[House Report 106-772]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-772
======================================================================
TRUTH IN REGULATING ACT OF 2000
_______
July 20, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Burton of Indiana, from the Committee on Government Reform,
submitted the following
R E P O R T
together with
MINORITY AND ADDITIONAL VIEWS
[To accompany H.R. 4744]
[Including cost estimate of the Congressional Budget Office]
The Committee on Government Reform, to whom was referred
the bill (H.R. 4744) to require the General Accounting Office
to report to Congress on economically significant rules of
Federal agencies, and for other purposes, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
CONTENTS
Page
I. Purpose..........................................................2
II. Need for Legislation.............................................3
III. Committee Action.................................................7
IV. Section-by-Section Analysis......................................8
V. Oversight Findings..............................................10
VI. Budget Analysis and Projections.................................10
VII. Congressional Budget Office Estimate............................10
VIII.Constitutional Authority Statement..............................11
IX. Changes in Existing Law Made by the Bill, as reported...........11
X. Committee Recommendations.......................................12
XI. Congressional Accountability Act; Public Law 104-1..............12
XII. Unfunded Mandates Reform Act; Public Law 104-4, Section 425.....12
XIII.Federal Advisory Committee Act (5 U.S.C. App.) Sec. 5(b)........12
Minority Views................................................... 13
Additional Views................................................. 19
I. Purpose
The purposes of the bipartisan ``Truth in Regulating Act of
2000'' are to increase the transparency of important regulatory
decisions; promote effective Congressional oversight to ensure
that agency rules fulfill statutory requirements in an
efficient, effective, and fair manner; and increase the
accountability of Congress and the agencies to the people they
serve. The bill establishes a Congressional Office of
Regulatory Analysis (CORA) function within the General
Accounting Office (GAO). This regulatory analysis capability is
intended to enhance Congressional responsibility for regulatory
decisions developed under the laws Congress enacts. The most
basic reason for the bill is Constitutional: just as Congress
needs a Congressional Budget Office (CBO) to check and balance
the Executive Branch in the budget process, so it needs an
analytic capability to check and balance the Executive Branch
in the regulatory process.
SUMMARY
In brief, the Truth in Regulating Act of 2000 is intended
to do the following:
Requires that GAO conduct independent evaluations of
economically significant rules and report its findings to the
Congressional Committees of jurisdiction which requested GAO's
help.
Section 3 defines ``economically significant rule'' as a
rule having a $100 million or more effect on the economy or a
significant impact on small businesses, and ``independent
evaluation'' as a substantive evaluation of the agency's and
the public's data, methodology and assumptions and any
additional evaluation that GAO determines to be necessary.
Section 4(a)(1) provides that a Chairman or Ranking Member
of a Committee of jurisdiction of either House of Congress may
request GAO to review an economically significant rule after it
is published by an Executive Branch agency.
Section 4(a)(2) requires that GAO submit a report to the
Committee of jurisdiction in both Houses of Congress not later
than 180 days after requested or, in the case of proposed or
interim rules, by not later than the end of the public comment
period. GAO's report shall include its independent evaluation
of the rule.
Section 4(a)(3) requires that GAO's independent evaluation
include: an evaluation of the potential quantifiable and
nonquantifiable benefits of the rule and the persons likely to
receive the benefits; an evaluation of the quantifiable and
nonquantifiable costs of the rule and the persons likely to
bear the costs; an evaluation of any alternative approaches
that could achieve the same goal in a more cost-effective
manner or that could provide greater net benefits; an
evaluation of the regulatory impact analysis (RIA), federalism
assessment, or other analysis or assessment prepared by the
agency; and, a summary of the results of GAO's evaluation,
including an identification of any changes made by the agency
from the proposed rule to the final rule.
Section 4(a)(4) establishes procedures for prioritizing
Committee requests. Priorities for GAO reports will be
determined by the Majority and Minority Leaders of the Senate
and the Speaker and the Minority Leader of the House, with the
highest priority to requests regarding proposed and interim
rules.
II. Need for Legislation
Article I, Section 1 of the U.S. Constitution vests all
legislative powers in the U.S. Congress. While Congress may not
delegate its legislative functions, it routinely authorizes
Executive Branch agencies to issue rules that implement laws
passed by Congress. Congress has become increasingly concerned
about its responsibility to oversee agency rulemaking,
especially due to the extensive costs, benefits and impacts of
Federal rules.
Over the past five years, Congress has changed the
direction of the Federal Government from the endless burden of
more taxes and spending to the new fiscal discipline of balance
and accountability. America's freedom and innovation have
resulted in a quality and productivity revolution and an
American economy that is the unparalleled envy of the world.
American business has brought incredible improvements to our
quality of life, health care, and education. Through the new
emphasis on flexibility and innovation, State and local
governments have led the way to safer, cleaner, and better
places to live. Congress should take responsibility for the
impact of Federal regulatory programs on our economy and
innovation. In addition to taxes, the Federal Government
imposes tremendous costs and restrictions on innovation on the
private sector, State and local governments, and the public
through ever increasing Federal regulations. Congress should
strive for quality, efficiency, and accountability in Federal
regulations.
The burden of Federal regulations on the American public
continues to grow. Professor Thomas D. Hopkins, Interim Dean,
College of Business at the Rochester Institute of Technology,
projected total off-budget regulatory costs for 1999 to be $758
billion.1 Families spend more on regulation than on
medical expenses, food, transportation, recreation, clothing,
and savings. In an annual report on the Federal regulatory
state, Clyde Wayne Crews, Director of Competition and
Regulation Policy at the Competitive Enterprise Institute,
reported that the $758 billion in regulatory costs rival the
$829 billion total of individual income taxes collected. Mr.
