries and countries with economies in
transition formulate their climate change policies.

+ Were other agencies also directed by OMB to transfer funds to assist developing and/or
‘other countries with climate change? If so, which agencies and for how much funding?
‘Were other agencies directed by OMB to transfer funds for any other climate change
Purpose? If so, which agencies, for what purpose, and for how much funding?

QI5. In response to our question for historical climate change funding, the Tennessee Valley
Authority's (TVA) replied that "Our investigation determined that .. TVA has not been correctly
‘updating its original budget estimates to actual expenditures.”

+ When did OMB become aware of this problem?

+ Are the “actuals” reported by any other agency for climate change also in error? Has
‘OMB checked to be sure?

QI6. Has OMB advised the key agencies involved in the development of the President's climate
change initiative — including CEQ, CEA, State, and Treasury — not to provide the requested
info about thei salaries and @ travel) i rs



39

Congress if the executive branch agencies would cooperate with GAO and provide

additional information relevant to each rule.

Since the congressional rulemaking review provisions of CRA were enacted on March 29,
1996, our Office has received 131 major and 9,052 nonmajor rules from executive branch

and independent agencies.

As noted earlier, before a rule can become effective, it must be filed in accordance with
the statute. Prior to the March 10 hearing, GAO conducted review to determine
whether all final rules covered by CRA and published in the Federal Register were filed
with the Congress and GAO. We performed this review to both verify the accuracy of our

database and to ascertain the degree of agency compliance with CRA.

Our review covered the 10-month period from October 1, 1996, to July 31, 1997. In
November 1997, we submitted to OIRA a computer listing of the rules that we found
published in the Federal Register but not filed with our Office. This initial list included
498 rules from 50 agencies. OIRA distributed this list to the affected agencies and
departments and instructed them to contact GAO if they had any questions regarding the

list. Beginning in mid-February, because 321 rules remained unfiled, we followed up with


64

6

and provide all records containing comments from other federal agencies. If not, please explain
fally why not.

17, Is there currently in place an interagency body that is analyzing the economic impacts on
the U.S. of the mandatory restrictions specified in the Kyoto Protocol and evaluating altemative
domestic policies to achieve those requirements? If so, please provide the same type of
information about this group, as well as produce the same type of documents, which were
Tequested in question number 15 above with respect to the “economics team.”

18. During its deliberations prior to Kyoto, did the Administration consider whether an
agreement to stabilize emissions at 190 levels or to reduce emissions below 190 levels would
result in lower economic growth? If so, how much lower economic growth did the
Administration consider as acceptable in exchange for a treaty thal would have at best only a
‘marginal impact on reducing emissions? Please produce all records of such deliberations and all
‘economic analyses and comments thereon (from federal agencies and private parties) that the
Administration considered.

19. If the Administration did not prepare cost estimates of the impacts on the U.S. economy
and the American people, how did the Administration determine its policy position first to
stabilize emissions at 1990 levels by 2008-2012 and then later to deviate with confidence from
that position and commit the U.S. to reducing emissions by 7 percent below 1990?

20. At what point prior to or during the negotiations, did the Administration decide that
emissions reductions below the 1990 baseline were acceptable? Who in the Administration and
in Congress were consulted in making this decision? Did the Administration examine any public
or private analyses in reaching this decision? If so, identify and provide the analyses upon which
the Administration relied, with all comments that were submitted by any federal agency.

21. Ifeconomic analyses were prepared internally to support positions that the
Administration intended to take at the Conference, why weren't these analyses made available to
Congress and the American public, who all have a right-to-know the potential

economic consequences of the President's climate change policies?

22. Did the Administration review any private sector analyses completed prior to Kyoto? If
50, please provide all records of comments thereon by federal agencies.

23. The Clinton Administration indicated its recognition of Senate Resolution 98 (the Byrd-
‘Hagel Resolution). Please describe in detail and document the steps that the Administration
already has taken and intends to take to assure compliance with each provision of that
Resolution.


148

nat ere generatec in the course of deliberations on

tive in nature. Disclosure of thes
T10Se participating in the process an
‘ore injure the uality of agency decision making. It is Administration polic
that these tyoes of communications are net disclosed except in extraorainar
circumstances. However, if the subcommittee has specific questions concernin
particular regulatory issues. the Council will seek ta provide responsive information

These written cocuments :
regulatory issue are pre-decisional and delibe
cemmunications would diminish the candor of

iner

When the Council reviews regulations and receives communications from outsid:
parties during that review, are the factual communications included in the rulemakin:
docket? Are the Council’s own comments to the reguiatory agency included in th
docket? If not, why not?

It should be emphasized that the Council itself does not engage in rulemaking
Instead, it assists in the coordination of the Adminisiration’s review of regulation:
being promulgated by Executive Branch agencies and deoartments. The agencie:
and deparrments invoivea retain tne statutory resoonsibility for making their decisions
based uoon the record that is developed. The Council works with them to ensure
compliance with ail of the relevant provisions of the Administrative Procedure Ac:
inet are requires for implementing regulations. Where meetings with outside parties
are involves as 2 result of the Vice Presiaenz’s policy to be evailgole to all members
of the public wno wish to communicate witn him or his stat on poiicy matters,
Council staf is available to work witn the agency. This heips ensure that the rules
issued by the agency are based on information and cata dleced in the rulemaking
cocker where requires 2s of :ne cate of promuigation.

OMB’s practice is to invite the rulemaking agency to all meetings that OMB staff has
with outside interests. Does the Council tollow this practice? If not, why not?

ne oractice of :ne Council 's :o invite stav¥ of she rulemaking agency to paricinate
mh getiberations wnen the agency has an interest in tne reguiatory agency being
ciscussed. When Council stat meets with sersons outsice of government, tney may
or may not invite reoresentatives from various agencies. Agency representatives
may not be invited on some occasions simpiy because it would be inconvenient or
inaporopriate. This practice is consistent with the general policy foilowed for ail
meetings in the Office of the Vice President.



35

a single agency has cited the good-cause exception except in accord-
ance with the statute.

Perhaps, more important, agencies are alerting the public in
their final rule publication in the Federal Register that the 60-day
effective date stated in the rule may be delayed due to the need
to comply with the statute. The Health Care Financing Administra-
tion, in a recent Medicare rule, offered such a notice and since its
submission of a rule was 5 days later than publication of the rule
in the Federal Register, the effective date was delayed in accord-
ance with the statute.

While these first two areas demonstrate enhanced implementa-
tion of the statute by OIRA and the agencies, the third area Id like
to address does not. It concerns the definition of rules and major
rules. One early question about implementation of CRA was wheth-
er executive agencies or OIRA would attempt to avoid designating
rules as major and, thereby, avoid GAO’s review and the 60-day
delay of the effective date. While we are not aware of any rule that
OIRA deliberately misclassified, mistakes have been made in major
rule classifications. CRA, as you pointed out earlier today, contains
a broad definition of rule. For example, the Administrative Proce-
dures Act defines a rule for purposes of notice and public comment
to exclude those that are interpretative or that are policy state-
ments by the agency. The rule in this statute, in the Congressional
Review Act, includes those rules. Our view is that agencies are not
aware of that difference.

Recently, we compared an OIRA-prepared list of important final
rules that it reviewed during the first year of the CRA to the list
of rules that OIRA and the agencies had identified to us as major
during the same period. We found that there were 12 rules on our
list of major rules that were not on OIRA’s list. Subsequently,
OIRA said, that they and the agencies believe that 7 of those 12
rules were not major. The OIRA list also contained 8 rules that
were not on our list of 122 major rules. In fact, two of those rules
had not been filed with our office at all; six had been filed, but the
filing stated that they were not major rules, that they were, in fact,
nonmajor rules and they were not treated as such. We are cur-
rently following up with OIRA and the agencies that issued these
rules to determine whether they should be added to or subtracted
from our list of major rules.

As I noted in my prior testimony, our office has been asked to
determine whether certain agency actions, issuance, or policies con-
stitute a rule under CRA. We've done that on a number of occa-
sions. We continue to believe that for CRA to achieve what Con-
gress intended, OJRA must assume a more active role in guiding
or overseeing these types of agency actions, agency decisions.

Finally, and I'll just take a second or two for this, Mr. Chairman,
we have been working with OIRA to compile a data base in a form
which the agencies can use to enable us to provide information to
the public and to the Congress with respect to the thousands of
rules that are filed with GAO and with the Congress. to make the
statute more useful to the American public.


67

9

34a. Please provide all records of written ot oral comments from other federal agencies on
each of the costbenefit analyses that were performed.

34b. Please provide all records of comments submitted by federal agencies on Dr. Janet
Yellen’s draft testimony about the economics of Kyoto for the hearing before the House
‘Commerce Committee on March 4, 1998,

International Emissions Trading: Not a Panacea.

35. Asa practical matter, until the Conference of the Parties makes all of the decisions that it
is empowered to make under Article 17 of the Kyoto Protocol concerning the establishment of
rules and procedures for international emissions trading, isn’t it premature for the Administration
to forecast definitively that the agreement would result in, at most, modest energy price hikes?

36a, With respect to the rules and procedures for international emissions trading that have yet
to be developed, what are the minimum requirements that the Administration to assure
an efficient and effective system for lowering the costs of emissions reductions?

36b. Does the Administration intend to confer with Congress and obtain comments
from Congress and the public in developing negotiating positions for Buenos Aires on rules and
procedures for an international emissions trading system and for obtaining joint implementation
project credit, including the Clean Development Mechanism?

37a. Why does the Administration believe it can obtain meaningful participation by
developing countries and what steps is the Administration taking to achieve this? What
indications of potential meaningful participation have been shown by developing countries that
prompt this optimism?

37. In particular, what are the steps being taken with respect to China, India, Mexico,
Brazil, and South Korea and what indications of potential meaningful participation has the
Administration received from these countries?

37¢. Which countries does the Administration consider “key,” in assuring that
“meaningful participation” is secured?

38. _ Why does the Administration maintain that the U. S. acid rain program experience
“clearly demonstrates how programs like international permit trading, joint implementation and
the Clean Development Mechanism will lead firms to find cheaper ways of reducing emissions
that can lead 10 unexpectedly low costs”? Is it appropriate for the Administration to extrapolate
from that experience to the global arena? Won't the effectiveness of the international system,
joint implementation, and the Clean Development Mechanism depend on such factors as the
rules and procedures governing these mechanisms, the extent of participation by other countries,
including developing countries, etc?



104

CONGRESSIONAL REVIEW ACT QUESTIONS

Unc of Additional E foc CRAL .
Q17. Our subcommittee worked closely with the Appropriations Committees last fall to increase
‘OMB's funding by $200,000 for the specific purpose of implementing the Congressional Review
‘Act (CRA). Despite clear report language and floor statements, it appears that OMB has
‘continued its business-as-usual approach to CRA implementation and has used the extra money
for other purposes of OMB’s own choosing. What specifically has OMB done, if anything, to
‘improve its performance since receiving this additional funding?

Q18. If any of the additional
please identify the specific acti

QI9. What has OMB done to improve its implementation of the CRA since the Subcommittee’s
March 10, 1998 hearing on CRA implementation?

ing was used for purposes other than CRA implementation,
‘or programs for which such funding was used.

B Coordination of Reporting of Previ
Q20. According to the GAO, the agencies have violated the CRA by failing to report hundreds
of new rules.

(@) What steps has OMB taken to ensure that all unreported rules identified by GAO are
reported?

(b) Has OMB taken a leadership role in coordinating and overseeing agency compliance
with the rule reporting requirements of the CRA?

(©) Isit the position of OMB that GAO, not OMB, is responsible for ensuring that the
agencies report unreported rules?

OMB Guidance on CRA Compliance

Q21. In many cases, it appears that the agencies are not even sure which rules are covered by the
statute — and they are apparently not receiving any guidance on this issue from OMB. Other

than the brief memorandum and question-and-answer sheet on CRA thal OMB issued shortly

after the CRA became law, what oversight and guidance, if any, has OMB provided the.

to ensure their full compliance with the CRA? Specifically, what guidance has OMB provided

regarding:

(1) the definition of a “rule” (§ 804(3));

(2) the requirement that no rule can legally take effect until it is reported to Congress (§
801(a{1)); and

(3) the meaning of the “good cause” exemption (§ 808(2))?
6


126

(@)_ Management costs

In carrying out the extramural funding programs of the Institute, including the

programs established under sections 278k, 2781, and 278n of this title, the Secretary
‘may retain reasonable amounts of any funds appropriated pursuant to authorizations
for these programs in order to pay for the Institute's management of these programs.

§272a, Technology services

In addition to such other technology services and technology extension activities which
may be mandated or authorized by law, and in order to help improve the use of
technology by small and medium-sized industrial firms within the United States, the
Director of the National Institute of Standards and Technology, as appropriate, shall ~

(1) work directly with States, local governments, and other appropriate organizations to
provide for extended distribution of Standard Reference Materials, Standard
Reference Data, calibrations, and related technical services and to help transfer other
expertise and technology to the States and to small businesses and other businesses
Within the States; ....

(3) provide support for workshops on technical and entrepreneurial topics and share
information developed through the Malcolm Baldrige Quality Award Program; and

(4) work with other Federal agencies to provide technical and related assistance to the
States and businesses within the States.

§ 273. Functions; for whom exercised

‘The Institute is authorized to exercise its functions for the Government of the United
‘States and for international organizations of which the United States is a member, for
governments of friendly countries; for any State or municipal government within the
United States; or for any scientific society, educational institution, firm, corporation, or
individual within the United States or friendly countries engaged in manufacturing or
other pursuits requiring the use of standards or standard measuring instruments: Provided,
‘That the exercise of these functions for international organizations, goveriments of
friendly countries and scientific societies, educational institutions, firms, corporations, or
individuals therein shall be in coordination with other agencies of the United States
Government, in particular the Department of State in respect to foreign entities. All
requests for the services of the Institute shall be made in accordance with the rules and
regulations herein established.

Question 11. One of the FY 98 “expected accomplishments” in the Environmental Protection
‘Agency's (EPA) reply was a “Design Clean Development Mechanism (CDM) project in six
developing countries.”


45

Recently, we compared an OIRA-prepared list of important final rules that it reviewed
during the first year of the CRA to the list of rules that OIRA and the agencies had
identified to us as major during the same period. We found that 12 rules on our list of
major rules were not on OIRA's list. OIRA officials said that, in retrospect, they and the
agencies should not have identified 7 of those 12 rules as major. The OIRA list also
contained 8 rules that were not on our list of 122 major rules. Of these, OIRA officials
said that all eight should have been identified and submitted to us as major rules. OIRA
officials noted that all of these nules were issued in the first year of the congressional
review process, and that they and the agencies were still learning how to respond to the
statutory requirements. We are currently following up with OIRA and the agencies that
issued these rules to determine whether they should be added to or subtracted from our

list of major rules.

‘As I noted in my prior testimony, on occasion, our Office has been asked whether certain
agency action, issuance, or policy constitutes a "rule" under CRA such that it would not
take effect unless submitted to our Office and the Congress in accordance with CRA. For
‘example, in response to a request from the Chairman of the Subcommittee on Forests and
Public Land Management, Senate Committee on Energy and Resources, we concluded that
‘a memorandum issued by the Secretary of Agriculture in connection with the Emergency
Salvage Timber Sale Program constituted a ‘rule" under CRA and should have been

submitted to the Houses of Congress and GAO before it could become effective.


87

ANSWER IL N/A

QUESTION 12 Is there an agency or interagency group that is developing
recommendations on the need for implementing legislation? Ifso, please identify the
persons who have been charged with coordinating this effort and the names of the agency
representatives who are participating.

ANSWER 12 The Administration has no plans to submit legislation or regulations that would be
aimed at implementing the requirements contained in the Protocol prior to its submission to the
Senate for its advice and consent.

QUESTION 13a Please identify all environmental and energy regulations that are being
developed, have been proposed, or have been issued since 1992 that have or will have the
effect of reducing greenhouse gas emissions (whether or not that is the intended purpose of
the particular regulation). As to those regulations that are being developed or that have
been proposed, provide an estimated timetable for each stage of rulemaking.

ANSWER 13a To our knowledge, there is not a consolidated list of regulations issued since 1992
that have or will have the effect of reducing greenhouse gas emissions.

QUESTION 13b Has OMB or any other federal agency prepared, contracted to have
prepared, or considered any studies that : (1) Have calculated the potential cumulative
costs of environmental and energy regulations that are presently planned or being
developed, have been proposed, ar already have been issued since 1992 that have or will
have the effect of reducing greenhouse gas emissions (whether or not this is the intended
purpose of the regulation); and (2) Have assessed the cumulative effects of these
regulations, or any combination of them, on the U.S. energy system and economy? If so,
please provide any such analyses and all federal agency comments on any drafts. If not,
please indicate why this has not been done. This Subcommittee believes that this,
information is vitally needed and is requesting that such an analysis be performed.

ANSWER 13b We are not aware of any studies of the cumulative costs of environmental and
energy regulations that reduce greenhouse gas emissions. It is possible that such studies may
exist at agencies, or outside organizations may have performed their own analysis of specific
environmental or energy regulations that have the effect of reducing greenhouse gas emissions.

QUESTION 13 ¢ Please provide any analyses that have been performed or considered by
the Administration concerning the potential combined effects ou the U.S. economy and
energy systems of such Clean Air Act regulations, as the recently issued National Ambient
Air Quality Standards for particulate matter and ozone, and regional haze proposal; the
Administration's proposed measures for implementing the requirements of the Kyoto
Protocol; and its planned legislative proposal for restructuring the electrical industry.


8

Mr. TIERNEY. Thank you, Mr. Chairman. Thank you for holding
this hearing today and I’m especially pleased to see that there is
a representative from the Office of Management and Budget here
to answer questions and to respond to any criticisms that were
lodged at the March 10, 1998, hearing.

Three months ago, Frank Raines, who was then the Director of
the Office of Management and Budget, offered to make Don Ar-
buckle, the Acting Administrator of OIRA, available to testify on
this issue. You, Mr. Chairman, refused this offer because you only
wanted to hear, apparently, from some political appointee. I’m glad
to see that OMB has a representative here today and I’m also
pleased to see that you’ve asked the General Accounting Office to
return so OMB can respond to their concerns directly. I only wish,
Mr. Chairman, that for a matter that is purported to be of this sig-
nificant interest, that other members of the majority here on the
committee had bothered to show up today to express how impor-
tant this might be to them, if, in fact, it is.

The Congressional Review Act is an important piece of legislation
that provides expedited procedures for Congress to disapprove
agency regulations. The act requires agencies to provide Congress
and GAO with a copy of each rule, a description of the rule, and
relevant analyses that are required by law. If the agencies don’t
provide this information, it’s difficult for Congress to make an in-
formed decision on whether it should disapprove a regulation. Now
3 months ago GAO testified that the agencies were not filing all
of their rules with Congress. However, I understand that GAO has
seen significant improvement in the last few months and that’s
good news.

Mr. Chairman, you may be frustrated that Congress has not dis-
approved the rule under the Congressional Review Act. If this is
because someone isn’t doing their job and Congress isn’t getting
enough information, then we should act to correct that situation.
On the other hand, if GAO’s concerns are merely procedural, and
congressional committees are getting the information that they
want, then we may just have to accept the fact that Congress sim-
ply chose not to disapprove any rules. This would not mean the
Congressional Review Act is a failure and it would not mean that
we need to create another bureaucracy like the Congressional Of-
fice of Regulatory Analysis to do yet another analysis of the analy-
sis. It simply would indicate that Congress has not yet found the
need to disapprove a rule.

Mr. Chairman, I’m also pleased that the OMB is available to de-
scribe the OMB review process, which affects both the depth and
timing of the agency’s responses to the subcommittee’s information
requests on global warming. The chairman has asked over 20 agen-
cies to answer very detailed questions about global warming and
to provide a large number of documents to this subcommittee. The
breadth and the details of these requests may well have set a new
precedent. Hopefully Mr. DeSeve can shed some light on how bur-
densome these requests are and whether the subcommittee’s expec-
tations with regard to the timing and depth of the responses are
at all reasonable under the circumstances. I look forward to the
testimony of these witnesses and thank the chairman for providing
them here today.


THE WHITE HOUSE GLOBAL CLIMATE
CHANGE INITIATIVE AND CONGRESSIONAL
REVIEW ACT IMPLEMENTATION: IS OMB
HIDING THE TRUTH ABOUT NEW REGULA-
TIONS AND PROGRAMS?

WEDNESDAY, JUNE 17, 1998

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The subcommittee met, pursuant to notice, at 2:25 p.m., in room
2154 Rayburn House Office Building, Hon. David Mcintosh (chair-
man of the subcommittee) presiding.

Present: Representatives McIntosh, Tierney, and Kucinich.

Staff present: Sean Cunningham, counsel; Barbara Kahlow, pro-
fessional staff member; Andrew Wilder, clerk; Elizabeth Mun-
dinger, minority counsel; and Alys Campaign, minority professional
staff member.

Mr. McINTOsH. The Subcommittee on National Economic
Growth, National Resources, and Regulatory Affairs will come to
order.

The purpose of today’s hearing is to examine the record of the
Office of Management and Budget in telling the American people
the truth about how Federal programs and regulations operate. In
particular, we will address two issues.

First is OMB’s cooperation, or lack of cooperation, with this sub-
committee’s request for information regarding the White House Cli-
mate Change Initiative, including OMB’s review of pending letters
of response from specific agencies about that issue. Second is
OMB’s progress, or lack or progress, in the implementation of the
Congressional Review Act.

I want to welcome Mr. Ed DeSeve, OMB’s Acting Deputy Direc-
tor for Management, responsible for regulatory affairs. 1 also want
to welcome back Mr. Bob Murphy, the general counsel of the Gen-
eral Accounting Office. Bob testified before this subcommittee in
March on CRA implementation and I want to thank you from the
outset for your strong leadership and consistent commitment to
this issue and the fact that you and your staff have shown that
commitment to us by working with O. and the subcommittee to
make CRA work as it is intended to work.

This hearing is about information. Congress and the American
people have a right to know the facts about new regulations and

q@


150

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(COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
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Room B-350A Raybum House Office Building
‘Washington, D.C. 20515

Dear Ranking Member Waxman:

Lam in receipt of your June 4, 1998 letter regarding your concems with the
‘Subcommittee’s requests for documents from the Council on Economic Advisors (CEA).

‘Your letter mistakenly suggests that the documents made available by CEA to the
‘Subcommittee staff that are responsive to requests from the Subcommittee on Energy and Power
are the same documents that are responsive to this Subcommittee’s March 13, 1998 request.
‘They are not. Indeed, at the end of the Subcommittee hearing on May 19, 1998, Dr. Yelien
expressly acknowledged that CEA was “working very hard at getting the answers" to the
Subcommittee’s inquiries. May 19, 1993 Hearing Transcript at 123.

Moreover, neither the White House Counsel's Office nor the CEA has ever suggested 10
the Subcommittee that the documents requested in the Subcommittee’s March 13, 1998 letter
cannot be released because doing so might undermine the Administration's position in
‘international negotiations. Again, Dr. Yellen testified at the May 19 hearing that only “the
documents 9" implicate the Administration's negotiations. May
19, 1998 Hearing Transcript at 55 (emphasis supplied). These documents are only the
documents responsive to the Subcommittee on Energy and Power's request, not this
‘Subcommittee’s request.

Lalso fail to understand how the documents that the Subcommittee has requested could
undermine the United States negotiating position. For example, there is no basis for withholding
‘economic analyses on which the Administration relies (or chooses to disregard) for its claims that
the impact of implementation of the Kyoto Protocol on American jobs and the economy would
be “modest.” Yet CEA continues to withhold this material.

‘The Subcommittee can only make an informed decision with respect to CEA’s
withholding of documents if CEA identifies with particularity these documents that it intends to
withhold and the reasons for withholding them. To date, CEA has not produced the requested
documents or any valid explanation for not producing thern. Thus. raising the possibility with


42

SIXTY-DAY DELAY AND "GOOD CAUSE"

Some agencies failed to delay the effective date of some major rules for 60 days as,
required by section 801(a)(3)(A) of the Act. At the time of my prior testimony, the
effective date of eight major rules had not been delayed. Agencies were not budgeting
enough time into their regulatory timetable to allow for the delay and were
misinterpreting the "good cause" exception to the 60-day delay period found in section

808(2).

Section 808(2) states that, notwithstanding section 801, “any rule which an agency for
good cause finds (and incorporates the finding and a brief statement of reasons therefor
in the rule issued) that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest” shall take effect at such time as the
federal agency promulgating the rule determines. This language mirrors the exception in
the Administrative Procedure Act (APA) to the requirement for notice and comment in
rulemaking. 5 U.S.C. § 553(b)(3)(B). In our opinion, the "good cause" exception is only
available if a notice of proposed rulemaking was not published and public comments
were not received. Many agencies, following a notice of proposed rulemaking, have
stated in the preamble to the final major rule that "good cause" existed for not providing
the 60-day delay. Examples of reasons cited for the "good cause" exception include (1)

that Congress was not in session and thus could not act on the rule, (2) that a delay


73

More details regarding the specific agency program, performance measures, and
accomplishments are normally provided in agency budget justifications and shared with the
Committees on Appropriations of both Houses of Congress. Additional information about the
accomplishments of the programs in the President's Climate Change Action Plan are discussed in
Attachment 2, U.S. Climate Action Report -- 1997.

Question 2. Please provide a table with FY89-FY99 historical budget authority, on an agency-
by-agency basis, for the various components of the “U.S. Global Change Research Program”
which were devoted exclusively to climate change R&D. For each component, please indicate
each specific budget account and a brief description of the program.

Response. The U.S. Global Change Research Program, an interagency program established by
the Global Change Research Act of 1990, produces an annual report to Congress entitled “Our
‘Changing Planet.” Attachment 4 is an appendix from the draft FY 1999 report that will be
published shortly that lists the agency contributions by program. Attachment 5 is a table
containing the 10-year funding history.

Question 2A. For FY 93 actual figures for the “U.S. Global Change Research Program,” please
explain the differences among the published figures in the Budget of the United States
Government Fiscal Year 1996 ($1,531 million), the Budget of the United States Government
Fiscal Year 1997 ($1,319 million), and the Budget of the United States Fiscal Year 1998 ($1,464
million), including any reprogramming from other budget accounts.

‘Response. The differences in the published figures for FY 1993 in the three budgets (FY 1996,
FY 1997, and FY 1998) you cited reflect changes in the definition of what agencies were asked
to report as contributions to the U.S. Global Change Research Program (USGCRP). The actual
figures for FY 1993 were then recalculated using the new definition for the program. For
example, the cost of launch vehicles for NASA satellites was not originally included in NASA's
contribution to the USGCRP. Beginning in FY 1998, launch vehicles were included in the
definition and FY 1993 actuals were corrected to reflect the new definition. Similarly, some
Department of Energy environmental technology programs originally included in the USGCRP
were no longer counted in USGCRP totals because of changes in the definition of what should be
included.

. For FY 95 and FY 96, please explain why the details in Table 7-2 do not equal the
ti in'abie 62 ofthe Buea of ir nted Sus Govemmnnt Eieal Year 1995
Besponse. As discussed in the response to Question 2A, the differences between the USGCRP
totals in Table 7-2 (the Science and Technology Chapter) and Table 6-2 (the Environment
Chapter) are a result of several agencies recalculating their numbers based on the new definition
of what should be counted as part of the USGCRP, and an earlier printing schedule for Table 6-2
that did not allow for last minute changes to the numbers. The printing of the President's Budget
requires a staggered schedule so certain materials have different print dates that make it difficult

3


82

reduce domestic emissions without regard to the achievement of a climate change agreement.
Towards that end, he proposed a five year, $6.3 billion Climate Change Technology Initiative
(CCTI) in the FY 1999 budget to enhance U.S. research and development, technology
development, and deployment for a variety of energy intensive sectors. This initiative has the
benefits of improving basic economic productivity, reducing dependence on foreign energy.
enlarging our competitiveness, and reducing greenhouse gas emissions without in any way
relying on binding domestic obligations.

A Budget Request without Justification or Ratification.

How can the Administration claim that its proposed Climate Change
Technology Initiative (CCTI) is not intended to implement the Kyoto Protocol, when this
initiative has been made an intergral part of the President’s Global Climate Change
Initiative, and the initiative is specifically deisgned to alter market behavior in futherance
of the treaty’s emissions reductions targets?

ANSWER 3 Please refer to Answer 2.

QUESTION 4a In a hearing before the Senate Foreign Relations Committee on February
11, 1998, Under Secretary of State Eizenstat testified that the tax incentives and research
funding that the President requested in his Fiscal Year (FY) 1999 Budget proposal are
necessary to place the U.S. in a “position where we will be further down the road and won't
have to make the kind of drastic reductions that otherwise might be called for.” Please
provide all of the economic data and analyses upon which the Administration relied for this
determination. As to any analysis, please identify who prepared it and provide all records
containing comments by other federal agencies on the drafts.

ANSWER 4g Dr. Janet Yellen, Chair of the Council of Economic Advisers (CEA), provided
congressional testimony recently on this issue and we have enclosed a copy of her testimony for
your information. We are producing information concerning your request. Some other
information implicates the confidentiality of Executive Branch deliberations and decision-
‘making and has been referred to the Counsel to the President of the United States.

QUESTION 4b Explain why the President decided to request $6.3 billion in his budget
proposal instead of the $5 billion that he stated he would seek at the time that he
announced his Climate Change Action Proposal on October 22, 1997. Was this decision
affected by the fact that the Administration agreed at Kyoto to commit the U.S. to reducing
greenhouse emissions by 7% below 1990 levels rather than stabilizing emissions at 1990
levels?

ANSWER 4b As indicated in response to question number 2, the President's $6.3 billion CCTI
request is based on the benefits of unilateral domestic action, and is not tied to Kyoto.


THE WHITE HOUSE GLOBAL CLIMATE CHANGE
INITIATIVE AND CONGRESSIONAL REVIEW ACT
IMPLEMENTATION: IS OMB HIDING THE TRUTH
ABOUT NEW REGULATIONS AND PROGRAMS?

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS
SECOND SESSION

JUNE 17, 1998

Serial No. 105-167

Printed for the use of the Committee on Government Reform and Oversight

Se

U.S. GOVERNMENT PRINTING OFFICE
50-963 CC WASHINGTON : 1999

For sale by the U.S. Govemment Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-058027-7



Qs.

108

only 6 rules from this April list whose status was still in question. Given the progress
agencies have made in establishing administrative systems to ensure that all final rules
covered by the CRA are properly submitted, we expect that GAO’s next review will
identify significantly fewer rules that require submission, and that the status of any such
rules will be quickly resolved.

