Federal Rulemaking: Perspectives on 10 Years of Congressional Review Act Implementation
Published: 2006-03-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This year marks the 10th anniversary of the Congressional Review Act (CRA). Congressional oversight of rulemaking using the CRA can be an important and useful tool for monitoring the regulatory process and balancing and accommodating the concerns of American citizens and businesses with the effects of federal agencies' rules. This statement provides an overview of the purpose and provisions of CRA; GAO's role and activities in fulfilling its responsibilities under the Act; and trends on CRA within the broader context of developments in presidential and congressional oversight of federal agencies' rulemaking.
section_title: What GAO Found
paragraphs: CRA gives Congress an opportunity to review most rules before they take effect and to disapprove those found to be too burdensome, excessive, inappropriate, duplicative, or otherwise objectionable. Under CRA, two types of rules, major and nonmajor, must be submitted to both Houses of Congress and GAO before they can take effect. The Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget specifies which rules are designated as major rules based on criteria set out in the CRA. Major rules cannot be effective until 60 days after publication in the Federal Register or submission to Congress and GAO, whichever is later. Congress may disapprove agencies' rules by introducing a resolution of disapproval that, if adopted by both Houses of Congress and signed by the President, can nullify an agency's rule. Members of Congress seldom have attempted to use this process. GAO's role under CRA is to provide 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. GAO compiles information on the rules it receives under CRA in a database containing basic information about major and nonmajor rules. GAO also conducts an annual review to determine whether all final rules covered by the Act and published in the Federal Register have been filed with the Congress and GAO. Although we reported that agencies' compliance with CRA requirements was inconsistent during the first years after CRA's enactment, compliance improved over time. There have been a limited number of CRA joint resolutions, but the benefits of compiling and making information available on potential federal actions should not be underestimated. The procedures for congressional disapproval also may have some deterrent effect. Efforts to enhance presidential oversight of agencies' rulemaking appear to have been more significant and widely employed in recent years than similar efforts to enhance congressional oversight. Some recent legislative proposals have focused on expanding the information and analysis available to Congress on pending rules, while others focus on enhancing the mechanisms that Congress could employ for its own review--and potential disapproval--of agencies' rules.

section_title: Letter
paragraphs: I am pleased to appear before you today on the 10th anniversary of the  enactment of the Congressional Review Act (CRA). As you know, CRA  was enacted to ensure that Congress has an opportunity to review, and  possibly reject, rules before they become effective. Under CRA, two types  of rules, major and nonmajor, must be submitted to both Houses of  Congress and GAO before they can take effect. We are required to provide  Congress with a report on each major rule concerning our assessment of  the promulgating federal agency’s compliance with the procedural steps  required by various acts and executive orders governing the regulatory  process.
Over the past 10 years, agencies have submitted information on thousands  of rules as required by the CRA. Although we generally found that agencies  complied with CRA’s requirements, one main area of noncompliance has  been that agencies have not always delayed the effective date of their  major rules for 60 days, as required by the Act. While considerable  information on agencies’ rules has been reported under CRA, to date  Congress has used the Act to disapprove only one rule, the Department of  Labor’s rule on ergonomics in 2001. In contrast, our reviews indicated that  efforts to increase presidential influence and authority over the regulatory  process have become more significant and widely used over the years.
In my statement today, I will focus on three topics. First, I will provide a  quick overview of the purpose and provisions of CRA. Second, I will  discuss GAO’s role in fulfilling its responsibilities under the Act and  summarize our CRA activities over the years. Finally, I will address CRA  within the broader context of developments in presidential and  congressional oversight of federal agencies’ rulemaking. My statement is  based on our activities and observations implementing our responsibilities  under CRA over the past decade and our related body of work reviewing  federal regulatory issues.
subsections: section_title: Overview of CRA Purpose, Procedures, and Requirements
paragraphs: Congressional oversight of rulemaking using the CRA can be an important  and useful tool for monitoring the regulatory process and balancing and  accommodating the concerns of American citizens and businesses with  the effects of federal agencies’ rules. As we noted early in the  implementation of CRA, it is important to assure that executive branch  agencies are responsive to citizens and businesses about the reach, cost,  and impact of regulations, without compromising the statutory mission  given to those agencies. CRA seeks to accomplish this by giving Congress  an opportunity to review most rules before they take effect and to  disapprove those found to be too burdensome, excessive, inappropriate,  duplicative, or otherwise objectionable.
