Regulatory Reform: Prior Reviews of Federal Regulatory Process Initiatives Reveal Opportunities for Improvements
Published: 2005-07-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal regulation is a basic tool of government. Agencies issue thousands of rules and regulations each year to achieve goals such as ensuring that workplaces, air travel, and foods are safe; that the nation's air, water and land are not polluted; and that the appropriate amount of taxes are collected. The costs of these regulations are estimated to be in the hundreds of billions of dollars, and the benefits estimates are even higher. Over the past 25 years, a variety of congressional and presidential regulatory reform initiatives have been instituted to refine the federal regulatory process. This testimony discusses findings from the large number of GAO reports and testimonies prepared at the request of Congress to review the implementation of regulatory reform initiatives. Specifically, GAO discusses common strengths and weaknesses of existing reform initiatives that its work has identified. GAO also addresses some general opportunities to reexamine and refine existing initiatives and the federal regulatory process to make them more effective. GAO's prior reports and testimonies contain a variety of recommendations to improve particular reform initiatives and aspects of the regulatory process.
section_title: What GAO Found
paragraphs: GAO's evaluations of regulatory reform initiatives indicate that some of these initiatives have yielded mixed results. Among the goals of the initiatives are reducing regulatory burden, requiring more rigorous regulatory analysis, and enhancing oversight. The initiatives have been beneficial in a number of ways, but they also were often less effective than anticipated. GAO's reviews suggest at least four overall strengths or benefits associated with existing initiatives: (1) increasing the attention directed to rules and rule making, (2) increasing expectations regarding the analytical support for proposed rules, (3) encouraging and facilitating greater public participation in rule making, and (4) improving the transparency of the rule-making process. On the other hand, at least four recurring reasons help explain why reform initiatives have not been more effective: (1) limited scope and coverage of various requirements, (2) lack of clarity regarding key terms and definitions, (3) uneven implementation of the initiatives' requirements, and (4) a predominant focus on just one part of the regulatory process, agencies' development of rules. As Congress develops its regulatory reform agenda, the lessons and opportunities identified by GAO's body of work suggest two avenues that might provide a useful starting point. The first would be to broadly revisit the procedures, definitions, exemptions, and other provisions of existing initiatives to determine whether changes are needed to better achieve their goals. As a second avenue to explore, GAO's reviews found that the regulatory process could benefit from more attention to evaluations of existing regulations, although recognizing some of the difficulties associated with carrying out such evaluations. The lessons that could be learned from retrospective reviews could help to keep the regulatory process focused on results and inform future action to meet emerging challenges. This is a particularly timely point to be reviewing the regulatory process. The long-term fiscal imbalance facing the United States, along with other significant trends and challenges, establishes the case for change and the need to reexamine the base of the federal government and all of its existing programs, policies, functions, and activities. No single approach or reform can address all of the questions and program areas that need to be revisited. However, federal regulation is a critical tool of government, and regulatory programs play a key part in how the federal government addresses many of the country's needs. Therefore, reassessing the regulatory framework must be part of that long-term effort to transform what the federal government does and how it does it.

section_title: Letter
paragraphs: I am pleased to be here today to discuss reform initiatives that have been  instituted over the years to improve the federal regulatory process.   Congress has often asked GAO to evaluate the effectiveness of procedures  and requirements established by certain initiatives.  Our work included  reviews of agencies’ compliance with the initiatives and provided us  opportunities to examine the outcomes of various reforms.  My remarks  today are based on this broad body of regulatory work and some of the  significant common themes and lessons that have emerged.
In brief, over the last 25 years Congresses and Presidents initiated a  number of regulatory reforms for a variety of purposes, such as reducing  regulatory burdens or improving the information available to decision  makers and the public about proposed rules.  Our reviews indicated that  some of these initiatives have yielded mixed results.  There have been  benefits associated with the initiatives, but they were often less effective  than intended.  Time and again we noted how features such as the limited  scope of the initiatives, unclear definitions, and broad exemptions affected  the results of these reforms.  Also, while many of these initiatives added  more requirements at the beginning of the regulatory process, fewer of  their provisions have focused on evaluating the actual benefits and costs of  rules once implemented and using such information to revise existing  regulations and inform future action.