Crews also stated that ``Corporate taxes, at $189 billion [in
1998], are greatly outdistanced by regulatory costs. Even
pretax corporate profits, $718 billion in 1998, are outstripped
by regulatory costs.'' 2
---------------------------------------------------------------------------
\1\ Thomas D. Hopkins article published in the December 1998
journal Policy Sciences.
\2\ P. 7, Clyde Wayne Crews, Jr., ``Ten Thousand Commandments: An
Annual Policymaker's Snapshot of the Federal Regulatory State,'' 2000
Edition.
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In 1999 alone, the Federal Register published 71,161 pages,
the highest number of pages since 1980, the last year of the
Carter presidency, which amounts to a 4 percent increase over
the 1998 level. This level is also a 43 percent increase in
number of pages in 10 years. In 1999, of the 4,538 new rules in
various stages, as shown in the Unified Agenda of Federal
Regulatory and Deregulatory Actions, 963 are expected to have a
significant economic impact on small businesses, which is a 35
percent increase in five years--from 711 to 963. The number of
economically significant rules expected increased 17 percent
from 1998 to 1999--from 117 to 137.
In recent years, various statutes (such as the Unfunded
Mandates Reform Act of 1995 and the Small Business Regulatory
Enforcement Fairness Act of 1996) and executive orders (such as
President Reagan's 1981 Executive Order 12291, ``Federal
Regulation,'' and President Clinton's 1993 Executive Order
12866, ``Regulatory Planning and Review'') have mandated that
Executive Branch agencies conduct extensive regulatory
analyses, especially for economically significant rules having
a $100 million or more effect on the economy or a significant
impact on small businesses. Unfortunately, Congress does not
have the analytical capability to independently and fairly
evaluate these analyses.
Congress currently has two opportunities to review agency
regulatory actions. Under the Administrative Procedure Act
(APA), Congress can comment on agency proposed and interim
rules during the public comment period. Under the Congressional
Review Act (CRA), Congress can disapprove an agency final rule
after it is promulgated but before it is effective.
Unfortunately, Congress has been unable to fully carry out its
responsibility under the CRA because it has neither all of the
information it needs to carefully evaluate agency regulatory
proposals nor sufficient staff for this function. Therefore,
since the March 1996 enactment of the CRA, there has been no
completed Congressional resolutions of disapproval.
To assume oversight responsibility for Federal regulations,
Congress needs to be armed with an independent evaluation of
more than just the agency's regulatory documents, including
agency-identified alternatives and the agency's costs and
benefits data. What is needed additionally is an analysis of
legislative history to see if there is a non-delegation
problem, such as in the Food and Drug Administration's proposed
rule to regulate tobacco products, which was struck down by the
Supreme Court in FDA v. Brown & Williamson, or backdoor
legislating, such as in the Department of Labor's Birth and
Adoption Unemployment Compensation (``Baby UI'') rule, which
provides paid family leave to small business employees, even
though Congress in the Family and Medical Leave Act said no to
paid family leave and any coverage of small businesses. Also,
Congress needs an identification of nonregulatory and lower-
cost alternatives neglected by the agency, such as in the
Department of Labor's proposed rule for an ergonomics standard,
and an identification and analysis of other sources of costs,
benefits and impacts data, such as in the Environmental
Protection Agency's rule on Particulate Matter and Ozone and
Labor's Baby UI rule.
During the 105th Congress, on June 3, 1998, after a March
11, 1998 hearing of the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs, the
Committee favorably reported H.R. 1704, the ``Congressional
Office of Regulatory Analysis Creation Act'' (Rept. 105-441,
Part 2). This bill, introduced by Small Business Subcommittee
Chairwoman Sue Kelly on May 22, 1997, called for the
establishment of a new Legislative Branch Congressional Office
of Regulatory Analysis (CORA) agency to, among several duties,
analyze all major rules and report to Congress on potential
costs, benefits, and alternative approaches that could achieve
the same regulatory goals at lower costs. This agency was
intended to aid Congress in analyzing Federal regulations. The
Committee Report stated, ``Congress needs the expertise that
CORA would provide to carry out its duty under the CRA.
Currently, Congress does not have the information it needs to
carefully evaluate regulations. The only analyses it has to
rely on are those provided by the agencies which promulgate the
rules. There is no official, third-party analysis of new
regulations'' (p. 5).
In January and February 2000, Government Reform
Subcommittee Chairman David McIntosh and Small Business
Subcommittee Chairwoman Kelly introduced bills (H.R. 3521 and
H.R. 3669, respectively) which established a CORA function
within GAO, which is an existing Legislative Branch agency.
These bills and H.R. 4744 respond to the main objection of the
earlier bill in the 105th Congress by establishing a CORA
function in an existing Legislative Branch agency instead of
creating a new agency. GAO is the logical location within the
Legislative Branch since it already has some responsibilities
under the CRA. On May 10, 2000, the Senate passed S. 1198, the
``Truth in Regulating Act of 2000,'' by unanimous consent. It
also places the CORA function within GAO.
During the 106th Congress, the Committee did not hold a
hearing specifically on H.R. 4744 but the Subcommittee on
National Economic Growth, Natural Resources, and Regulatory
Affairs did hold a June 14, 2000 hearing, entitled ``Does
Congress Delegate Too Much Power to Agencies and What Should be
Done About It?''. At the hearing, Senator Sam Brownback and
Representative J.D. Hayworth testified that Congress needs to
assume more responsibility for regulations. Dr. Wendy Lee
Gramm, Director, Regulatory Studies Program, Mercatus Center,
George Mason University and former Administrator of the Office
of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget (OMB), Alan Raul, Partner, Sidley &
Austin and former OMB General Counsel, and David Schoenbrod,
Professor of Law, New York Law School and Adjunct Scholar, Cato
Institute, all echoed their belief that Congress needs to
assume more responsibility for regulations, especially for
regulatory proposals without an explicit delegation of
regulatory authority from Congress.