In addition, OIRA worked last year, and has been working since January of this
year with the agencies and GAO to develop a common form that agencies could use to
submit their final rutes to GAO and Congress. We have been making substantial progress
in this effort. Agencies have developed a wide variety of regulatory tracking and
management systems and we have been working with them to develop a common form
that does not increase administrative burdens, but rather streamlines work and will make
the process for submitting rules to Congress and GAO under the Act more effective and
efficient. OIRA and the agencies have developed a draft common form and have shared
it with GAO for discussion purposes. (See response to Question 25 below as well.)

If any of the additional funding was used for purposes other than CRA
implementation, please Identify the specific activities or programs for which such
funding was used.

As noted in a colloquy with Chairman Kolbe on the House floor on September 30,
1997, the conferees for the FY 1998 Treasury, Postal Service, and General Government
Appropriation bill increased the OMB budget by $200,000 “in order to help OMB.
facilitate their oversight and coordination of both new and ongoing statutory
responsibilities, including the Congressional Review Act.” Consistent with this
expressed intent, the additional funds provided by Congress were used for a broad range
of activities. Some of the funds were used to prepare the report on the Northeast
Interstate Dairy Compact mandated by the FY 1998 Agriculture and Related Agencies
Appropriations Act. One of the reasons the Congress approved these additional funds
‘was to fund this mandated report, which was not part of OMB's original request to
Congress. Consistent with the stated intent, the remaining funds have been used to
support “new and ongoing statutory responsibilities,” such as Y2K compliance efforts,
IRA information systems modemization efforts (related to the Paperwork Reduction
Act), and work on OMB’s mission critical budget system.

In addition, under the CRA, as I described in my testimony, itis the statutory
responsibility of OIRA to determine whether an agency's final rule is “major,” and thus
subject to certain procedures and GAO oversight under the CRA. OIRA has taken
special care to assure that OIRA staff carry out this CRA responsibility. The
computerized regulatory review worksheet that OTRA staff fill out when they conclude
review of a draft regulation now includes a “yes/no” box for their determination of
whether the rule is “major.” In addition, OIRA has gone beyond this specific statutory
responsibility to help GAO and the agencies meet their responsibilities under the Act, as


131

Questions Regarding Global Climate Change Policies and Initiatives
A. Budget Information and Performance Measures

1. Please provide a table with Fiscal Year (FY) 89 - FY 99 historical budget authority for your
agency for the various components of the President's “Climate Change Technology Initiative,”
including the previous “Climate Change Action ProgranvPlan” and any other new or previously
authorized Research and Development (R&D) herein (except for the U.S. Global Change
Research Program included in Question 3 below). For each component, please indicate each
specific budget account, the specific legislative authority (including the specific statute, the
section citation, and the language of the section) for the program, and a brief description of the
Program.

2. In Section 2 ("Programmatic Details") of OMB's February 2, 1998 handout, "Climate Change
‘Technology Initiative - 1999 Budget Briefing Materials," please provide the following
information associated with each paragraph description in which your agency has been funded or
is requesting funding: the associated funding in FY 97, FY 98, and FY 99. Also, for each

for the requested funding in FY 99, please provide evidence of any sccomplishments
from the FY 93 - FY 97 funding, if any. Lastly, for each paragraph, please indicate any program
performance measures for the requested funding, and, for each such measure, please provide data
for the 1990 base year and annual data for the most recent three-year period for which data are
available.

3. Please provide a table with FY 89 - FY 99 historical budget authority for your agency for the
various components of the “U.S. Global Change Research Program” which were or are devoted
exclusively to climate change R&D. For each component, please indicate each specific budget
‘account, the specific legislative authority for the program (including the specific statute, the
section citation, and the language of the section), and a brief description of the program.

* If funded in any of FY 93 - FY 97, please provide evidence of any accomplishments from
these dollars. Also, for requested funding in FY 99, please indicate any program
performance measures for the requested funding, and, for each such measure, please
provide data for the 1990 base year and annual data for the most recent three-year period
for which data are available.

4. Please provide a table with FY 89 - FY 99 historical budget authority for your agency for any
other components of the Administration's climate change program (i.e, in addition to those
included in answer to-questions ! and 2). For each component, please indicate each specific
Dudget account, the specific legislative authority for the program (including the specific statute,
the section citation, and the language of the section), and a brief description of the program.

5. For the FY 99 request, please provide a table showing what part is funding to continue
initiatives funded in FY 98 or prior years and what partis brand new activity. For each
‘component, please indicate each specific budget account, the specific legislative authority for the
program (including the specific statute, the section citation, and the language of the section), and




Qs.

Q20.

109

‘we describe in the answers to Questions 17 and 25.

‘What bas OMB done to improve its implementation of the CRA since the
Subcommittee’s March 10, 1998, hearing on CRA implementation?

As described in my answer to Question 17, OIRA has worked with the agencies
and with GAO to help ensure that they submit the final “rules” subject to the CRA to
GAO and the Congress. As noted above, OIRA has been active in this cooperative work
this spring, transmitting the GAO lists of unsubmitted rules to agencies and utilizing the
interagency Regulatory Working Group (RWG) to urge careful compliance by agencies
with the Act. Through the RWG, OIRA has also pointed out that unless submitted under
the CRA, rules cannot take effect. In addition, OIRA has followed up by repeating these
concems to staff regulatory contacts. As described in my answers to Questions 17 and
25, OIRA is working with the agencies and GAO to develop a common form that
agencies could use to submit their final rules to GAO and Congress.

‘According to the GAO, the agencies have violated the CRA by failing to report
hundreds of new rules,

(a) What steps has OMB taken to ensure that all unreported rules identified by
GAO are reported?

As | indicated in some detail in my response to Question 17, OIRA has worked
with GAO to provide agencies with the lists developed by GAO; has worked through the
Regulatory Working Group to urge agencies to consult with GAO to assure that rules
subject to the CRA are submitted; and has followed up with telephone calls to agency
staff to repeat this concem, OTRA has urged agencies to pay particular attention to
‘meeting their responsibilities under the CRA by reminding them that rules cannot take
effect until they are submitted to Congress and GAO.

(b) Has OMB taken a leadership role in coordinating and overseeing agency
compliance with the rule reporting requirements of the CRA?

Under the CRA, as I described in my testimony, itis the statutory responsibility of
OIRA to determine whether an agency's final rule is “major,” and thus subject to certain
procedures and GAO oversight under the CRA. Those procedures are in place and now
implemented routinely. In addition, OIRA has sought to work cooperatively with GAO
and the agencies to encourage submission to Congress and GAO of the final rules subject
to the CRA and to develop # more efficient common reporting form. (See answers to
‘Questions 17 and 25.) As to agency compliance, it is important the agencies themselves
remain fully responsible for complying with the provisions of the Act that apply to them.
While as described above, agencies have had some initial difficulty developing



30

in the front row, I assume on somebody’s payroll, busily scribbling
notes, but none of the interested parties on the majority here both-
ered to listen, never mind taking notes.

Let me just ask, sir, when you were asked to testify today, did
you not tell the chairman that there were some areas that you
might not have all the information he’d want?

Mr. DESEVE. Yes, sir. I think we did.

Mr. TIERNEY. And offered to bring other people that might be
helpful in that regard?

Mr. DESEVE. Correct.

Mr. TIERNEY. And were told, no, don’t bring anybody else?

Mr. DESEVE. No, we were allowed to bring someone, but it was
only in an advisory capacity.

Mr. TIERNEY. But not to testify?

Mr. DESEVE. Right.

Mr. TIERNEY. So, all the times I hear you say that you might not
have that information, I want to make it clear to those that may
be interested enough to be listening here today that it’s not for
want of—your part, on your part to want or desire to give the an-
swers, you expressed your limitations and were refused the oppor-
tunity to have other people testify with you?

Mr. DESEVE. Correct.

Mr. TIERNEY. What areas, in particular, might you have some
limitations on in terms of knowledge that the chairman has
sought?

Mr. DESEVE. In terms of running a clearance process, that’s not
within my jurisdiction. I don’t run the clearance process; I don’t
participate in budget decisions around environmental or regulatory
matters, or any budget decisions, for that matter. On the CRA side,
I certainly do have oversight of that area, but I don’t do global
warming.

Mr. TIERNEY. Are you fairly satisfied that your agency is being
as responsive as it possibly can be to the requests that have been
put forth?

Mr. DESEVE. We certainly have been working as hard as we can
and have been as responsive as we can. We get an enormous num-
ber of requests, not just from this committee, but from many oth-
ers, and it requires us to try to work as hard as we can and work
very long hours, so, yes, I am satisfied with our responsiveness.

Mr. TIERNEY. Did I hear you mention that you think you’ve had
some 80 to 100 different responses that you’ve had to review?

Mr. DESEVE. I’ve been provided information that says that this
committee has sent us about 44 oversight requests so far to the 22
different agencies, asking approximately 485 questions. The best
estimate from the staff is that over 4,000 staff hours have been
spent responding to these, that 22,000 pages have been provided to
the subcommittee and 150,000 pages of documents are under inter-
nal review.

Mr. TIeERNEY. And still, apparently, not enough. Do you have
other committees also requesting information?

Mr. DESEVE. Yes, I do. Mr. Kucinich and I both appear quite
often before Congressman Horn on the Government Oversight
Committee.


89

ANSWER 15b The tean: to which former Undersecretary Wirth may have been referring was
called the Interagency Analytic Team, a group composed of a variety of members designated by
various federal agencies. There is no formal list of members but we have included meeting
attendance lists found in our files.

Please produce records of all meetings of this group and information on
any workshops conducted. Also, produce all analyses performed by the group and provide
all records of written or oral comments from other federal agencies on the team’s analyses
and advice.

ANSWER 15c We are producing information responsive to your request. Some other
information implicates the confidentiality of Executive Branch deliberations and decision
making and has been referred to the Counsel to the President of the United States.

QUESTION 16 In developing its positions for the Conference in Kyoto, did the
Administration at any point renew its efforts to estimate the costs of various polices to
reduce greenhouse gas emissions? If so, please provide all economic analyses that were
prepared for the Administration and the U.S. delegation to review. As to each analysis,
please indicate who prepared the analysis and provide all record containing comments
from other federal agencies. If not, please explain fully why not.

ANSWER 16 In preparing for Kyoto the Administration did consider various issues and relied
‘on reports from agency analysts to respond to specific questions. We are producing information
responsive to your request. Some other information implicates the confidentiality of Executive
Branch deliberations and decision-making and has been referred to the Counsel to the President
of the United States,

QUESTION 17 Is there currently in place an interagency body that is analyzing the
economic impacts on the U.S. of the mandatory restrictions specified in the Kyoto Protocol
and evaluating alternative domestic policies to achieve those requirements? If'so, please
provide the same type of information about this group, as well as produce the same type of
documents, which were requested in question number 15 above with respect to the
“economics team.”

ANSWER 17 There is no such group.

QUESTION 18 During its deliberations prior to Kyoto, did the Administration consider
whether an agreement to stabilize emissions at 1990 levels or to reduce emissions below
1990 levels would result inJower economic growth? If so, how much lower economic
growth did the Administration consider as acceptable in exchange for a treaty that would
have at best only a marginal impact on reducing emissions? Please produce all record of
such deliberations and all economic analyses and comments thereon (from federal agencies
and private parties) that the Administration considered.

9


84

would obviously be of benefit to the U.S. and therefore worthy of consideration, whether that be
on with climate change actions or independent of them. Voluntary activities under
ate Change Action Plan are estimated to result in energy savings of $50 billion
annually in 2010 slong with reduction in greenhouse gas emissions of 170 million metre tons
of carbon equivalent.

je the environmental and economic data and analyses

QUESTION 6b In this regard, pro
that support this request.

ANSWER 6b Please see Answer Sd.

Can the Administration point to a significant market failure or
demonstrate a compelling public need that necessitates $3.6 billion of new tax incentives
and a 73 percent increase in funding to accelerate the development and diffusion of more
energy efficient technology? According to OECD data, USS. energy efficiency since 1980
has improved more than that of most industrialized countries.

ANSIWER 6¢ Increasing the productivity of and reducing costs for American industries and
taxpayers cannot help but benefit the U.S. economy. Opportunities to enhance our economic
well-being through increased energy R and D are detailed in a recent report on this topic
prepared by the President's Committee of Advisors on Science and Technology.

QUESTION 64 Please provide a detailed explanation of and produce all records indicating
the alternative policy options that the Administration analyzed, including more broadly
based options, such as integrated pollution prevention, performance-based regulation, and
multi-media regulation. In this regard, did the Administration evaluate whether existing
regulation may be a signifleant barrier to improving energy efficiency and the
environment?

ANSWER 6d OMB and CEQ did not analyze, nor do we have records on, the specific alternative
policy actions listed above. Various Departments and agencies have programs in the additional
areas you mention and may have supporting documentation for these programs. The
‘Administration would be delighted to receive the Committee's ideas on additional or alternative
methods to clean the environment and improve energy efficiency.

QUESTION 6c Please explain in detail and fully document the cost-effectiveness of the
Administration's proposal when compared to other available options for improving energy
efficiency and the environment.

ANSWER 6¢ Please see Answer 6d.

QUESTION 6f Please explain in detail and fully document the opportunity costs of
committing such a significant amount of our nation’s resources in this manner.

4


12

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, O.¢, 20503

STATEMENT OF G. EDWARD DESEVE
ACTING DEPUTY DIRECTOR FOR MANAGEMENT
AND

CONTROLLER

OFFICE OF MANAGEMENT AND BUDGET
BEFORE THE

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES

June 17, 1998

Good afternoon, Mr. Chairman and members of this Subcommittee. Your letter of
invitation asked me to discuss two topics: (1) implementation of the Congressional Review Act
by OMB's Office of Information and Regulatory Affairs (OIRA); and (2) cooperation with the
‘Subcommittee's requests for information regarding the White House Climate Change Initiative,
including OMB's review of pending letters of response from specific agencies.

CONGRESSIONAL REVIEW OF AGENCY RULEMAKING

‘The Congressional Review Act' had the strong support of President Clinton. It was
signed on March 29, 1996. By passing this law, Congress acknowledged and assumed more
responsibility for its continuing role in the regulatory system. For too long, Congress passed
laws, taking credit for mandating clean air, or a safe workplace, only to question or even criticize
the agency rule that implements the law. With this law, Congress will see what it has authorized,
and can speak to any regulatory actions that it thinks are not true to its intent.

I welcome the opportunity to discuss what has happened over the past two years, and to
hear the experience of GAO in administering the law.

* S U.S.C. chapter 8, passed in Title If, Subtitle E, of PL, 104-121.


54

‘Thank you in advance for your attention to this request.

Sincerely,

QaniQ. M cterbo

David M. Melntosh

Chairman

‘Subcommittee on National Economie Growth,
Natural Resources, and Regulatory Affairs

‘The Honorable Dan Burton
‘The Honorable Bernard Sanders

Enclosure


96

ANSWER 37c Please refer to the answer to question 37a.

QUESTION 38 Why does the Administration maintain that the U.S. acid rain program
‘experience “clearly demonstrates how programs like international permit trading, joint
implementation and the Clean Development Mechanism will lead firms to find cheaper
ways of reducing emissions that can lead to unexpectedly low costs”? Is it appropriate for
the Administration to extrapolate from that experience to the global arena? Won't the
effectiveness of the international system, joint implementation, and the Clean Development
Mechanism depend on such factors as the rules and procedures governing these
mechanisms, the extent of participation by other countries, including developing countries,
ete?

‘The success of the U.S. acid rain program in reducing compliance costs over
altemative command and control programs is well documented. Past experience suggests that it
is possible to construct rules and financial structures that commoditize pollution reductions.

Experience with Joint implementation demonstration programs under the 1992 Framework
Climate Change Convention suggests that international offset programs are also feasible. For
instance, The Nature Conservancy, American Electric Power Company, and British Petroleum
structured a rain forest preservation program with Bolivia for $0.37 per ton COs reduction.

In addition, speculative option markets for offsets are emerging in the U.S. that suggest broad
market feasibility. Two of the more active participants in this market are the Chicago Board of
Trade, and Kenner Financial.

We believe the effectiveness of trading and CDM programs will be significantly affected by rules
and governance of these mechanisms, and international participation. The Administration
welcomes dialogue and input from Congress, U.S. firms, and non-government organizations that
are interested in the design of effective policy in this area.

QUESTION 39a Even assuming that effective rules and procedures can be developed for
an international emissions trading system and for joint implementation projects and that
key developing countries agree to participate, isn’t there a real risk that these mechanisms
could effect an enormous transfer of wealth and jobs out of this country overseas, especially
to the countries of the former Soviet Union and emerging countries (ie., that system would
be essentially a foreign aid program)? Some studies have estimated that more than 50% of
our reductions would have to be purchased from other countries,

ANSWER 39a Trading and joint implementation will only be utilized if U.S. corporations feel
that they present business opportunities. The Administration strongly believes that using market
mechanisms to achieve environmental goals can reduce costs substantially. In addition, we have
‘extraordinary opportunity to lead the world in marketing American technology and innovation
to markets in great need. We view this as an economic opportunity, and clearly, U.S. businesses

16


5

Question 4A. The Performance Plan in DOE's FY 99 Budget submission includes goals of
reducing gas emissions by 5 percent in 2010 and reducing energy consumption by 25 percent in
2010. Please provide at least FY 97, FY 98, and FY 99 data on gas emissions and energy
consumption to meet these goals.

Response... We do not have the information you requested on gas emissions and energy
consumption related to the Department of Energy's Performance Plan. We suggest you contact
the Department of Energy directly to obtain this information.

Question 4B. EPA’s FY 99 Budget includes goals of reducing emissions by 40 million metric
tons and reducing energy consumption by 45 billion kilowatts. Please provide at least FY 97, FY
98, and FY 99 data on gas emissions and energy consumption to meet these goals.

Response. We do not have the information you requested on gas emissions and energy
consumption related to the Environmental Protection Agency's (EPA) FY 1999 Budget. We
suggest you contact EPA directly to obtain this information.

Question 4C. Please explain whether and how DOE’s and EPA's performance measures
overlap--i.e., whether they relate to reductions made by only that agency's programs or by all
agencies’ program in the aggregate.

Response. It is our understanding that the DOE’s and EPA's current performance measures do
not overlap and that each agency has performance measures specific to its own programs. Where
4 program may be jointly administered by DOE and EPA, efforts are made by the two agencies
to track progress made separately. In future years, as performance measures focus more on broad
outcomes beyond the control of individual agencies, there will be even more need to coordinate
such tracking,


36

That concludes my summary of my statement. I would ask that
the full statement that I have submitted be included in the record.
Mr. MCINTOSH. Seeing no objection, we shall. My proposal would
be that we take a brief recess to vote and return afer the vote.
{The prepared statement of Mr. Murphy follows:]


48

Position of the group that the completion of this questionnaire for each of the 4,000 to

5,000 rules filed each year is too burdensome for the agencies concerned.

‘On April 22 of this year we again contacted OIRA officials with a modified version of our
questionnaire, which we believed addressed the major concerns raised with the initial
version, We have subsequently met with officials from OIRA and a select group of
executive agency officials, at their request, to explore additional ways to capture the
information. We are currently reviewing an alternative, but we believe inadequate,
version of the questionnaire proposed by those officials and will meet next week to

continue negotiations on this matter.

We continue to believe that it would further the purpose of CRA for a database of all
rules submitted to GAO to be available for review by Members of Congress and the public
and to contain as much information as possible concerning the content and issuance of
the rules. We believe that further talks with the executive branch, led by OIRA, can be
productive and that there may be alternative approaches that address both congressional

and executive branch concerns.

CRA gives the Congress an important tool to use in monitoring the regulatory process,
and we believe that the effectiveness of that tool can be enhanced. Executive Order

12866 requires that OIRA, among other things, provide meaningful guidance and oversight

12


uy

Response to Chairman David M. Mcintoth
Subcommittee on Natural Economic Growth, Natural Resources, and Regulatory Affairs

a in Published Bud

Question 1. My staff identified to OMB several errors, which OMB has now admitted, for
climate change program funding in the last four budgets prepared by OMB.

Question 1A. Does OMB expect the Congress to fund these programs when even the published
information of what the President wants is inaccurate?

Response. The information prepared by OMB and published in the President's FY 1999 Budget
for the Climate Change Technology Initiative did not include errors. A less than $1 million
rounding matter is not an error. As discussed in OMBs May 13, 1998, letter to the
Subcommittee, rounding discrepancies of this kind are common in many budget documents and
are generally not of a concem to the Appropriations Committees when evaluating the President's
Budget.

Where minor number differences were identified in prior year budgets, the May 13th letter to the
Subcommittee provided detailed explanations as to why certain numbers change from year to
year. In all cases, OMB provided the Subcommittee with the correct budget information so it can
perform its oversight responsibilities related to the President's climate change initiative.

Question LB. What is being done to ensure that budget numbers are accurate?

‘Response. OMB takes pride in preparing the President's Budget and providing Congress with
accurate information on which it can perform its appropriations and oversight responsibilities, In
most cases, the information provided in the President's Budget is the most accurate available at
the time the budget documents are printed. In those rare instances where we discover a
discrepancy after documents are printed, OMB or the relevant agency provides the appropriate
committee with the correct information. In the case of funding related to climate change, OMB’s
May 13, 1998, letter provided the Subcommittee with a full explanation of any discrepancies in
prior year budget documents. The Subcommittee can be assured that it has accurate budget
information on the President's Climate Change Technology Initiative.

Absence of Performance Measures

Question 2. Despite the Government Performance and Results Act (Results Act) requirement
that agencies establish program performance measures for each program in each agency, the
agencies have identified only a handful of such measures for the dozens of climate change
programs. And OMB has not identified any government-wide program performance measures
for the President's climate change initiatives, as required by the Results Act.


53

(OnE HUNORED FIFTH CONGRESS

Congress of the United States
Bouse of Representatives

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
2187 Ravouan House Ornice Bunoue
Wasranaron, DC 20515-6143

March 2, 1998

BYEACSIMILE

‘The Honorable Franklin D. Raines
Director

Office of Management and Budget
‘Washington, D.C. 20503

‘The Honorable Kathleen A. McGinty
Chair

‘Council on Environmental Quality
‘Washington, D.C. 20502

Dear Director Raines and Chair McGinty:

‘The Subcommittee on National Ec Groh, Natura} Resources, and Regulatory
‘Affairs is conducting oversight of the White House Initiative on Global Climate Change.

Pursuant to the Constitution and Rules X and XI of the United States House of
Representatives, please provide the Subcommittee with detailed information in response to the
attached questions regarding the budget and performance measures for this initiative. Please
‘Rate cat qenon before th comeponding answer

Please contact Subcommittee Staff Director Mildred Webber at 225-4407 if you have any
‘questions about this request. Please provide this information not later than 12 noon, March 24,
1998 to the Subcommittee in Room B-377 Rayburn.


138

the analyses. If not, does the Administration plan to do so? Please describe fully the steps that
the Administration plans to take.

30. In connection with these cost-benefit analyses, fully explain how the baseline(s), against
which costs and benefits were calculated, was determined.

3a. Please provide all records of written or oral comments from other federal agencies on each
of the cost-benefit analyses that were performed.

31b. Please provide all records of coraments submitted by federal agencies on Dr. Janet
Yellen's draft testimony about the economics of Kyoto for the hearing before the House
‘Commerce Committee on March 4, 1998.

32, Given the significant economic costs projected by private sector studies, why did the
Administration abandon a year and a half-long effort to develop cost estimates of the President's
proposed policies to reduce greenhouse emissions?

32b. Please identify any and all private parties that are currently performing economic
analyses of the Kyoto treaty or any aspect of it for the Administration. Describe their work and
provide all products of their work in draft or final form.

E. International Emissions Trading

33a. Even assuming that effective rules and procedures can be developed for an international
‘emissions trading system and for joint implementation projects and that key developing countries
agree to pasticipste, isn’t there a real risk that these mechanisms could effect an enormous
transfer of wealth and jobs out of this country overseas, especially to the countries ofthe former
Soviet Union, China, India, South Korea, Brazil, and Mexico (i.c., that this system would be
essentially a foreign aid program)? Some studies have estirsated that more than 50% of our
reductions would have to be purchased from other countries.

33b. Please provide and document estimates of the percentage of U.S. emissions
reductions that might have to be purchased from other countries to minimize the costs of
reducing emissions and which countries likely would be the beneficiaries.

34, What real incentives do developing countries bave to participate in the international
emissions trading system, which would require them to commit to mandatory reductions, when
they can transfer emissions reductions credits in connection with joint implementation projects
‘and obtain financing through the Clean Development Mechanism?


49

so that each agency's regulatory actions are consistent with applicable law. After 2 years’
experience in carrying out our responsibilities under the Act, we can suggest several
areas in which OIRA should exercise more leadership within the executive branch
regulatory community, consistent with the intent of the Executive Order, to enhance
‘ORA's effectiveness and its value to the Congress and the public. We believe that OIRA

should:

~ develop a standardized reporting format that can readily be incorporated into GAO's

database providing the information of most use to the Congress, the public, and GAO;

= establish a system to monitor compliance with the filing requirement on an ongoing

basis; and

= provide clarifying guidance as to what is a nule that is subject to CRA and oversee the

process of identifying such rules.

‘Thank you, Mr. Chairman. This concludes my prepared remarks. I would be happy to

answer any questions you may have.


18

provide the specific budget account and a brief description of the program forall activities
between FY 89 and FY 93. OMB's answer to question 1C is in error since the published figures
differ from the total by $19 million, not $1 million due to rounding. Please explain this
discrepancy.

With respect to question 1D, OMB's May 13th letter did not provide deuiled information
to support each paragraph in the 1999 Budget briefing handout on CCTI. OMB's answer that "In
‘many instances, we identified the lead agency of agencies” is not responsive to my request for &

full identification of all agencies and their associated funding request. Please provide all ofthe

requested information for each paragraph and for each agency so that we can fully understand the
President's budget request for climate change funding.

‘OMB’s May 13th letter also did not answer question 2 which asked for historical budget
authority for the second category of funding, ie., only for programs devoted exclusively to

Climate change, not for the entire U.S. Global Change Research Program. Please indicate each
specific budget account and a brief description of each program devoted exclusively to climate
change. Question 2C asked OMB to provide evidence of any accomplishments from FY 97

funding in this second category and the associated performance measures, including annual data
for the most recent three-year period for which data are available. Please provide the requested

‘OMB's May 13th leter also ignored most of question 3 which asked for historical budget.
suthority for the third category of funding, ie, for any other climate change programs and
‘ctivities; instead, OMB addressed only "major budget components.” On an agency-by-agency
basis, please indicate each specific budget account and a brief description of each activity,
including all salaries and expenses accounts used for climate change programs and activities.

With respect to questions 4A and 4B, if, as OMB’s May 13th letter claims, OMB truly
does not have the information to answer these questions, then OMB is failing to meet its
responsibilities for coordinating government-wide implementation of the Government
Performance and Results Act (GPRA) and for ensuring that the agencies’ budget documents
submitted to Congress are consistent with the President's budget request. Therefore, please
nawer questions 4A and 43 by obtaining he noosa infornaton om ie Deprtoes of
Energy and the Environmental Protection Agency.

Finally, I note that OMB's letter does not mention the status ofthe information and the
‘produetion of the documents requested in my March 6, 1998 letter. As you know, I have raised
‘with Chairman Burton the possibility of issuing a subpoena for the documents because it has
been nearly three months since my initial request. Unless OMB can commit to a full and prompt
production of documents, I will pursue further the issuance of a subpoens.

Please contact Subcommittee Senior Counsel Keith Ausbrook at 225-4407 to discuss the
production of documents and sny other questions you may have regarding the Subcormmittee's

2


88

ANSWER Lic CEQ and OMB have no such analyses.
POLICIES WITHOUT ECONOMIC ANALYSES

“By providing incentives for early action to reduce emissions, attacking domestic
energy inefficiencies, and putting in place a market-based emissions trading
system, we can reach [our emission reduction targets] with minimum economic
costs.”

‘Statement of President Clinton
Climate Change Proposal
October 1997

The Administration’s Repeated Failure to Conduct Economic Analysis.

Given the significant economic costs projected by private sector studies,
why did the Administration abandon a year and a half-long effort to develop cost estimates
of the President's proposed policies to reduce greenhouse emissions? In testimony before
the House Subcommittee on Energy and Power on July 15, 1997, the Chair of the Council
of Economic Advisers, Dr. Janet Yellen, stated that President Clinton's top priority since
his first days of office, “bas been revitalizing the U.S. economy, creating jobs, and investing
in people and technology to enhance long-term growth.”

ANSWER 14a Please refer to Dr. Yellen’s testimony.

QUESTION 14 b How can the Administration defend its policy actions based on the results
of climate models that must take into account significant uncertainties surrounding the
effects of human activities on the climate, yet nevertheless consider economic modeling to
be “futile” (Dr. Yellen’ s expression at the House Commerce hearing on July 15, 1997)?

ANSWER 14b Acting in the face of uncertainty is an affliction of the human condition, but we,
at least, have put to rest our doubts about the merits of pursuing economically sound, voluntary
actions that have multiple benefits for the economy and the environment as part of a “no regrets”
strategy to begin to prepare for the future,

1Sa In testimony before the House Commerce Committee in 1997, former Under Secretary
of the State Timothy Wirth stated that an interagency “economics team” was formed to
analyze the impacts of climate change policies.

QUESTION 15h Please provide the following background information regarding that
group: when it was formed, the names of the participants and their agencies, the head of
the team, the scope of the group’s responsibilities, and to whom the group reported.


43

would result in a loss of savings that the rule would produce, or (3) that there was a

statutorily mandated effective date.

The former administrator of OIRA disagreed with our interpretation of the statutory "good
cause" exception. She believed that this interpretation would result in less public
participation in rulemaking because agencies would forgo issuing a notice of proposed
rulemaking and receipt of public comments in order to invoke the CRA "good cause”
exception. OIRA contends that the proper interpretation of "good cause" should be the
standard employed for invoking section 553(d)(3) of the APA, "as otherwise provided by
the agency for good cause found and published with the rule,” for avoiding the 30-day

delay in a rule's effective date required under the APA.

Since CRA's section 808(2) mirrors the language in section 553(b)(B), not
section 553(4)(3), it is clear that the drafters intended the "good cause" exception to be
invoked only when there has not been a notice of proposed rulemaking and comments

received.