For these reasons, as this subcommittee begins to develop its regulatory  reform agenda, we suggest two avenues that might provide a useful starting  point.  First, the subcommittee might wish to broadly revisit the  procedures, definitions, exemptions, and other provisions of existing  initiatives to determine whether changes are needed to better achieve their  goals.  Second, to keep the regulatory process focused on results meeting  emerging challenges, we found that the process could benefit from more  attention on evaluations of existing regulations and the lessons that could  be learned from such retrospective reviews.  This is a particularly timely  point to reexamine the regulatory process because the long-term fiscal  imbalance facing the United States, along with other significant trends and  challenges, establishes the case for change and the need to reexamine the  base of the federal government and all of its existing programs, policies, functions, and activities.  Reassessing the regulatory framework must be  part of that discussion.
subsections: section_title: Regulatory Reform Initiatives Reveal Some Common Strengths and Weaknesses
paragraphs: Federal regulation is a basic tool of government.  Agencies issue thousands  of rules and regulations each year to implement statutes enacted by  Congress.  The public policy goals and benefits of regulations include,  among other things, ensuring that workplaces, air travel, foods, and drugs  are safe; that the nation’s air, water and land are not polluted; and that the  appropriate amount of taxes is collected.  The costs of these regulations  are estimated to be in the hundreds of billions of dollars, and the benefits  estimates are even higher.  Given the size and impact of federal regulation,  it is no surprise that Congresses and Presidents have taken a number of  actions to refine and reform the regulatory process within the past 25  years.  One goal of such initiatives has been to reduce regulatory burdens  on affected parties, but other purposes have also played a part.  Among  these are efforts to require more rigorous analyses of proposed rules and  thus provide better information to decision makers, to enhance oversight  of rule making by Congress and the President, and to promote greater  transparency and participation in the process.
Over the last decade, at the request of Congress, GAO has released over 60  reports and testimonies reviewing the implementation of various  regulatory reform initiatives.  Some initiatives, such as the Paperwork  Reduction Act (PRA), Regulatory Flexibility Act (RFA), Unfunded  Mandates Reform Act (UMRA), and Executive Order 12866 on Regulatory  Planning and Review, have undergone repeated scrutiny.  While our  reviews identified specific strengths and weaknesses of individual  initiatives, it may be more worthwhile to focus on crosscutting strengths  and weaknesses.  The common strengths we identified largely mirror the  general purposes of various reform initiatives.  The common weaknesses  reflect issues associated with both the design and implementation of the  initiatives.
subsections: section_title: Initiatives Increase Attention on Proposed Rules and Raise Expectations of the Rule- Making Process
paragraphs: Our reviews suggest at least four overall strengths or benefits that have  been associated with existing regulatory reform initiatives: (1) increasing  the attention directed to rules and rule making, (2) increasing expectations  regarding the analytical support for proposed rules, (3) encouraging and  facilitating greater public participation in rule making, and (4) improving  the transparency of the rule-making process.
First, the simple fact that such initiatives bring added attention to rules and  the rule-making process is an important benefit.  As we have pointed out in  prior reports, oversight of agencies’ rule making can result in useful  changes to rules.  Furthermore, awareness of this added scrutiny may  provide an important indirect effect.  For example, in a previous GAO  review, Department of Transportation officials told us that they will not  even propose certain regulatory provisions because they know that the  Office of Management and Budget (OMB), which reviews significant  agency draft rules under Executive Order 12866, will not find them  acceptable.  Similarly, there is evidence that the focus placed on potential  mandates under UMRA may have helped to discourage or limit the costs of  federal mandates.
Second, several of the reform initiatives have increased the analytical  requirements and expectations in the regulatory process.  These initiatives  have raised the bar for agencies regarding the information and analysis  needed to support policy decisions underlying regulations.  Simply put, the  initiatives call for more analysis of the effects—both benefits and costs—of  proposed regulations before they are implemented.  Whether imposed by  statute or executive order, these initiatives seek to answer a basic question,  “What are the consequences of this rule?”  Closely related are other  requirements that encourage agencies to identify and consider alternatives  when developing regulations.  Executive Order 12866, for example, asks  agencies to first identify and assess available alternatives to direct  regulation.  Initiatives such as RFA and UMRA ask agencies to identify  regulatory alternatives that will be less burdensome to regulated parties.
Third, some of the reform initiatives have encouraged and facilitated  greater public participation and consultation in rule making.  Initiatives  such as the E-Government Act and the Government Paperwork Elimination  Act encourage agencies to allow the public to communicate with them by  electronic means.  Other initiatives require additional consultation by  agencies with the parties that might be affected by rules under  development.  These initiatives ask that agencies seek input earlier in the  process, rather than waiting for the public to comment on proposals  published in the Federal Register.