Witnesses stressed the need for analytical assistance so
that Congress could especially provide timely comment on
proposed rules that: (a) take into account Congressional
legislative intent; (b) examine other, less costly regulatory
and nonregulatory alternative approaches besides those in an
agency proposal; and (c) identify additional, non-agency
sources of data on benefits, costs, and impacts of an agency's
proposal.
Dr. Gramm testified that, ``there's clearly a need for more
and better analysis that is independent of the agency writing
the regulation * * * In my view, Congress cannot carry out its
responsibilities effectively without such analysis.'' She
continued by recommending, ``a shadow OIRA, and that is to
perform independent, high-quality analysis of agency
regulations at the proposal stage * * * whether or not the
agency has considered the different alternatives, what might be
other alternatives * * * I would suggest that all this analysis
be done at the proposal stage so that this information can be
put into the rulemaking record.''
On June 26, 2000, Chairwoman Kelly and Chairman McIntosh
introduced H.R. 4744, the ``Truth in Regulating Act of 2000,''
which includes several needed improvements to the Senate-passed
S. 1198. H.R. 4744 and S. 1198 share nearly identical purposes
and very similar provisions. However, H.R. 4744 includes some
needed improvements, such as: (a) providing for timely
Congressional comment on agency proposed rules during the
public comment period, while there is still an opportunity to
influence the cost, scope and content of the rule; (b)
requiring GAO to review not only the agency's data but also the
public's data to assure a more complete, unbiased and balanced
evaluation; (c) including not only rules having a $100 million
or more effect on the economy but also rules with a significant
impact on small businesses; (d) clarifying that GAO's
evaluation of alternative approaches should include
alternatives that achieve the same goal in a more cost-
effective manner or that could provide greater net benefits;
and, (e) changing procedures so that the bipartisan leadership
of Congress instead of GAO determines the priority for GAO's
independent evaluations, with highest priority to proposed and
interim rules. Comments filed by Congress after the end of the
public comment period can be ignored by an agency, as the
Department of Labor did after its December 1999 proposed Baby
UI rule, which was finalized in June 2000, i.e., in a little
over 180 days.
Lastly, S. 1198 includes a pilot project approach to test
the effectiveness of a CORA function in GAO; in contrast, H.R.
4744 includes a sunset provision approach, which is a more
usual legislative approach for a new organizational function.
In fact, the Committee was unable to find any examples in law
of a pilot approach for an organization; instead, pilot
projects have been used by Congress to demonstrate new and
experimental service delivery approaches, e.g., for welfare
reform or Medicaid.
As a consequence, at its June 29, 2000 markup, after
extensive debate, the Committee rejected an amendment to
substitute the text of H.R. 4763, which is identical to the
Senate-passed version of S. 1198, i.e., without the needed
improvements in H.R. 4744. During the debate, Subcommittee
Chairman McIntosh clarified that H.R. 4744 does not require or
expect GAO to conduct any new RIAs. Instead, GAO will evaluate
the agency's RIA and review the public's cost-benefit and other
impact analyses.
Instructed by GAO's independent evaluations, Congress will
be better equipped to review final agency rules under the CRA.
More importantly, Congress will be better equipped to comment
knowledgeably on proposed rules during the public comment
period.
The Committee has received letters of support for H.R. 4744
from: the bipartisan National Conference of State Legislatures
(NCSL); the bipartisan National League of Cities (NLC), which
represents 18,000 municipalities; Alliance USA, a national
coalition of more than 1,000 business organizations and
individual companies; Americans for Tax Reform; the Business
Roundtable; the Chamber of Commerce of the USA, which
represents over three million members; the General Motors
Corporation; the National Association of Manufacturers, which
has 14,000 member companies; National Small Business United,
which has 65,000 members; the Schatz Bearing Corporation; the
Small Business Survival Committee, which has 60,000 members;
and, the Westchester County Chamber of Commerce.
An example of a comment submitted is from NCSL President
Paul Mannweiler: ``The independent evaluations to be carried
out by the U.S. General Accounting Office would ensure a more
efficient, effective and fair development of agency
regulations. For state and local government officials, it would
provide another important marker for ensuring that appropriate
federalism assessments are made on proposed rules.'' NLC
President Bob Knight commented that, ``Requiring the GAO to
consider public data as well as agency data will ensure that a
truly objective evaluation results from the GAO analysis.''
Chairman Karen Kerrigan of the Small Business Survival
Committee commented that, ``Allowing a Committee Chairman or
Ranking Member to turn to * * * (GAO) for an independent
evaluation of a proposed major rule's costs and benefits;
reviewing the accuracy of various impact analyses; and
determining alternative approaches to achieve the same goal in
a more cost-effective manner will allow Congress and the public
to more proficiently comment on a proposed rule.'' Lastly,
Bruce Josten, Chamber of the United States Executive Vice
President Government Affairs, commented that: ``Armed with GAO
reports, Congressional committees--and by extension the
public--will be better equipped to review and respond to
regulatory proposals.''
The ``Truth in Regulating Act of 2000'' is a basic step
toward a smarter partnership in regulatory programs. The best
government is a government accountable to the people. For
America to have an accountable regulatory system, the people's
elected representatives must participate in, and take
responsibility for, the rules promulgated under the laws
Congress passes. H.R. 4744 is a meaningful step towards
Congress's meeting its regulatory oversight responsibility.
III. Committee Action
The bipartisan ``Truth in Regulating Act of 2000'' (H.R.