With certain exceptions, CRA applies to most rules issued by federal  agencies, including the independent regulatory agencies. Under CRA, two  types of rules, major and nonmajor, must be submitted to both Houses of  Congress and GAO before they can take effect. CRA defines a “major” rule  as one which results 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 the Office of Information and Regulatory Affairs  (OIRA) of the Office of Management and Budget (OMB). Major rules  cannot be effective until 60 days after publication in the Federal 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 Congress and GAO.
CRA established a procedure by which members of Congress may  disapprove agencies’ rules by introducing a resolution of disapproval that,  if adopted by both Houses of Congress and signed by the President, can  nullify an agency’s rule. If such a resolution becomes law, the rule then  cannot take effect or continue in effect. In addition, CRA prohibits an  agency from reissuing such a rule in substantially the same form, or a new  rule that is substantially the same as the disapproved rule, unless the  reissued or new rule is specifically authorized by a law enacted after the  date of the joint resolution disapproving the original rule. Members of  Congress seldom have attempted to use this disapproval process. Over the  past decade, 37 joint resolutions of disapproval have been introduced  regarding 28 rules. Only once has Congress used this disapproval process  to nullify a rule, when it disapproved the Department of Labor’s rule on  ergonomics in 2001.
section_title: GAO’s Role and Activities under CRA
paragraphs: GAO’s only stated role under CRA is to provide 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  (UMRA), the Administrative Procedure Act (APA), the Paperwork  Reduction Act, and Executive Order 12866. GAO’s report must be sent to  the congressional committees of jurisdiction within 15 calendar days of  the publication of the rule or submission of the rule by the agency,  whichever is later. While the CRA is silent with regard to GAO’s role  concerning nonmajor rules, we found that basic information about those  rules also should be collected in a manner that can be of use to Congress  and the public.
To compile information on all the rules submitted to us under CRA, we  established a database, available to the public on the Internet. Our  database gathers basic information about the 15–20 major and nonmajor  rules that we receive each day, including 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 have been  introduced. We created a standardized submission form available on the  Internet, which is used by almost all the agencies, to allow more consistent  information collection. Since CRA was enacted on March 29, 1996, we  have received and submitted timely reports on 610 major rules and entered  41,218 nonmajor rules into the database.
As noted earlier, before a rule can become effective, it must be filed in  accordance with CRA. We conduct an annual review to determine whether  all final rules covered by the Act and published in the Federal Register  have been filed with the Congress and us. We perform the review to both  verify the accuracy of our database and to ascertain the degree of agency  compliance with CRA. We forward a list of unfiled rules to OIRA for their  handling, and, in the past, they have disseminated the list to the agencies,  most of which file the rules or offer an explanation of why they do not  believe a rule is covered by CRA.
Although we reported that agencies’ compliance with CRA requirements  was inconsistent during the first years after CRA’s enactment, compliance  improved over time. In general, we have found the degree of compliance  to have remained fairly constant, with roughly 200 nonmajor rules per year  not filed with our office. In the 10 years since CRA was enacted, all major  rules have been filed in a timely fashion.
In the past 10 years, we also have issued eight opinions regarding what  constitutes a “rule” under CRA in response to requests from congressional  committees and members concerning various agency pronouncements and  memorandums. CRA contains a broad definition of the term “rule,”  including more than the usual notice and comment rulemakings published  in the Federal Register under APA. Under CRA, “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. For example,  in 1996 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  Congress and GAO before it could become effective. Similarly, in 2001, we  concluded that a Fish and Wildlife Service Record of Decision entitled  “Trinity River Mainstem Fishery Restoration” was a rule covered by CRA.  We believe these opinions have strengthened the reach of CRA by insuring  compliance with the main thrust of the Act, which was to insure that  agency actions, whether labeled a “rule” by the agency or not, are subject  to congressional review. We have noted that certain congressional  committees, such as the Joint Committee on Taxation, were taking an  active role in overseeing agency compliance with CRA. As a result, for  example, Internal Revenue Service procedures, rulings, regulations,  notices, and announcements are forwarded as CRA submittals.
The one major area of noncompliance with the requirements of the Act  has been that agencies have not always delayed the effective date of major  rules for 60 days as required by the Act. Agencies have filed 610 major  rules with our office, and, for 71 of those rules, the agencies did not delay  the effective date for the required 60 days.