In the last 3 months, our Office has not reviewed a major rule that did not properly
comply with the 60-day delay requirement. Also, the "good cause" exception has been
properly employed in those instances where no notice of proposed rulemaking was issued
or comments received. Finally, agencies are alerting the public, in the final rule

publication in the Federal Register, that the 60-day effective date stated in the rule may


129

ome ake
SS (re NOMED FIT CONGRESS sas
Bese Congress of the United States a
= House of Repcesentatives =
= COMMITTEE ON GOVERNMENT REFORM AN OVERSIGHT =
ae 2157 Raveunn House Ormce Buona Sere
ES Wasmaron, OC 20616-8143, ——
March 13, 1998

BY FACSIMILE

‘The Honorable Janet Yellen
Chairman

Council of Economic Advisers
Old Executive Office Building
‘Washington, D.C. 20500

Dear Chair Yellen:

‘The Subcommittee on National Economic Growth, Natural Resources, and Regulatory
Affairs is conducting oversight of the Administration's global climate change policies and its
initiatives to jummp-start U.S. effons to achieve the Kyoto Protocol greenhouse gas emissions
reductions targets.

Pursuant to the Constitution and Rules X and XI of the United States House of
Representatives, please provide the Subcommittee with detailed information in response to the
questions in sections A and B of the attached inquiry, to the extent that they are applicable to
yur agency, and the questions in sections C through E. In responding to this inquiry, please
Testate each question and subpart with cach of your answers, and follow the attached definitions
and instructions concerning the production of records.

Please provide your responses to the written questions and requests for production of
records not later than 12 noon, April 7, 1998 to the Subcommittee in Room 8-377 Rayburn. In
addition, please contact Larisa Dobriansky, Senior Counsel, at (202) 225-4407 as soon as
practicable to coordinate the timely production of the information to the Subcommittee.


us.

113

“Te

(a) What steps has OMB taken to ensure that the Forest Service reports these plans
to Congress as the law requires?

Given the fact that OIRA did not disagree with the Forest Service's conclusion
that these Plans do not constitute rules, OIRA has taken no steps to ensure that these
plans are submitted to Congress under the CRA. It is my understanding, however, that
the interested committees have received copies of Forest Service land management plans
for their review and consideration.

(b) Has OMB provided, formally or informally, any opinion or advice to the Forest
Service on the applicability of the CRA to the Tongass plan or any other LRMP?

No.

(©) Has the Department of Agriculture or the Forest Service submitted any forest or
land management plan to OMB for review pursuant to Executive Order 12866?
Please identify any such plan and deseribe any action taken by OMB with respect to
such plan.

OIRA has not reviewed any Forest Service land management plan under E.O.
12866.

‘To make the CRA rule reporting process work efficiently, OMB should be working
closely with GAO to establish a consistent format for providing all pertinent
information to Congress.

(a) What steps has OMB taken to develop uniform, government-wide procedures
for the reporting of all new final rules to Congress and a standard rule reporting
form that best facilitates the development of GAO's database of new rules?

In the past several months, an interagency group has discussed and drafted a
‘common form that agencies could use to submit final rules to Congress and GAO.
Agencies have developed a wide variety of regulatory management and tracking systems,
and the goal of the group has been to develop a common form that would not create
additional burden to any of these systems. The group has been working toward
development of a common form that would reduce the burden on agencies and make
submission of rules to GAO and Congress under the Act OIRA more effective and
efficient. The group has submitted a discussion draft of a common form to GAO, and
discussions are ongoing to explore the details of what information that form should
display, the possibilities of electronic submission, and the compatibility of the draft new
form with the existing computerized tracking systems already developed in the agencies.


122

Commerce (Q8-14), Defense (Q8-14), Energy (Q7-45), Interior (Q6-14), State (Q8-14), AID
(Q8-14), EPA (Q8-14, 30 & part of 18), NASA (Q7), CEQ (Q8-34), and the NEC (QI-14). We
still do not have the bulk of the requested documents from: OMB, CEQ, CEA, OSTP, State, and
Treasury.

Question ZA. Which of these replies are currently in OMB and/or White House Counsel
clearance? Which agencies have documents that are currently in OMB and/or White House
Counsel clearance? How long have they been under review? What factors are being used to
determine if a substantive answer or a document requires confidentiality?

Response. We can only provide you with information on agency responses submitted to OMB
for interagency review since OMB is not reviewing other agencies’ documents. As of July 22,
1998, the following agency responses are being reviewed: EPA (Q8-14, 18-19, 30), DOE (8, 14,
19, 20, 27, 31, 41, 43), and Treasury (Q8-14). The EPA reply has been in and out of the review
process for about a month as changes are made; the DOE and Treasury responses two weeks or
less. Questions about what factors are being used to determine whether documents require
confidentiality should be referred to the White House Counsel's Office.

Question 7B. Since OMB is responsible for preparing and preseating the President's budget
request, what is OMB doing to ensure prompt completion of agency responses to our March
inquiries?

Response. It is our understanding that all agencies have responded to the Subcommittee’s
questions about the President's budget.

Questions about 4 of the 5 Agencies in the President's $6.3 billion CCTI

Question 8. We have still not received any reply from one of the five agencies included in CTI
~- the Department of Agriculture. We understand that Agriculture's partial reply has been in
‘OMB clearance since April 20th, What is holding up OMB's clearance?

‘Response. The response to this question was provided in the July 10, 1998, letter to the
Subcommittee,

Question 9. Secretary Andrew Cuomo of the Department of Housing and Urban Development
(HUD) replied that “HUD's budget for FY 1999 and prior years do [sic] not contain funds for
research identified as part of the President's Climate Change Technology Initiative.” In follow
up, HUD stated “The HUD Office of Policy Development and Research Budget Request for FY
99... did not discuss Climate Change. That must have been added subsequently. Also attached
is the formal program plan of PATH (Partnership for Advancing Technologies in Housing)
developed jointly with private industry. Note that there is no discussion of global warming
anywhere in this plan .. . PATH is not a global warming program. . . During the planning
process, carbon emission and climate change has never even come up.”

+


127

Question L1A. Isn't this implementation of the Protocol prior to ratification because the Clean
Development Mechanism is a creature of the Kyoto Protocol?

Response. The Administration has stated numerous times that it will not implement the Kyoto
Protocol prior to Senate ratification, so it is unclear what was intended in EPA's response to the
Subcommittee. Since 1995, EPA has traditionally supported energy efficiency and renewable
energy projects funded as part of the U.S. Initiative on Joint Implementation. Many of these
projects take place in developing countries and have proven to be successful at reducing
greenhouse gas emissions.

Question 11B. Ambassador Eizenstat promised that there will be no implementation by the
Administration prior to Senate ratification. Will OMB direct EPA not to expend FY 98 funds for
this purpose?

Response. The Administration has stated that it will not implement the Kyoto Protocol prior to
‘Senate ratification.

Question 12. EPA's reply revealed over $85 million in grant and contract awards to one
organization -- ICF, Inc. -- from FY 93 to FY 97. Additionally awarded over $500,000 contract
awards to 9 other organizations and over $500,000 grant awards to 20 other organizations in this
S-year period. For example, LISBOA, Inc. received a contract for $3,030,830. These are huge
awards.

Question 124. Were all awards to ICF, Inc. made through competition? Were all over $500,000
‘contract and grant awards made through competition?

Response. We believe EPA is in a better position to answer your questions about contracts it has
with the private sector and suggest you contact them directly.

Question 12B. Has OMB reviewed the final reports from each of these huge awards?

Response. It is unclear from the information in your question what specific work EPA had
performed under contract, so it is difficult to know whether EPA staff have reviewed the final
reports associated with these projects. OMB does not receive copies of all reports contracted out
by agencies.
Question 12C. Has OMB reviewed the scope of work and deliverables for EPA's $389,409 grant
(5/1/97-11/30/98) to the World Resources Institute for “building business support for action on
climate change”? Is any part of this grant essentially implementation prior to ratification?

. OMB staff have not reviewed the scope of work and deliverables for EPA’s grant to
the World Resources Institute and have no information on this project.

“ne


61

CEA of obtaining a subpoena at this time is not only appropriate but also the only responsible
‘way to conduct oversight on these issues.

‘The Subcommittee is seeking to fulfill its Constitutional responsibilities on behalf of the
‘American people who are entitled to know the facts concerning the Administration's efforts on
global warming. { know that you do not want to be a party to concealing those facts.

‘As always, I appreciate your continuing interest in the work of the Subcommittee.

Sincerely,
David M. McIntosh
Chairman
‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

cc: The Honorable Dan Burton
‘The Honorable John Tiemey


CONTENTS

Hearing held on June 17, 1998 .
Statement of:
DeSeve, G. Edward, Deputy Director-Designate for Management, Office
of Management and Bu
Murphy, Robert P., gener:
Letters, statements, ete., submitted for the record by:
DeSeve, G. Edward, Deputy Director- Designate for Management, Office
of Management and Budget, prepared statement of
Mclntosh, Hon. David M., a Representative in Congress from the State
of Indiana, oa statment of .
Murphy, Rober
statement of ...

general counsel, General Accounting Office, Prepared

a)

Be

12

37


145

The attached document is the response by the Office of the Vice President to questions
ior the record submitted by the Subcommittee on Treasury. Postal Service and General
Government for the Subcommittees March 17. 1992. hearing.

ft was submited to the Subcommittee on April 29, 1992 by the Office of the Vice
President.


106

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, BC. 20503

July 10, 1998
The Honorable David Mcintosh
‘Chairman

‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

USS. House of Representatives

Washington, DC 20515

Dear Chairman McIntosh:

‘Attached please find a response to your questions stemming from the hearing held on
June 17, 1998 at which G. Edward DeSeve, Acting Deputy Director for Management, testified.
‘The questions related to the Congressional Review Act have been answered in full. The
‘questions related to the Climate Change Initiative have been answered in part. We will continue
to work on the answers to these questions and will forward them to you as soon as they are
complete.

Please contact Elizabeth Gore (395-4790) if you have any questions.

Sincpeey, Z
?
thy C6 La
eo
‘Acting Associate Director
for Legislative Affairs


26. — With respect to any analysis provided, please identify and explain the basis for
assumptions used regarding such factors as the rate of improvement in energy efficiency, the
effectiveness of market incentives in increasing the market share of fuels that emit less carbon,
and economic and demographic growth. Also, explain fully any assumptions on how emissions
reductions will be achieved, as for example, through the early retirement of coal plants or nuclear
plant life extensions.

27. Inconsidering the opportunity costs, evaluate the extent to which the Administration's
climate change strategy will require the diversion of funds from savings and/or investments
which would have provided other benefits, such as saving social security, or more funding for
‘education, health care, etc.

28. Inassessing the impacts on the U.S. of complying with the Kyoto targets and timetables,
please explain in detail the potential effects on the following indicators of economic
performance: gross domestic product (GDP), per capita GDP, unemployment, income and real
‘wages, trade competitiveness, and energy prices.

29. _ Inassessing the benefits of complying with the Kyoto treaty, please evaluate fully the
potential offsetting negative effects of exempting developing countries and of “carbon leakage.”
Also, if the economies of developed countries experience reductions in economic growth,
‘evaluate the impact that this will have on the ability of emerging countries with export markets to
transition to more energy efficient technologies.

30. President Clinton has suggested that the U.S. economy can continue to grow under this
agreement. Please indicate at what rate the Administration expects that the economy
continue to grow during the next ten 10 20 years if the treaty is ratified and at what rate itis
expected to grow if the treaty is not ratified.

31. Have any of the cost/benefit analyses performed by the Administration or any agency
‘een peer-reviewed? [If so, please identify the reviewers provide their comments on the analyses.
If not, does the Administration plan to do so? Please describe fully the steps that the
‘Administration plans to take.

32. Please describe in detail the strengths and weaknesses of the methodology of any
economic models used. Also, indicate the differences between the models used in any of the
cost/benefit analyses performed post-Kyoto and those used in any prior analyses performed by
the Administration.

33. In connection with these cost-benefit analyses, fully explain how the baseline(s) against
which costs and benefits were calculated was determined.


52

Mr. Murpuy. We've been working closely with your staff on each
of these issues and as soon as we have something that is accept-
able, we'll certainly talk to them.

Mr. MCINTOSH. Do you have any idea of where the $200,000 has
gone?

Mr. MurpHy. No, I don’t, Mr. Chairman.

Mr. McINTOsSH. Let me see what answer we get back from Mr.
DeSeve. At some point I want to find that out. As John indicated,
there may be some additional points that they raise. We'll leave the
record open for the next 5 days. If you have anything additional,
you’d like to submit, we'll invite you to do that. Thank you again
for coming and thank you for your good work on that.

The subcommittee is adjourned.

Mr. Murpuy. Thank you, Mr. Chairman.

{Whereupon, at 4:05 p.m., the subcommittee adjourned subject to
the call of the Chair.]

[Additional information submitted for the hearing record follows:]


101

© What was the longest review time for OMB clearance of an agency's climate change
response and for which agency?

+ What specific changes did OMB make to each of the agencies" intended replies?

+ Why did OMB remove some budgetary detail, such as in NSF’s reply, from some of
these intended replies?

Q7. We have not received complete replies from at least 15 of the 22 agencies. We still do not
have any answers to many questions from the following agencies: Agriculture (Q1-14),
‘Commerce (Q8-14), Defense (Q8-14), Energy (Q7-45), Interior (Q6-14), State (Q8-14), AID
(Q8-14), EPA (Q8-14, 30 & part of 18), NASA (Q7), CEA (Q8-34), and the NEC (QI-14). We
still do not have the bulk of the requested documents from: OMB, CEQ, CEA, OSTP, State, and
‘Treasury.

+ Which of these replies are currently in OMB and/or White House Counsel clearance?
Which agencies have documents that are currently in OMB and/or White House Counsel
clearance? How long have they been under review? What factors are being used to
determine if « substantive answer or a document requires confidentiality?

‘+ Since OMB is responsible for preparing and presenting the President's budget request,
what is OMB doing to ensure prompt completion of agency responses to our March
inquiries?

‘Questions about 4 of the 5 Agencies in the President's $6.3 hillion CCT]

Q8. We have still not received any reply from one of the five agencies included in CCTI - the
Department of Agriculture. We understand that Agriculture's partial reply has been in OMB
clearance since April 20th.

+ Whats bolding up OMB's clearance?

Q9. Secretary Andrew Cuomo of the Deparunent of Housing and Urban Development (HUD)
replied that “HUD’s budget for FY 1999 and prior years do {sic] not contain funds for research
identified as part of the President's Climate Change Technology Initiative.” In follow up, HUD
stated "The HUD Office of Policy Development & Research Budget Request for FY99... did not
discuss Climate Change. That must have been added subsequently. Also attached is the formal
brogram pan of PATH (Parvershi for Advancing Technologie in Housing) developed jointly
with pr ry. Note that there is no dis ‘of global warming anywhere in this plan

"PATH is nota global warming program .. During the planning process carbon emission and
<limate change has never even come up.”



26

Mr. DESEVE. I can’t answer the specific question for this budget
justification. There are a series of review processes that are con-
ducted by the resource management offices, by the agencies, and by
the budget review division that typically examine the literally mil-
lions and millions of numbers in the budget, but I don’t have cog-
nizance of the specific question you ask.

Mr. McINTOSH. OK, if you could get an answer for us, we’d ap-
preciate it.

Mr. DESEvE. I would certainly be happy to do that.

Mr. MCINTOSH. The other problem that we've got with the budget
requests is there don’t seem to be any performance measures and
I don’t know if they are available now, but the staff prepared for
me a chart that went through agency by agency to list the number
of performance measures, performance criteria for each request and
in the overwhelming number of cases, there were none. There were
a few here and now. What is OMB doing to ensure that there are
performance measures so that we can tell in Congress whether this
money is being well spent?

Mr. DESEVE. That’s a good question. I'd like to give you a general
answer. We have worked with agencies since the submission of
their strategic plans last September and their first-draft perform-
ance plans to continue to perfect those plans. They were updated
and included in the President’s budget this year to the extent that
they were part of the governmentwide performance plan and an
agency’s plans to the extent that they were part of the agency’s
budget submissions, as they should have been. We will continue in
the resource management offices to work with agencies to make
their plans better. Recently several of your colleagues on the Re-
publican side have sent us a letter requesting us to continue to
work with Congress and we're delighted to do so.

Mr. MCINTOSH. But they don’t seem to be reflected in the fiscal
year 1999 budget request.

Mr. DESEVE. I’d have to look at that. I don’t have that informa-
tion in front of me; I'll be happy to examine the table your staff
has prepared.

Mr. McINTOSH. And, specifically what I’d like to know is by what
time will you commit that we'll get a full set of performance meas-
ures for the global climate change request?

Mr. DESEVE. We've asked agencies generally, I can’t make a spe-
cific commitment. We’ve asked agencies generally that as they pre-
pare their fiscal year 2000 budgets, that as necessary they amend
their performance plans to reflect their conversations with Con-
gress and any changes they know about in their levels of authoriza-
tion for funding. A performance plan is contingent on the amount
of funding an agency may get, so there will always be changes in
that plan as congressional deliberation goes forward, so I can’t an-
swer your specific question. Our expectation is that the plans will
be modified as necessary based on congressional action and con-
sultation.

Mr, McINTOSH. When would we be able to see that up in Con-

SS?

Mr. DESEVE. You can certainly request it and as soon as the

agencies have it——


22

-2-

transmittal letter. The transmittal letter has to be addressed
specifically to the identified individuals, and signed by an
agency official at a level appropriate for transmitting documents
to the Congress. The cover letter also has to include a contact
person and telephone number in case they have any questions
concerning the rule.

Submissions are to be sent to both Houses of Congress and GAO:

The Honorable Al Gore, the President of the Senate, S-212, the
Capitol, Washington, D.C. 20510;'

The Honorable Newt Gingrich, the Speaker, H-209, the Capitol,
Washington, D.C. 20515; and

Mr. Robert P. Murphy, the General Counsel, General Accounting
Office, Room 7175, 441 G Street, N.W., Washington, D.C. 20548.

6. Does the agency have to send anything else to the GAO?

A:

Yes. When an agency submits this "report" to Congress and the
GAO, the agency is also to submit to GAO, and to make available,
upon request, to each House of Congress the analyses prepared as
part of the rulemaking. These include:

Any cost-benefit analysis [and, if the risk assessment is set
forth as document separate from the benefit analysis, the risk
assessment] ;

Any Regulatory Flexibility Analysis (including any
certification that such an analysis is not needed);

Any action under Title II of the Unfunded Mandates Reform Act
of 1995 (i.e, the required written statement and attendant
selection of the “least costly, most cost-effective or least
burdensome alternative"); and

“Any other relevant information or requirements under any
other Act [e.g., Paperwork Reduction Act of 1995] and any
relevant Executive Orders."

Agencies are to send these analyses to GAO and make them
available to Congress for al] rules, not just those designated as
major."

+ Administrator Sally Katzen’s April 2, 1996, memorandum

suggested that submissions to the Senate and House should be sent
to the Secretary of the Senate and the House Clerk. Those _
Offices have since requested that submissions go to the President
of the Senate and the Speaker. That change in addressees is set
forth in Sally Katzen’s April 19, 1996, memorandum.


105

Q22. To the extent that OMB has not issued guidance on definition ofa rule, the legal effect of
the reporting requirement, and the good cause exemption, what are OMB's plans to develop and
issue guidance on these issues?

Q23. The CRA’s definition of a rule is not limited to agency statements for which the notice and
‘comment procedures of 5 U.S.C. § 553 are required. Rather, the CRA's definition tracks the
much broader definition of 5 U.S.C. § 551, which covers any agency statement of general
applicability and future effect designed to implement, interpret, or prescribe law or policy. The
legislative history of the CRA makes clear that Congress chose the broader definition of § 551 to
censure that the agencies would report not only notice-and-comment rules, but also policy
statements, guidances, enforcement manuals, interpretative rules, and other rules of whatever
format, What steps is OMB taking to ensure that the agencies are aware of the breadth of
coverage of the CRA and are fully complying with the reporting requiremeats forall rulemaking
formats, including policy statements, guidances, and other formats?

Q24. The Forest Service's Department of Agriculture has openly and deliberately refused to
repor its land and resource management plans (LRMPs) to Congress, despite the fact that the
plans fall well within the CRA’s broad definition of a rule. For example, as the GAO has
‘testified, the Tongass National Forest Plan is an agency statement of general applicability and
future effect, designed to implement Forest Service policy and is, therefore, a rule forthe
purposes of the CRA.

(a) What steps has OMB taken to ensure that the Forest Service reports these plans to
Congress as the law requires?

() Has OMB provided, formally or informally, any opinion or advice to the Forest
Service on the applicability of the CRA to the Tongass plan or any other LRMP?

(©) Has the Department of Agriculture or the Forest Service submitted any forest or land
_management plan to OMB for review pursuant to Executive Order 1286? Please
identify any such plan and describe any action taken by OMB with respect to such plan,

Q25. To make the CRA rule reporting process work efficiently, OMB should be working closely

‘with GAO to establish a consistent format for providing all pertinent information to Congress,
(a) What steps has OMB taken to develop uniform, government-wide procedures for the
reporting of all new final rules to Congress and a standard rule reporting form that best
facilitates the development of GAO's database of new rules?

(b) What are OMB's plans 10 work with GAO to develop a standard form this fiscal
year?


34

gressional Review Act or the CRA. Since I testified before this sub-
committee on March 10, in some areas we have seen enhanced co-
operation from OIRA in implementing the CRA. In additional, exec-
utive branch and independent agencies appear to be more cog-
nizant of their responsibilities under the requirements of the CRA.
However, we do have remaining areas of concern. I will discuss
what progress has been made in four areas during the past 3
months.

First, with respect to unfiled rules. Before a rule can become ef-
fective, it must be filed in accordance with the statute. Prior to the
March 10 hearing, GAO conducted a review to determine whether
all final rules covered by CRA and published in the Federal Reg-
ister were actually filed with the Congress and with GAO. Our re-
view covered the 10-month period from October 1, 1996, to July 31,
1997. Our review disclosed that as of your March 10 hearing, 279
rules should have been filed with us and after we identified those
with the agencies and called the agencies, 264 had been subse-
quently filed. As of today, two of those rules remain unfiled. As we
noted at the hearing, OIRA did not play a role in ensuring which
agencies, that the agencies which had failed to file rules were both
aware of the CRA filing requirements and were complying with
them.

Last week our office concluded a second review covering the 5-
month period from August 1, 1997, to December 31, 1997, which
we conducted in the same manner as the prior review. The initial
list, which we forwarded to OIRA back in April for distribution to
the concerned agencies, identified 115 rules from 21 agencies which
had not been filed. On June 2, OIRA agreed to followup with the
agencies that had not responded. As of June 11, 45 of the 115 rules
had been filed; 25 were not subject to CRA because they were rules
of particular applicability; and 24 had been previously filed and our
data base was corrected. Twenty-one rules from eight agencies re-
mained unfiled.

I would like to point out two areas which show improvement.
First, the number of unfiled rules which should have been filed
were 66 for the 5-month period; this is down markedly from the
279 for the prior 10-month review, thus indicating a more con-
certed effort on the part of agencies to fulfill their responsibilities.

Second, OIRA did become more involved and conducted the
lowup contacts with agencies after OIRA’s distribution of the initial
list. Our second area of concern has been the 60-day delay which
is built into the statute. Some agencies failed to delay the effective
date of major rules for 60 days as required by the act. At the time
of my prior testimony, the effective date of eight major rules had
not been delayed. Agencies were not budgeting enough time into
their regulatory timetable to allow for the delay and were misinter-
preting the good-cause exception to the 60-day delay period filed in
the statute.

The good-cause exception is only available if a notice of proposed
rulemaking was not published and public comments were not re-
ceived. At the March 10 hearing, I described in some detail our dif-
ference of opinion with the former administrator of OIRA as to how
to interpret that good-cause exception. One of the things that I can
say today is that during the last 3 months, since your hearing, not



CLIMATE CHANGE QUESTIONS

Qi6.

OMB hes not produced the documents, such as environmental, cost-benefit, and/or
economle data and analyses retating to the Administration’s climate change policies
and the Kyoto Protocol that we requested in March.

(a) Don’t you believe that Congress and the American public have right to know
the full range of risks that the United States may face in entering into this agreement
and the poteatial economic consequences of the President's climate change policies?

(®) Isn’t our review of these documents essential to Congress’s role to ratify and
implement the Protocol?

(©)When will these documents be provided?

‘These documents have been produced. The June 7 letter from Council on
Environmental Quality chair McGinty produced both CEQ’s and OMB's documents in
response to the subcommittee’s March 7 request, which was sent jointly to CEQ and
OMB.

‘We have still not received any reply from one of the five agencies included in CCTI-
the Department of Agriculture, We understand that Agriculture's partial reply has
been in OMB clearance since April 20th.

What is holding up OMB’s clearance?

‘The Department of Agriculture’s response has been cleared by OMB, and was
subsequently sent to the Subcommittee on June 22, 1998.

Has OMB advised the key agencies involved in the development of the President's
climate change initiative — including CEQ, CEA, State, and Treasury ~ mot to
provide the requested information about thelr considerable salaries and expenses
(including overseas travel) incurred to date and requested for FY 99?

No.


136

‘Administration to delay any unilateral executive branch action to address global warming until
that cooperation is forthcoming?

2le. Given that the Kyoto Protocol seeks to address a global issue, isn’t harmful to U.S.
interests to proceed without the full participation of developing countries?

21d. Besides being unconstitutional, isn’t it also premature and harmful to U.S. interests
to take such unilateral actions, without ratification, when the Administration has characterized
the Protocol as a “work in progress” - a Protocol that “is not yet fully complete nor ready for the
President's submission to the Senate”?

D. Cost/Benefit Analysis of the Kyoto Treaty

22a. Please provide any and all analyses that the Administration or any federal agency prepared
(or had prepared) or is preparing (or is having prepared) of the costs and benefits of imposing on
the U.S. the binding targets and timetables set forth in the Kyoto Protocol for reducing
greenhouse gas emissions, taking into account the global implications of the way in which this
agreement is structured. Also, please analyze and document the following:

22b, Whether the benefits of implementing this Protocol are justified by the costs;

22c. Evaluate the effectiveness of this agreement by comparing the marginal abatement
costs of the most plausible alternative scenarios for meeting the Kyoto targets, given the way in
which this agreement is structured, with the marginal costs of other reasonable alternative
compliance schemes;

22d. With respect to each scenario that is analyzed, identify the assumptions used,
explain any uncertainties concerning the assumptions, and examine the sensitivity of net effects
to the different compliance strategies, using a range of plausible assumptions about future
‘economic development and about fundamental climate processes;

22e. Evaluate the opportunity costs of pursuing the Administration's strategy for the
abatement of greenhouse gas emissions under the terms of the treaty; and

22f. Evaluate how the benefits and burdens of complying with this treaty would be
distributed on the national and household levels, describing, among other things, the disparate
regional and industrial sector impacts, and the effects on different income levels.
23a. In evaluating altemative scenarios, please examine the following:

23b, Compare the economic and environmental effects of not including developing
countries in the effort to reduce global emissions (with the potential for binding developed


58
‘Thank you for your cooperation in this matter.

Sincerely,

Qed Me tar

David M. McIntosh.

‘Chairman

‘Subcommittee on National Economic Growth,
‘Natural Resources, and Regulatory Affairs

‘The Honorable Dan Burton, Chairman
‘Committee on Government Reform and Oversight

‘The Honorable John Tiemey, Ranking Member
‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

‘The Honorable Henry Waxman, Ranking Member
Committee on Government Reform and Oversight


112

+6.

requirements for all rulemaking formats, including policy statements, guidance, and
other formats?

OIRA notified agencies of the full scope of the CRA in its original April 2, 1996,
memorandum to the agencies. As I indicate in my answer to Question 20(c), and given
the nature of the CRA, it is the responsibility of the agencies, working with their
respective authorizing committees, to ensure compliance with the CRA. It is my
understanding that certain committees have asked certain agencies to submit particular
kkinds of material to them to satisfy their needs under the CRA. Otherwise, I am unaware
‘of complaints to the agencies from their authorizing committees about the scope and kind
of material that they are receiving.

The Department of Agriculture’s Forest Service has openly and deliberately refused

to reports its land and resource management plans (LRMPs) to Congress, despite
the fact that the plans fall well within the CRA’s broad definition of a ruie. For

example, as the GAO has testified, the Tongass National Forest Plan is an agency
statement of general applicability and future effect, designed to implement Forest
Service policy and ts, therefore, a rale for the purposes of the CRA.

On July 9, 1997, the former OIRA Administrator Sally Katzen testified before the
‘Senate Committee on Energy and Natural Resources and the House Committee on
Resources to discuss the applicability of the CRA to the final draft of the Tongass Land
Management Plan. (OIRA staff provided this testimony to subcommittee staff some
months ago.) She stated:

“{I]n preparation for this testimony, I sought to ascertain whether the
Forest Service has decided that the Tongass Land Management Plan is otis not a
‘rule’ as defined in the Congressional Review statute. | was advised that the
Forest Service does not consider this Land Management Plan a ‘rule’ within the
meaning of the Congressional Review statute. Since that statute passed on March
29, 1996, the Forest Service has issued six revisions of Land Management Plans,
none of which was treated as a ‘rule’ under the Congressional Review statute.
Nor, I understand, has the Forest Service ever treated its Land Management Plans
as ‘rules’ subject to the APA’s informal rulemaking procedures under 5 U.
553.

“| would note that under Executive Order No. 12866, and its predecessor
Orders, Nos, 12291 and 12044, OIRA (or its predecessor) has been given the
responsibility to review agency rulemakings. 1 am advised that OIRA has never
reviewed Forest Service Land Management Plans under these Orders. During my
tenure, OIRA has not reviewed any Forest Service Land Management Plans, nor
do we disagree with the Forest Service's conclusion that these Plans do nat
constitute ‘rules.’ (pp. 3-4)


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28

Mr. McINTOsH. Will you join me in asking that they resolve that
in the next week?

Mr. DESEvE. I will certainly ask them to expedite the review of
those documents. Yes, sir, I will definitely do that.

Mr. McInTosu. And that, if there’s no legal reason they can’t be
sent, they should be sent?

Mr. DESEVE. I'll work to make sure that they do everything that
is necessary.

Mr. McINToSH. The other problem we've been having is difficulty
in getting the responses from some of the 22 different agencies. Did
OMB provide any guidance to the agencies in responding to these
requests on global climate change?

Mr. DESEVE. I know of no guidance they’ve provided.