4744) was introduced on June 26, 2000, by Small Business
Subcommittee on Regulatory Reform and Paperwork Reduction
Chairwoman Sue Kelly and Government Reform Subcommittee on
National Economic Growth, Natural Resources, and Regulatory
Affairs Chairman David McIntosh.
After introduction, the bill was referred to the Committee
on Government Reform. On June 29, 2000, the Government Reform
Committee held a mark up of the bill. The Committee, by
recorded vote did not accept an amendment offered by
Subcommittee Ranking Member Dennis Kucinich and full Committee
Ranking Member Henry Waxman to substitute the text of S. 1198,
which was introduced as H.R. 4763 on June 27, 2000 by Rep. Gary
Condit. By voice vote, the Committee then approved reporting
H.R. 4744 without amendment to the full House.
Vote of the Committee
There was one recorded vote on the Kucinich-Waxman
amendment during the Committee's consideration of H.R. 4744, as
follows.
Rollcall--An amendment offered by Mr. Kucinich to
substitute the text of H.R. 4763 for the text of H.R. 4744.
Defeated 15-18.
YEAS NAYS
Mr. Waxman Mr. Burton
Mr. Lantos Mr. Shays
Mr. Owens Ms. Ros-Lehtinen
Mr. Kanjorski Mr. McHugh
Mrs. Maloney Mr. Horn
Ms. Norton Mr. Mica
Mr. Fattah Mr. Davis (VA)
Mr. Cummings Mr. McIntosh
Mr. Kucinich Mr. Souder
Mr. Davis (IL) Mr. LaTourette
Mr. Tierney Mr. Barr
Mr. Turner Mr. Hutchinson
Mr. Allen Mr. Terry
Mr. Ford Mrs. Biggert
Ms. Schakowsky Mr. Walden
Mr. Ose
Mr. Ryan
Mr. Vitter
IV. Section-by-Section Analysis
Section 1. Short title
Section 2. Findings and purposes
Congress finds that many Federal rules have improved the
quality of life of Americans. Congress has responsibility to
ensure that the laws are properly implemented by the Executive
Branch. In order for Congress to ensure that the laws are
implemented in an efficient, effective and fair manner,
Congress needs accurate and reliable information on which to
base decisions. The bill is intended to increase the
transparency of important regulatory decisions, promote
effective Congressional oversight of agency rules, and increase
the accountability of Congress.
Section 3. Definitions
Section 3 includes definitions for ``agency,''
``economically significant rule,'' and ``independent
evaluation.'' The term ``economically significant rule'' means
a rule having a $100 million or more effect on the economy or a
significant impact on small businesses. ``Independent
evaluation'' means a substantive evaluation of the agency's and
the public's data, methodology and assumptions and any
additional evaluation that the Comptroller General of GAO
determines to be necessary, including strengths or weaknesses
in those data, methodology, and assumptions and any
implications for the rulemaking.
Rules having a significant impact on small businesses are
specifically included in the definition of ``economically
significant rule'' because small businesses are the backbone of
America and deserve special analysis for regulatory burdens.
Small businesses are less able to shoulder heavy regulatory
burdens. To ensure a more complete, unbiased and balanced
analysis by GAO, ``independent evaluation'' is defined to
include not only the agency's but also the public's data.
Merely evaluating the agency's data will not provide Congress
with sufficient information in which to formulate appropriate
comments on an agency proposed rule or a Congressional
resolution of disapproval for an agency final rule. This
Section does not require GAO to conduct any new RIAs.
Section 4. Report on rules
Section 4(a)(1) provides that a Chairman or Ranking Member
of a Committee of jurisdiction of either House of Congress may
request GAO to review an economically significant rule after it
is published by an Executive Branch agency.
Section 4(a)(2) requires that GAO submit a report to the
Committee of jurisdiction in both Houses of Congress not later
than 180 days after requested or, in the case of proposed or
interim rules, by not later than the end of the public comment
period. The provision for shortened review time for proposed or
interim rules is to ensure that comment by Congress is
submitted during the public comment period, while there is
still an opportunity to influence the cost, scope and content
of the rule. The APA requires that all members of the public,
including Congress, be given an equal opportunity to comment.
In fact, under the APA, late Congressional comments cannot be
considered by the agency unless all other late public comments
are equally considered. Under the APA, agencies are required to
consider timely Congressional and public comment filed during
the public comment period and to respond to them in the
preamble of the final rules. Therefore, GAO needs to complete
its review during the same period afforded all other members of
the public. GAO's report shall include its independent
evaluation of the rule.
Section 4(a)(3) requires that GAO's independent evaluation
include: an evaluation of the potential quantifiable and
nonquantifiable benefits of the rule and the persons likely to
receive the benefits; an evaluation of the quantifiable and
nonquantifiable costs of the rule and the persons likely to
bear the costs; an evaluation of any alternative approaches
that could achieve the same goal in a more cost-effective
manner or that could provide greater net benefits; an
evaluation of the RIA, federalism assessment, or other analysis
or assessment prepared by the agency; and, a summary of the
results of GAO's evaluation, including an identification of any
changes made by the agency from the proposed rule to the final
rule. Requiring GAO to evaluate additional alternative
approaches besides those identified in the rule is essential
because the American people deserve the most cost-effective
approach or one that provides the greatest net benefits.
Section 4(a)(4) establishes procedures for prioritizing
Committee requests. Priorities for GAO reports will be
determined by the Majority and Minority Leaders of the Senate
and the Speaker and the Minority Leader of the House, with the
highest priority to requests regarding proposed and interim
rules, while there is still an opportunity to influence the
cost, scope and content of the rule. This approach provides
that the bipartisan leadership of Congress determines the
priorities for GAO's independent evaluations instead of GAO.