A final shared strength of many of these initiatives, and one closely  connected to the three previous items, is that they help to improve the  transparency of the regulatory process.  In prior work, we have cited  transparency as a regulatory best practice.  By providing more information  about potential effects and alternatives, requiring more documentation and  justification of agencies’ decisions, and facilitating public access to and  queries about such information, regulatory reform initiatives can help  make the process more open.  We recommended that more could be done  to increase transparency, and we have also highlighted the value of  transparency when agencies had particularly clear and complete  documentation supporting their rule making.  As the Administrator of  OMB’s Office of Information and Regulatory Affairs (OIRA) pointed out,  openness can help to “transform the public debate about regulation to one  of substance … rather than process.”
section_title: Some Recurring Weaknesses Might Explain Why Reform Initiatives Have Not Been More Effective
paragraphs: Despite these strengths, the overall results and effectiveness of regulatory  reform initiatives have often been mixed.  This may be particularly true  when results of the initiatives are compared to the goals and purposes  originally established for them.  For example, despite the goals set for the  reduction of paperwork burdens under PRA, we have repeatedly testified  about the growth in burden hours imposed by federal information  collections.  We similarly reported that initiatives such as UMRA, the  executive order on federalism, and requirements imposed under Section  610 of RFA for reviews of existing rules, have had little impact on agencies’  rule making.  Our reviews have identified at least four general reasons that  might explain why reform initiatives have not been more effective: (1) the  limited scope and coverage of various requirements, (2) lack of clarity  regarding key terms and definitions, (3) uneven implementation of the  initiatives’ requirements, and (4) a predominant focus on just one part of  the regulatory process, agencies’ development of rules.
First, we have pointed out significant limits in the scope and coverage of  certain reform initiatives.  UMRA provides one example of the effect of  definitional limitations, exceptions, and thresholds on restricting an  initiative’s coverage.  As we noted in a report last year, part of the reason  for the relatively small number of rules identified as containing mandates  under UMRA could be traced to 14 different restrictions on the  identification of federal mandates under the Act.  Furthermore, our  analysis of all 122 major or economically significant rules (generally, rules  with an impact of $100 million or more) published in 2001 and 2002 also  showed that more than one of these restrictions applied to 72 percent of  the 65 rules that were not identified as containing federal mandates under  UMRA but nonetheless appeared to result in significant financial effects on  nonfederal parties.
UMRA, along with RFA, also illustrates the potential domino effect of  building reform requirements on other procedural requirements.  Both acts  only apply to rules for which an agency publishes a notice of proposed rule  making.  However, agencies can publish final regulatory actions without  notices of proposed rule making using either good cause, categorical, or  statute-specific exceptions to the Administrative Procedure Act’s notice  and comment requirements.   In one of our prior reports, we estimated  that about half of all final regulatory actions published by agencies were  issued without going through the proposed rule stage.  Although many  final rules without proposed rules were minor actions, in both that analysis  and our recent UMRA review there were major rules that did not have  notices of proposed rule making.
Another recurring message in our reports has been the effect of unclear  terms and definitions that affect the applicability of requirements.   Combined with the discretion given rule-making agencies to interpret the  requirements in reform initiatives, it is not surprising that we have  observed uneven implementation across agencies.  In particular, we have  often cited the need to clarify key terms in the Regulatory Flexibility Act.   RFA requires analyses and other actions to help address concerns about  the impact of regulations on small entities, but the requirements do not  apply if the agency head certifies that the agency’s rule will not have a  “significant economic impact on a substantial number of small entities.”   However, the Act neither defines this key phrase nor places clear  responsibility on any party to define it consistently across government.  As  a result, we found that agencies had different interpretations of RFA’s  requirements.  We said in a series of reports that, if Congress wanted to  strengthen the implementation of RFA, it should consider amending the Act  to define the key phrases or provide some other entity with clearer  authority and responsibility to interpret RFA’s provisions.  To date,  Congress has not acted on our recommendations.  Again, there is a domino  effect associated with this uncertainty, because other reform initiatives,  such as the requirement for agencies to review existing rules under Section  610 of RFA and a requirement to provide compliance assistance guides to  regulated entities, only apply if an agency has determined the rule will have  a significant economic impact on a substantial number of small entities.
Sometimes, though, it might not be uncertainty over the provisions of an  initiative that help to limit its effectiveness, but rather an agency’s  implementation of the requirements.  For example, as noted in our recent  report on the Paperwork Reduction Act, one of the provisions aimed at  helping to achieve the goals of minimizing burden while maximizing utility  is a requirement for chief information officers (CIO) to review and certify  information collections.  However, our analysis of case studies showed  that CIOs provided these certifications despite often missing or inadequate  support from the program offices sponsoring the collections.  We  recommended that OMB clarify the kinds of support it asks agency CIOs to  provide for certifications and that heads of certain agencies direct  responsible CIOs to strengthen agency support for CIO certifications,  including with regard to the necessity of collection, burden reduction  efforts, and plans for the use of information collected.