Mr. MCINTOSH. Were there any conference calls?

Mr. DESEVE. I was not involved in any; I have no knowledge of
any conference calls.

Mr. MCINTOSH. Could you go back——

Mr. DESEVE. That’s not to say there weren’t any; I simply don’t
know of any.

Mr. MCINTOSH [continuing]. Could you go back and find out from
the staff if there were and if so, what type of guidance was given
out on those?

Mr. DESEVE. Sure.

Mr. McINTOsSH. Did OMB advise the agencies about releasing
not-yet-publicly available documents on economic or environmental
data?

Mr. DESEVE. I’m sorry. I just don’t know the answer because I
wasn’t involved in those issues.

Mr. McINTosu. OK. If you can take that back, and I’ve got a cou-
ple of other questions too that we'll give to you in writing to find
out.

Mr. DESEVE. That will be great and we'll make sure that—some-
one, I’m sure, is writing these down now. We'll look at the early
draft of the transcript and whatever you send us down we’ll move
quickly to deal with those.

Mr. McInTosu. The other thing I understand is it has taken an
unusual amount of time for OMB clearance on these. What is the
average OMB clearance time for agency responses to congressional
inquiries?

Mr. DESEVE. From my experience, with my experience only, it
can be very rapid turnaround, from a day or two, to very long turn-
around. OMB clearance involves the legislative review process,
which allows other agencies to comment. It allows counsels within
the White House to comment. It’s seldom that it is OMB itself in
the legislative review process that is holding it up. It is typically
a reconciliation of one department or agency’s concern with another
department or agency’s concern. I have seen things held up for sev-
eral months in that process, trying to resolve such concerns, par-
ticularly legislative matters.

Mr. McINTOSH. Now, did OMB make any changes or suggest
changes to the agencies in their responses?

Mr. DESEVvE. I don’t know the answer to that question; I wasn’t
involved in the process.



94

Answer 31 Please refer to the answer to question 24a.

QUESTION 32 Please describe in detail the strengths and weaknesses of the methodology
of any economic models used. Also, indicate the differences between the models used in
any of the cost/benefit analyses performed post-Kyoto and those used in any prior analyses
performed by the Administration.

ANSWER 32 Please refer to the answer to question 24a,

In connection with these cost-benefit analyses, fully explain how the
baseline(s) against which costs aud benefits were calculated was determined.

ANSWER 33 Please refer to the answer to question 24a.

QUESTION 34a Please provide all records of written or oral comments from other federal
agencies on each of the cost/benefit analyses that were performed.

ANSWER 34a Please refer to the answer to question 24a,

Please provide all records of comments submitted by federal agencies on
Dr. Janet Yellen's draft testimony about the economics of Kyoto for the hearing before the
House Commerce Committee on March 4, 1998.

ANSWER 34b This information implicates the confidentiality of Executive Branch deliberations
and decision-making and has been referred to the Counsel to the President of the United States.

International Emissions Trading: Not a Panacea

QUESTION 35 As a practical matter, until the Conference of the Parties makes all of the
decisions that it is empowered to make under Article 17 of the Kyoto Protocol concerning
the establishment of rules and procedures for international emissions trading, isn’t it
premature for the Administration to forecast definitively that the agreement would result
in, at most, modest energy price hikes?

ANSWER 35 Clearly, a failure to attain effective emissions trading would raise compliance costs
with a ratified and implemented Protocol. That is why getting the “rufes of the road” in place
and working hard on the diplomatic front are such important U.S. priorities.

QUESTION 36a With respect to the rules and procedure for international emission trading.
that have yet to be developed, what are the minimum requirements that the Administration
is seeking to assure an efficient and effective system for lowering the costs of emissions
reductions?

4


9

Mr. McINTosH. Thank you, Mr. Tierney. If you’re concerned
about the breadth of those—let me share with you. I’ve worked
with one of your colleagues, John Dingell, many times when he was
the chairman. I still don’t think our letters quite match up to the
breadth and detail of his, but it is something that I think is a long
history here in Congress. Does anyone else want to make an open-
ing statement? Dennis, do you, or?

ir. KUCINICH. Just delighted to be here, Mr. Chairman.

Mr. McINTosH. Let us proceed with our first witness. Mr. Ed
DeSeve, Acting Deputy Director for Management at the Office of
Management and Budget. Mr. DeSeve, please stay standing. We
have, at the request of the chairman, a policy of asking all of our
witnesses to be sworn in.

{Witness sworn.]

Mr. McINTOSH. Let the record show the witness answered in the
affirmative. Mr. DeSeve, we have a full, printed copy of your testi-
mony which will be included in the record. I would ask you now
to sive us a summary of that and any points that you would like
to make.

STATEMENT OF G. EDWARD DESEVE, DEPUTY DIRECTOR-DES-
IGNATE FOR MANAGEMENT, OFFICE OF MANAGEMENT AND
BUDGET

Mr. DESEvE. Thank you very much, Mr. Chairman. The Congres-
sional Review Act has the strong support of President Clinton. It
was signed into law on March 29, 1996. I welcome the opportunity
to discuss what has happened over the past 2 years and | to hear
the experience of GAO in administering the law. To help us focus
our discussion, we can summarize the legislation in general terms
by saying that agencies are required—and you had it well put over
here—that before a rule can take effect, they must submit to each
house of Congress and the Controller, a report. When an agency
sends a rule to Congress and GAO, the agency is to indicate wheth-
er the rule is major or not. The statute directs the Office of Man-
agement and Budget’s Office of Information and Regulatory Affairs,
to find out whether a rule meets the statutory definition of major,
that is, whether the rule is likely to result in an annual effect on
the economy of over $100 million; a major increase in costs or
prices; or significant adverse effects on competition, employment,
investment, productivity, innovation, or ability of the United
States-based enterprises to compete with foreign-based enterprises.
That’s a major undertaking that OIRA has responsibility for.

The designation of a rule as major has several consequences. I
want to stress that there are two distinct time periods in the stat-
ute, one, the delay in the effective date for major rules, and, two,
the congressional review period. For the effective date, major rules
can only take effect, with certain exceptions, 60 calendar days after
submission to Congress and GAO. Nonmajor rules take effect as
they normally do after submission. For the congressional review pe-
riod, if within a time period a Member of Congress introduces a
joint resolution of disapproval, then the joint resolution is subject
to certain expedited procedures for consideration in Congress. All
rales are subject to this congressional review for 60 legislative

lays.


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17

Sen o« SEs
gece Congress of the United States =
Pao Foouse of Representatives Eee
= ‘COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT Hi

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2157 Ravounn House Orice Buna
Wasranaron, DC 20518-6149

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May 27, 1998
BYEACSIMILE
The Honorable Jacob J. Lew
sng Di

‘Acting
Office of Management and Budget
Washington, D-C. 20503

Dear Acting Director Lew:

‘The Office of Management and Budget’s (OMB) May 13, 1998 letter to me is
unacceptable as a response to the inquiries of the Subcommittee on National Economic Growth,
‘Natural Resources, and Regulatory Affairs relating to the White House Initiative on Global
Climate Change. The Subcommittee insists on complete answers to its March 2, 1998 letter.
‘This letter explains why OMB's May 13th answers are inadequate and, in some cases, restates
the questions to assist you in providing complete answers.

First, question 4 in my March 2nd letter asked for ali performance measures related to
climate change. OMB’s May 13th cover letter states “We have also included same examples of
performance measures related to the climate change initiative" (emphasis added). Clearly,
some” is not “al.” Please identify all government-wide performance measures (including
emissions reductions from the 1990 base year) and agency-specific performance measures,
including data for at least Fiscal Year (FY) 1997, FY 98, and FY 99.

‘Second, OMB's May 13th letter failed to respond fully to my questions about funding for
three separate categories of climate change programs and activities. The first category covered
the Climate Change Technology Initiative (CCTI) and any predecessor programs for the
Activities included in CTI. The second category covered the U.S. Global Change Research
Programs devoted exclusively to climate change (emphasis added). The third category covered
any other climate change programs and activities, including related salaries and expenses,
‘accounts (emphasis added).

OMB’s May 13th letter also failed to address fully question | in my March 2nd letter
which asked for historical budget authority from FY 89 to FY 9 forthe first category of
funding. Were any climate change activities funded in the first category between FY 89 and FY
93 or were all climate change activities newly initiated in FY 94 of subsequent years? Please

!
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83

QUESTION Sa Article 3.2 of the Kyoto Protocol states: “Each Party included in Annex [,
by 2005, shall have made demonstrable progress in achieving its commitments under this
Protocol.” Please explain how the Administration is interpreting this provision of the
treaty.

ANSWER Sa The U.S. opposed efforts by some nations to mandate early control actions by
2005. It is our position that the article 3.2 provision regarding “demonstrable progress” is a
general and non-binding provision,

QUESTION Sb Does the Administration believe that its Global Climate Change Initiative,
including the CTI, will enable the U.S. to make demonstrable progress in achieving its
commitments under the Kyoto Protocol?

ANSWER Sb As stated by the President in his October 22, 1997 policy announcement, the CCTI
is a domestic initiative that is both good for our economy and good for the environment. It will
enhance our economic productivity while helping the U.S. reduce greenhouse gas emissions and
reduce economic and environmental risks associated with inaction.

QUESTION 5¢ Please provide and document the Administration's annual performance
measures for its 5-year Climate Change Technology Initiative (CCTD. In this regard,
provide the fotlowing: the 1990 U.S. emissions level, data on actual emissions reductions for
Fiseal Year 1997, and then projected emissions reduction beginning with Fiscal Year 1997
and then for each year up to and including Fiscal Year 2003.

ANSWER Sc The President's 1999 Budget Request and an attached fact sheet by the Office of
Management and Budget (OMB) contain details about the CCTI as do submissions by the
various Federal department and agencies responsible for pieces of the CCTI.

QUESTION 5d Please specify the annual greenhouse gas emissions reductions that the
Administration estimates will occur between FY 1999 and FY 2005 from implementing
each element of its Global Climate Change Initiative

ANSWER Sd We anticipate the ability to answer such questions after Congress has enacted the
President's program and it is in place. Analysis of this sort prior to achieving consensus on this
program would be premature.

QUESTION 6a The Administration has maintained that the CCTI is « “no-regrets”
proposal; that is, regardless of whether or not there is a real threat of global warming, this
proposal is justified on its own merits as good energy and environmental policy. In view of
this claim, please demonstrate the need for this initiative based on reasons other than
facilitating green house gas emissions reductions.

ANSWER 66 Significant improvements in economic productivity and national energy security
3


Chairman David M. Mcintosh
‘Opening Statement
‘The White House Global Climate Change Initiative and
Congressional Review Act Implementation:
Is OMB Hiding the Truth about New Regulations and Programs?
June 17, 1998

‘The purpose of today’s hearing is to examine the record of the Office of Management and Budget
in telling the American people the truth about new federal programs and regulations.

In particular, we will address two issues: (1) OMB’s cooperation, or lack of cooperation, with the
‘Subcommittee’s requests for information regarding the White House Climate Change Initiative,
including OMB's review of pending letters of response from specific agencies; and (2) OMB's
progress, or lack of progress, in implementing the Congressional Review Act (CRA).

T want to welcome Mr. Ed DeSeve, OMB's Acting Deputy Director for Management, responsible
for regulatory affairs.

want to welcome also Mr. Bob Murphy, the General Counsel of the General Accounting Office.
Bob testified before the Subcommittee in March on CRA implementation. Bob, I want to thank
‘you from the outset for the strong leadership and consistent commitment you and your staff have
shown by working with OIRA and the Subcommittee to make the CRA work as it was intended
to work.

This hearing is about information. Congress and the American people have a right to know the
facts about new regulations and programs — before those regulations and programs go into
effect.

‘They have a right to know where their tax dollars are going and how these new regulations and
programs will affect their lives and livelihoods.

‘What are the costs and benefits?

What will it cost families and local communities?

‘How will it affect workers and small businesses?

‘The American people have a right to know the answers to these basic questions.

But, in the case of the Administration's climate change policies and in getting useful information
about all new regulations, Congress and the public are not getting these answers.
‘These are OMB's responsibilities, and, in both areas, the Subcommittee is concerned about the

job OMB is doing. OMB has been unresponsive to the Subcommittee’s efforts to obtain
information and documents that would justify the President's Budget request for $6.3 billion in


22.

Q23,

ul

“5

IRA has reiterated that no rule can legally take effect until itis reported to
Congress and GAO under the CRA in staff to staff discussions with agencies and in
discussions with the Regulatory Working Group. For example, when OIRA sent the
GAO list of final rules to agencies on April 8, 1998, Acting Administrator Don Arbuckle

ized that, “under the CRA, a final rule has to be submitted to Congress and the
GAO before the rule can take effect.” Agencies are well aware of this provision and
appear to be taking appropriate steps to ensure proper submission of final rules to GAO
and Congress so that rules can take effect as planned.

OIRA has also made available, on request, the April 28, 1997, letter signed by
former OIRA Administrator Sally Katzen to Chairman George W. Gekas, which
discusses the meaning of the “good cause” exemption in § 808(2) of the CRA. (OIRA
staff provided this material to subcommittee staff some months ago.) In that letter, the
former OIRA Administrator suggested that § 808(2) could be interpreted to permit an
agency to waive the 60-day delay in implementation even if the major rule had been
published for public comment. The former OTRA Administrator explained that, even if
the agency has “good cause” to have the final rule take effect more quickly, the rule will
likely be a better rule because it has been subject to public notice and comment. Public
‘comment can assist the rulemaking agency, and improve the decision-making process, by
providing new factual information, by offering different perspectives on an issue, and by
suggesting altemative approaches for addressing a problem.

To the extent that OMB has not issued guidance on the definition of a rule, the legal
effect of the reporting requirement, and the good cause exemption, what are OMB"s
plans to develop and issue guidance om these issues?

‘OMB does not have plans at this time to issue additional guidance to the agencies.
However, OMB would of course be interested in providing guidance should we conclude
that there was a problem developing that should be addressed and is not adequately
addressed by existing guidance. With the exception of the recent GAO report on the use
of “interim final” rules, we have not seen evidence that there is a potential problem in
these areas.

‘The CRA’s defialtion of a rule is not limited to agency statements for which the
notice and comment procedures of 5 U.S.C. § 553 are required. Rather, the CRA’s
definition tracks the much broader definition of 5 U.S.C. § 551, which covers any
agency statement of general applicability end future effect designed to implement,
Interpret, or prescribe {aw or policy. The legislative history of the CRA makes clear
that Congress chose the broader definition of § 551 to ensure that the agencies
would report not only notice-aud-comment rules, but also policy statement,
guidance, enforcement manuals, interpretive rules, and other rules of whatever
format. What steps ts OMB taking to ensure that the agencies are aware of the
breadth of coverage of the CRA and are fully complying with the reporting


81

QUESTIONS FOR THE RECORD FROM DIRECTOR FRANKLIN D. RAINES AND
CHAIRMAN KATHLEEN A. McGINTY
FOR CHAIRMAN DAVID M. McINTOSH

IMPLEMENTATION WITHOUT RATIFICATION

“We have no intention through the back door or anything else. without Senate
confirmation, of trying to impose or take any steps to impose what would be
binding restrictions on our companies, on our industry. on our business, on our
agriculture, on our commerce, or on our country, until and unless, the Senate of
the Unites States says so.”

Statement of the Honorable Stuart E. Eizenstat
Under Secretary of State for Economic, Business, and
Agriculture Affairs

Before the U.S. Senate Committee on Foreign Relations
February 1998

“Whether there is an agreement in Kyoto or not, the United States is prepared,
under President Clinton’s leadership, to unilaterally take steps that we believe
should be taken in order to deal with this problem.”

Statement of Vice President Gore
December 1997

Unilateral Executive Actions on a Global Issue.

Given that the Kyoto Protocol seeks to address a global issue, isn’t it
harmful to U.S. interests to proceed without the full participation of developing countries?

ANSWER | As Undersecretary of State Stuart Eizenstat testified before Congress recently, the
President will not seek to implement the Kyoto Protocol without the advice and consent of the
USS. Senate. The President has made it clear that the Protocol does not yet include the
meaningful participation of key developing countries. Until it does, he will not submit it for
Senate approval.

QUESTION 2 Besides being unconstitutional, isn’t it also premature and possibly
counterproductive for the United States to take unilateral executive branch action, without
ratification, when the Administration has characterized the Protocol as a “work in
Progress”?

ANSWER 2 The President indicated in his October 22, 1997 announcement of his policy (see
‘enclosures) that he believes itis in the best interest of the U.S. to begin taking long-term steps to

1


107

CONGRESSIONAL REVIEW ACT QUESTIONS

Use of Additional Funds Intended for CRA Implementation

Q17. Our subcommittee worked closely with the Appropriations Committees last fall to
Increase OMB’s funding by $200,000 for the specific purpose of implementing the
Congressional Review Act (CRA). Despite clear report language and floor
statements, it appears that OMB has continued its business-as-usual approach to
CRA implementation and has used the extra money for other purposes of OMB's
own choosing. What specifically has OMB done, if aaything, to improve Its
performance since recelving this additional funding?

Regarding the $200,000 provided to OMB, please see our response to Question
18, below.

Regarding implementation of the CRA, OMB has not only fully met its

responsibilities under the Act, but has gone beyond these responsibilities over the past
‘year working with agencies and GAO to help them meet their duties under the Act. As I
described in my testimony, the sole statutory responsibility of OIRA under CRA is to
determine whether an agency's final rule is “major” and thus subject to certain procedures
and General Accounting Office (GAO) oversight under the CRA. Those “major rule”
procedures are in place and are now implemented routinely. The CRA does not confer on
OMB any statutory authority or responsibility to oversee compliance with the Act.

OIRA is also working cooperatively with GAO. For example, last October, GAO
started to monitor whether agencies were submitting to Congress and the GAO all the
final rules that they should. GAO provided OIRA with alist of 498 final rules that
agencies had published in the Federal Register, but that apparently had not been
submitted to GAO (and presumably to Congress) under the CRA. (None of the 498 final
rules was a “‘major” rule.) OIRA forwarded this GAO list to the agencies listed, and
encouraged them (1) to discuss with GAO what was or was not a “rule” as defined in the
CRA, and (2) to submit those “rules” that had mistakenly not been transmitted to
Congress. Agencies found that in some cases rules had in fact been submitted to GAO
and the Congress; in some cases items on the list were not rules under the Act; and in
‘some cases they had not submitted rules. In this latter case, agencies took corrective
action. By the spring of 1998, all but a handful of these rules had been submitted as
required by the CRA.

This April, GAO sent OIRA another list of 115 final rules that had been published
in the Federal Register during a second time period and not submitted to GAO (only one
of which was a “major” rule, a rule issues by an independent agency). Again, OIRA sent
the list to the appropriate agencies. In addition, through the interagency Regulatory
Working Group, OIRA urged agencies to ensure that they submit all final rutes,
reminding them that under the CRA a rule cannot take effect until it is submitted to
Congress and GAO. OIRA staff also followed up by calling agency staff to urge them to
work with GAO to ensure complete, timely submissions, As of July 10th, there were



92

ANSWER 24c Please refer to the answer to question 24a.

QUESTION 244 With respect to each scenario that is analyzed, identify the assumptions
used, explain any uncertainties concerning the assumptions, and examine the sensitivity of
net benefits to the different compliance strategies, using a range of plausible assumptions
about future economic development and about fundamental climate processes;

ANSWER 24d Please refer to the answer to question 24a.

QUESTION 24¢ Evaluate the opportunity costs of pursuing the Administration's strategy
for the abatement of greenhouse gas emissions under the terms of the treaty; and

ANSWER 24¢ Please refer to the answer to question 24a.

Evaluate how the benefits and burdens of complying with this treaty
‘would be distributed on the national and household levels, describing among other things,
the disparate regional and industrial sector impacts, and the effects on different income
levels.

ANSWER 24f Please refer to the answer to question 24a.
2Sa In evaluating the alternative scenarios, please examine the following:

25b Compare the economic and environmental effects of not including developing countries
in the effort to reduce global emissions (with the potential for binding developed countries
to even greater obligations, without limiting developing countries) against the effects of
addressing greenhouse gas mitigation on a global scale by the international community.

25 Compare the economic and environmental effects of complying within the time frames
set forth in the Kyoto Protocol with the effects of complying over a longer time period.

25d Compare the impacts of reducing greenhouse emissions using international emissions
trading, joint implementation, and the Clean Development Mechanism with the impacts of
relying upon domestic emissions permit trading. Jn this regard, evaluate alternative
international trading scenarios: trading only between Annex I countries, trading that
‘extends to a number of “key” developing countries, and trading in which all countries are
fully participating.

ANSWERS 25a-d Dr. Janet Yellen’s testimony considers the positive effects of issues such as
developing country participation and the use of méchanisms providing flexibility such as
emissions trading, joint implementation, and the Clean Development Mechanism. Please refer to
Answer 24a.


60

2

reductions that otherwise might be called for.” Please provide all of the economic data and
analyses upon which the Administration relied for this determination. As to any analysis, please
identify who prepared it and provide all records containing comments by other federal agencies
con the drafts.

4b. Explain why the President decided to request $6.3 billion in his budget proposal
instead of the $5 billion that he stated he would seek at the time that he announced his Climate
Change Action Proposal on October 22, 1997. Was this decision affected by the fact that the
Administration agreed at Kyoto to commit the U.S. to reducing greenhouse emissions by 7%
below 1990 levels rather than stabilizing emissions at 1990 levels?

Sa. Article 3.2 of the Kyoto Protocol states: “Each Party included in Annex I, by 2005, shall
have made demonstrable progress in achieving its commitments under this Protocol.” Please
explain how the Administration is interpreting this provision of the treaty.

‘Sb. Does the Administration believe that its Global Climate Change Initiative,
including the CTI, will enable the U.S. to make demonstrable progress in achieving its
commitments under the Kyoto Protocol?

Sc. Please provide and document the Administration's annual performance measures
for its 5-year Climate Change Technology Initiative (CCT). In this regard, provide the
following: the 1990 U.S. emissions level, data on actual emissions reductions for Fiscal Year
1997, and then projected emissions reductions beginning with Fiscal Year 1997 and then for each
year up to and including Fiscal Year 2003.

Sd. Please specify the annual greenhouse gas emissions reductions that the
Administration estimates will occur between FY 1999 and FY 2005 from implementing each
element of its Global Climate Change Initiative.

6a, The Administration has maintained that the CTI is a “no-regrets” proposal; that is,
regardless of whether or not there is a real threat of global warming, this proposal is justified on
its own merits as good energy and environmental policy. In view of this claim, please
demonstrate the need for this initiative based on reasons other than facilitating greenhouse gas
emissions reductions.

6b. —_In this regard, provide the environmental and economic data and analyses that
support this request on its own merits.

6c. Can the Administration point to a significant market failure or demonstrate a
‘compelling public need that necessitates $3.6 billion of new tax incentives and a 73 percent
increase in funding to accelerate the development and diffusion of more energy efficient
technology? According to OECD data, U. S. energy efficiency since 1980 has improved more
than that of most industrialized countries.


56

For FY 95 and FY 96, please explain why the details in Table 7-2 do not equal the totals
in Table 6-2 of the Budget of the United States Government Fiscal Year 1996.

For each agency with funding in FY 97, please provide evidence of any accomplishments
from the FY 97 funding. Also, for cach agency requesting funding in FY 99, please
indicate any program performance measures for the requested funding and, for each such
measure, please provide annual data for the most recent three-year period for which data
are available.

3. Please provide a table with FY 89 - FY 99 historical budget authority, on an agency-by-
agency basis, for any other components of the Administration's climate change program (j.e., in
addition to those included in answer to questions | and 2). For each component, please indicate
each specific budget account and a brief description of the program.

4. Since the Government-wide Performance Plan for FY 1999 does not include any performance
measures for the Administration's Climate Change proposal, please identify all govemment-wide
and agency-specific performance measures for the Administration's Climate Change proposal,
including data for at least FY 97, FY 98, and FY 99,

‘The Performance Plan in DOE’s FY 99 Budget submission includes goals of reducing gas
emissions by $ percent in 2010 and reducing energy consumption by 25 percent in 2010.
Please provide at least FY 97, FY 98, and FY 99 data on gas emissions and energy
consumption to meet these goals.

EPA's FY 99 Budget includes goals of reducing emissions by 40 million metric tons and
reducing energy consumption by 45 billion kilowatts. Please provide at least FY 97, FY
98, and FY 99 data on gas emissions and energy consumption to meet these goals.

Please explain whether and how DOE's and EPA's performance measures overlap — i.,
whether they relate to reductions made by only that agency"s programs or by all agencies"
programs in the aggregate.


18

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, OC 20502

ADMINISTRATOR
onrice oF

APR ~ 2 1596

MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS, AGENCIES,
AND INDEPENDENT ESTABLISHMENTS

FROM: Sally ansgaRO

SUBJECT: ‘New Statutory Procedures for Regulations

All agencies need to be aware of the enactment, on Friday, March 29, 1996, of new
provisions concerning Congressional review of regulations (enacted as Chapter 8 of Title 5, U.S.
Code) and the Regulatory Flexibility Act.

Chapter 8 applies to every Executive branch “agency” as defined in 5 U.S.C. 551(1); this
definition includes the independent regulatory commissions and boards. Chapter 8 applies to
‘every final or interim final rule, with certain exclusions: e.g., any rule relating to agency
“management or personnel” or agency “procedure or practice." Chapter 8 distinguishes between
major and non-major rules (see definition below).

For All Final Rules: Each agency is now to submit a report -- containing a copy of each
final rule, a “concise general statement® of the rule (including whether it is a "major" rule), and the
rule's effective date — to each House of Congress and to the GAO before the rule can take
effect. Once this obligation is satisfied, all non-major final rules may take effect on the date
provided by the agency.

Each agency needs to submit this report for any rule issued on March 29, 1996 and
thereafter. When the agency submits this report, the agency is also to submit to GAO, and to
make available, upon request, to each House of Congress, the analyses identified in the statute —
e.g., cost-benefit, regulatory flexibility and unfunded mandates analyses.

: On or after March 29, 1996, for all major final rules, the
et eae cents tan 60 days afer the later of Congressional rect of he
material submitted or Federal Register publication. The effective date of a major rule may be
sooner if the President determines in an Executive Order that the rule should take effect because
such rule is necessary for certain reasons (e.g., an emergency situation). The effective date may
also be sooner if the agency "for good cause” finds that "notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest."



aT

corresponded with the Internal Revenue Service (IRS) as to what should be submitted.
‘Therefore, IRS procedures, rulings, regulations, notices, and announcements are
forwarded 2s CRA submittals. Also, in response to the request of the House Committee
on Education and the Workforce, the Departments of Labor and Education deliver their
CRA submissions with a monthly summary directly to the Committee, in addition to our

Office and both Houses of Congress as required by the CRA.

DATABASE ENHANCEMENT

‘As we discussed at your March hearing, we have attempted to work with executive
agencies to get more substantive information about the rules and to get such information
supplied in a manner that would enable quick assimilation into our database. An
expansion of our database could make it more useful not only to GAO for its use in

supporting congressional oversight work, but directly to the Congress and to the public.

In the initial development of the questionnaire, we consulted with executive branch
officials to insure that the requested information would not be unnecessarily burdensome.
We circulated the questionnaire for comment to 20 agency officials with substantial
involvement in the regulatory process, including officials from OTRA. The Administrator
of OIRA submitted a response in her capacity as Chair of the Regulatory Working Group,

consolidating comments from all the agencies represented in that group. It was the

i


51

and other similar documents that have been issued by agencies
that have not been filed. As I mentioned in my testimony, we did
a double check to compare OIRA’s list with major rules with those
that had been filed with GAO and we found that eight of them
were not filed as major rules; six had actually been filed as
nonmajor rules, but two hadn’t been filed with us at all. So while
I can’t tell you what the dimension of the rules that haven’t been
filed with GAO are, we know that there is a sizable number of
them out there. And that is the reason why we have consistently
advocated that OIRA assume responsibility of both monitoring the
agencies and providing guidance to the agencies about what they
should be filing.

Mr. McIntTosu. And we heard from Mr. DeSeve, they haven’t
issued guidance on the terms of some of the statutes. ve you
seen any signs that they have increased their monitoring of the
agencies on new rules?

Mr. MurpuHy. Not to date, other than to take our review and to
check up with the agencies, although we've talked to them about
the—they haven't said they would do it, but we’ve been talking to
them about picking up the job that we are doing, which is really
their job and that is to check with the agencies to make sure that
they are filing.

Mr. McINTOSH. My last question is this: what do you think in
particular OIRA should be doing? I take it OIRA should be picking
up some of the auditing that you are doing.

Mr. MurRpHY. Oh, absolutely. One of the things that I didn’t have
a chance to cover in my oral testimony but it’s in the written testi-
mony, are three things that we think OIRA really should do to
make the statute more fully implemented. One is to develop a
standardized reporting format, which they are working with us to
do. We have a meeting scheduled with OIRA and key agencies next
week and we have some hope that we are going to be able to
achieve that. But, second, to establish a system to monitor compli-
ance with the filing requirement on an ongoing basis. So far GAO
has been doing that, but I think that if OIRA were to do it, some
agencies such as those which only file with us when we do this re-
view and point out that we don’t have any of their rules, would
start sending them on a more regular basis.

And, third, to provide clarifying guidance as to what a rule is
that is subject to CRA. I think that if OIRA picks up those three,
one of which I think they are already committed to doa—

Mr. McINTOSH. That would go a long way.

Mr. Murpuy. Yes, that would go a long way.

Mr. McINTosH. And I understand that on that form, GAO had
a proposal and OIRA had their version. Is their version adequate,
or are there flaws?

Mr. MurRPHY. No, it really isn’t. It’s inadequate, but, there again,
my sense from—I went to OMB 2 weeks ago to personally talk to
people that were working on this issue and my sense from that is
that they are committed to working with the agencies and GAO to
produce a survey that is acceptable and I have every hope that
they will do that and I hope we don’t have to have another over-
sight hearing in order to point out that they haven't.

ir. McINTOSH. Haven’t done it.


80

EXECUTIVE OFFICE OF THE PRESIDENT
‘COUNCIL ON ENVIRONMENTAL QUALITY
WASHINGTON, 0.¢. 20603,

June 9, 1998

‘The Honorable David M. McIntosh
Chairman
Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs
House Committee on Government Reform and Oversight
B-377 Raybum House Office Building
Washington, DC 20515-6143

Dear Mr. Chairman:

Thank you for the opportunity to respond to your letter to Office of Management and
Budget (OMB) Director Frank Raines and myself regarding the President's climate change
initiative. I regret the delay in responding to your questions.