Section 5. Authorization of appropriations
Section 5 authorizes $5,200,000 for each year from Fiscal
Year 2001 to 2003. This is the same annual level of funding as
received by OMB's OIRA.
Section 6. Effective data; sunset provision
Section 6 establishes an effective date 180 days after
enactment, with a three-year sunset provision. A 180-day
delayed effective date provides sufficient time for GAO to hire
appropriate analytical staff to conduct the independent
evaluations, which differ substantially from GAO's usual audit
reports.
V. Oversight Findings
Pursuant to rule XIII, clauses 3(c)(1), of the Rules of the
House of Representatives, the results and findings for these
oversight activities are incorporated in the recommendations
found in this bill and in this report.
VI. Budget Analysis and Projections
H.R. 4744 provides for a new authorization for GAO.
Consequently, the provisions of section 308(a)(1) of the
Congressional Budget Act of 1974 are applicable.
VII. Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 10, 2000.
Hon. Dan Burton,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4774, the Truth in
Regulating Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John R.
Righter.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 4744--Truth in Regulating Act of 2000
Summary: H.R. 4774 would require the General Accounting
Office (GAO), at the request of a Chairman or Ranking Minority
Member of an authorizing committee with appropriate
jurisdiction, to independently evaluate and report on certain
regulatory rules issued by federal agencies. The rules subject
to review would be those that could have an annual effect on
the U.S. economy of at least $100 million or that could
adversely affect the economy, environment, public health and
safety, or state, local, or tribal governments. Each GAO report
would include an evaluation of the potential costs and benefits
of implementing a particular rule, alternative approaches for
achieving the rule's goal at a lower cost, and an evaluation of
the regulatory impact analysis or other assessment performed by
the agency issuing the rule. To carry out these functions, the
bill would authorize the appropriation of $5.2 million for each
fiscal years 2001 through 2003. The bill would not take effect
until 180 days after enactment, and would not apply to rules
issued more than three years after that date.
Subject to appropriation of the authorized amounts, CBO
estimates that implementing the bill would cost $14 million
over the 2001-2005 period. Enacting H.R. 4774 would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply. H.R. 4774 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would not affect the
budgets of state, local, or tribal governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4774 is shown in the following table.
This estimate assumes that the authorized amounts will be
appropriated for each year from 2001 through 2003. The outlays
estimated for 2001 are lower because the bill would not take
effect until 180 days after enactment. The costs of this
legislation fall within budget function 800 (general
government).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------
2000 2001 2002 2003 2004 2005
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SPENDING SUBJECT TO APPROPRIATION
GAO Spending Under Current Law:
Estimated Authorization Level \1\........................... 379 397 412 427 442 458
Estimated Outlays........................................... 379 394 409 421 436 452
Proposed Changes:
Authorization Level......................................... 0 5 5 5 0 0
Estimated Outlays........................................... 0 3 5 5 1 0
GAO Spending Under H.R. 4774:
Estimated Authorization Level............................... 379 402 417 432 442 458
Estimated Outlays........................................... 379 397 414 426 437 452
----------------------------------------------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year. The levels shown for 2001 through 2005 are baseline
projections, reflecting annual adjustments for anticipated inflation. Without such adjustments, the level
would stay constant at $379 million.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 4774
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: John R. Righter.
Impact on the State, local, and tribal governments: Susan Sieg
Tompkins. Impact on the private sector: Sarah Sitarek.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
VIII. Constitutional Authority Statement
Clauses 14 and 18 of Article I, section 8 of the
Constitution grants the Congress the power to enact this law.
IX. Changes in Existing Law Made by the Bill, as Reported
H.R. 4744 does not make any changes in existing law.
X. Committee Recommendations
On June 29, 2000, a quorum being present, the Committee on
Government Reform ordered the bill favorably reported by voice
vote.
XI. Congressional Accountability Act; Public Law 104-1
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(B)(3) of the Congressional Accountability Act (P.L. 104-1).
XII. Unfunded Mandates Reform Act; Public Law 104-4, Section 425
The Committee finds that the legislation does not impose
any Federal Mandates within the meaning of section 423 of the
Unfunded Mandates Reform Act (P.L. 104-4).
XIII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b)
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., section 5(b).
MINORITY VIEWS
H.R. 4744 is an ill-conceived bill. It did not receive the
benefit of a hearing or Subcommittee markup. Instead, it was
rushed through the Committee in a flawed form.
H.R. 4744 calls on the Government Accounting Office (GAO)
to review the cost-benefit analyses conducted by federal
agencies as part of federal rulemaking. The Senate recently
considered this issue and developed a workable, bipartisan
approach to GAO involvement. The Senate bill, S. 1288, passed
by unanimous consent in the Senate. It was recently introduced
by Rep. Gary Condit in the House as H.R. 4763.
We can support the Condit-Senate approach. In fact, the
Kucinich-Waxman substitute that was defeated on a party line
vote during the full committee markup was identical to it.
Unfortunately, H.R. 4744 does not take this bipartisan
approach. Instead, it would impose costly obligations on the
GAO and would bog down the rulemaking process. That is why it
is opposed by environmental groups such as the National
Environmental Trust; labor organizations such as the AFL-CIO
and the United Auto Workers; health groups such as the American
Public Health Association; and consumer organizations such as
Public Citizen. A letter urging opposition to H.R. 4744 from
the Citizens for Sensible Safeguards--a broad based coalition
of more than 200 public interest groups--is included as
Attachment 1.
Moreover, GAO--the entity charged with carrying out the
responsibilities in the bill--has expressed concern that H.R.
4744 requires too much analysis, in too short of a time period,
without a promise of additional funding. Furthermore, GAO
expressed concern that the requirement for independent analyses
expands its responsibilities beyond its traditional role as an
auditor. These concerns stand in stark contrast to GAO's
support of the Kucinich-Waxman substitute. The GAO letter is
included as Attachment 2.