One reason for noncompliance with the 60-day delay is that the agencies  have misapplied the “good cause” exception which waives the delay of the  rule if it would be impracticable, unnecessary, or contrary to the public  interest. Since the enactment of CRA, our office has consistently held  that 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 and receipt of  comments, have stated in the preamble to the final major rule that “good  cause” existed for not providing the 60-day delay.
The other reason for noncompliance is that the statute that an agency is  implementing by issuing the final major rule contains a date by which the  Secretary or Administrator must issue the regulation, and the date, in  many instances, does not permit the 60-day delay. However, the CRA  states that it shall apply notwithstanding any other provision of law.
section_title: Trends in Presidential and Congressional Review of Rulemaking
paragraphs: Agencies and GAO have provided Congress a considerable amount of  information about forthcoming rules in response to CRA. The limited  number of CRA joint resolutions introduced might suggest that this  information generates little additional oversight of rulemaking. However,  as we found in our review of the information generated on federal  mandates under UMRA, the benefits of compiling and making information  available on potential federal actions should not be underestimated.  Further, as we also found regarding UMRA, the availability of procedures  for congressional disapproval may have some deterrent effect. The  Congressional Research Service has reported that several rules have been  affected by the presence of the review mechanism, suggesting that the  CRA review scheme has had some influence.
Still, as I noted in my testimony before this Subcommittee last November,  efforts to enhance presidential oversight of agencies’ rulemaking appear to  have been more significant and widely employed in recent years than  similar efforts to enhance congressional oversight. In particular, our  reviews have noted the growing influence and authority of OIRA in the  oversight of the regulatory process. Some of this increased activity  reflects administration initiatives, but it also includes some new  responsibilities assigned by Congress through statute, such as the  requirement for OMB to issue governmentwide guidance to implement the  Information Quality Act.
In contrast, there does not appear to have been a similar expansion of  direct congressional influence and authority over the regulatory process,  although bills have been introduced over the years to enhance the  mechanisms available for congressional oversight of agencies’ rulemaking.  Some recent legislative proposals have focused on expanding the  information and analysis available to Congress on pending rules, while  others focus on enhancing the mechanisms that Congress could employ  for its own review—and potential disapproval—of agencies’ rules.
As the major example of the first category of proposals, Congress passed  the Truth in Regulating Act (TIRA) in 2000 to provide a mechanism for it  to obtain more information about certain rules. In contrast to the  essentially procedural reviews that GAO now conducts under CRA, TIRA  contemplated a 3-year pilot project during which GAO would perform  independent evaluations of “economically significant” agency rules when  requested by a chairman or ranking member of a committee of jurisdiction  of either House of Congress. However, during the 3-year period  contemplated for the pilot project, Congress did not enact any specific  appropriation to cover TIRA evaluations, as called for in the Act, and the  authority for the 3-year pilot project expired on January 15, 2004.  Therefore, we have no information on the potential effectiveness of this  mechanism.
Congress has considered reauthorizing TIRA, and we have strongly urged  that any reauthorization of TIRA continue to contain language requiring a  specific annual appropriation for GAO before we are required to  undertake independent evaluations of major rulemakings. Such an  expansion of GAO’s current lines of business without additional dedicated  resources would pose a serious problem for us, especially in light of what  will likely be increasing budgetary constraints in the years ahead. It would  also likely serve to adversely affect our ability to provide the same level of  service to the Congress in connection with our existing statutory  authorities. We have also recommended that TIRA evaluations be  conducted under a pilot project basis.
Members of Congress have also introduced several bills over the past year  that would provide additional mechanisms for direct review and approval  (or disapproval) of agencies’ rules. Some of these proposals would  modify how Congress reviews information submitted under CRA and how  the disapproval procedures would work. These bills could, for example,  create a joint committee that would be tasked with reviewing all rules to  determine whether a disapproval resolution under CRA should be  introduced. We have conducted no work that would provide information  on the potential effectiveness of such changes.
Mr. Chairman, this concludes my prepared statement. Once again, I  appreciate the opportunity to testify on these important issues. I would be  pleased to address any questions you or other Members of the  Subcommittee might have at this time.
If additional information is needed regarding this testimony, please  contact J. Christopher Mihm, Managing Director, Strategic Issues, at (202)  512-6806 or mihmj@gao.gov.
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