Enclosed you will find the answers I have prepared and OMB has reviewed in response to
your questions. This letter represents the response for both OMB and CEQ and the documents
included as part of the response were collected through a document search of the files of both
agencies. Some of the documents responsive to your request implicate the confidentiality of
Executive Office of the President deliberations and decision-making. You should contact the
Counsel to the President to discuss these additional documents. I hope you will find the
information helpful. If you have any questions or require clarification, we will be happy to
respond further.

‘Again, thank you.

KAMirsk

Attachments

ce: The Honorable Bernard Sanders
Ranking Minority Member


142

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June 4, 1998

‘The Honorable David Mcintosh

Chairman

Subcommittee on National Economic Growth.
Natural Resources. and Regulatory Affairs

B-377 Raybum House Office Building

Washington. DC 20515

Dear Chairman Melntosh:

Yesterday, you wrote Dr. Janet Yellen, Chair of the Couneil of Economic Advisors
(CEA), to threaten the issuance of a subpoena if she does not “commit toa full and prompt
response and production of documents” related to U.S. policies on global warming.

‘Your approach is inappropriate. Many of the documents you request relate to ongoing
imernational negotiations. The Administration is rightly concemed that releasing information
‘that outlines the U.S. negotiating position and its objectives would undermine the ability of our
negotiators to do their job effectively.

Despite those genuine concerns. in response to a request by Rep. Schaefer. the Chairman
of the Subcommittee on Energy and Power. and in response to your request. the CEA has made
relevant documents available to Congress for review. The minority staff of the Government
Reform and Oversight Commintee viewed these documents at the CEA’s offices before the
hearing on May 19, 1998. It is my understanding that your staff did not take advantage of this
‘opportunity. The Administration has also indicated that they will continue to make every effort
10 provide necessary information.

The cooperative effort of the Clinton Administration stands in stark contrast to the actions
‘you took as Executive Director of the White House Council on Competitiveness during the Bush
‘Administration. As you know. the Council on Competitiveness was formed to coordinate and
review the Administration's regulatory policy. During your tenure, the Council intervened to
weaken or delay numerous regulations to protect workers and the environment. According to an
article by Bob Woodward in the Washingion Post in 1992, the Council operated with a “no


1385

18a. In her testimony, Dr. Yellen stated that, in evaluating the “likely net economic impact of the
Kyoto Protocol,” the Administration has “drawn upon a broad array of analytical tools” and a
“wide range of models of the energy sector and economy over the next 25 years” to assess the
various possible costs and non-climate benefits of the Administration's emissions reduction
policy. Please specify all of the models and analytical tools that the Administration has used and
describe in detail their strengths and weaknesses.

18b. According to the testimony, the Administration has relied particularly on the Second
Generation Mode! (SGM) of Battelle Laboratories for many of its estimates. However, the
Interagency Analytical Team report indicated that the SGM model “focuses on long-term
tansitions and measures the economy in five-year intervals,” so that “it risks racing past short-
term transition issues,” such as GDP loss and impacts on specific industries. Specify all of the
Administration’s estimates that were derived by this model. Also, indicate why many of the
Administration's key estimates were derived from this model? Finally, please identify the
corresponding estimates derived from each model that the Administration has used in assessing
the impacts of the Kyoto Protocol.

19. What are the 1990 baseline, the Fiscal Year 1997, 1998 and1998 data, and the annual
‘outyear estimates until 2012 for the following outcome performance measures mentioned in Dr.
Yellen’s testimony: motbidity rates for some diseases, mortality rates for some causes, monetary
damages from temperature increases, consequences from some catastrophes, traffic congestion,
highway accidents, and air pollution unrelated to climate change?

20. Why does the Administration maintain that the U. S. acid rain program experience “clearly
demonstrates how programs like intemational permit trading, joint implementation and the Clean
Development Mechanism will lead firms to find cheaper ways of reducing emissions that can
lead to unexpectedly low costs”? Why does the Administration believe that itis appropriate to
‘extrapolate from that experience to the global arena? Won't the effectiveness of the international
system, joint implementation, and the Clean Development Mechanism depend on different
factors, such as the rules and procedures governing these mechanisms, the extent of participation
by other countries, including developing countries, etc?

2la, In her testimony, Dr. Yellen stated that part of doing it smart (i.e., lowering the costs of
reducing greenhouse gas emissions) under the Kyoto Protocol means “taking serious and
responsible steps in the short run to prepare us to meet our obligations in the longer term.” She
indicated that these steps include a $6.3 billion program of tax cuts and R&D investments,
industry-by-industry consultations to prepare emission reduction plans in key industrial sectors,
and legislation to restructure the electrical industry. Under what authority is the Administration
pursuing this unilateral executive branch course of action in furtherance of the treaty’s emissions
reductions targets and without Senate ratification?

21b. If the Administration is delaying the submission of the treaty to the Senate until it
obtains “meaningful participation” by developing countries, doesn’t that decision also require the


13

1. What does the statute require?

To help focus our discussion, let me first summarize this legislation. In general terms,
agencies are to send a copy of each new final rule (and certaint analyses that they may undertake
related to the rule) to both Houses of Congress (for transmittal to the appropriate authorizing
Committees) and to the General Accounting Office (GAO) before the rule can take effect

When an agency sends a rule to Congress and GAO, the agency is to indicate whether the
rule is “major” or not. The statute directs OMB's Office of Information and Regulatory Affairs
(OIRA) to find whether a rule meets the statutory definition of “major”-- that is, whether the rule
is likely to result in an annual effect on the economy of over $100,000,000; a major increase in
costs or prices; or significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based enterprises to compete with
foreign-based enterprises.

The designation of a rule as “major” has several consequences. Unless exempted, a
major rule may not take effect until 60 calendar days after it has been submitted to Congress. In

addition, GAO is to provide a report to the agency's authorizing Committee on each major rule.
Whether or not a rule is designated as “major,” Congress has 60 legislative days during which it
may use expedited procedures to disapprove the rule.

I want to stress that there are two distinct time periods in the statute -- (1) the delay in
effective date for “major” rules, and (2) the Congressional review period, during which the
expedited review procedures are available:

(1) Effective Date. “Major” rules can only take effect, with certain exceptions, 60.
calendar days after submission to Congress and GAO. “Non-major" rules take effect as
they normally do after submission. All of the rules that were submitted to Congress
under this Act year went into effect according to these effective date provisions.


187

countries to even greater obligations, without limiting developing countries at all) against the
effects of addressing greenhouse gas mitigation on a global scale by the international community.

23c. Compare the economic and environmental effects of complying within the
timeframes set forth in the Kyoto Protocol with the effects of complying over a longer time
period.

234. Compare the impacts of reducing greenhouse gas emissions using intemational
emissions trading, joint implementation, and the Clean Development Mechanism with the
impacts of relying upon domestic emissions permit trading. In this regard, evaluate altemative
international trading scenarios: trading only between Annex I countries, trading that extends to a
number of “key” developing countries, and trading in which all countries are fully participating.

24. With respect to any analysis provided, please identify and explain the basis for assumptions
used regarding such factors as the rate of improvement in energy efficiency, the effectiveness of
market incentives in increasing the market share of fuels that emit less carbon, and economic and
demographic growth. Also, explain fully any assumptions on how emissions reductions will be
achieved as, for example, through the early retirement of coal plants or nuclear plant life
extensions.

25. In considering the opportunity costs, evaluate the extent to which the Administration's
climate change strategy will require the diversion of funds from savings and/or investments
which would have provided other benefits, such as savirig social security, or more funding for
‘education, health care, etc.

26. In assessing the impacts on the U.S. of complying with the Kyoto targets and timetables,
please explain in detail the potential effects on the following indicators of economic
performance: gross domestic product (GDP), per capita GDP, unemployment, income and real
wages, trade competitiveness, and energy prices.

27. In assessing the benefits of complying with the Kyoto treaty, please evaluate fully the
potential offsetting negative effects of exempting developing countries and of “carbon leakage.”
Also, if the economies of developed countries experience reductions in economic growth,
‘evaluate the impact that this will have on the ability of emerging countries with export markets to
transition to more energy efficient technologies.

28. President Clinton has suggested that the U.S. economy can continue to grow under this
agreement. Please indicate at what rate the Administration expects that the economy will
continue to grow during the next ten to 20 years if the treaty is ratified and at what rate itis
expected to grow if the treaty is not ratified.

29. Have any of the cost-benefit analyses performed by the Administration or any agency been
peer-reviewed? If so, please identify the reviewers and provide their comments on all drafts of


55

Questions on the White House Initiative on Global Climate Change

1. Please provide a table with Fiscal Year (FY) 89 - FY 99 historical budget authority, on an
agency-by-agency basis, for the various components of the President's "Climate Change

Technology Init

ive,” including the previous “Climate Change Action ProgramvPlan” and any

‘other new or previously authorized Research and Development (R&D) herein (except for the
USS. Global Change Research Program included in Question 2 below). For each component,
please indicate each specific budget account and a brief description of the program.

For FY 93 and FY 95, please explain why the details in Table S-10 do not equal the totals
in Table 6-2 in the Budget of the United States Government Fiscal Year 1996.

For FY 97, please explain the difference between the published figures in the Budget of

the United States Govemment Fiscal Year 1998 (estimated $183 million) and the Budget
i {actual $743 million), including any

reprogramming from other budget accounts.

For FY 99, please explain why the published figures (the requested funding for key
sectors) in Table 6-3 of the Budget of the United States Government Fiscal Year 1999 do
not equal the total,

In Section 2 ("Programmatic Details") of OMB's February 2, 1998 handout, “Climate
Change Technology Initiative - 1999 Budget Briefing Materials” please provide the
following information associated with each paragraph description: each affected agency
and, for each agency, the associated funding in FY 97, FY 98, and FY 99. Also, for each
paragraph, and for each agency, please provide evidence of any accomplishments from
the FY 97 funding. Lastly, for each paragraph, and for each agency, please indicate any
program performance measures for the requested funding and, for each such measure,
please provide annual data for the most recent three-year period for which data are
available.

2. Please provide a table with FY 89 - FY 99 historical budget authority, on an agency-by-
agency basis, for the various components of the “U.S. Global Change Research Program” which
were or are devoted exclusively to climate change R&D. For each component, please indicate
each specific budget account and a brief description of the program.

For FY 93 actual figures for the “U.S. Global Change Research Program,” please explain
the differences among the published figures in the Budget of the United States
Govemnment Fiscal Year 1996 ($1531 million), the Budget of the United States
Govemment Fiscal Year 1997 ($1319 million), and the Budget of the United States Fiscal
‘Year 1998 ($1464 million), including any reprogramming from other budget accounts.


2

programs before those regulations go into effect. We have a right
to know whether their tax dollars are going into these programs,
how the new regulations and programs will affect their lives and
their livelihoods. What are the costs and benefits? What will it cost
families and local communities? How will it affect workers and
small businesses? The American people have a right to know the
answers to these basic questions.

But, in the case of the administration’s climate change policies
and in getting useful information about all new regulations, Con-
gress and the public are not getting these answers. These are
OMB’s responsibilities and in both areas the subcommittee is con-
cerned about the job OMB is doing. OMB has been unresponsive
to the subcommittee’s efforts to obtain information and documents
that would justify the President’s budget request for $6.3 billion in
additional ding for fiscal year 1999 to fiscal year 2003 for the
so-called Climate Change Technology Initiative and other funding
for climate change programs and activities. These other categories
include part of $1.9 billion U.S. Global Change Research Program
and various other programs and activities, including $250 million
requested for the Agency for International Development to award
grants, contracts, loans, and loan guarantees for climate change ac-
tivities presumably overseas.

Although we wrote to OMB in March, we are still seeking infor-
mation and documents regarding OMB’s own analysis of the Presi-
dent’s budget request and other documents and information regard-
ing OMB’s own role in reviewing this. First, the other agencies’ re-
sponses to our March oversight questions. I understand some of
those are still bottled up in the White House. Second, draft testi-
mony and agency comments thereon by administration officials
who are attempting to defend the President’s budget request for cli-
mate change and the Kyoto Protocol.

Only today has my office been able to review at the White House
a handful of previously withheld documents in OMB’s and CEQ’s
files which we requested in March of this year. The documents
made available today include comments from Energy and Justice
critical of the draft testimony of CEA Chair Janet Yellen’s so-called
economic analysis and some previously withheld data that
underlies the administration’s climate change policy options. Last,
the available documents reveal that, as early as February 1996, the
administration was projecting command and control regulatory
mechanisms in its post-2000 climate change options. We need to
know what was the deliberation that was going on in the adminis-
tration prior to February 1996, what is the decision, and were
those decisions made to prevent that type of command-and-control
regulatory mechanism or were they put on hold for political pur-
poses while the treaty is still pending in the Senate?

It is also clear from this review that many documents in OMB’s
and CEQ’s files requested in March are still being withheld. For
example, no post-Kyoto documents from CEQ were made available
today. I find it hard to believe that in the boxes and boxes of docu-
ments, there are no CEQ documents that have been generated
since the Kyoto Protocol was entered into in Japan. And the boxes
and boxes of documents from other agencies are still awaiting re-
view by the White House counsel. They don’t allege executive privi-


72

Question 1B. For FY 97, please explain the difference between the published figures in the

Budget of the United States Government Fiscal Year 1998 (estimated $183 million) and the
it (actual $743 million), including any

reprogramming from other budget accounts.

Response. The larger number ($743 million) in the FY 1999 Budget includes most of the
Department of Energy’s Energy Conservation appropriation account (Energy Efficiency and
Conservation, Federal Energy Management Program, Partnership for a New Generation of
Vehicles, and Municipal Energy Management) and the entire Solar and Renewable R&D
appropriation account. The smaller number ($183 million) in the FY 1998 Budget includes only
those programs identified as part of the President’s 1993 Climate Change Action Plan. The shift
in the FY 1999 Budget to using the more complete accounts better represents the level of funding
related to programs that help reduce greenhouse gas emissions.

Question 1C. For FY 99, please explain why the published figures (the requested funding for
key sectors) in Table 6-3 of the Budget of the United States Government Fiscal Year 1999 do not
equal the total.

Besponse. The $1 million difference between the published figures and the total for FY 1999 is a
result of rounding, This minor discrepancy is common in many budget documents where several
numbers are rounded and the total may not equal the sum of the parts. The total of $1,292
million for FY 1999 is the correct budget authority number for the Climate Change Technology
Initiative.

Question 1D. In Section 2 (“Programmatic Details") of OMB’s February 2, 1998 handout,
“Climate Change Technology Initiative - 1999 Budget Briefing Materials,” please provide the
following information associated with each paragraph description: each affected agency and, for
each agency, the associated funding in FY 97, FY 98, and FY 99. Also, for each paragraph, and
for each agency, please provide evidence of any accomplishments from the FY 97 funding.
Lastly, for each paragraph, and for each agency, please indicate any program performance
measures for the requested funding and, for each such measure, please provide annual data for
the most recent three-year period for which data are available.

Response. The February 2, 1998, paper on the Climate Change Technology Initiative is a brief
summary of the major components of the initiative and was not intended to be an exhaustive
description of every program or action taken by an agency to reduce greenhouse gas emissions.
In many instances, we identified the lead agency or agencies, the level of funding requested, and
the increase over the FY 1998 enacted level for the major programs or actions, The paper also
includes several views or perspectives on the initiative -- by agency, by type of activity, and by
sector or technical topic.


27

Mr. McINTosu. I think we have requested it. We haven’t gotten
any performance criteria.

Mr. DESEVE. I don’t know of any updated performance plans. At
this point, it’s in a sense, premature. The initial performance plans
were submitted with the budgets and I believe you have those. If
you don’t, I can give you——

Mr. MCINTOSH. So your position is that Congress should spend
all this money without any performance criteria?

Mr. DESEVE. No, my position is that Congress should continue
to ask the agencies; appropriators, authorizers, oversight commit-
tees should continue to ask the agencies questions about perform-
ance in the normal course of appropriation and authorization hear-
ings. And that, to the extent that the information is not available,
then they've got to ask some hard questions about performance.
That’s been my testimony in this room and Mr. Horn asked the
same question.

Mr. McINTOsH. What do you plan to do when the agencies fail
to meet that? For example, when EPA says we don’t set up per-
formance standards for global warming because we don’t measure
back to 1990.

Mr. DESEVE. I don’t have enough information to answer that
question. I don’t have the specifics to answer that question.

Mr. McINTOsH. We'll take that, go from the general to the spe-
cific—from the specific to the general. What do you plan to do if
an agency just doesn’t come up with performance criteria? Are you
going to continue to let their funding requests go through? Are you
going to increase them, which is appeared to be is what happened.
when the White House got a hold of the global climate change? I
mean, there’s a disconnect between the use of these criteria and
what happens in the budget.

Mr. DESEVE. What we’re trying to do in each of the agencies is
to make the performance plans as good and reflective as possible
and we encourage Congress to have that same colloquy with the
agencies about those plans.

Mr. McINTOsH. Let’s go back to some of the documents, such as
the cost/benefit and economic data relating to the climate change
policies and the budget requests there. Will you ensure, work to en-
sure, that we can receive those documents—I mean, I think it’s im-
portant that White House counsel hear from you on your opinion
on whether those should be made available to the Congress.

Mr. DESEVE. One of the first rules of the executive branch, sir,
and I think you probably know this, is that you look to your coun-
sel for advice and sometimes you follow their advice very, very
closely, other times Pee follow it even more closely. Rarely do we
give counsel advice. Counsel in this process looks at the documents,
reviews them, and makes a decision——

Mr. McINTOsH. Let me put it this way. If they tell you there is
no legal impediment to those documents being sent to Congress,
will you ensure that they are sent to Congress?

Mr. DESEVE. I assume that they will be sent to Congress if Con-
gress has requested it. I don’t know the specific answer, but if you
asked for them, and counsel finds there is no legal impediment, it
would seem logical that they be sent. But, I would really ask you
to ask counsel that question——


70

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUOGET
WASHINGTON, O.C 20503

May 13, 1998

Honorable David M. MeIntosh

Chairman, Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

‘Committee on Government Reform and Oversight

House of Representatives

Washington, D.C, 20515-6143

Dear Mr. Chairman:

This is a joint Office of Management and Budget and Council on Environmental Quality
response to your letter requesting detailed information on budget and performance measures
related to the President's climate change initiative.

In accord with your request, we have provided information on the President's FY 1999
Climate Change Technology Initiative and the U.S. Global Change Research Program. We have
also included some examples of performance measures related to the climate change initiative
from the Government-wide Performance Plan for FY 1999. Some agencies have included
additional information on performance measures for the climate change initiative in the budget
justifications they provide to the Committees on Appropriations. We understand that you have
requested performance information from agencies directly in separate letters you have sent them,
You should know that we will be working with agencies to develop more comprehensive
performance measures for the President's climate change initiative,

‘We hope the information is helpful to the Subcommittee in its work to review the
President's climate change initiative.

: Sincerely,
;
“ei, G .
‘Kathleen McGinty
Chair; Council on Envirot
Quality
Enclosures

cc: The Honorable John F. Tiemey, Ranking Member
‘Subcommittee on National Economic Growth
Natural Resources, and Regulatory A fairs


146

THE RECCRO SUBMITTED BY MR. SKAGGS

CUESTIONS FOR

White House Office

What criteria is used in determining whether a Presidential wip is for “otfici
business” or political/campaign purposes? Who makes this decision? Is there ar
independent oversight of this decision?

White House officials evaluate eacn proposed trip to determine whether it is offici
or political in nature. Among the criteria considered are the individual(s) or group(
making the invitation, those individuals or groups meeting with the President or Fir
Lady, and the nature of the remarks.

Following the trip. the actual schedule of the trip and remarks by the President ai
reviewed to ensure that events occurred as planned. This final review determine
the actual designation of the trip fie. official vs. political). Since itineraries ma
change once a trip begins, the final review is critical. When the trip is designate
as political or mixed (official and political), a trip summary is approved and is signet
off by the aopropriate official with the White House Counsel’s Office, Advance
Office, Political Affairs Office, and White House Operations. The Deputy Assistar
to the President for White House Operations approves and signs a trip summary fc
trips designatec as 100% official. .

Fegarciess of the nature of the trip. certain individuais are designated as offic
travellers at ail umes. In addition, a travel authorization form for each traveller i
prepared and signed by the Deputy Assistant to the President for White Hous
Operations for eacn ana every tip.

Tne General Accounting Office (GAO) periodically reviews the White House trave
exgenses and “rio summaries for the accounting of official charges. In the pas:
GAO has founc tne methocs in accounting for crave! excenses to be aoorooriate.

How many of the Office’s requested 26 FTEs are assigned to the Council o
Competitiveness? How much are you requesting to
fund these FTES?

There are no full-time stat? dedicated ta the Council. Two of the twenty-six FTE
requested by the Office of the Vice President would devote a substantial amount c
their duty hours (approximately 70 to 80 percent) to supporting the Council. Th
funding required is $86,000.

Please submit a complete list of regulatory proposals or other cases in which th:
Council on Competitiveness has been involved. What criteria does the Council us
in choosing which cases to work on?

The Council is involved in a wide range of regulatory and competitiveness issues
Among the more significant are those described in the attached fact sheets ani
press releases that discuss the Council’s activities to date. The President ha
directed that the Council serve as the coordinating body for regulatory review unde
Executive Orders 12291 and 12498. These executive orders also contain the criteri.
that the Office of Management and Budget (OMB) and the Council use in reviewin:
regulations and discussing regulatory policy.


POLICIES WITHOUT ECONOMIC ANALYSIS

“By providing incentives for early action to reduce emissions, attacking domestic
energy inefficiencies, and putting in place a market-based emissions trading system,
‘we can reach (our emission reduction targets) with minimum economic costs.”

Statement of President Clinton
‘Climate Change Proposal
October 1997

‘The Administration’s Repeated Failure to Conduct Economic Analysis.

14a, Given the significant economic costs projected by private sector studies, why did the

inistration abandon a year and a half-long effort to develop cost estimates of the President's
ies to reduce greenhouse emissions? In testimony before the House Subcommittee
‘on Energy and Power on July 15, 1997, the Chair of the Council of Economic Advisers, Dr. Janet
Yellen, stated that President Clinton’s top priority since his first days in office “has been
revitalizing the U.S. economy, creating jobs, and investing in people and technology to enhance
long-term growth.”

14b. How can the Administration defend its policy actions based on the results of
climate models that must take into account significant uncertainties surrounding the effects of
human activities on the climate, yet nevertheless consider economic modeling to be “futile” (Dr.
Yellen’s expression at the House Commerce hearing on July 15, 1997)?

15a, _In testimony before the House Commerce Committee in 1997, former Under Secretary of
State Timothy Wirth stated that an interagency “economics team” was formed to analyze the
impacts of climate change policies.

15b. Please provide the following background information regarding that group: when
it was formed, the names of the participants and their agencies, the head of the team, the scope of
the group's responsibilities, and to whom the group reported,

15c. Please produce records of all meetings of this group and information on any
workshops conducted. Also, produce all analyses performed by the group and provide all records
of written or oral comments from other federal agencies on the team’s analyses and advice,

16. _ In developing its positions for the Conference in Kyoto, did the Administration at any
‘point renew its efforts to estimate the costs of various policies to reduce greenhouse gas

emissions? If so, please provide all economic analyses that were prepared for the Administration
and the U.S. delegation to review. As to each analysis, please indicate who prepared the analysis


20

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT ANO BUDGET
WASHINGTON O¢ 20803

19 egg

MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS, AGENCIES,
AND INDEPENDENT ESTABLISHMENTS

FROM: Sally karoge OO

SUBJECT: Revised Instructions, Effective Immediately, for
Submission of Agency Regulations for Congressional
Review

On April’2, 1996, I sent you a memorandum stating that the
reports for final rules should be sent to the Secretary of the
Senate and the House Clerk, as well as GAO. Those Offices have
since requested that the reports go to the President of the
Senate and the Speaker, viz. --

The Honorable Al Gore, the President of the Senate, S-212,
the Capitol, Washington, D.C. 20510;

The Honorable Newt Gingrich, the Speaker, H-209, the
Capitol, Washington, D.C. 20515; and

Mr. Robert P. Murphy, the General Counsel, General
Accounting Office, Room 7175, 441 G Street, N.W.,
Washington, D.C. 20548.

This morning we received a call stating that each
transmittal must include a letter, addressed specifically to the
identified individuals, and signed by an agency official at an
appropriate level for transmitting documents to the Congre:
They also asked that the cover letter include a contact person
and telephone number in case they have any questions concerning
the rule. We understand that some of the reports that have
already been submitted are being returned or are being held
because of the absence of an appropriate transmittal letter.



37

Chairman Mcintosh, Mr. Tierney, and Members of the Subcommittee:

1am pleased to appear before you today to discuss the General Accounting Office's
experience in fulfilling its responsibilities under the Congressional Review Act (CRA) and
our efforts to coordinate implementation of the Act with the Office of Management and

Budget's Office of Information and Regulatory Affairs (OIRA).

Since | testified before this Subcommittee on March 10, 1998, in some areas we have seen
enhanced cooperation from OIRA in implementing the CRA. In addition, executive
branch and independent agencies appear to be more cognizant of their responsibilities
under the requirements of the CRA. However, there remain areas of concem. After a
brief review of the operation of the statute, I will discuss what progress has been made in

four areas during the past 3 months.

‘Under CRA two types of rules, major and nonmajor, must be submitted to both Houses of
Congress and the GAO before either can take effect. CRA defines a "major" rule as one
which has resulted in or is 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, individual
industries, government agencies, or geographic regions; or (3) significant adverse effects
‘on competition, employment, investment, productivity, innovation, or on the ability of
U.S-based enterprises to compete with foreign-based enterprises in domestic and export,
markets. CRA specifies that the determination of what rules are major is to be made by

OIRA. Major rules cannot be effective until 60 days after publication in the Federal


57

(ONE HUNDRED FIFTH CONGRESS.

Congress of the United States

Douse of Representatives
‘COMMITTEE ON GOVERNMENT REFORM ANO OVERSIGHT
2157 Ravourn House Orrice BusLona
Wasrmaton, OC 20515-6143,

March 6, 1998

BY FACSIMILE

‘The Honorable Franklin D. Raines
Director

Office of Management and Budget
Washington, D.C. 20503

‘The Honorable Kathleen A. McGinty

Chair
Council on Environmental Quality
‘Washington, D. C. 20502

Dear Director Raines and Chair McGinty:

‘The Subcommittee on National Economic Growth, Natural Resources, and Regulatory
Affairs is conducting af inquiry conceming the economic, legal, and regulatory implications of
the Administration's efforts to jump-start the process of reducing greenhouse gas emissions
under the terms of the Kyoto Protocol.

Pursuant to the Constitution and Rules X and XI of the United States House of
Representatives, please provide the Subcommittee with detailed information in response to the
attached questions. In responding to this inquiry, please restate each question and subpart with
‘each of your answers, and please follow the definitions and instructions conceming the
production of records on the attached page.

Please provide your responses to the written questions and requests for production of
records by March 20, 1998 to the Subcommittee’s office in Room B-377 Raybum. In addition,
please contact Larisa Dobriansky, Senior Counsel, at (202) 225-4407 as soon as practicable to
‘coordinate the timely production of the information to the Subcommittee.


23

-3-
7. When did 5 U.S.C. Chapter 8 take effect?
A: Chapter 8 took effect on March 29, 1996.

Each agency needs to submit the report to Congress and GAO (and
the related analyses to GAO) for any final and interim final rule
issued on March 29, 1996, and thereafter.

Note: Section 802(e) makes any major final rule "promulgated"
between March 1, 1996, and March 29, 1996, subject to the
Congressional disapproval procedures in § 802; it does not appear
that these major rules need to be submitted to the Congress or
GAO. ‘This appears to be the only provision applicable to final
rules issued before March 29, 1996.

Il. EFFECTIVE DATES.
8. When do "non-major" rules take effect?

A: As a general matter, most rules (rules other than those
designated as "major") may take effect at the time designated by
the agency, if the agency has previously (or on the same day) *
submitted the rule to Congress (§ 801(a) (4)).?

9. When do "major" rules take effect?

A: As a general matter (and assuming that the Congress has not
passed a joint resolution of disapproval during the first 60-
days), "major" rules may take effect no earlier than 60 days
after the later of Congressional receipt of the material
submitted’ or Federal Register publication. "Major" rules may
take effect later if the agency so desires.

A major rule may take effect before the 60-day time limit under
two Circumstances: (1) if the President determines in an
Executive Order that the rule should take effect because such
rule is necessary for certain reasons (e.g., an emergency
situation) (see § 801(c)); or (2) if the agency "for good cause”
finds that "notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest"
(see § 808(2)).*

2 Note: for non-major rules, the statutory requirement is
that the agency "submit" the rule (§ 801(a) (1) (A)).

> Note: for major rules, the statutory requirement is that
“Congress receives the report submitted..." (§ 801(a) (3))-

4 ‘The effective date may also be sooner if the rule relates
to “hunting, fishing, or camping" (§ 808(1))-


144

‘The Honorable David Melntosh
June 4, 1998
Page 3

hope that you and your staff take the opportunity to view the documents that the
Administration has made available. Subpoenaing and publicly disclosing sensitive documents
‘ould be unreasonable and constitute an attack on the Administration during its ongoing
negotiation of the Kyoto Protocol. It would also be inconsistent with the approach you followed
while at the White House Council on Competitiveness.

Sincerely,
(loung a Waypwra,
Henry A. Waxman

Ranking Minority Member

cc: Members of the Subcommittee on National Economic Growth, Natural Resources and
Regulatory Affairs


ANSWER 18 The Administration was well aware that details of any global warming agreement
have economic ramifications. That is why the Administration worked hard to implement the
considerable number of flexibility mechanisms now in the Kyoto Protocol. Please refer to the
‘economic analysis contained in Dr. Janet Yellen's testimony for an analysis of the outcome
achieved by the inclusion of the flexibility mechanisms contained in the Protocol combined with
the binding targets and timetable of the Protocol. In addition, we are producing information
responsive to your request. Some other information implicates the confidentiality of Executive
Branch deliberations and decision-making and has been referred to the Counsel to the President
of the United States.

QUESTION 19 If the Administration did not prepare cost estimates of the impacts on the
U.S. economy and the American people, how did the Administration determine its policy
ion first to stabilize emissions at 1990 levels by 2008-2012 and then later to deviate
with confidence from that position and commit the U.S, to reducing emission s by 7 percent
below 19907

ANSWER 19 The U.S. drew from a broad body of public information concerning its current and
future potential emissions and the costs associated with making such reductions. As Dr. Yellen
has emphasized in her testimony, no one model, study, or analysis could serve as the basis for
these decisions.