The most important difference between the H.R. 4744 and the
Kucinich-Waxman substitute is that H.R. 4744 would require GAO
to conduct a host of new independent analyses, many of which
are not currently performed by the agencies. The substitute
would only require GAO to evaluate agency analyses.
During the markup, one of the authors of H.R. 4744--Rep.
David McIntosh--stated that he did not intend to require GAO to
conduct its own independent analyses. Unfortunately, the
language of the bill is inconsistent with this stated
intention.
As Rep. Jim Turner pointed out during the markup, H.R. 4744
requires ``an independent evaluation,'' which shall include
``an evaluation of the potential benefits'' and ``potential
costs'' of the rule. Furthermore, H.R. 4744 requires GAO to
conduct a number of analyses that are not currently conducted
by the agencies. For instance, it requires cost/benefit, small
business impact, and federalism analyses of some minor rules
and of major rules promulgated by independent agencies. Because
current law does not require that these analyses be performed
by the agencies, GAO would have no choice but to conduct its
own independent analyses under H.R. 4744.
We are also concerned that H.R. 4744 focuses more on the
costs of regulations than on the benefits. In theory, the
weighing of costs and benefits may appear appealing. But in
practice, many of the most important regulatory benefits cannot
be quantified. Thus, an undue emphasis on cost-benefit figures
can skew the analysis. This problem is exacerbated by the
requirement that GAO analyze the cost-effectiveness of
alternatives to the regulation, which emphasizes the cost side
of the equation.
This Committee has passed a number of regulatory reform
measures which were voted out of Committee largely on a party
line vote. None of these measures has been passed by the
Senate. However, in this case, the Committee had an opportunity
to take a different approach and pass a bipartisan bill that
had received unanimous support in the Senate. We are
disappointed that the Committee chose not to take this route
when it rejected the Kucinich-Waxman substitute amendment.
Henry A. Waxman.
Tom Lantos.
Major R. Owens.
Edolphus Towns.
Paul E. Kanjorski.
Patsy T. Mink.
Bernard Sanders.
Carolyn B. Maloney.
Eleanor H. Norton.
Chaka Fattah.
Elijah E. Cummings.
Dennis J. Kucinich.
Rod R. Blagojevich.
Danny K. Davis.
John F. Tierney.
Tom Allen.
Harold E. Ford, Jr.
Jan Schakowsky.
Attachment 1
Citizens for Sensible Safeguards,
Washington, DC, June 28, 2000.
Dear Representative: On behalf of Citizens for Sensible
Safeguards, a broad-based coalition of more than 200 public
interest organizations, we are writing to express our strong
opposition to H.R. 4744, which seeks to establish an office
within GAO to conduct cost-benefit analysis of agency rules.
This legislation is vastly different from the Senate
version (S. 1198), which recently passed by unanimous consent.
In reaching this bipartisan compromise, our coalition worked
closely with the Senate Governmental Affairs Committee to make
sure that (1) GAO is capable of conducting the work assigned to
it; (2) that an extra-rulemaking process is not created; and
(3) that cost considerations are not elevated above the benefit
side of the equation.
H.R. 4744 violates all of these principles. Specifically:
It requires that GAO conduct its own cost-benefit
analysis. Cost-benefit analyses are extremely time-consuming,
require significant expertise, and are done within the context
of each rulemaking. Yet H.R. 4744 requires that GAO finish its
analysis within 180 days for final rules, and 60 days--or the
end of the public comment period, whichever is later--for
proposed or interim final rules. This is clearly unworkable,
especially considering that the bill authorizes only $5.2
million to fund the office. The Senate bill, by contrast, only
asks GAO to conduct ``an evaluation of the agency's analysis''
to examine ``underlying assessments and assumptions'' (and
allows 180 days for analysis of proposed rules, as it does for
final rules). This is more realistic and fits much more
naturally with GAO's skill, which is in auditing agency
activity, not in developing regulation.
It requires GAO to assess regulatory alternatives
using new criteria--not required of the agencies--that slant
analysis to the cost side of the equation. H.R. 4744 requires
GAO to conduct an analysis ``of any alternative regulatory
approaches that could achieve the same goal in a more cost-
effective manner or that could provide greater net benefits * *
*'' Currently, agencies are not required to develop rules on
the basis of a cost-effectiveness test, and in many cases, they
are statutorily prohibited from doing so because of the
seriousness of the health, safety, or environmental risks
involved. Such a test inevitably leads to less protective
standards. GAO should not be charged with evaluating rules on
the basis of a standard that Congress has found, in many cases,
to be inappropriate. This provision was removed from the Senate
version for that reason.
It puts GAO in the position of weighing outside
analysis. Not only would GAO have to review the agency's work,
it would also have to review the ``public's data, methodology,
and assumptions used in developing the economically significant
rule''--presumably information from the public comment period,
although the bill does not specify. This would put GAO in the
position of weighing outside analysis (including self-serving
analysis generated by affected industry)--in search of a ``more
cost effective'' approach--that the agency has already reviewed
and rejected. GAO would simply not have the time or the
expertise to do its own credible, independent assessment of the
``public's data.''
Some of the language in this bill is somewhat ambiguous.
The proponents may claim that it does not actually require GAO
to conduct cost-benefit analysis. But if that's the case, then
why not go with language from the Senate version that is
decidedly unambiguous? Clearly, the sponsors of H.R. 4744 have
something more in mind.