Our reports over the years have also highlighted issues regarding agencies’  implementation of analytical requirements, such as the economic analyses  that support regulations.  Although the economic performance of some  federal actions is assessed prospectively, few federal actions are monitored  for their economic performance retrospectively.  In addition, our reviews  have found that economic assessments that analyze regulations  prospectively are often incomplete and inconsistent with general economic  principles.  Moreover, the assessments are not always useful for  comparisons across the government, because they are often based on  different assumptions for the same key economic variables.  In our recent  report on UMRA, we noted that parties from various sectors expressed  concerns about the accuracy and completeness of agencies’ cost estimates,  and some also emphasized that more needed to be done to address the  benefits side of the equation.  Our reviews have found that not all benefits  are quantified and monetized by agencies, partly because of the difficulty in  estimation.
Finally, although not an explicit finding in any of our reports, it is clear  when stepping back to look at the big picture presented by the set of  reform initiatives and our body of regulatory work that these initiatives  primarily target one particular phase of the regulatory process, agencies’  development of rules.  While rule making is clearly an important point in  the process when the specific substance and impact of regulations are most  open to public debate, other phases also help determine the effectiveness  of regulation.  Few of the reform initiatives contain major requirements or  processes that address those other phases in the life cycle of regulations— from the underlying statutory authorizations, through effective  implementation and monitoring of compliance with regulatory provisions,  to evaluation and revision of existing rules.  For example, only UMRA  explicitly addresses the potential effect of legislative proposals in creating  mandates that would ultimately be implemented through regulations, and  that element of UMRA has generally been viewed as among its most  effective elements.  We have reported that agencies sometimes have little  rule-making discretion, so in some cases concerns raised about  burdensome regulations are traceable to the statutes underlying the  regulations, rather than a failure of an agency to comply with rule-making  requirements.  With regard to other phases in the regulatory process, RFA  is unique among statutory requirements in having a provision (Section 610)  for reviews of existing rules, although it is limited to rules with significant  effects on small entities.  Executive Order 12866 also includes some  provisions to encourage agencies to review and revise existing rules.  It is  not clear, however, that either the Section 610 or the executive order look  back provisions have been consistently and effectively implemented.
section_title: Opportunities Exist to Refine Existing Reform Initiatives and Explore New Ways to Transform the Regulatory Process
paragraphs: As this subcommittee begins to develop its regulatory reform agenda, our  body of work on regulatory issues, and also on results-oriented government  management, suggests two general avenues of effort you may want to  consider as useful starting points.  One avenue is to revisit the procedures,  definitions, exemptions, and other provisions of existing initiatives to  determine whether changes might be needed to better achieve their goals.   Second, the subcommittee may wish to explore options to more effectively  and productively evaluate existing regulations and the results they have  generated.  Not only could such retrospective evaluations help to inform  Congress and other policymakers about ways to improve the design of  regulations and regulatory programs, but they could play a part in the  overall reexamination of the base of the federal government that we have  recommended in our recent work on addressing 21st century challenges.
With respect to the first avenue, my testimony to this point indicates that  there are ample opportunities to revisit and refine existing regulatory  reform initiatives.  Although progress has been made to implement  recommendations and matters for consideration we have raised in our  prior reports, there are still unresolved issues.  In particular, Congress may  want to consider whether some provisions of existing statutory initiatives  need to be amended to make those initiatives more effective.  We still  believe, for example, that Congress should clarify key terms and definitions  in RFA or provide another entity with the authority and responsibility to do  so.
We also believe there is some value to taking a broader look at how all of  the pieces of existing initiatives have, or have not, contributed to achieving  the purposes intended.  For example, we suggested in our recent review of  PRA that a new approach might be required to address burden reduction.   As illustrated by our work on lessons learned about UMRA in the 10 years  since it was enacted, such reviews can reveal opportunities and options for  both reinforcing the strengths and addressing the weaknesses that have  emerged in practice.  The options can take a number of different  directions.  For example, in our work on UMRA, concerns about the scope  of coverage were most frequently raised by the many knowledgeable  parties we consulted, but issues and options were also identified regarding  enforcement, consultation, and the analytic framework, among other  topics.  In undertaking reviews of existing initiatives, it will be important to  also revisit the reasons why particular limitations and exceptions were  included in the initiatives to begin with.  As pointed out in the UMRA work,  this probably needs to be an inclusive effort to be successful, involving all  affected parties in the debate to find common ground if changes are to be  accepted.