At what point prior to or during the negotiations, did the Administration
decide that emissions reductions below 1990 baseline were acceptable? Who in the
Administration and in Congress were consulted in making this decision? Did the
Administration examine any public or private analyses in reaching this decision? If'so,
identify and provide the analyses upon which the Administration relied, with all comments
that were submitted by any federal agency.

ANSWER 20 The Administration consulted broadly with Congress and within the
Administration both before and after the President's October 22, 1997 policy announcement and
in Kyoto. Indeed, meetings with a variety of interested parties continued up to and including the
meeting of the Conference of the Parties. It would be impractical, if not impossible, to attempt to
assemble the specifics of these numerous conversations and consultations.

If economic analyses were prepared internally to support positions that the
Administration intended to take at the Conference, why weren't these analyses made
available to Congress and the American public, who all have a right-to-know the potential
economic consequences of the President’s climate change policies?

ANSWER 21 CEQ and OMB have no economic analyses prepared internally to support
positions that the Administration intended to take at the Conference.


44

be delayed due to the need to comply with the CRA. The Health Care Financing
Administration (HCFA) of the Department of Health and Human Services, in a recent
Medicare rule, contained such a notice, and since HCFA's submission of the rule was

5 days later than the publication of the rule in the Federal Register, the effective date was

delayed in accordance with the CRA.

DEFINITIONS OF RULES AND MAJOR RULES.

One_early question about implementation of CRA was whether executive agencies or
OIRA would attempt to avoid designating rules as major and thereby avoid GAO's review
and the 60-day delay in the effective date. While we are unaware of any rule that OIRA
deliberately misclassified to avoid the major rule designation, mistakes have been made in
major rule classifications. Also, the failure of agencies to identify some issuances as

“rules” at all has meant that some major rules have not been identified.

CRA contains a broad definition of *rule," including more than the usual “notice and
comment* rulemakings under the Administrative Procedure Act which are published in
the Federal Register. "Rule" means the whole or part of an agency statement of general

applicability and future effect designed to implement, interpret, or prescribe law or policy.


85

ANSWER 6f Please see answers to Question 6a, 6c, 6d and 6e.

QUESTION 6g As to any analysis provided, identify who prepared it and provide all
records of comments by other federal agencies.

ANSWER 6g N/A

fie and achievable are the targets and timetables that the U.S.
delegation agreed to at Kyoto, ifit is necessary to take unilateral executive branch actions
prior to Senate ratification in order “to get us in a position where we will be further down
the road and won't have to make the kind of drastic reduction that otherwise might be
called for”?

ANSWER 7 The Administration believes strongly that the targets and timetables agreed to at
Kyoto are both realistic and achievable, especially because the targets are accompanied by
flexible compliance measures that have the benefits of significantly reducing compliance costs
(please see Dr. Yellen’s testimony). Once again, actions now to reduce emissions or increase
efficiency wil reduce future costs and are justified on their own merits as exemplified by the
over 5,000 U.S. industries, public organizations, and state and local governments participating in
voluntary action and advocating investments in efficiency and new technology development.

QUESTION 8 Under section 102 of the National Environmental Policy Act, the federal
government is required to provide a detailed environmental impact statement (EIS) and to
follow specified procedures for review and comment whenever it is recommending to
Congress legislation that “affects the quality of the human environment”. Please provide
any EIS (or draft EIS, if not finalized) that was prepared in connection with the
Administration's requests for tax incentives and research funding to facilitate greenhouse
gas emissions reductions. With respect to any EIS, identify who prepared the document
and provide all records of written and oral comments from other federal agencies.

ANSWERS Under section 102 of the National Environmental Policy Act, “all agencies of the
Federal Government shall ... include in every recommendation or report on proposals for
legistation and other major Federal actions significantly affecting the quality of the human
environment, a detailed statement by the responsible official on ~(I) the environmental impact of
the proposed action...” ‘Therefore, “federal agencies” must prepare NEPA documents for
“proposals for legislation and other major Federal actions.” While all federal agencies are
subject to NEPA, the NEPA regulations clearly state that the President is not. (See 40 CFR
1508.12, which provides that a “federal agency” does not mean “the Congress, the Judiciary, or
the President.”) The NEPA regulations further define the types of “legislation” intended to be
subject to NEPA. “Legislation” includes “a bill or legislative proposal to Congress developed by
‘or with the significant cooperation and support of a Federal agency, but does not include requests
for appropriations.” 40 CFR 1508.17.



62

4

10a, _ In testimony before the Senate Foreign Relations Committee on February 11, 1998,
Ambassador Eizenstat stated that the only legislation that would be required to enable the U.S. to
abide by the Kyoto Protocol would be legislation authorizing emissions trading; otherwise, he
indicated that the U.S. could rely on existing legislation. In this regard, please provide all legal
and policy analyses performed by the State Department and other federal agencies on whether,
and to what extent, new implementing legislation would be required to meet the U.S.
‘commitments under the Kyoto treaty and provide all comments thereon by other agencies.

10b. Also, please provide any and all legal and policy analyses developed by the State
Department or other federal agencies regarding the applicability and availability of existing
legislation to implement the Protocol and all comments thereon by other agencies.

11. To the extent that analyses have been performed, describe any differences between the
legislation and regulations that would have been needed to implement the President's October
1997 Climate Change Action Proposal and that which would be needed to implement the Kyoto
Protocol.

12, Is there an agency or interagency group that is developing recommendations on the need
for implementing legislation? If so, please identify the persons who have been charged with
coordinating this effort and the names of the agency representatives who are participating.

13a, Please identify all environmental and energy regulations that are being developed, have
been proposed, or have been issued since 1992 that have or will have the effect of reducing
greenhouse gas emissions (whether or not that is the intended purpose of the particular
regulation). As to those regulations that are being developed or that have been proposed,
provide an estimated timetable for each stage of the rulemaking.

13b, Has OMB or any other federal agency prepared, contracted to have prepared, or
considered any studies that: (1) Have calculated the potential cumulative costs of environmental
and energy regulations that are presently planned or being developed, have been proposed, or
already have been issued since 1992 that have or will have the effect of reducing greenhouse gas
emissions (whether or not this is the intended purpose of the regulation); and (2) Have assessed
the cumulative effects of these regulations, or any combination of them, on the U.S. energy
system and economy? If so, please provide any such analyses and all federal agency comments
on any drafts. If not, please indicate why this has not been done. This Subcommittee believes
that this information is vitally needed and is requesting that such an analysis be performed.

13c, Please provide any analyses that have been performed or considered by the
Administration concerning the potential combined effects on the U.S. economy and energy
system of such Clean Air Act regulations, as the recently issued National Ambient Air Quality
‘Standards for particulate matter and ozone, and regional haze proposal; the Administration's
‘proposed measures for implementing the requirements of the Kyoto Protocol; and its planned
legislative proposal for restructuring the electrical industry.


86

The Ineseapable Regulatory Backdoor.

QUESTION 9 In its 1997 U.S. Climate As Report under the current Framework
Convention on Climate Change, the Administration made this statement: “Recognizing
that even the most draconian measures would likely be insufficient to reverse the growth in
greenhouse gases and return U.S. emissions to their 1990 levels by the year 2000, new U.S.
efforts are focusing most intensively on the post-2000 period.” Based on this assessment,
how can the President assert that the U.S, commitments under the Kyoto Protocol are
achievable with minimum economic costs? Provide any economic and legal analyses that
demonstrate that U.S. obligations can be met without constraining U.S. economic growth
and without imposing onerous and costly regulation. Also, please provide two copies of the
1997 U.S. Climate Action Report.

ANSWER 9 The statement in the Climate Change Action Report referred to the year 2000, well
before the 2008 - 2012 timetable set out in the Kyoto agreement. Please refer to Dr. Yellen’s
testimony. Two copies of the 1997 U.S. Climate Action Report are attached. The Report is also
available on the internet at www.state gov/wnvw/global/oes/9 7climate_reporv.

QUESTION 10a In testimony before the Senate Foreign Relations Committee on February
11, 1998, Ambassador Eizenstat stated that the only legislation that would be required to
enable the U.S. to abide by the Kyoto Protocol would be legislation authorizing emissions
trading; otherwise, he indicated that the U.S. could rely on existing legislation . In this
regard, please proved all legal and policy analyses performed by the State Department and
other federal agencies on whether, and to what extent, new implementing legislation would
be required to meet the U.S, commitments under the Kyoto treaty and provide all
comments thereon by other agencies.

ANSWER 10a CEQ and OMB have no such analysis.

QUESTION 10b Also, please provide any and all legal and policy analyses developed by
the State Department or other federal agencies regarding the applicability and avail

of existing legislation to implement the Protocol and all comments thereon by other
agencies.

ANSWER 10b CEQ and OMB have no such analysis. We are aware of an EPA legal opinion on
the authority to regulate pollutants emitted by electric power generation sources and understand
‘that this document was provided to you by EPA.

QUESTION 11 To the extent that the analyses have been performed, describe any
differences between the legislation and regulations that would have been needed to
implement the President’s October 1997 Climate Change Action Proposal and that which
would be needed to implement Kyoto Protocol.


121

Question SC. Did OMB advise the agencies about release of their comments or draft testimony
by Administration officials on climate change, including the draft testimony by CEA Chair Janet
Yellen’s so-called “economic analysis"?

Response. No.

Qusstion SD. Did OMB advise the agencies about disclosure of funding for the U.S. Global
Change Rescarch Program activities?

Response. The U.S. Global Change Research Program (USGCRP) is an interagency program
and includes a representative from OMB. The USGCRP program coordination office and
participating agencies discussed the possibility of identifying what activities are devoted
exclusively to climate change. OMB staff were involved in those discussions,

Question 6, We understand that most, but not all, of the agencies sent their replies to OMB for
clearance and that many were in clearance within OMB for a considerable amount of time.

Question 6A. What was the longest review time for OMB clearance of an agency's climate
change response and for which agency?

Response. No formal log was kept that tracked the review time for agency responses to the
Subcommittee. Agencies were notified of any comments through the normal review process
coordinated by OMB.

Question 6B. What specific changes did OMB make to each of the agencies’ intended replies?

‘Response. Besides OMB's role in coordinating the interagency review process, OMB staff
reviewed the agency responses for consistency with the President's budget. Where funding
information differed from the President’s budget, OMB staff notified the agency of the
discrepancy.

‘Question 6C. Why did OMB remove some budgetary detail, such as in NSF's reply, from some
of these intended replies?

Response. OMB did not remove specific funding information. OMB staff work with various
agencies and offices in reviewing responses for Congress and other parties. In this case,
preliminary material was prepared by the NSF program office and reviewed by other NSF
offices, the Global Change Research Program office, and OMB staff. NSF decided to remove
the reference to specific funding levels because providing budget information associated
exclusively with climate change was considered arbitrary and misleading,

Question 7. We have not received complete replies from at least 15 of the 22 agencies. We still
not have any answers to many questions from the following agencies: Agriculture (I-14),

5


124

1SUS.C.
Chapter 7: National Institute of Standards and Technology

§ 272. Establishment, functions, and activities
(a) Establishment of National Institute of Standards and Technology

‘There is established within the Department of Commerce a science, engineering,
technology, and measurement laboratory to be known as the National Institute
of Standards and Technology (hereafter in this chapter referred to as the
“Institute").

(b) Functions of Secretary and Institute

‘The Secretary of Commerce (hereafter in this chapter referred to as the
Secretary”) acting through the Director of the Institute (hereafler in this chapter
referred to as the "Director") and, if appropriate, through other officials, is
authorized to take all actions necessary and appropriate to accomplish the
purposes of this chapter, including the following functions of the Institute —

(2) to assist industry in the development of technology and procedures
needed to improve quality, to modernize manufacturing processes, to
ensure product reliability, manufacturability, functionality, and cost-
effectiveness, and to facilitate the more rapid commercialization,
especially by small- and medium-sized companies throughout the United
States, of products based on new scientific discoveries in fields such as
automation, electronics, advanced materials, biotechnology, and optical
technologies; ...

(4) to provide United States industry, Government, and educational institutions
with a national clearinghouse of current information, techniques, and advice for
the achievement of higher quality and productivity based on current domestic
and intemational scientific and technical development;

(5) to assist industry in the development of measurements, measurement methods,
and basic measurement technology;

(6) to determine, compile, evaluate, and disseminate physical constants and the
properties and performance of conventional and advanced materials when they
are important to science, engineering, manufacturing, education, commerce,
and industry and are not available with sufficient accuracy elsewhere;

(7) to develop a fundamental basis and methods for testing materials, mechanisms,
structures, equipment, and systems, including those used by the Federal
Government; .. .

(9) to cooperate with other departments and agencies of the Federal Government,
with industry, with State and local governments, with the governments of other

8


31

Mr. TIERNEY. On the management, is that the management sub-
committee?

Mr. DESEVE. Right. And others.

Mr. TIERNEY. How—is this adversely affecting the ability of your
department to live up to its other responsibilities?

Mr. DESEVE. It makes people work overtime. It just gives us a
lot of extra work to do. We certainly don’t degrade our service, we
just work harder and longer hours.

Mr. TIERNEY. And do most of your people get overtime for the
extra hours that they serve?

Mr. DESEVE. Some do, some don’t.

Mr. TIERNEY. So it’s impacting our budget also on this end. I
don’t have any other questions at this time.

Mr. McINTOSH. Thank you, Mr. Tierney. Mr. DeSeve let me
switch now to the Congressional Review Act. Last year in the budg-
et my committee worked very closely with the Treasury-Postal Sub-
committee on the Appropriations Committee to increase OIRA’s
funding by $200,000 for the specific purpose of implementing the
Congressional Review Act. Now despite very clear report language
and a floor statement, it appears that OIRA has continued its busi-
ness-as-usual approach to CRA implementation and has used that
extra money for other purposes of their own choosing. What, spe-
cifically, has OIRA done, if anything, to improve the performance
since receiving this additional funding?

Mr. DESEVE. That’s a good question, Mr. Chairman. I think that
in the testimony Mr. Murphy is about to give today, he outlines the
improvement in rules being submitted to GAO and our work both
to encourage the agencies through Mr. Arbuckle’s letters, as well
as having desk officers make specific calls on behalf of GAO at
GAO’s request about specific rules has really lead to, along with in-
creased familiarity with the act, has led to better performance by
the agencies over time since the roughly 2 years the act has been
in place. So we at the desk officer level, at the branch chief level,
as well as at the acting administrator level, have paid closer atten-
tion since the hearings that you held last year, as well as this year,
to CRA. But I think the degree of compliance is actually quite high,
given the relative newness of the statute. But nothing less than
100 percent is acceptable and we'll continue to work with GAO to
that end.

Mr. McINTOSH. Were the funds used to hire additional staff for
this purpose?

Mr. DESEVE. No, sir, I don’t believe they were. I don’t know the
exact appropriations history and I could certainly find it out and
give you an accounting for the funds.

Mr. McINTOSH. Yes, I would like to know—you have no idea
what that $200,000 was for?

Mr. DESEVE. I’d be happy to get back to you on that. I wasn’t
prepared to talk about that today.

Mr. McINTosH. Do you want to check with some of the people
that you did bring for advice?

Mr. DESEVE. No, I'd be happy to get you that information I just
don’t have it.

Mr. McINTosH. And none of them have it?


‘The GAO has found that despite the law, the agencies have failed to report hundreds of other
rules, including many rules that have a major impact on small business.

Here again, OMB should be taking the lead and providing the agencies guidance in order to
facilitate the free flow of regulatory information to the American people and their elected
representatives. Instead, here again, OMB is the bottleneck.

‘The Subcommittee held a hearing on OIRA's implementation of CRA on March 12 of this year
to bring GAO and OIRA together to cooperate on CRA implementation. Regrettably, OMB
refused to send a politically accountable representative to that hearing. In my 3 years as
Chairman of OIRA’s anthorizing and oversight committee, Thave never observed a more blatant
gesture of defiance,

Today, Bob Murphy will report on GAO’s efforts to work with OIRA in implementing the CRA
since the March 12 hearing. We applaud the efforts of the GAO in particular, whose staff have
worked closely with the Subcommittee to build up the reporting process.

But GAO can’t do it all. What the agencies need most is strong leadership and guidance from
OMB.

By holding back key information from Congress, OMB is denying the American People their
right to know the Administration's real agenda on climate change and on new regulations in
general. Time and again, OMB has bottle necked the flow of information from the agencies to
the people's elected representatives.

want to know what they're hiding, and why they're hiding it.
will continue to investigate OMB and hold hearings until the full truth about the President

Clinton and Vice President Gore's Climate Change Initiative comes to light, and until the CRA is
fully implemented.


1. When a request calls for the production of records, the Subcommittee requests all
responsive records that are in the agency's possession, custody, or control through the date of the
final submission of records to the Subcommittee, unless the request clearly states that the
‘Subcommittee is only interested in records received during a particular time period.

2. Please sequentially number all records that you produce to the Subcommittee, and
indicate the source of any record if the source is not accurately reflected on the record itself.
Please submit all records on single-sided paper and submit an inventory of records produced if
the volume is more than 100 pages.

3. Totthe extent practicable, please organize the records or documents in tabbed binders or
folders that indicate which records are responsive to which requests for information,

4. For the purposes of this and related requests in the future, the “record” or “records” shall
include any and all drafts, originals, and non-identical copies of any item whether written, typed,
printed, electronically recorded, transcribed, punched, or taped, however produced or reproduced,
and includes but is not limited to any writing, transcription, or recording, produced or stored in
any fashion, including any and all computer entries, memoranda, notes, talking points, letters,
Journal entries, reports, studies, calendars, manuals, press releases, opinions, documents,
analyses, messages, summaries, bulletins, e-mail messages (in hard copy and electronic forms),
disks, the text of any alphanumeric messages or other electronic paging devices, briefing
materials, cover sheets or routing cover sheets and any other machine readable material of any
sort whether prepared by current or former officers and employees, agents, consultants or by any
non-employee without limitation. “Record” or “records” shall also include redacted and
uunredacted versions of the same record.


47

Tre Couneii's reguiatory review activities involve working ciesely with OMB in
carrying out that agency's regulatory review program. Normaily, the items it
considers are thase that present cifficuit issues requiring Cabinet-ievel attention, and
particularly where ihere is a policy disagreement among agencies who have an
interest in the reguiatory issues. The Council recentiy acted to coordinate activities
curing 2 $0-day regulatory review period for all Federal regulations. In requesting
agencies to undertake this review, the President aiso established criteria to be used
in evaluating regulations. Tne relevant executive orders and @ copy of the
President’s memoranda are attached.

Please describe each regulatory proposal as it came before the Council or its staff
and then describe the position advocated by the Council or its staff regarding the
regulation. Finally, please describe all changes in proposed regulations, as they were
finalized, reflecting the comments of the Council and its staff.

The broad scope of this request would require by its literal terms a description of
every proposed regulation reviewed by the OMB since the inception of the Council
in its present form on March 31, 1989. Uncer the process established by Executive
Orders 12291 and 12498, the Office of Information and Regulatory Affairs (OQIRA)
reviews approximately 2,200 regulations eacn year, although che figure reached
2,823 in 1991. This reques: also encompasses various drafts of the reguiations and
@ description of positions tzken by various agencies curing the review pracess. The
process of identifying, gathering anc these materials for release would

viewing @
impose an extraordinary burden on the limited staff resources of the Council and
OMB. The Council would be hapey to respond to particular questions about
panicular regulations that may be of interest to the suocommitiee.

it or its staff

Please submit a copy of all written communications made by the Coun:
to ail departments and agencies on any of these proposals.

i staff frecuentiy meets witn OIRA on regulatory issues chat are being

Sordinated anc these meetings often invoive interestea agency stat?. No detailed
records are keot of communications that occur on these occasions, particularly where
oral deliberations are invoived. In addition, teleonone canversations take piace during
the review process and no records are keot of routine communications of statt

members.

Coun

Those written documents that are generated in the course of deliberations on a
regulatory issue are pre-d ional and deliberative in nature. Disciosure of these
communications wouid inhidit the candor of those paricioating in the process and,
as a consequence, injure the quality of agency decision making. Consistent with
Administration policy, these types of communications involving Cabinet-level bodies
are not disctosed except in extraordinary circumstances. However, if the
subcommittee has specific questions concerning particular regulatory issues, the
Council will seek to provide responsive information.

For each of the regulatory cases that the Council has considered, please list all
communications that the Council has received -- oral or written from outside
interests. Please provide the Committee a copy of any written materials received.

Council staff frequently meet with interests outside the government on regulatory
issues that are being coordinated. No detailed records are kept of communications
that occur on these occasions. particularly where oral deliberations are involved. In
addition, telephone conversations take place curing the review process and no
records are kept of routine communications of staff members


46

Likewise, we concluded that the Tongass National Forest Land and Resource Management
Plan issued by the United States Forest Service was a "rule" under CRA and should have
been submitted for congressional review. There are 123 forest plans covering all

156 forests in the National Forest System. Each plan must be revised and reissued every

10 years.

OIRA stated that, if the plan was a mule, it would be a major rule. In testimony before the
Senate Committee on Energy and Natural Resources and the House Committee on
Resources regarding the Tongass Plan, the Administrator of OIRA stated that, as was the
practice under the APA, each agency made its own determination of what constituted a

rule under CRA and by implication, OIRA was not involved in these determinations.

We continue to believe that for CRA to achieve what the Congress intended, OIRA must,
assume a more active role in guiding or overseeing these types of agency decisions.
Other than an initial memorandum following the enactment of CRA, we are unaware of
any further OIRA guidance, Because each agency or commission issues many manuals,
documents, and directives which could be considered “rules' and these items are not
collected in a single document or repository such as the Federal Register, it is difficult to
ascertain if agencies are fully complying with CRA.

We note certain congressional committees are taking an active role in overseeing agency

compliance with the CRA. For example, the Joint Committee on Taxation has

10


additional funding from Fiscal Year (FY) 99 to FY 2003 for the “Climate Change Technology
Initiative” (CTI) and other funding for climate change programs and activities. These other
categories include part of the $1.9 billion U.S, Global Change Research Program, and various
other programs and activities, including a $250 million request for the Agency for International
Development (AID) to award grants, contracts, loans, and loan guarantees for climate change
activities.

Although we wrote to OMB in March, we are still seeking information and documents regarding
OMB’s own analysis of the President's budget request and other documents and information
regarding OMB's role in reviewing: (1) other agencies’ responses to our March oversight
‘questions and (2) draft testimony (and agency comments thereon) by Administration officials
who are attempting to defend the President's budget request for climate change and the Kyoto
Protocol.

‘Only today has my staff been able to review at the White House a handful of previously withheld
documents in OMB’s and CEQ's files which we requested in March. The documents made
available today include comments from Energy and Justice critical of the draft testimony of CEA
Chair Janet Yellen’s so-called economic analysis and some previously withheld data that
underlies the Administration's climate change policy options. Lastly, the available documents
reveal that, as early as February 1996, the Administration was projecting command-and-control
regulatory mechanisms in its post-2000 climate change options.

It is also clear from this review that many documents in OMB's and CEQ's files requested in
March are still being withheld. For example, no post-Kyoto documents from CEQ were made
available today. And boxes and boxes of documents from the other agencies are still awaiting
review by the White House Counsel.

In short, Congress has not been provided sufficient information to evaluate the President's
budget request. For example, despite the requirements of the Government Performance and
Results Act, OMB has identified po government-wide program performance measures, and the
agencies identified only a few outcome measures for their dozens of climate change programs,
including many new activities. And, despite the requirement in the Kyoto Protocol for the
United States to reduce greenhouse gas emissions 7 percent below 1990 levels, EPA says
“Performance for these programs is not measured against a 1990 base year” and “performance
measures are not applicable for 1990 because the programs did not exist at that time.
Congress being asked to expend huge sums without a road map to understand how they would
contribute to meeting the Kyoto target?

‘Today we will also address OMB's performance of its responsibility to coordinate agency
compliance with the Congressional Review Act.

In particular, OIRA is responsible for overseeing and providing guidance to the agencies on
‘compliance with the Congressional Review Act, or CRA, which requires the agencies to file
certain reports with Congress for each new rule before that rule can legally take effect. If it’s not
reported, its an illegal rule, plain and simple.


40

each agency that still had rules which were unaccounted for. OIRA did not participate in

the follow-up effort.

Our Office experienced varying degrees of responses from the agencies. Several agencies,
notably the Environmental Protection Agency and the Department of Transportation, took
immediate and extensive corrective action to submit rules that they had failed to submit,
and to establish fail-safe procedures for future rule promulgation. Other agencies
responded by submitting some or all of the rules that they had failed to previously file.
Several agencies are still working with us to assure 100 percent compliance with CRA.

‘Some told us they were unaware of CRA or of the CRA filing requirement.

‘Overall, our review disclosed, as of the March 10 hearing, that:

~ 279 rules should have been filed with us; 264 of these have subsequently been filed;

~ 182 were found not to be covered by CRA as rules of particular applicability or agency

Management and thus were not required to be filed;

- 87 rules had been submitted timely and our database was corrected; and

~ 15 rules from six agencies had not been filed.


120

related to climate change.

Question 4. OMB has not produced the documents, such as environmental, cost-benefit, and/or
economic data and analyses relating to the Administration's climate change policies and the
Kyoto Protocol that we requested in March.

Question 44. Don’t you believe that Congress and the American public have a right to know the
fall range of risks that the United States may face in entering into this agreement and the
potential economic consequences of the President's climate change pol

Response. Answer provided in July 10, 1998, letter to the Subcommittee.

. Isn't our review of these documents essential to Congress's role to ratify and
implement the Protocol?

Response. Answer provided in July 10, 1998, letter to the Subcommittee.
Question 4C. When will these documents be produced?

Response. Answer provided in July 10, 1998, letter to the Subcommittee. Additional documents
provided on July 7, 1998, and July 27, 1998.

Gui & Repl

Question 5. We have had difficulty in getting responses from most of the 22 agencies from
which we requested documents and information about their climate change activities.

Question 5A. What guidance, if any, did OMB provide the agencies on responding? How many
‘conference calls did OMB have with agency staff? When? What was concluded?

‘Response. OMB staff advised agencies that responses to questions should be cleared through the
normal interagency review process. Questions about documents should be referred to individual
agencies, or to the White House Counsel’s Office insofar as the documents reflect confidential
White House decision-making. OMB staff participated in two or three conference calls
organized by the White House Climate Change Task Force to update agencies on the status of
clearing their responses.

Question 5B. Did OMB advise the agencies about the release of not-yet-publicly-available
documents containing economic and environmental data and analyses and agency comments on
‘them?

Response. No.


19

2

“Major” rule is defined to be any rule that the Administrator of the Office of Information
and Regulatory Affairs finds "has resulted in or is likely to result in an annual effect on the
economy of $100,000,000 or more;" a "major" increase in costs or prices for consumers,
individual industries, Federal, State, or local government agencies, or geographic regions; or
“significant adverse effects" on competition, employment, investment, productivity, innovation, or
on the ability of United States-based enterprises to compete with foreign-based enterprises. This
definition excludes any rule promulgated under the Telecommunications Act of 1996, and the
amendments made therein. This definition of "major" is similar but not identical to the definition
of economically "significant" under section 3((1) of E.O. 12866. If there are questions
concerning whether a rule is "major," please contact the Office of Information and Regulatory
Affairs as soon as possible during the rulemaking.

Chapter 8 establishes special Congressional procedures for disapproval of rules. The
Congressional disapproval procedures apply to all major final rules that were promulgated
between March 1, 1996 and March 29, 1996, and to all final rules (major or not) promulgated
thereafter.

Submissions to Congress should be sent to both Houses: the House Clerk, Ms. Robin H.
Carle, H-154, the Capitol, Washington, D.C. 20515-6601, and the Secretary of the Senate, Mr.
Kelly D. Johnston, S-208, the Capitol, Washington, D.C. 20510-7100, GAO requests that
agencies send their submissions to Mr. Robert P. Murphy, General Counsel, General Accounting
Office, Room 7175, 441 G Street, N.W., Washington, D.C. 20548, As agencies start sending
material to the Congress, they should consider creating a tracking system, both to permit them to
demonstrate compliance and also to enable agencies to provide (when requested) data on what
was sent.

Chapter 8 took effect om the date of enactment. In addition, the same law made
amendments to the Regulatory Flexbility Act ~ in part to provide for judicial review. These
amendments take effect 90 days after enactment (Le, June 27, 1996).

see

I appreciate that there is much that has to be done quickly — both the submission of
particular materials and the institution of an ongoing process. I welcome your comments and
suggestions on how best to implement this new lew to make it useful for Congress and workable
for the agencies.

A copy of the text of Chapter 8 is attached.
Attachment


14

3.
(2) Congressional Review Period. If, within a prescribed time period, a Member
introduces a joint resolution of disapproval, then that joint resolution is subject to certain
expedited procedures for consideration in Congress. All rules (both major and non-
major) are subject to this Congressional review for 60 legislative days, which, depending
‘on when Congress is or is not in session, is a time period that can extend to over one-and-
ahalf years. During the past two years, all the rules issued by the agencies went into
effect before the expiration of the Congressional review period,

2. What did OIRA do when the statute took effect?

‘The Congressional Review Act took effect immediately on the day the statute was signed
into law -- on Friday, March 29, 1996. Most agency staff knew little about it. To help them
prepare quickly, OIRA moved quickly. On Tuesday, April 2, 1996, the OIRA Administrator,
Sally Katzen, sent an OMB memorandum (M-96-19) to the heads of all agencies outlining the
provisions of the new legislation and discussing the definition of “major.” Based on advice
OMB staff received from Congressional staff, Ms. Katzen included the address of the House
Clerk and the Secretary of the Senate as the place to which agencies should send their final rules.

Two weeks later, after agencies had begun to send their final rules to these officials, she
received telephone calls asking that final rules go to the Speaker of the House and the President
of the Senate, and that they be transmitted with a cover letter providing certain information. On
April 19, 1996, she sent another memo to the heads of Federal agencies, providing these new
addresses and the content suggested for the cover letter.

Meanwhile, as Chair of the Regulatory Working Group established under Executive
Order No, 12866, the OIRA Administrator stressed to agency Regulatory Policy Officers the
importance of moving quickly to implement this new law. During this time, OIRA staff were
receiving a variety of questions from agency staff about what they should do under the new
statute, OIRA then prepared a document entitled “Frequently Asked Questions,” which was


3

lege because I think they know this Congress would reject that as
we have in other very serious matters that we are investigating the
President on, but yet they stall and they don’t provide the informa-
tion. We have not been able to receive sufficient information in
order to review the President’s budget request.