In particular, we are concerned that H.R. 4744 creates an
extra-rulemaking process at GAO--which could serve as the basis
for rejecting agency rules--that includes none of the checks
and balances of an executive branch rulemaking (e.g., notice
and comment, judicial review, etc.). This is especially
significant since the immense scope of the work, coupled with
the limited time-frame, is likely to produce sloppy work. Add
in the bill's overemphasis on costs, and GAO's reports would
provide a distorted regulatory picture that could bias Congress
against important health, safety, and environmental
protections.
Accordingly, we strongly urge you to oppose H.R. 4744. If
you have any questions on this bill or would like to meet with
coalition members, please contact Reece Rushing.
Sincerely,
AFL-CIO; AFSCME; American Public Health
Association; Consumers Union; National
Environmental Trust; OMB Watch; Public
Citizen; UAW; United Steelworkers of
America; U.S. PIRG.
Attachment 2
U.S. General Accounting Office,
Office of the General Counsel,
Washington, DC, June 29, 2000.
Hon. Henry A. Waxman,
Ranking Minority Member, Committee on Government Reform, House of
Representatives.
Hon. Dennis Kucinich,
Ranking Minority Member, Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs, Committee on
Government Reform, House of Representatives.
As you requested, this letter provides our views regarding
the role proposed for GAO by H.R. 4744, the ``Truth in
Regulating Act of 2000,'' We have met with majority and
minority staff on several occasions regarding the GAO-related
provisions of the Senate bill (S. 1198) that was passed by the
Senate on May 9, 2000, as well as the previously introduced
House bills on this issue (H.R. 3521 and H.R. 3669).
We are not taking a position on whether Congress needs the
type of regulatory analysis and reporting contemplated by the
bill. However, in testimony earlier this month, we noted both
the House and Senate legislation on this issue and said that we
stood ready to assist Congress in carrying outs its oversight
responsibility.\1\ We also said that our ability to carry out
that role depended on how any legislation that is ultimately
enacted addresses such issues as (1) the scope of the analysis
contemplated, (2) the amount of time within which we must
perform our reviews, (3) the number of requests that we
receive, and (4) the resources that we are given to accomplish
the tasks involved.
---------------------------------------------------------------------------
\1\ Regulatory Reform: Procedural and Analytical Requirements in
Federal Rulemaking (GAO/T-GGD/OGC-00-157, June 8, 2000).
---------------------------------------------------------------------------
H.R. 4744 contains provisions that could affect each of
these issues. With respect to the scope of our analysis, the
bill states that our reports should include an evaluation of
the potential benefits and costs of the rules, as well as an
evaluation of any alternative approaches that could achieve the
same goal in a more cost-effective manner or that could provide
greater net benefits. This language could be interpreted to
require us to prepare our own cost-benefit analysis for the
rules--a complex and resource intensive task that sometimes
takes agencies months or years to complete. It is also a role
that is very different than our traditional responsibility of
evaluating agencies' analyses. To eliminate any ambiguity on
this issue, the language in the bill could be clarified to
specify that GAO's role would be to review the agencies'
evaluations of costs, benefits, and alternative approaches.
With regard to the amount of time permitted for our
reviews, H.R. 4744 states that, for proposed or interim final
rules, our reports should be submitted to Congress within 60
calendar days of the request or by the end of the rulemaking
comment period, whichever is later. While the bill provides us
with 180 days to review other types of rules, it states that
the procedures delineating priorities of requests should give
the highest priority to proposed and interim final rules.
Therefore, most of our reviews pursuant to H.R. 4744 could have
to be completed within 60 days. We believe that we will often
need more than 60 days to develop our reports given the size
and complexity of many of the economic analyses that we could
be expected to review. Also, on several occasions we have
provided our views on proposed rules after the official comment
period had ended, sometimes to great effect.\2\ Therefore, we
believe that providing 180 days for the review of all rules
would permit GAO to perform meaningful and timely analyses.
---------------------------------------------------------------------------
\2\ See, for example, Dietary Supplements: Uncertainties in
Analyses Underlying FDA's Proposed Rule on Ephedrine Alkaloids (GAO/
HEHS/GGD-99-90, July 2, 1999). In response to our concerns, FDA
partially withdrew this 1997 proposed rule.
---------------------------------------------------------------------------
The potential universe of rules that could be the subject
of a congressional request under H.R. 4744 could also be
substantial. The bill initially defines ``economically
significant'' rules subject to a possible review request to
include any proposed or final rule that would, among other
things, have a $100 million impact on the economy. We estimate
that about 100 rules are published each year that meet this
standard. The bill also includes in the definition of
``economically significant'' rules any proposed or final rule
that has a significant effect on small entities under the
Regulatory Flexibility Act. It is unclear how many rules this
provision could add to the number of potentially reviewable
rules, but it could be several hundred.
Finally, H.R. 4744 states that $5.2 million is authorized
to be appropriated to GAO in each fiscal year, but does not
make our review responsibility contingent upon our receiving an
additional appropriation. Therefore, we could be required to
assume a significant additional workload with no additional
funds during a period of time when the demand for GAO
assistance throughout the Congress has never been greater. As
we said in a report last year, an independent analysis of
regulatory costs and benefits will be most useful to
policymakers if the organization charged with this
responsibility has sufficient resources to do a proper job.\3\
---------------------------------------------------------------------------
\3\ Regulatory Accounting: Analysis of OMB's Reports on the Costs
and Benefits of Federal Regulation (GAO/GGD-99-59, Apr. 20, 1999).
---------------------------------------------------------------------------
We would be happy to discuss these and other issues with
you or your staff in greater detail, and to work with the
Committee as it considers issues related to GAO in this
important legislation. As noted earlier, we worked extensively
with both majority and minority staff in the Senate on the
related GAO provisions in S. 1198. As a result of those
discussions, we believe that the Senate bill provides a
reasonable accommodation to our concerns.