The second broad avenue I would suggest the subcommittee consider in its  reform agenda would be to explore using retrospective evaluations of  existing regulations.  Such evaluations could help to keep the regulatory  process focused on results and identify ways to better meet emerging  challenges.  Among the potential benefits of more retrospective analysis of  federal regulations are that it could enable policymakers to better gauge  actual benefits and costs and whether regulations are achieving their  desired goals, bring additional accountability to the regulatory process,  identify opportunities to revise existing regulations, and provide  information that could lead to better decisions regarding future  regulations.
In our work this year on both UMRA and economic performance measures,  we clearly heard from the experts we consulted that they believe more  retrospective analysis is needed and, further, that there are ways to  improve the quality and credibility of the analyses that are done.  In the  UMRA work, parties had particularly strong views about the need for better  evaluation and research of federal mandates, including those imposed by  regulations.  The most frequently suggested option to address this issue  was to do more postimplementation evaluation of existing mandates or  “look backs” at their effectiveness.  As one of the parties pointed out,  retrospective evaluation of regulations is useful because rules can change  people’s behavior in ways that cannot be predicted prior to  implementation.  In our recent workshop where we obtained the views of  experts about the use of economic performance measures, such as a  comparison of benefits and costs (net benefits) and cost-effectiveness,  participants identified several gaps in the application of these measures to  analyze federal regulations and programs.  For example, while some  agencies have done retrospective economic performance assessments, the  participants said that in general federal agencies often do not assess the  performance of regulations or existing programs retrospectively, even  though this information could be useful in managing programs. However,  there are also challenges to effectively implementing retrospective  evaluations.  For example, we previously identified some of the difficulties  regulatory agencies face in demonstrating the results of their work, such as  identifying and collecting the data needed to demonstrate results, the  diverse and complex factors that affect agencies’ results (for example, the  need to achieve results through the actions of third parties), and the long  time period required to see results in some areas of federal regulation.   There is also a potential balance concern because, as I noted earlier, it may  be more difficult to quantify the benefits of regulations than it is to quantify  the costs.
Finally, I want to emphasize that this is a particularly timely point to be  reviewing the regulatory process because of the long-term fiscal imbalance  facing the United States, along with other significant trends and challenges.   The 21st century challenges that we have been highlighting this year  establish the case for change and the need to reexamine the base of the  federal government and all of its existing programs, policies, functions, and  activities.  We recognize that a successful reexamination of the base of the  federal government will entail multiple approaches over a period of years.   No single approach or reform can address all of the questions and program  areas that need to be revisited.  However, federal regulation is a critical tool  of government, and regulatory programs play a key part in how the federal  government addresses many of the country’s needs.  Asking the questions  necessary to begin reexamining the federal regulatory process is an  important first step in the long-term effort to transform what the federal  government does and how it does it.
Madam Chairman, this concludes my prepared statement.  Once again, I  appreciate the opportunity to testify on these important issues.  I would be  pleased to address any questions you or other members of the  subcommittee might have at this time.
If additional information is needed regarding this testimony, please contact  J. Christopher Mihm, Managing Director, Strategic Issues, at (202) 512-6806  or mihmj@gao.gov.
section_title: Summary of Regulatory Reform Initiatives Implemented since 1980
paragraphs: Congresses and Presidents have taken a number of actions to refine and  reform the regulatory process within the past 25 years.  The following  paragraphs summarize the general purpose, applicability, and requirements  imposed by some of those regulatory reform initiatives.
subsections: section_title: Paperwork Reduction Act (PRA)
paragraphs: PRA was originally enacted in 1980, then amended in 1986 and 1995.  PRA  requires agencies to justify any collection of information from the public in  order to minimize the paperwork burden they impose and to maximize the  practical utility of the information collected.  The Act applies to  independent and nonindependent regulatory agencies.  Under PRA,  agencies are required to submit all proposed information collections to the  Office of Management and Budget (OMB) for approval.  In their  submissions, agencies must establish the need and intended use of the  information, estimate the burden that the collection will impose on  respondents, and show that the collection is the least burdensome way to  gather the information.