For example, despite the requirements of the Government Per-
formance and Results Act, something that Mr. DeSeve is respon-
sible for at OMB, the agency has identified no governmentwide pro-
gram performance measures and the agencies have identified only
a few outcome measures for their dozens of climate change pro-
grams, including many new activities. And, despite the require-
ment of the Protocol for the United States to reduce its greenhouse
gas emissions by 7 percent below 1990 levels, EPA says, “Perform-
ance for these programs is not measured against a 1990 base year.”
Something is very wrong here when the treaty in which Vice Presi-
dent Gore signed the United States up for a 7 percent reduction
below 1990 levels, the agency responsible chiefly for environmental
protection says, and I quote again, “Performance for these pro-
grams is not measured against a 1990 base year.”

How are we supposed to know whether we will even succeed if
that’s the case? “And, they went on to say performance measures
are not applicable for 1990 because the programs did not exist at
that time. If the goal is to be 7 percent below 1990 emissions, it
will be critical to determine whether these programs actually move
toward meeting that goal; therefore, a baseline is necessary. Is
Congress being asked to expend huge sums without a road map to
understand exactly how they would contribute to meeting the
Kyoto target?

Today, we will address OMB’s performance of its responsibility
to coordinate agency compliance with the Congressional Review
Act, the second subject of this hearing. In particular, OIRA is re-
sponsible for overseeing and providing guidance to the agencies on
compliance with the Congressional Review Act or CRA. This re-
quires the agencies to file certain reports with Congress for each
new rule before that rule can legally take effect. If it’s not reported,
it’s not a legal rule, plain and simple, under that statute.

Now GAO, I understand, has found that, despite that law, the
agencies have failed to report hundreds of rules, including many
rules that have a major impact on small businesses. Regardless of
what you think of the merits of those rules, it is a terrible way to
run a railroad to purport to regulate when you know legally they
are not binding and cannot be withheld in a procedural challenge
because OMB has failed to meet its obligations in coordinating with
the agencies in submitting those reports.

Here again, it is OMB’s responsibility to take the lead and pro-
vide agencies with that guidance in order to facilitate the free flow
of regulatory information to the American people and their elected
representatives here in Congress. And, here again, OMB is the bot-
tleneck. The subcommittee held a hearing on OIRA’s implementa-
tion of CRA on March 12 of this year, to bring GAO and OIRA to-
gether to cooperate on this CRA implementation. Regrettably, OMB
refused to send a politically accountable representative to that
hearing. In my 3 years as chairman of OIRA’s authorizing and
oversight subcommittee, I’ve never observed a more blatant gesture


182

brief description of the program. For each brand new activity, please indicate expected
requested funding annually through FY 03.

6. Please identify the full set of your agency-specific performance measures for the
Administration's Climate Change proposal (besides those indicated in response to questions 2
and 3), including data for at least the 1990 base year, FY 97, FY 98, and FY 99. Also, please
identify how any of your agency-specific measures (including those in response to questions 2
and 3) relate to those for any other Federal agency. Lastly, please describe any interagency
efforts to identify and relate the entire set of climate change performance measures, including
which agencies are involved and the names of the agency representatives.

7. Please provide a table for FY 93 - FY 97 identifying all assistance (including grants,
cooperative agreements, and other transactions) and contract awards to non-profit and for-profit
organizations for any climate change activity, including the date, amount of the award, name of
the organization, purpose of the award, and a summary of any result(s) from the award. Please
provide a copy of any final report from these awards.

B. Economic, Policy, and Legal Analyses

8. Since January 1993, has your agency participated in any interagency effort(s) relating to
climate change in any of the following areas: (a) review of current legislation and/or the need for
any new legislation; (b) review of current rules, any needed revisions to current rules, and/or any
needed new rules; (c) production or review of any environmental data and/or analyses; (d)
‘production or review of any cost-benefit data or analyses; and/or (e) production or review of any
economic data and/or economic analyses? If so, please identify the interagency effort, its
member agencies, its membership not only from your agency but also from other Federal
agencies and/or any non-Federal parties, all drafts and analyses from the effort(s), and any
‘comments from your agency on any drafts.

9. Has your agency either prepared or reviewed any environmental, cost-benefit, and/or
economic data and analyses relating to the White House Initiative on Global Climate Change? If
50, please provide a copy of all data, analyses, and any comments by your agency.

10. Did your agency comment on any of the draft testimony on climate change by
Administration witnesses since the President's 1998 State-of-the-Union address? If so, please
provide a copy of the draft testimony and any comments by your agency.

11, Has your agency suggested any alternative policy options for climate change? If so, please *

provide a copy of all drafts and supporting analyses and any comments from other Federal
agencies on your alternatives.

12, Does your agency plan to revise any existing legislation or propose any new legislation
relating to climate change (including legislation that will have the effect of reducing greenhouse


110

4.

management systems to ensure submission of the enormous number of rules that are sent
to GAO and the Congress (over 9,500 to date), it appears that their performance is
improving.

(©) Ist the position of OMB that GAO, not OMB, is responsible for ensuring that
the agencies report unreported rules?

Each agency is responsible for submitting its final rules to its authorizing
committees under the CRA. In other words, itis the responsibility of each agency to
censure that itis in compliance with the CRA. Under the CRA, GAO is obligated to report
to authorizing committees on the major rules that it receives. GAO, because it knows
what it receives on a daily basis, can compare what it receives with what is published in
the Federal Register. OIRA, given its daily interaction with agencies on regulatory
matters, encourages agencies to implement the CRA responsibly.

In many cases, it appears that the ageucies are not even sure which rules are
covered by the statute — and they are apparently not receiving any guidance on this
issue from OMB. Other than the brief memorandum and question-and-answer
sheet on CRA that OMB issued shortly after the CRA became law, what oversight
and guidance, if any has OMB provided the agencies to ensure their full compliance
with the CRA? Specifically, what guidance has OMB provided regarding:

(1) the deftnition of “rule” (§ 804(3));

2) the requirement that no rule can legally take effect until it is reported to
Congress (§ 801(a}(1)); and

(3) the meaning of the “good cause” exemption (§ 808(2))?

Section 804(3) defines “rule,” with some exceptions, by making reference to the
definition of "rule" that is found in the 1946 Administrative Procedure Act (APA) -- "the
whole or a part of an agency statement of general ... applicability and future effect
* In 1947, the Justice

‘Attomey General's Manual on the Administrative Procedure Act,
in which the Department provided to the agencies its interpretation and guidance on the
APA's definition of "rule." Since then, the rulemaking agencies and the Justice
Department have had five decades of experience identifying "rules" under the APA,
defending those decisions in the courts, and applying the courts’ rulings. In light of the
‘experience that the agencies and the Justice Department have gained during 50 years of
applying the APA's definition of “rule” in the context of particular Federal programs,
OIRA does not have the institutional expertise to provide general legal guidance to the
agencies on this issue.


69

ns and Instructic Lecors

1, When a request calls forthe production of records, the Subcommittee requests all responsive
records that EPA has inits possession, custody, or control through the date of the final submission of
records to the Subcommittee, unless the request clearly states that the Subcommittee is only interested
in records EPA received duting a particular time period.

2. Please sequentially number all records that you produce to the Subcommittee, and indicate
the source of any record if the source is not accurately reflected on the record itself. Please submit all

records on single-sided paper and submit an inventory of records produced if the volume is more than
100 pages.

3. To the extent practicable, please organize the records or documents in tabbed binders or
folders that indicate which records are responsive to which requests for information,

4. For the purposes of this and related requests in the future, the word “record” or “records”
shall include any and all drafts, originals, and non-identical copies of any item whether written, typed,
Printed, electronically recorded, transcribed, punched, or taped, however produced or reproduced, and
includes but is not limited to any writing, transcription, or recording, produced or stored in any fashion,
including any and all computer entries, memoranda, notes, talking points, letters, journal entries,
reports, studies, calendars, manuals, press releases, opinions, documents, analyses, messages,
suramaries, bulletins, e-mail messages (in hard copy and electronic forms), disks, the text of any
atphanumeric messages or other electronic paging devices, briefing materials, cover sheets or routing
cover sheets and any other machine readable material of any sort whether prepared by current or former
officers and employees, agents, consultants or by any non-employee without limitation. “Record” or
“records” shall also include redacted and unredacted versions of the same record.


10.

A:

24

-4-

Several statements in recent press stories have suggested that a
rule may not take effect until Congress has completed its review.
Is this accurate?

No. Agency final and interim final rules take effect as
described above. Congressional review does not change the
effective date of an agency rule unless and until Congress pass
a joint resolution of disapproval.

11. What is a "major" rule?

12.

A:

"Major" rule is defined to be any rule that the Administrator o
the Office of Information and Regulatory Affairs finds “has
resulted in or is likely to result in an annual effect on the
economy of $100,000,000 or more;" a "major" increase in costs o
prices for consumers, individual industries, Federal, State, or
local government agencies, or geographic regions; or "significa
adverse effects" on competition, employment, investment,
productivity, innovation, or on the ability of United States-
based enterprises to compete with foreign-based enterprises.®

This definition of "major" is similar but not identical to the,
definition of economically "significant" under Section 3(f) (1)°
E.0, 12866. For those agencies subject to £.0. 12866 regulator
review, an agency should indicate whether it considers the rule
as "major" when it submits the proposed rule for OIRA review.
there are, in other cases, questions concerning whether a rule
"major," agencies should contact their Desk Officer in the Offi
of Information and Regulatory Affairs (OIRA) as soon as possibl
in the rulemaking.

In case of general questions, who in OIRA should agencies contact?

A: Jefferson B. Hill, 395-3176.

teens

Note: A few days ago, extended statements appeared in the

Record from the House and Senate sponsors discussing this statute.
These were inserted by Senator Nickles on April 18, at page $3683, an¢
by Congressman Hyde on April 19, at page E571.

5 This definition excludes any rule promulgated under the
Telecommunications Act of 1996.


143

The Honorable David Meintosh
June 4. 1998
Page 2

fingerprints” policy.'

Despite requests from several congressional committees. the Bush Administration's
Council on Competitiveness refused to provide Congress with even the most basic information
about its activites. For example:

+ The Council refused to provide Congress with a list of reviewed regulations. According
to the Washington Post article. the Council reviewed approximately 50 regulations
annually. However. when Rep. Skaggs, then Chairman of the Subcommittee on Treasury,
Postal Service. and General Government. requested the list of regulations in which the
‘Councit had significant involvement. he received virtually no information. The Council
refused to provide him with a lise. claiming that it would impose an “extraordinary
burden” on Council staff

+ The Council refused to provide copies of written communication between its staff and
tulemaking agencies. The Council claimed that “disclosure of these communications
‘would inhibit the candor of those participating in the process, and as a consequence,
injure the quality of decision making.” The Council also noted that, “consistent with
‘Administration policy.” these types of communications were not disclosed?

+ The Council even refused to provide Congress with the identities of outside interests that
hhad contacted the Council to seek relief from regulations. The Council took the position
that its communications with groups seeking regulatory relief were “pre-decisional and
deliberative in nature.” and claimed that “it is Administration policy that these types of
communications are not disclosed.~’ The Council took this position even though no court
has ever extended the deliberative process privilege to communications with outside
‘groups.

Thave enclosed copies of relevant documents that provide further detail on the refusal of
the Council on Competitiveness to cooperate with Congressional oversight activities during your
tenure there.

* “Quayle’s Quest: Curb Rules. Leave ‘No Fingerprinis’.” The Washington Post. January
9.1992.

ffice of the Vice President. Response to Questions Submitted For the Record
‘Submitted by Mr. Skaggs, p. 2. April 29, 1992.

5 Wbid., p. 2.
* Ibid. p. 3.


10

What did OIRA do when this statute took effect? The Congres-
sional Review Act took effect immediately on the day it was signed,
Friday, March 29, 1996, just over 2 years ago. Most agency staff
knew little about it. OIRA moved quickly. On Tuesday, April 2,
1996, the OIRA Administrator, Sally Katzen, sent an OMB Memo.
randum M-9619, to the heads of all agencies outlining the provi-
sions of the new legislation and discussing the definition of major.
Based on advice from OMB staff, Ms. Katzen included the address-
es of the House Clerk and Secretary of the Senate.

Two weeks later, after agencies had begun to send their final
rules to these officials, she received other telephone calls asking
that the rules go over to the Speaker and President of the Senate.
Meanwhile, as Chair of the Regulatory Working Group established
under Executive Order 12088, the OIRA Administrator stressed to
agencies’ regulatory policy officers the importance of moving quick-
ly to implement this new law.

During this time, OIRA staff were receiving a variety of ques-
tions from agencies about what they should do under the law.
OIRA then prepared a document, “Frequently Asked Questions,”
which was distributed to OIRA staff and agencies to answer these
questions. I have attached a copy of these memoranda at the end
of this written statement.

In addition, because OIRA does not review the regulations issued
by the independent regulatory agencies, OIRA had to design a proc-
ess to determine whether the final rule of an independent agency
is major within the meaning of the statute. OI! invited regu-
latory contacts from independent agencies to discuss OIRA’s April
2 memorandum and how they could best coordinate regarding
OIRA’s determination of major. After this meeting, the independent
regulatory agencies began sending OIRA summaries of their up-
coming final regulations to allow OIRA to decide whether or not
these rules were major. Initially, there was a flurry of staff discus-
sion. The process for the independents has now become routine.

For those agencies whose regulations were subject to review
under Executive Order 12866, the administrator asked OIRA staff
to ensure that agencies understood which rules were major. The
term as defined in the statue is similar but not identical to the cat-
egory covered under 3F(1) of the Executive Order 12866. The statu-
tory definition was taken from a predecessor, Executive Order
12291. It is now routine for OIRA to implement the CRA as it re-
views under Executive Order 12866. OIRA staff determined wheth-
er or not the draft rule should be considered in the course of these
reviews. They also review the various analyses agencies perform to
determine whether they meet appropriate standards. Where are we
now?

In their testimony, GAO informs us that it has received 131
major rules and 9,052 nonmajor rules, roughly 80 per week. Over-
all, this indicates that the agencies are making serious efforts to
comply with the statute and that the authorizing committees are
receiving a lot of rules. However, agency compliance has not been
100 percent. In 1997, GAO prepared a list that pointed out that
agencies, as opposed to independent regulatory bodies, had not sub-
mitted 279 final rules on a timely basis. Recently, GAO prepared
another analysis that indicated tt 66 final rules had not been


41

‘Thank you in advance for your attention to these matters.

Sincerely,

Quid Meurer,

David M. McIntosh

‘Chairman

Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

cc: The Honorable Dan Burton
The Honorable John Tierney


29

Mr. McIntosu. OK, if you could find that out for us, that would
be important, particularly if there budget details that were sug-
gested to be changed. And then let me ask you, and I’ll make the
whole list available, but from at least 15 of the 22 agencies, we
have not gotten complete answers. Are you aware of any of the re-
sponses that are still at OMB?

Mr. DESEvE. I believe the Agriculture response is still at OMB
and is about to be cleared. Other than that, I don’t know of any
that are still at OMB to be cleared.

Mr. McINTOSH. So, as far as you know, at the OMB, are there
any other that are——

Mr. DESEVE. Only Agriculture, as far as I know.

Mr. McInTosu [continuing]. Are there any that you've cleared,
that OMB have cleared but are at White House counsel?

Mr. DESEvs. I don’t know the answer to that.

Mr. McINTosH. That would be important to know. Sounds like
we might have to get White House counsel up here on this one. So
you say Agriculture is about to be cleared, you think by the end
of this week?

Mr. DESEvE. I don’t know the answer, but I'll get you that an-
swer quickly.

Mr. McINToSH. OK. I think it would be important if it is any-
thing other than that. Now, the other interesting thing is we did
get a response from HUD that indicated that its budget in fiscal
year 1999 and prior years does not contain funds for research iden-
tified as part of the President’s Climate Change Technology Initia-
tive. And yet, in OMB’s budget submission, there’s a request for
$10 million for HUD’s PATH 1 program for climate change. Did the
agency not want to have global warming funds?

Mr. DESEvE. I don’t know because there is a case where the
OMB clearance process did not work. According to the little note
that I have here, we did not review the HUD request; it was sent
directly to the committee. So, unfortunately, I can’t answer that. I
Pouldn't be able to anyway, because I don’t know the answer

yut——

Mr. McIntTosuH. Forgive me if I seem overly paranoid, but it
sounds to me like that, when we get a response that hasn’t been
whitewashed through OMB, we find out some more details that are
pretty critical. In this case, HUD doesn’t particularly think it’s a
high priority. Now is this an initiative that the agencies came up
with or was it something the White House said stick it in their
budget and we'll justify it later?

ir. DESEVE. I honestly don’t know the answer to that.

Mr. McINTosH. That’s the way it is beginning to look. Well, let
us know the position on that request from HUD and whether it is
part of the initiative or not. I have some questions on the CRA, but
since we didn’t start the clock right away, let me turn to Mr.
Tierney and see if he has any questions and then I'll come back to
those on CRA.

Mr. TIERNEY. Mr. Chairman, thank you. It’s not that I’m abso-
lutely not riveted by all that we’re discussing here today. I’m al-
most as fascinated as all of the other members that showed up to
get this important colloquy going. And I’m somewhat a little bit cu-
rious to know just how we have so many interested people down


= SAT
Sao cre neRED FM CONOnESS ==.
= Congress of the United States Sa
= House of Representatives en
Ee (COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT =
Ea 2157 Ravoot House Orrick Bun owe Se
Ea \asnooron, OG 20618-6148 Sates.
June 22, 1998

BYEACSIMILE

‘The Honorable G. Edward DeSeve

‘Acting Deputy Director for Management

Office of Management and Budget
‘Washington, D.C, 20503

Dear Mr. DeSeve:

‘Thank you for testifying on June 17, 1998 before the Subcommittee on National
Economic Growth, Natural Resources, and Regulatory Affairs on the White House Initiative on
Global Climate Change and implementation of the Congressional Review Act, During the
hearing, you agreed to respond promptly both to questions posed for which you were unable to
provide answers and to additional questions which we did not ask based on your responses to the
questions we did pose.

‘After you departed, Congressman John Tierney, Ranking Minority Member of the
Subcommittee, asked that the record be left open so that additional information could be
provided. Please provide the information requested in this letter not later than noon on Monday,
July 6, 1998 to the Subcommittee staff in Room B-377 Raybum House Office Building.

Please contact Subcommittee Senior Counsel Keith Ausbrook at 225-4407 if you have
any questions. Thank you in advance for your attention to this request

Sincerely,

OQurd Adan

David M. Mcintosh:

Chairman

‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

ce: The Honorable Dan Burton
‘The Honorable John Tierney

Attachment


140

ee. =r
Sa ‘one ramon FFT cones se
aoe Congress of the United States a
SS House of Representatives ESS
a= ‘COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT So
2187 Ravaunn House Orrice Bukowa SS
Wassmoton, OC 20515-6149 Ee
June 3, 1998
BYEFACSIMILE
‘The Honorable Janet L. Yellen
‘Chair

‘Council of Economic Advisers
‘Washington, D.C. 20500

Dear Chair Yellen:

‘Your May 18, 1998 partial response to the Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs’ March 13, 1998 oversight questions about the White
House Initiative on Global Climate Change was incomplete with respect to question 4 and failed
to provide other requested information and documents. Accordingly, this letter restates that
question and renews my request for the information and documents responsive to my original
request.

Question 4 asked you to provide a table with FY 89 - FY 99 historical budget authority

for your agency for any other components of the Administration's climate change program. My
question was intended for you to include not only program dollars but also salaries and expenses
‘account dollars since they account for most of your agency's expenditures. In fact, because your
‘agency bas been a major participant in the Administration's climate change policy development.
process, your staff time has probably been considerable.

Finally, while I appreciate your agency's effort to develop answers and locate responsive
documents for my remaining questions, it has already taken more than two and one-half months
to conduct a search. I have specifically exctuded the Council on Economic Advisers (CEA) from
"my requests for subpoenas from Chairman Burton in the hope that CEA would be responsive.
Unless you can commit to a full and prompt response and production of documents, I will pursue
the issuance of a subpoens from Chairman Burton.

lease contact Subcommittee Senior Counsel Keith Ausbrook at 225-4407 to discuss the
production of documents and sny other questions you may have regarding the Subcommittce's
requests. Alll responses and documents should be produced to the Subcommittee office in Room
B-377 Raybum House Office Building.


91

QUESTION 22 Did the Administration review any private sector analyses completed prior
to Kyoto? If so, please provide all records of comments thereon by federal agencies.

ANSWER 22 Analyses by private sector and non-profit organizations on climate change were
provided to us for information purposes. Copies of those studies are enclosed. No records of
comments exist in our files.

QUESTION 23 The Clinton Administration indicated its recognition of Senate Resolution
98 (the Byrd-Hage! Resolution). Please describe in detail and document the steps that the
Administration already has taken and intends to take to assure compliance with each
provision of that Resolution.

ANSWER 23 The Administration respects and supports Senate Resolution 98. We fully intend
to provide supporting documentation related to potential impacts in the context of sending the
treaty to the Senate and we have an extensive effort underway to advance our goal of achieving
meaningful participation by key developing countries. The President's recent joint statement
with his counterpart in Chile in support of this position is an example of the types of efforts
currently underway.

No Cost/Benefit Analysis of the Kyoto Treaty.

QUESTION 24a Please provide any and all analyses that the Administration or any federal
agency prepared (or is preparing) of the costs and benefits of imposing on the U.S. the
binding targets and timetables set forth in the Kyoto Protocol for reducing greenhouse gas
emissions, taking into account the global implication of the way in which this agreement is
structured. Also, please analyze and document the following:

ANSWER 24a Dr. Yellen, Chair of the Council of Economic Advisers, provided congressional
testimony on this issue and we have enclosed a copy of her testimony for your information. As
indicated elsewhere in this letter, several analyses have been produced or otherwise implicate the
confidentiality of Executive Branch deliberations and decision-making and have been referred to
the Counsel to the President of the United States.

QUESTION 24b Whether the benefits of implementing this Protocol are justified by the
costs;

ANSWER 24b Please refer to the answer to question 24a.

Evaluate the effectiveness of this agreement by comparing the marginal
abatement costs of the most plausible alternative scenarios for meeting the Kyoto targets,
given the way in which this agreement is structured, with the marginal costs of other
reasonable alternative compliance schemes;


11

submitted on a timely basis. We’re pleased the agencies are doin;
well, that the rate of compliance is increasing and that GAO an
OIRA are working together to help this to happen.

We also know that compliance with CRA is not cost free. It takes
effort and resources for agencies to transmit the rules to Congress,
for congressional staff to process the submissions, for the authoriz-
ing committees to review them, and for GAO to keep track of all
the submissions. We hope that the authorizing committees find this
information useful and helpful.

Regarding your question about our cooperation with the sub-
committee’s request information to the White House Climate
Change Initiative, we worked diligently to prepare written answers
to the questions you raised on March 2 and March 6 in letters
jointly sent to OMB and the Council for Environmental Quality,
CEQ. You were sent responses on May 138 and June 9. You have
the responses to both letters and the accompanying documents col-
lected through a search of files of both agencies. The time it took
us to respond was dictated by the length and complexity of the
questions you posed.

With respect to the process for review of agency responses to the
subcommittee’s request for information, we follow the normal
interagency review process coordinated by OMB and used for con-
gressional reports, testimony, or for followup questions from con-
gressional hearings. The amount of time involved in reviewing an
agency’s response was, in part, determined by the number of re-
sponses in the review process at any one time. Obviously, review-
ing a number of agency responses, involving 80 to 100 questions
and answers submitted for review at the same time, slowed down
the process considerably.

I appreciate the opportunity to testify and welcome any questions
that you may have.

[The prepared statement of Mr. DeSeve follows:]


7

‘on the cutting edge of efficient technologies do as well.

QUESTION 39b Please provide and document estimates of the percentage of U.S.
emissions reductions that might have to be purchased from other countries to minimize the
costs reducing emissions and which countries likely would be the beneficiaries.

ANSWER 39b All countries have the potential to benefit from trading, including the U.S.
Trading is a market-based mechanism that allows emissions to be reduced cost-effectively. The
percentage of U.S. emissions reductions that might be purchased from abroad depends upon a
number of factors, including the marginal abatement cost in each country.


102

‘+ Since the Secretary did not request funds for climate change and since HUD says that
PATH is not a global warming program, why does the President's initiative request $10
million for HUD's PATH program for climate change?

Q10. The Chief Counsel for Special Matters replied for the Department of Commerce that "The
NIST mission does not specifically include efforts to study the global climate; however,

laboratories have performed standards and measurement research to improve climate
‘observations, improve energy efficiency, and identify greenhouse gas alternatives” (emphasis
added).

+ Since Commerce did not receive prior funding from FY 93 through FY 98 under the
‘Climate Change Action Plan and is newly included in CCTI for FY 99, under what
authority is NIST requesting its share of the CTI funding and is this request consistent
with NIST's principal statutory mission?

Q11. One of the FY 98 “expected sccomplishments” in Environmental Protection Agency's
(EPA) reply was a "Design Clean Development Mechanism (CDM) project in six developing
countries.”

‘+ Isn't this implementation of the Protocol prior to ratification because the Clean
‘Development Mechanism is a creature of the Kyoto Protocol?

+ Ambassador Eizenstat promised that there will be no implementation by the
‘Administration prior to Senate ratification. Will OMB direct EPA not to expend FY 98
funds for this purpose?

Q12. EPA's reply revealed over $85 million in grant and contract awards to one organization —
ICF, Ine. ~ from FY 93 to FY 97. Additionally, EPA awarded over-$500,000 contract awards to
9 other organizations and over-$500,000 grant awards to 20 other organizations inthis 5-year

period. For example, LISBOA, Inc. received a contract for $3,030,830. These are huge awards.

+ Were all awards to ICF, Inc, made through competition? Were all over $500,000 contract,
and grant awards made through competition?

* Has OMB reviewed the final reports from each of these huge awards?

+ Has OMB reviewed the scope of work and deliverables for EPA’s $389,409 grant
(S/1197-11/30/98) to the World Resources Institute for "building business support for
action on climate change"? Is any part of this grant essentially implementation prior to
‘Senate ratification?


118

With respect to the most obvious measurement, the expected reductions in greenhouse gases
issions from the 1990 base year in the Kyoto Protocol, OMB told the Subcommittee in writing
that those measures would be identified after the program is enacted.

Question 2A. Without program performance measures, how can Congress and the American
people properly evaluate the President's proposals? Should Congress just approve programs
without knowing what are the expected outcomes, i.c., what they are expected to achieve? Was
this the intent of the Results Act?

‘Response. OMB's May 13, 1998, letter to the Subcommittee provided performance information.
on the climate change initiative that was in OMB’s possession, including detailed performance
information from the most recent evaluation (U.S. Climate Action Report -- 1997) of the
programs in the President's Climate Change Action Plan. Many of these same programs are
included in the FY 1999 Budget under the Climate Change Technology Initiative. In addition,
the Subcommittee has been provided directly by the agencies with climate change programs
performance information from agency annual plans. OMB also provided additional performance
information on climate change programs in its response to the Subcoramittee's May 27, 1998,
letter. While we have not developed a comprehensive set of measures, each of the component
programs that make up the Initiative have their own set of measures and justifications which
have been provided by the agencies to the Subcommittee. We believe that these measures and
justification materials fully support and provide sufficient justification for Congress to fully fund
the President’s proposals.

Question 2B. Since OMB is the coordinating agency for the Results Act, what efforts has OMB
taken to identify a full set of government-wide and agency-specific measures for Congress’
consideration of the President's FY 99 budget request for climate change funding?

Response. The President’s FY 1999 Budget, which includes the Government-Wide Performance
Plan, includes specific programs that eupport the Climate Change Technology Initiative (see
‘examples in chapter 15, Energy, Government-Wide Performance Plan, FY 1999, 2/27/98). In
addition, OMB’s May 13, 1998, letter to the Subcommittee (attached) provided performance
information on the climate change initiative that was in OMB's possession. Additional
performance inforruation is provided in the response to the Subcommittee’s May 27, 1998, letter.
‘Agencies also provided specific climate change performance information directly when
responding to the Subcommittee's letters. We will be working with the Department of Energy
and the Environmental Protection Agency in the coming year to develop more comprehensive
performance information for the climate change initiative as part of the FY 2000 budget process.

Question 2C. By what date will you commit to submitting a full set of performance measures to
us?

‘Response. OMB has provided the Subcommittee with all of the performance information on the
climate change initiative that is in our possession through the May 13, 1998 letter and the

2


65

7
‘No Cost/Benefit Analysis of the Kyoto Treaty.

24a, Please provide any and all analyses that the Administration or any federal agency
prepared (or is preparing) of the costs and benefits of imposing on the U.S. the binding targets
and timetables set forth in the Kyoto Protocol for reducing greenhouse gas emissions, taking into
account the global implications of the way in which this agreement is structured. Also, please
analyze and document the following:

24b, Whether the benefits of implementing this Protocol are justified by the costs;

24c. Evaluate the effectiveness of this agreement by comparing the marginal abatement
costs of the most plausible alternative scenarios for meeting the Kyoto targets, given the way in
which this agreement is structured, with the marginal costs of other reasonable alternative
compliance schemes;

‘24d. With respect to each scenario that is analyzed, identify the assumptions used,
explain any uncertainties conceming the assumptions, and examine the sensitivity of net benefits
to the different compliance strategies, using a range of plausible assumptions about future
economic development and about fundamental climate processes;

‘24e, Evaluate the opportunity costs of pursuing the Administration’s strategy for the
abatement of greenhouse gas emissions under the terms of the treaty; and

24f, Evaluate how the benefits and burdens of complying with this treaty would be
distributed on the national and household levels, describing, among other things, the disparate
regional and industrial sector impacts, and the effects on different income levels.

25a. In evaluating alternative scenarios, please examine the following:

25b. Compare the economic and environmental effects of not including developing
countries in the effort to reduce global emissions (with the potential for binding developed
countries to even greater obligations, without limiting developing countries) against the effects of
addressing greenhouse gas mitigation on a global scale by the international community.

25e. Compare the economic and environmental effects of complying within the
timeframes set forth in the Kyoto Protocol with the effects of complying over a longer time
period.

