Improved Quality, Adequate Resources, and Consistent Oversight Needed if Regulatory Analysis Is To Help Control Costs of Regulations

PAD-83-6: Published: Nov 2, 1982. Publicly Released: Nov 2, 1982.

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In response to a congressional request, GAO examined the role and performance of regulatory analysis in controlling the costs of federal regulation and the fundamental outstanding issues confronting Congress in determining whether and how to legislate a regulatory analysis requirement. Specifically, GAO was asked to analyze the effects of regulatory oversight by the Office of Management and Budget (OMB) under Executive Order 12291 and the potential effects of proposed Senate Bill S. 1080.

Executive Order 12291 currently requires that major regulations be analyzed to assess their costs and benefits. This requirement may be augmented by proposed regulatory reform legislation, S. 1080, which would require a description and comparison of the costs and benefits of all major proposed and existing regulations and reasonable alternatives to them. GAO found that many regulatory analyses do not provide adequate support for their conclusions. The costs of regulatory analysis under Executive Order 12291 are high, and S. 1080 can be expected to increase them. The regulatory impact analysis requirement of Executive Order 12291 has not significantly slowed deregulation. S. 1080 would require more analysis of deregulatory initiatives and provides no discretionary authority to waive the regulatory analysis requirement for the initiatives or to provide selective relief not supported by analysis. S. 1080 incorporates some provisions that would provide the public with more information on the role of OMB and would also increase the potential for displacing agency rulemaking discretion by formally authorizing presidential oversight. GAO believes that ambiguity in existing legislation about the applicability of cost-benefit standards may conflict with congressional intent and that the oversight provided for in S. 1080 is likely to reduce the independence of regulatory agencies.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.

    Matter: Congress should consider reviewing the provisions of existing regulatory legislation to help remove statutory barriers to cost-effective regulation and reduce the likelihood of a regulatory analysis requirement conflicting with congressional intent.

  2. Status: Closed - Not Implemented

    Comments: The Rules Committee, which might have initiated such direction as noted in the recommendation, apparently preferred to leave the matter to the judgment of the leadership of individual authorizing committees.

    Matter: Congress should direct congressional committees with responsibility for substantive regulatory legislation to consider amending existing legislation to take into account the fact that, absent any statutory directions to the contrary, a cost-benefit standard may now be applied.

  3. Status: Closed - Not Implemented

    Comments: More attention has generally been given to restructuring the legislation veto provisions of regulatory legislation to conform with the recent Surpreme Court ruling than to clarifying the cost-benefit dimension of such legislation.

    Matter: Congress should consider removing language that prevents agencies from considering costs or clarifying goals in terms of performance so that agencies are permitted to seek out the most cost-effective means of achieving those goals.

  4. Status: Closed - Not Implemented

    Comments: More attention has generally been given to restructuring the legislative veto provisions of regulatory legislation to conform with the recent Surpreme Court ruling than to clarifying the cost-benefit dimension of such legislation.

    Matter: Congress should consider providing agencies with additional guidance on how intangible costs and benefits should be evaluated for purposes of including them in a regulatory analysis.

  5. Status: Closed - Not Implemented

    Comments: No final action was taken in the 98th Congress.

    Matter: Congress should consider reviewing the implementation of Senate Rule 26.11(b) that requires these economic impacts of regulatory legislation to be assessed.

  6. Status: Closed - Implemented

    Comments: Relevant legislation addressing this matter was introduced in the 98th Congress and amendments were made in the legislation consistent with this recommendation. The legislation, however, failed to pass and prospects in the next Congress are uncertain.

    Matter: Congress should consider clarifying presidential oversight authority in S. 1080, especially as it relates to rulemaking by independent regulatory agencies.

  7. Status: Closed - Implemented

    Comments: Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.

    Matter: Congress should consider the relevant provisions of the Paperwork Reduction Act of 1980 as an approach to defining a procedure by which independent regulatory agencies can overrule rulemaking directions of the President.

  8. Status: Closed - Implemented

    Comments: Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.

    Matter: Congress should consider requiring OMB and the agencies to provide information on what resources the agencies have for preparing regulatory analyses and on whether there is a disparity between the resources available and required for meeting the substantive requirements of statutes.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its role as outlined in the report.

    Recommendation: The Director of OMB should ensure that OMB plays a broader role in overseeing the regulatory analysis process.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its role as outlined in the report.

    Recommendation: The Director of OMB should ensure that OMB monitors the procedures used by the agencies in integrating regulatory analysis into the regulatory decisionmaking process and should monitor the resources available to the agencies to fulfill their analytical responsibilities.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its role as outlined in the report.

    Recommendation: The Director of OMB should ensure that OMB broadens its effort in promoting the adoption of innovative techniques as an approach to reducing costs, rather than simply establishing less restrictive standards.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Not Implemented

    Comments: OMB has never commented on this recommendation and has made no public initiatives to promote the development of consistent methodologies.

    Recommendation: The Director of OMB should ensure that OMB promotes the development of consistent methodologies for measuring regulatory impacts.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its procedures as outlined in the report.

    Recommendation: The Director of OMB should ensure that OMB develops written guidelines for waiving the analysis requirement to replace the implicit guidelines that are now in effect. OMB should apply the regulatory analysis requirement more consistently, and a full public explanation should be provided when waivers are granted.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  6. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its procedures as outlined in the report.

    Recommendation: The Director of OMB should ensure that OMB oversight be conducted in the open, with public filings of OMB comments on agency analyses.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  7. Status: Closed - Not Implemented

    Comments: Although over 2 years have passed since this recommendation was made, OMB still has not commented on this recommendation and appears to intend to continue its procedures as outlined in the report.

    Recommendation: The Director of OMB should require that all those who contribute factual information from outside OMB provide sufficient documentation to enable it to assess the validity of the information. OMB should use ex parte facts or analyses as a basis for commenting on an agency's proposed rule or regulatory impact analysis only when the source of those ex parte materials is identified publicly and accompanied by sufficient documentation to assess their validity. Procedures should be established to ensure that those materials, including the documentation, are forwarded to the agency for inclusion in the rulemaking record.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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