PRA also established the Office of Information and Regulatory Affairs  (OIRA) within OMB to provide central agency leadership and oversight of  government efforts to reduce unnecessary paperwork and improve the  management of information resources.  Subsequent reform initiatives,  including amendments of PRA, have added responsibilities for OIRA, such  as making the office responsible for overseeing and reporting on agencies’  compliance with new regulatory requirements.  PRA of 1995, for example,  included a requirement that OIRA, in consultation with agency heads, set  annual governmentwide goals for the reduction of information collection  burdens.
section_title: Regulatory Flexibility Act of 1980 (RFA) and Small Business Regulatory Enforcement Fairness Act (SBREFA)
paragraphs: RFA was enacted in response to concerns about the effect that federal  regulations can have on small entities.  RFA requires independent and  nonindependent regulatory agencies to assess the impact of their rules on  “small entities,” defined as including small businesses, small governmental  jurisdictions, and certain small not-for-profit organizations.  Under RFA an  agency must prepare an initial regulatory flexibility analysis at the time  proposed rules are issued unless the head of the agency determines that the  proposed rule would not have a “significant economic impact upon a  substantial number of small entities.”  The Act also requires agencies to  ensure that small entities have an opportunity to participate in the rule- making process and requires the Chief Counsel of the Small Business  Administration’s Office of Advocacy to monitor agencies’ compliance.   Further, Section 610 of RFA requires agencies to review existing rules  within 10 years of promulgation that have or will have a significant impact  on small entities to determine whether they should be continued without  change or amended or rescinded to minimize their impact on small entities.
Congress amended RFA in 1996 with SBREFA.  SBREFA made certain  agency actions under RFA judicially reviewable.  Other provisions in  SBREFA added new requirements.  For example, SBREFA requires  agencies to develop one or more compliance guides for each final rule or  group of related final rules for which the agency is required to prepare a  regulatory flexibility analysis, and the Act requires agencies to provide  small entities with some form of relief from civil monetary penalties.   SBREFA also requires the Environmental Protection Agency and the  Occupational Safety and Health Administration to convene advocacy  review panels before publishing an initial regulatory flexibility analysis.
section_title: Unfunded Mandates Reform Act of 1995 (UMRA)
paragraphs: UMRA was enacted to address concerns about federal statutes and  regulations that require nonfederal parties to expend resources to achieve  legislative goals without being provided funding to cover the costs.  UMRA  generates information about the nature and size of potential federal  mandates but does not preclude the implementation of such mandates.   UMRA applies to proposed federal mandates in both legislation and  regulations, but it does not apply to rules published by independent  regulatory agencies.  With regard to the regulatory process, UMRA requires  federal agencies to prepare written statements containing a “qualitative and  quantitative assessment of the anticipated costs and benefits” for any rule  for which a proposed rule was published that includes a federal mandate  that may result in the expenditure of $100 million or more in any 1 year by  state, local, and tribal governments in the aggregate, or by the private  sector.  For such rules, agencies are to identify and consider a reasonable  number of regulatory alternatives and from those select the least costly,  most cost-effective, or least burdensome alternative that achieves the  objectives of the rule (or explain why that alternative was not selected).   UMRA also includes a consultation requirement that agencies develop a  process to permit elected officers of state, local, and tribal governments (or  their designees) to provide input in the development of regulatory  proposals containing significant intergovernmental mandates.
section_title: Congressional Review Act (CRA)
paragraphs: CRA was enacted as part of SBREFA in 1996 to better ensure that  Congress has an opportunity to review, and possibly reject, rules before  they become effective.  CRA established expedited procedures by which  members of Congress may disapprove agencies’ rules by introducing a  resolution of disapproval that, if adopted by both Houses of Congress and  signed by the President, can nullify an agency’s rule.  CRA applies to rules  issued by nonindependent and independent regulatory agencies.  CRA  requires agencies to file final rules with both Congress and GAO before the  rules can become effective.  GAO’s role under CRA is to provide Congress  with a report on each major rule (for example, rules with a $100 million  impact on the economy) including GAO’s assessment of the issuing  agency’s compliance with the procedural steps required by various acts and  executive orders governing the rule-making process.
section_title: Government Paperwork Elimination Act (GPEA)
paragraphs: Congress enacted GPEA in 1998, and the Act promoted the expansion of a  trend in the federal government toward using e-government applications to  collect and disseminate information and forms.  GPEA requires federal  agencies to provide the public, when practicable, the option of submitting,  maintaining, and disclosing required information—such as employment  records, tax forms, and loan applications—electronically, instead of on  paper.  GPEA also requires agencies to guard the privacy and protect  documents from being altered and encourages federal government use of a  range of electronic signature alternatives when practicable.