25d. Compare the impacts of reducing greenhouse emissions using international
emissions trading, joint implementation, and the Clean Development Mechanism with the
impacts of relying upon domestic emissions permit trading. In this regard, evaluate alternative
international trading scenarios: trading only between Annex I countries, trading that extends to a
number of “key” developing countries, and trading in which all countries are fully participating.


7

Enclosure

Response to Chairman David M. McIntosh
Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs

Question 1, Please provide a table with Fiscal Year (FY) 89-FY 99 historical budget authority,
‘on an agency-by-agency basis, for the various components of the President's “Climate Change
‘Technology Initiative,” including the previous “Climate Change Action ProgranvPlan” and any
other new or previously authorized Research and Development (R&D) herein (except for the
USS. Global Change Research Program included in Question 2 below). For each component,
please indicate each specific budget account and a brief description of the program.

Response. Attachment | is a table with historical budget authority by agency for Fiscal Years
1995-1999 for the President’s Climate Change Action Plan and the Climate Change Technology
Initiative. Fiscal year 1994 was the first year for the Climate Change Action Plan. Funding for
the Department of Energy’s (DOE) programs include most of the Energy Conservation
appropriation account (except for the low-income weatherization and Slate energy grant
programs) and all of the Solar and Renewable R&D appropriation account. This change was
made to better account for those programs most directly related to reducing greenhouse gas
emissions. Funding for DOE's programs in the Climate Change Action Plan are included in the
totals provided for DOE.

A brief description of the programs in the Climate Change Action Plan is included in Appendix
‘A of Attachment 2, U.S. Climate Action Report - 1997. Attachment 3 are FY 1999 budget
materials that provide a brief description of the programs in the Climate Change Technology
Initiative.

Question LA. For FY 93 and FY 95, please explain why the details in Table S-10 do riot equal
the totals in Table 6-2 in the Budget of the United States Government Fiscal Year 1996,

Response. The difference between the details in Table S-10 and the total in Table 6-2 in the FY
1996 Budget for the climate change action plan are due to the timing, availability of data, and the
source of the data. Table S-10 is generated from a central computer database where agencies
provide the data, whereas Table 6-2 is prepared manually by OMB staff. Also, the timing of
‘when the data is available and whether adjustments can be made is limited in the central
computer database while manual changes can be made to Table 6-2 up to the time the table is
printed. This allows for last minute adjustments to numbers in Table 6-2 that cannot be made to
the central computer database which is locked so the Budget Appendix and related documents
‘can be printed in time to transmit the budget to Congress. The printing of the President's
Budget requires a staggered schedule so certain materials have different print dates that make it
difficult to accommodate last minute changes for programs located in different sections of the
budget.


16

3. Where are we now?

In their testimony, GAO informs us that it has received 131 major rules and 9,052 non-
‘major final rules -- an average of roughly 80 rules a week. Overall, this indicates that the
agencies are making serious efforts to comply with the statute and that the authorizing

Committees are receiving a lot of rules.

However, agency compliance has not been 100% complete. In November 1997, GAO
prepared a list that pointed out that agencies had not submitted 279 final rules on a timely basis.
Recently, GAO prepared another list indicating that 66 final rules had not been submitted on a
timely basis. We are pleased that the agencies are doing so well (97% compliance for the first
check), that the rate of compliance is increasing (over 99% compliance for the second check),
and that GAO and OIRA are working together so well in helping this to happen,

We also know that compliance with the CRA is not cost free. It takes effort and
resources for agencies to transmit the rules to Congress, for Congressional staff to process the
agency submissions, for the authorizing Committees to review them, and for GAO to keep track
of all the submissions and prepare reports for major rules. We hope that the authorizing
Committees find this information useful and helpful.

REQUESTING INFORMATION ABOUT THE CLIMATE CHANGE INITIATIVE

Regarding your questions about our cooperation with the Subcommittee’ requests for
information regarding the White House Climate Change Initiative -- we worked diligently 10
prepare written answers to the questions you raised in the March 2 and March 6, 1998, letters
sent jointly to OMB and the Council on Environmental Quality (CEQ). You were sent responses
‘on May 13 and June 9. You have the responses to both letters and the accompanying documents
collected through a search of the files of both agencies. The time it took us to respond was
dictated by the length and complexity of the questions you posed,


(CLIMATE CHANGE QUESTIONS

Emorsin the Published B
QI. My staff identified to OMB several errors, which OMB has now admitted, for climate
change program funding in the fast four budgets prepared by OMB.

+ Does OMB expect the Congress to fund these programs when even the published
information of what the President wants is inaccurate?

‘+ Whats being done to ensure that budget numbers are accurate?

Absence of Performance Measures

Q2. Despite the Goverment Performance and Results Act (Results Act) requirement that
agencies establish program performance measures for each program in each agency, the agencies
have identified only a handful of such measures for the dozens of climate change programs.
‘And OMB has not identified any government-wide program performance measures for the
President's climate change initiatives, as required by the Results Act.

‘With respect to the most obvious measurement, the expected reductions in greenhouse gas
emissions from the 1990 base year in the Kyoto Protocol, OMB told the Subcommittee in writing
that those measures would be identified aftes the program is enacted.

+ Without program performance measures, how can Congress and the American people
properly evaluate the President's proposals? Should Congress just approve programs
‘without knowing what are the expected outcomes, ie., what they are expected to achieve?
Was this the intent of the Results Act?

. ‘Since OMB is the coordinating agency for the Results Act, what efforts has OMB taken
to identify «full set of government-wide and agency-specific measures for Congress’
consideration of the President's FY 99 budget request for climate change funding?

+ By what date will you commit to submitting a full set of performance measures to us?

‘+ Since the agencies do not have data for the 1990 base year, what is OMB doing to ensure
that data are available for the 1990 base year for each of the government-wide and
agency-specific program performance measures?

(Q3. OMB has yet to answer fully our March requests regarding the President's requests for
FY99 funding for climate change. For example, OMB has still not answered our request for
historical budget authority for climate change programs that are not part of the $6.3 billion that
the President has identified as the Climate Change Technology Initiative (CTI), such as part of
the $1.9 billion U.S. Global Change Research Program.


21

CONGRESSIONAL REVIEW OF AGENCY RULEMAKING
5 U.S.C. Chapter 8
Enacted in P.L. 104-121 (March 29, 1996)

Erequently Asked Questions

I. SUBMISSION OF RULES TO BOTH HOUSES OF CONGRESS AND GAO.
1. Which agencies have to submit their rules to Congress and GAO?

A: Chapter 8 applies to every Executive branch "agency" as defined
in 5 U.S.C. 551(1); this definition includes the independent
regulatory commissions and boards.

2. Do agencies submit all rules before they can take effect?

A: Agencies are to submit all final or interim final rules, with
certain exemptions.

Agencies do not need to submit proposed rules.
3. What are these exemptions?

A: In its definition of "rule," the statute excludes "any rule of
particular applicability" (§ 804(3)(A)); any rule relating to
agency "management or personnel" or agency "procedure or practice
that does not substantially affect the rights or obligations of
non-agency parties" (§§ 804(3)(B) & (C)); and any rule concerning
monetary policy issued by the Federal Reserve Board (§ 807).

4. Are there any other exemption:

A: No. There is no other exemption from the requirement to submit
final and interim final rules to Congress.

Not only do agencies have to submit to Congress and the GAO the
"significant" and "economically significant" final and interim
final rules that OIRA reviews under E.0. 12866, but agencies have
to submit to Congress and the GAO the non-significant final and
interim rules that OIRA does not review as well as the general
categories of final and interim final rules that OIRA has
exempted from centralized regulatory review.

5S. Do agencies have to submit to Congress and GAO more than the text of
the rule?

“A: Yes. Each agency ie to submit a ‘report containing a copy of
each rule, a "concise general statement" of the rule (including
whether it is a "major" rule), and the rule’s effective date.

No particular format is required for this report, although each
report -has to be in the form of, or covered by, a formal


50

Mr. TIERNEY. Mr. Chairman, I just request that the record be
held open for 5 days for additional comments that we might be able
fo submit in writing. And I don’t believe I’m going to be able to be

ack.

Mr. MCINTOSH. Yes, we will hold it open.

Mr. TIERNEY. I thank you for that. I thank the witness, and
apologize that I might not be able to return.

Mr. McINTOosH. Thank you, John. And we'll be back, hopefully,
in 5 to 10 minutes.

[Recess.]

Mr. McINTOSH. The subcommittee will come to order. Thank you,
Mr. Murphy, for your patience in this. We had more than the one
vote, unfortunately. Let me ask you a couple of questions, and we
may have a few more for the record afterwards. First of all, let me
repeat how much we appreciate your work in this area and dili-
gence in making sure that information is out there and available
and used by the agencies in complying with the Congressional Re-
view Act. You talked about the expansion of your audit for addi-
tional rules. In your estimation, has OIRA done anything further
to take the lead on bringing these rules to the attention of the
agency, or what ha, pened in that regard after the last hearing?

Mr. Murpuy. Well, as we reported at the last hearing, OIRA had
not taken any—made any effort at all other than to send the rule
to the agency and tell them that they could call GAO if they had
questions. en we did the latest review, a 5-month study, we took
that to OIRA, they distributed it to the agencies, and this time
they called the agencies individually to raise the issues with them.
We work with OIRA to identify the individuals so they now have
a list of the key people in the agency to contact. They did so, and
in fact, during the 2 weeks since they did that, we've gotten an
awful lot of those rules which have not been filed that are now ac-
tually filed with GAO. I think we are probably down to 20 or 21
that are left at the moment that haven't been filed.

Mr. McINTOsH. For both time periods?

Mr. MurpHy. Two for the prior time period; those are still out-
standing—one from the National Science Foundation and one from
the Small Business Administration. Those are the—those that we
discussed at the last hearing and now there are probably another
21 left over that haven’t been filed yet from the second study.

Mr. McIntosu. And that’s under the narrower definition of a
rule, that essentially things that are published in the Federal Reg-
ister, right?

Mr. Murpny. That’s right.

Mr. McINTOSH. Because as I understand it, your audit, out of ne-
cessity, was confined to that. Do you have any estimate of the num-
ber of other illegal rules or procedures that are not covered by the
audit because they were not published?

Mr. MurPHY. Well, we know they are out there. We recently did
a study after discussions with your staff to take a look at the num-
ber of forest plans which are clearly rules, and, for the most part,
we believe they would be major rules although that’s OIRA’s deter-
mination to see how many of those had been promulgated since
CRA was enacted, and there were seven of those that have come
out. At the same time I know there are land management plans,


95

ANSWER 36a The key principles underlying U.S. support for emissions trading are
environmental effectiveness and economic efficiency: emissions trading will allow those Parties
that assumed binding emissions targets to reach the Kyoto Protocol's environmental goals at the
lowest cost. We believe that a credible emissions trading system depends on strong national
‘measurement, reporting and compliance regimes, and that trading rules can be used to strengthen
incentives for such regimes. The U.S. favors a simple set of rules and guidelines for trading that
(1) promote cost-effective achievement of the agreed Kyoto targets, (2) promote compliance with
the Protocol's requirements for accurate measurement, complete reporting, and target attainment,
and (3) address national compliance incentives and risk issues.

QUESTION 36b Does the Administration intend to confer with Congress and obtain
comments from Congress and the public in developing negotiating positions for Buenos
Aires on rules and procedures for an international emissions trading system and for
obtaining joint implementation project credit, including the Clean Development
Mechanism?

ANSWER 36b The Administration sincerely welcomes input from Congress, industry, and other
interested parties and opportunity for dialogue on trading and CDM niles, given the importance
of these issues to the U.S. economy and our industries and citizens.

QUESTION 37a Why does the Administration believe it can obtain meaningful
participation by developing countries and what steps is the Administration taking to
achieve this? What indications of potential meaningful participation have been shown by
developing countries that prompt this optimism?

ANSWER 37a A number of delegations from developing nations indicated in Kyoto that they
regarded an agreement by Annex | parties to undertake binding commitments as a necessary
precondition for their negotiation of binding commitments. Since the Kyoto Protocol succeeded
in achieving this very type of Annex 1 agreement, we believe this barrier to key developing
nations negotiations has been removed. In agreeing to CDM projects and the creation of an
Annex B, developing nations also helped create essential mechanisms for cooperation between
developed and developing nations on emissions reductions, and a mechanism for upward
graduation to binding commitments. Recent congressional testimony on this subject by
Undersecretary of State Stuart Eizenstat may be helpful to you, and is attached.

QUESTION 37b In particular, what are the steps being taken with respect to China, India,
Mexico, Brazil, and South Korea and what indications of potential meaningful
participation has the Administration received from these countries?

ANSWER 37 Please refer to the answer to question 37a.

‘Which countries does the Administration consider “key,” in assuring that
“meaningful participation” is secured?

1s


33

cy, won’t even provide them guidance about some key definitions
in the end?

Mr. DeSeEveE. I don’t know that the agencies are having the kind
of difficulty that you specify. Again, I'll ask Mr. Murphy to please
testify to the problems that he’s seen. My belief is that the defini-
tion of a rule is relatively idiosyncratic in this area to particular
agencies. What is a rule for one agency working with their author-
izing committee, may not have the same characteristics. So trying
to find a one-size-fits-all definition of the word rule is extremely
difficult. We’ve asked the agencies to work with their authorizing
committees which receive the CRA information and to try to get an
understanding with them through practice as well as through stat-
ute what constitutes a rule.

Mr. McINTOSH. And yet, there’s been nothing published, you
know, on an agency-by-agency basis.

Mr. DESEVE. That’s correct. OMB would not do it on an agency-
by-agency basis.

Mr. MCINTOSH. You wouldn’t give specific guidance to an agency
that this is a rule and it needs to bk——_

Mr. DESEVE. If they asked us, we would try to work with them
and with their counterparts in the Congress to seek such clarifica-
tion, but we have not, to my knowledge, you know——

Mr. McINTOsH. The statute is different in its definition of a rule
than the President’s Executive order. Is that right?

Mr. DESEVE. I believe it is, yes.

Mr. McINTOsH. And it’s different than the Administrative Proce-
dure Act definition of a rule?

Mr. DESEVE. I don’t know the answer to that.

Mr. McINTOsH. I’m pretty sure that’s the case—

Mr. DESEVE. I’m just not a lawyer, I’m not familiar with that.

Mr. McINTOSH [continuing]. Because it was a broader definition
because Congress wanted to have more information about what
was being used. The key thing that I think the agencies need to
know is which things they are required to submit and if they don’t
know that, then they are going to choose not to submit things for
the process because it’s less work. Thank you very much, Mr.
DeSeve. Do you have any more questions?

Mr. TIERNEY. Mr. DeSeve, I want to thank you for putting up
with this and I appreciate the job that you’ve done, thank you.

Mr. DESEVE. Mr. Chairman, thank you very much. Mr. Tierney,
thank you.

Mr. McINTOSH. Let’s proceed to the next witness’ testimony and
then we'll recess for a vote. Our next witness is Mr. Robert Murphy
who is the general counsel at the General Accounting Office.

{Witness sworn.]

Mr. McINTosH. Thanks, Mr. Murphy. Welcome back again. Give
us an update from your March testimony on exactly what’s happen-
ing under the Congressional Review Act.

STATEMENT OF ROBERT P. MURPHY, GENERAL COUNSEL,
GENERAL ACCOUNTING OFFICE

Mr. Murpny. Thank you, Mr. Chairman, Mr. Tierney, members
of the subcommittee. I am pleased to be here today to discuss
GAO’s experience in fulfilling its responsibilities under the Con-


133

gas emissions whether or not that is the intended purpose of the legislation)? If so, please
identify and describe all such initiatives, including a timetable for their development and
submission to Congress. Also provide any and all legal and policy analyses regarding the
applicability and availability of existing legislation to implement the Kyoto Protocol and any
‘comments from other Federal agencies on the analyses.

13. Does your agency plan to revise any existing rules or propose any new rules relating to
climate change (including regulatory actions that will have the effect of reducing greenhouse gas
‘emissions whether or not that is the intended purpose of the regulatory action)? If so, please
identify and describe all such initiatives, including any cost-benefit analysis, and a timetable for
their development and promulgation. Also, provide any and all analyses that were prepared or
considered of the cumulative effects on the U. S. economy and/or energy system of all or any
combination of regulations that were issued since 1992, that were proposed, and that are being
developed that have or will have such effects.

14, Has your agency participated in discussions or reviewed any documents relating to
intemational emissions trading, joint implementation, and/or the Clean Development
Mechanism? If so, please provide a copy of all drafts and any comment provided by your
agency.

C. Dr. Yellen’s Testimony before the House Commerce Committee on March 4, 1998,

15. Please provide any and all analyses that support the Administration’s conclusion that impacts
on the U.S. economy of complying with the terms of the Kyoto Protocol “are likely 0 be
modest.” Also, explain fully how the Administration can make such a forecast responsibly when,
as Dr. Yellen stated, “it is not yet possible to provide a full authoritative analysis” of the Kyoto
Protocol. Among other things, Dr. Yellen noted that there is still “much that we do not know”
because much has been left unresolved by this treaty (for example, implementation issues, the
rules and procedures governing international emissions trading, joint implementation projects,
and the Clean Development Mechanism, and future emissions reductions obligations).
‘Moreover, Dr. Yellen asserted that, to her knowledge, “ no [economic] model — whether used
inside the government or not -- has yet been set up to analyze the implications of the Kyoto
Protocol, since this agreement is only a few months old. .

16. Inher testimony, Dr. Yellen supported the Administration's conclusion that “economic
impacts are likely to be modest” with other optimistic conclusions about the effects of the Kyoto
treaty “flexibility” mechanisms and U.S, electricity restructuring, and about the rate of
technological progress. Please provide any and all analyses that support the following estimates:

16a, U.S. electricity restructuring “will offer approximately $20 billion in cost savings.”

16b, Emissions trading among Annex I countries “can reduce the cost to the United
‘States of achieving its targets for 2008-20012 emissions by about half.”


17

<6.
With respect to the process for review of agency responses to the Subcommittee’s request
for information, we followed the normal interagency review process coordinated by OMB and
used for congressional reports, testimony, or follow up questions from congressional hearings.
The amount of time involved in reviewing an agencies response was, in part, determined by the
number of responses in the review process at any one time. Obviously, reviewing a number of
agency responses involving 80 to 100 questions and answers submitted for review at the same

time slowed down the process considerably.

I appreciate the opportunity to testify, and welcome any questions that you may have.

aeHee


61

3

6d, Please provide a detailed explanation of and produce all records indicating the
alternative policy options that the Administration analyzed. including more broadly-based
options, such as integrated pollution prevention, performance-based regulation, and multi-media
regulation. In this regard, did the Administration evaluate whether existing regulation may be a
significant barrier to improving energy efficiency and the environment?

Ge. Please explain in detail and fully document the cost-effectiveness of the
Administration's proposal when compared to other available options for improving energy
efficiency and the environment.

6f. Please explain in detail and fully document the opportunity costs of committing
‘such a significant amount of our nation’s resources in this manner.

6g. Asto any analysis provided, identify who prepared it and provide all records of
comments by other federal agencies.

7. How realistic and achievable are the targets and timetables that the U.S. delegation agreed
to at Kyoto, if itis necessary to take unilateral executive branch actions prior to Senate
ratification in order “to get us in a position where we will be further down the road and won't
have to make the kind of drastic reductions that otherwise might be called for"?

8 Under section 102 of the National Environmental Policy Act, the federal government is
required to provide a detailed environmental impact statement (EIS) and to follow specified
procedures for review and comment whenever it is recommending to Congress legislation that
“affects the quality of the human environment”. Please provide any EIS (ot draft EIS, if not
finalized) that was prepared in connection with the Administration's requests for tax incentives
and research funding to facilitate greenhouse gas emission reductions. With respect to any EIS,
identify who prepared the document and provide all records of written and oral comments from
other federal agencies.

‘The inescapable Regulatory Backdoor.

9. Inits 1997 U. S. Climate Action Report under the current Framework Convention on
Climate Change, the Administration made this statement: “Recognizing that even the most
draconian measures Would likely be insufficient to reverse the growth in greenhouse gases and
return U.S. emissions to their 1990 levels by the year 2000, new U.S. efforts are focusing most
intensively on the post-2000 period.” Based on this assessment, how can the President assert
that the U.S. commitments under the Kyoto Protocol are achievable with minimum economic
costs? Provide any economic and legal analyses that demonstrate that U.S. obligations can be
‘met without constraining U.S. economic growth and without imposing onerous and costly
regulation. Also, please provide two copies of the 1997 U.S. Climate Action Report.


130

‘Thank you in advance for your attention to this request.
Sincerely,
Qed Maawro~
David M. McIntosh
‘Chairman
‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

cc: The Honorable Dan Burton
‘The Honorable John Tiemey


114

-8-
(b) What are OMB’s plans to work with GAO to develop a standard form this fiscal
year?

Our efforts are ongoing with the interagency group and GAO. As indicated
above, we believe we are making progress. We do not know how long it will take to
resolve all the various detailed issues.


116

EXECUTIVE OFFICE OF THE PRESIOENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. 0c 2050

July 27, 1998

‘The Honorable David McIntosh

Chairman
‘Subcommittee on National Economic Growth
‘Natural Resources, and Regulatory Affairs
USS. House of Representatives

Washington, D.C. 20515

Dear Mr. Chairman:

Enclosed please find a response to your latest set of questions stemming from the hearing
held on June 17, 1998, at which G. Edward DeSeve, Acting Deputy Director for Management,
testified.

‘This completes the responses to your questions that we referred to in our July 10, 1998,
letter to you.

Please contact Elizabeth Gore (395-4790) of my staff if you have any questions.

Sincerely,
‘Charles Kieffer fF —
Acting Associate Director

for Legislative Affairs


4

of defiance. Frankly, during my years in the administration, I
would never have been imagined that when Congress wanted to
have someone on the oversight committee testify that they would
be denied that.

Today, Bob Murphy will report on GAO’s efforts to work with
OIRA in implementing the CRA since the March 12 hearing. We
applaud the efforts of GAO in particular, whose staff have worked
closely with the subcommittee to buildup the reporting process. But
GAO can’t do it all. What the agencies need most is strong leader-
ship and guidance from OMB. By holding back key information
from Congress, OMB is denying the American people their right to
know the administration’s real agenda on climate change and new
regulations in general. Time and again, OMB has bottlenecked the
flow of information from these agencies for the people’s elected rep-
resentatives to consider. What f want to know is what they have
to hide and why they are hiding it. I will continue to investigate
OMB’s performance in these areas and hold hearings until the full
truth about President Clinton’s and Vice President Gore’s climate
change initiative comes to light and until CRA is fully imple-
mented.

With that, let me turn now to the ranking member, Mr. John
Tierney, for an opening statement.

{The prepared statment of Hon. David M. McIntosh follows:]


93

QUESTION 26 With respect to any analysis provided, please identify and explain the basis
for assumptions used regarding such factors as the rate of improvement in energy
efficiency, the effectiveness of market incentives in increasing the market share of fuels that
emit less carbon, and economic and demographic growth. Also, explain fully any
assumptions on how emissions reductions will be achieved, as for example, through the
early retirement of coal plants or nuclear plant life extensions.

ANSWER 26 Please refer to the answer to question 24a.

7 In considering the opportunity costs, evaluate the extent to which the
Administration's climate change strategy will require the diversion of funds from savings
and/or investments which would have provided other benefits, such as saving social
security, or more funding for education, health care, ete,

ANSWER 27 Please refer to the answer to question 24a.

In assessing the impacts on the U.S. of complying with the Kyoto targets

and timetabics, please explain in detail the potential effects on the following indicators of
‘economic performance: gross domestic product (GDP), per capita GDP, unemployment,

income and real wages, trade competitiveness, and energy prices.

ANSWER 28 Please refer to the answer to question 24a.

In assessing the benefits of complying with the Kyoto treaty, please
evaluate fully the potential offsetting negative effects of exempting developing countries
and of “carbon leakage.” Also, if the economies of developed countries experience
reductions in economic growth, evaluate the impact that this will have on the ability of
‘emerging countries with export markets to transition to more energy efficient technologies.

ANSWER 29 Please refer to the answer to question 24a.

QUESTION 30 President Clinton bas suggested that the U.S. economy can continue to
grow under this agreement. Please indicate at what rate the Administration expects that
the economy will continue to grow during the next ten to 20 years if the treaty is ratified
and at what rate it is expected to grow if the treaty is not ratified.

ANSWER 10 Please refer to the answer to question 24a,
QUESTION 31 Have any of the cost/benefit analyses performed by the Administration or
any agency been peer-reviewed? If'so, please identify the reviewers and provide their

comments on the analyses. If not, does the Administration plan to do so? Please describe
fully the steps the Administration plans to take.

13


38

Register or submission to Congress and GAO, whichever is later. Nonmajor rules
become effective when specified by the agency, but not before they are filed with the

Congress and GAO.

GAO's primary role under CRA is to provide the Congress with a report on each major
rule concerning GAO's assessment of the promulgating federal agency's “compliance with
the procedural steps" required by various acts and executive orders governing the
regulatory process. These include preparation of a cost-benefit analysis, when required,
and compliance with the Regulatory Flexibility Act, the Unfunded Mandates Reform Act
of 1995, the Administrative Procedure Act, the Paperwork Reduction Act, and Executive
Order No. 12866. GAO's report must be sent to the congressional committees of

jurisdiction within 15 calendar days.

Although the law is silent as to GAO's role relating to the nonmajor rules, we believe that
basic information about the rules should be collected in a manner that can be of use to
Congress and the public. To do this, we have established a database that gathers basic
information about the 15-20 rules we receive on the average each day. Our database
captures the title, the agency, the Regulation Identification Number, the type of rule, the
proposed effective date, the date published in the Federal Register, the congressional
review trigger date, and any joint resolutions of disapproval that may be enacted. We
have made this database available, with limited research capabilities, on the Internet. I

will discuss shortly our belief that this database would have more significant value to the


©

125

nations and international organizations, and with private organizations in
establishing standard practices, codes, specifications, and voluntary consensus
standards;

(10) to advise government and industry on scientific and technical problems, and

(11) to invent, develop, and (when appropriate) promote transfer to the private
sector of measurement devices to serve special national needs.

Implementation activities in carrying out the functions specified in subsection (b) of
this section, the Secretary, acting through the Director and, if appropriate, through
other appropriate officials, may, among other things ~

(1) construct physical standards;

(2) test, calibrate, and certify standards and standard measuring apparatus;

(3) _ study and improve instruments, measurement methods, and industrial process
control and quality assurance techniques; .

(6) prepare, certify, and sel standard reference materials for use in ensuring the
accuracy of chemical analyses and measurements of physical and other
properties of materials;

(7) in furtherance of the purposes of this chapter, accept research associates, cash
donations, and donated equipment from industry, and also engage with industry
in research to develop new basic and generic technologies for traditional and
‘new products and for improved production and manufacturing;

(8) _ study and develop fundamental scientific understanding and improved
measurement, analysis, synthesis, processing, and fabrication methods for
chemical substances and compounds, ferrous and nonferrous metals, and all
traditional and advanced materials, including processes of degradation; .

(10) determine the atomic and molecular structure of matter, through analysis of
spectra and other methods, to provide a basis for predicting chemical and
physical structures and reactions and for designing new materials and chemical
substances, including biologically active macromolecules; .. ..

(16) undertake such research in engineering, pure and applied mathematics,
statistics, computer science, materials science, and the physical sciences as may
be necessary to carry out and support the functions specified in this section;

(17) compile, evaluate, publish, and otherwise disseminate general, specific and
technical data resulting from the perforinance of the functions specified in this
section or from other sources when such data are important to science,
‘engineering, or industry, or to the general public, and are not available

elsewhere; .

(22) undertake such other activites similar to those specified in this subsection as

the Director determines appropriate.

9


100

Why has OMB been unable and/or unwilling for over 3 months to provide complete
answers to our legitimate oversight questions?

When will Congress receive complete replies so that we can fully evaluate the President’s
requested funding for climate change, including not only CCTI but also other requested
funding for climate change, some of which are very substantial, such as the Agency for
Intemational Development (AID), which i requesting $250 milion in FY 99 for grants,
contracts, loans and loan guarantees for climate change activities? This amount even
‘exceeds the $205 million requested for EPA.

Q4. OMB has not produced the documents, such as environmental, cost-benefit, and/or
economic data and analyses relating to the Administration's climate change policies and the
Kyoto Protocol that we requested in March.

Don't you believe that Congress and the American public have a right to know the full
range of risks that the United States may face in entering into this agreement and the
potential economic consequences of the President's climate change policies?

Isn't our review of these documents essential to Congress’s role to ratify and implement
the Protocol?

When will these documents be produced?

Guidance to the Agencies & Review of Agency Replies
Q5. We have had difficulty in getting responses from most of the 22 agencies from which we
requested documents and information about their climate change activities.

‘What guidance, if any, did OMB provide the agencies on responding? How many
conference calls did OMB have with agency staff? When? What was concluded?

Did OMB advise the agencies about release of not-yet-publiely-available documents
containing economic and environmental data and analyses and agency comments on
them?

Did OMB advise the agencies about release of their comments on draft testimony by
‘Administration officials on climate change, including the draft testimony by CEA Chair
Janet Yellen's so-called “economic analysis"?

Did OMB advise the agencies about disclosure of funding for the U.S. Global Change
Research Program activities that are devoted exclusively to climate change?

(Q6. We understand that most, but not all, of the agencies seat their replies to OMB for clearance
‘and that many were in clearance within OMB for a considerable amount of time.

2


41

‘As we noted at the hearing, we believe OIRA should have played a role in ensuring that

agencies were both aware of the CRA filing requirements and were complying with them.

Last week, our Office concluded a second review covering the 5-month period from
August 1, 1997, to December 31, 1997, which we conducted in the same manner as the

prior review.

‘The initial list which we forwarded to OIRA on April 2 for distribution to the concerned
agencies contained 115 rules from 21 agencies. On June 2, OTRA agreed to follow up with
the agencies that had not responded. As of June 11, 45 of the 115 rules had been filed;
25 were found not to be subject to CRA because they were rules of particular
applicability or agency management and 24 had been previously timely submitted and our

database was corrected. Twenty-one rules from eight agencies remain unfiled.

I would like to point out two areas which show improvement. First, the number of
unfiled rules which should have been filed were 66 for the 5-month period. This is down
markedly from the 279 for the prior 10-month review, thus indicating a more concerted
effort on the part of the agencies to fulfill their responsibilities under CRA. Secondly,
OIRA has become more involved and conducted the follow-up contacts with the agencies

after OIRA's distribution of the initial list.