section_title: Truth in Regulating Act (TIRA)
paragraphs: In 2000, Congress enacted TIRA to provide a mechanism for Congress to  obtain more information about certain rules.  TIRA contemplated a 3-year  pilot project during which GAO would perform independent evaluations of  “economically significant” agency rules when requested by a chairman or  ranking member of a committee of jurisdiction of either House of  Congress.  The independent evaluation would include an evaluation of the  agency’s analysis of the potential benefits, potential costs, and alternative  approaches considered during the rule-making proceeding.  Under TIRA,  GAO was required to report on its evaluations within 180 calendar days  after receiving a committee request.  Section 6(b) of the Act, however,  provided that the pilot project would continue only if, in each fiscal year, a  specific annual appropriation was made.  During the 3-year period  contemplated for the pilot project, Congress did not enact any specific  appropriation to cover TIRA evaluations, and the authority for the 3-year  pilot project expired on January 15, 2004.  Congress has considered  reauthorizing TIRA, and we have strongly urged that any reauthorization of  TIRA continue to contain language requiring a specific annual  appropriation before we are required to undertake independent evaluations  of major rule makings.  We have also recommended that TIRA evaluations  be conducted under a pilot project basis.
section_title: Information Quality Act (IQA)
paragraphs: Enacted in Section 515 of the Treasury and General Government  Appropriations Act of 2001, the Information Quality Act directed OMB to  issue governmentwide guidelines to ensure and maximize the quality,  objectivity, utility, and integrity of information (including statistical  information) disseminated by federal agencies.  The Act requires OMB to  issue guidelines directing all agencies to issue their own guidelines within 1  year and to establish administrative mechanisms allowing affected persons  to seek and obtain correction of information maintained and disseminated  by the agency.  The Act also requires agencies to report periodically to the  Director of OMB on the number and nature of complaints received and how  such complaints were handled by the agency.
section_title: E-Government Act
paragraphs: The E-Government Act was intended to enhance the management and  promotion of electronic government services and processes.  With regard  to the regulatory process, the Act requires agencies, to the extent  practicable, to accept public comments on proposed rules by electronic  means.  The Act also requires agencies to ensure that publicly accessible  federal Web sites contain electronic dockets for their proposed rules,  including all comments submitted on the rules and other relevant  materials.  The E-Government Act also established an Office of Electronic  Government within OMB, headed by an administrator appointed by the  President.
section_title: Related Executive Orders and Initiatives
paragraphs: In addition to congressional regulatory reform initiatives enacted in  statutes, it is important to also recognize the key role that presidential  initiatives have in the regulatory process.  Centralized review of agencies’  regulations within the Executive Office of the President has been part of  the rule-making process for more than 30 years.  The formal process by  which OIRA currently reviews agencies’ proposed rules and final rules is  essentially unchanged since Executive Order 12866 was issued in 1993.   Under Executive Order 12866, OIRA reviews significant proposed and final  rules from all agencies, other than independent regulatory agencies, before  they are published in the Federal Register.
The executive order states, among other things, that agencies should assess  all costs and benefits of available regulatory alternatives, including both  quantitative and qualitative measures.  It also provides that agencies should  select regulatory approaches that maximize net benefits (unless a statute  requires another approach).  Among other principles, the executive order  encourages agencies to tailor regulations to impose the least burden on  society needed to achieve the regulatory objectives.  The executive order  also established agency and OIRA responsibilities in the review of  regulations, including transparency requirements.  OIRA provides guidance  to federal agencies on implementing the requirements of the executive  order, such as guidance on preparing economic analyses required for  significant rules.
There are also other orders that impose requirements on agencies during  rule making, such as Executive Order 13132 on federalism that requires  agencies to prepare a federalism summary impact statement for actions  that have federalism implications.  Also, in January 2005, OMB published  a final bulletin on peer review that establishes minimum standards for  when peer review is required for scientific information, including stricter  minimum standards for the peer review of “highly influential” scientific  assessments, and the types of peer review that should be considered by  agencies in different circumstances.  The selection of an appropriate peer  review mechanism is left to the agency’s discretion.
More detailed information about these various initiatives is available in the  related GAO products listed at the end of this testimony.
section_title: Related GAO Products
paragraphs: Economic Performance: Highlights of a Workshop on Economic  Performance Measures. GAO-05-796SP. Washington, D.C.: July 2005.
Paperwork Reduction Act: New Approach May Be Needed to Reduce  Government Burden on Public. GAO-05-424. Washington, D.C.: May 20,  2005.
Unfunded Mandates: Views Vary About Reform Act’s Strengths,  Weaknesses, and Options for Improvement. GAO-05-454. Washington,  D.C.: March 31, 2005. 21st Century Challenges: Reexamining the Base of the Federal  Government. GAO-05-325SP. Washington, D.C.: February 2005.
Electronic Government: Federal Agencies Have Made Progress  Implementing the E-Government Act of 2002. GAO-05-12. Washington,  D.C.: December 10, 2004.
Unfunded Mandates: Analysis of Reform Act Coverage. GAO-04-637.  Washington, D.C.: May 12, 2004.
Paperwork Reduction Act: Agencies’ Paperwork Burden Estimates Due to  Federal Actions Continue to Increase. GAO-04-676T.  Washington, D.C.:  April 20, 2004.
Rulemaking: OMB’s Role in Reviews of Agencies’ Draft Rules and the  Transparency of Those Reviews. GAO-03-929. Washington, D.C.:  September 22, 2003.
Electronic Rulemaking: Efforts to Facilitate Public Participation Can Be  Improved. GAO-03-901. Washington, D.C.: September 17, 2003.
Civil Penalties: Agencies Unable to Fully Adjust Penalties for Inflation  Under Current Law. GAO-03-409. Washington, D.C.: March 14, 2003.
Regulatory Flexibility Act: Clarification of Key Terms Still Needed. GAO- 02-491T. Washington, D.C.: March 6, 2002.
Regulatory Reform: Compliance Guide Requirement Has Had Little  Effect on Agency Practices. GAO-02-172. Washington, D.C.: December 28,  2001.
Federal Rulemaking: Procedural and Analytical Requirements at OSHA  and Other Agencies. GAO-01-852T. Washington, D.C.: June 14, 2001.
Regulatory Reform: Implementation of Selected Agencies’ Civil Penalties  Relief Policies for Small Entities. GAO-01-280. Washington, D.C.:  February 20, 2001.
Regulatory Flexibility Act: Implementation in EPA Program Offices and  Proposed Lead Rule. GAO/GGD-00-193. Washington, D.C.: September 20,  2000.
Electronic Government: Government Paperwork Elimination Act  Presents Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.:  September 15, 2000.
Regulatory Reform: Procedural and Analytical Requirements in Federal  Rulemaking. GAO/T-GGD/OGC-00-157. Washington, D.C.: June 8, 2000.
Federalism: Previous Initiatives Have Little Effect on Agency  Rulemaking. GAO/T-GGD-99-131. Washington, D.C.: June 30, 1999.
Regulatory Accounting: Analysis of OMB’s Reports on the Costs and  Benefits of Federal Regulation. GAO/GGD-99-59. Washington, D.C.:  April 20, 1999.
Regulatory Flexibility Act: Agencies’ Interpretations of Review  Requirements Vary. GAO/GGD-99-55. Washington, D.C.: April 2, 1999.
Regulatory Burden: Some Agencies’ Claims Regarding Lack of  Rulemaking Discretion Have Merit. GAO/GGD-99-20. Washington, D.C.:  January 8, 1999.
Federal Rulemaking: Agencies Often Published Final Actions Without  Proposed Rules. GAO/GGD-98-126. Washington, D.C.: August 31, 1998.
Regulatory Management: Implementation of Selected OMB  Responsibilities Under the Paperwork Reduction Act. GAO/GGD-98-120.  Washington, D.C.: July 9, 1998.
Regulatory Reform: Agencies Could Improve Development,  Documentation, and Clarity of Regulatory Economic Analyses.  GAO/RCED-98-142. Washington, D.C.: May 26, 1998.
Regulatory Reform: Implementation of Small Business Advocacy Review  Panel Requirements. GAO/GGD-98-36. Washington, D.C.: March 18, 1998.
Congressional Review Act: Implementation and Coordination. GAO/T- OGC-98-38. Washington, D.C.: March 10, 1998.
Regulatory Reform: Agencies’ Section 610 Review Notices Often Did Not  Meet Statutory Requirements. GAO/T-GGD-98-64. Washington, D.C.:  February 12, 1998.
Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’  Rulemaking Actions. GAO/GGD-98-30. Washington, D.C.: February 4, 1998.
Regulatory Reform: Changes Made to Agencies’ Rules Are Not Always  Clearly Documented. GAO/GGD-98-31. Washington, D.C.: January 8, 1998.
Regulatory Reform: Agencies’ Efforts to Eliminate and Revise Rules Yield  Mixed Results. GAO/GGD-98-3. Washington, D.C.: October 2, 1997.
Managing for Results: Regulatory Agencies Identified Significant  Barriers to Focusing on Results. GAO-GGD-97-83. Washington, D.C.:  June 24, 1997.
Regulatory Burden: Measurement Challenges and Concerns Raised by  Select Companies. GAO/GGD-97-2. Washington, D.C.: November 18, 1996.
Regulatory Reform: Implementation of the Regulatory Review Executive  Order. GAO/T-GGD-96-185. Washington, D.C.: September 25, 1996.
Regulatory Flexibility Act: Status of Agencies’ Compliance. GAO/GGD-94- 105. Washington, D.C.: April 27, 1994.