Because of our previous discussions regarding this issue
with congressional staff, we are sending copies of this letter
to Representative Dan Burton, Chairman, Committee on Government
Reform; Representative David McIntosh, Chairman, Subcommittee
on National Economic Growth, Natural Resources, and Regulatory
Affairs, Committee on Government Reform; Representative Sue
Kelly, Chairwoman, Subcommittee on Regulatory Reform and
Paperwork Reduction, Committee on Small Business;
Representative Constance A. Morella; Senator Fred Thompson and
Senator Joseph I. Lieberman, Chairman and Ranking Minority
Member, respectively, of the Committee on Governmental Affairs;
Senator Christopher Bond; Senator Richard C. Shelby; and
Senator Carl Levin.
Lynn H. Gibson
(For Robert P. Murphy, General Counsel).
ADDITIONAL VIEWS
The Minority Views section of this report erroneously
states that H.R. 4744 ``would require GAO to conduct a host of
new independent analyses.'' During the Committee debate, I
clarified that H.R. 4744 does not require or expect GAO to
conduct any new RIAs, cost-benefit analyses, or other impact
analyses. The Minority Views section also erroneously states
that the bill ``requires cost/benefit, small business impact,
and federalism analyses * * * Because current law does not
require that these analyses be performed by the agencies, GAO
would have no choice but to conduct its own independent
analyses.'' The bill merely requires GAO to analyze already-
prepared agency analyses, not to prepare any missing cost/
benefit, small business impact, federalism analysis, or any
other missing analysis.
Attachment 1, an unsigned letter from ten organizations on
Citizens for Sensible Safeguards letterhead, misunderstands
several aspects of the bill. First, it also erroneously states
that the bill ``requires that GAO conduct its own cost-benefit
analysis.'' Second, the letter states that the GAO analysis
will be slanted to the cost side of the equation ``in search of
a `more cost effective' approach.'' Instead, the bill calls for
an analysis of alternatives that could achieve the goal in a
more cost-effective manner or that could provide greater net
benefits. Alternatives that achieve the same goal achieve the
same benefit; alternatives that provide greater net benefits
are more beneficial. Third, the letter states that the bill
``creates an extra-rulemaking process at GAO * * * that
includes none of the checks and balances of an executive branch
rulemaking (e.g., notice and comment, judicial review, etc.).''
This is a misunderstanding of the bill and the agency
rulemaking process. The bill merely calls for GAO's analytic
help so that Congressional Committees can effectively
participate in the agency's rulemaking process at the proposed
rule stage and can effectively consider actions under the CRA
at the final rule stage. The agency continues to be the
ultimate decisionmaker after notice and consideration of
comments from Congressional Committees and other public
commentors, and agency actions continue to be subject to
judicial review.
Attachment 2 is a pre-Committee markup letter from GAO. The
Committee debate addressed GAO's concerns: (a) H.R. 4744 does
not require or expect GAO to conduct any new RIAs, cost-benefit
analyses, or other impact analyses; (b) under the APA's
fairness provisions, GAO cannot be given more time than other
members of the public to comment on agency regulatory
proposals; (c) the inclusion of rules, within the scope of
GAO's new evaluation function, that significantly impact small
businesses is desirable because small businesses, which are the
backbone of America, deserve a special analysis for new agency
regulatory burdens on them; and (d) authorization bills do not
include guaranteed appropriation amounts. In fact, GAO was
unable to provide the Committee with any example of an enacted
authorization bill with such a guarantee.
David McIntosh.
The text of H.R. 4744 follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Truth in Regulating Act of
2000''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) many Federal regulations have improved the
quality of life of the American public, however,
uncontrolled increases in regulatory costs and lost
opportunities for better regulation should not be
continued;
(2) the legislative branch has a responsibility to
ensure that laws passed by Congress are properly
implemented by the executive branch; and
(3) in order for the legislative branch to fulfill
its responsibilities to ensure that laws passed by
Congress are implemented in an efficient, effective,
and fair manner, the Congress requires accurate and
reliable information on which to base decisions.
(b) Purposes.--The purposes of this Act are to--
(1) increase the transparency of important regulatory
decisions;
(2) promote effective congressional oversight to
ensure that agency rules fulfill statutory requirements
in an efficient, effective, and fair manner; and
(3) increase the accountability of Congress and the
agencies to the people they serve.
SEC. 3. DEFINITIONS.
In this Act, the term--
(1) ``agency'' has the meaning given such term under
section 551(1) of title 5, United States Code;
(2) ``economically significant rule'' means any
proposed or final rule, including an interim or direct
final rule, that may have an annual effect on the
economy of $100,000,000 or more or adversely affect in
a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment,
public health or safety, or State, local, or tribal
governments or communities, or for which an agency has
prepared an initial or final regulatory flexibility
analysis pursuant to section 603 or 604 of title 5,
United States Code; and
(3) ``independent evaluation'' means a substantive
evaluation of the agency's and the public's data,
methodology, and assumptions used in developing the
economically significant rule, and any additional
evaluation that the Comptroller General determines to
be necessary, including--
(A) an explanation of how any strengths or
weaknesses in those data, methodology, and
assumptions support or detract from conclusions
reached by the agency; and
(B) the implications, if any, of those
strengths or weaknesses for the rulemaking.
SEC. 4. REPORT ON RULES.
(a) In General.--
(1) Request for review.--When an agency publishes an
economically significant rule, a chairman or ranking
member of a committee of jurisdiction of either House
of Congress may request the Comptroller General of the
United States to review the rule.
(2) Report.--The Comptroller General shall submit a
report on each economically significant rule selected
under paragraph (4) to the committees of jurisdiction
in each House of Congress not later than 180 calendar
days after a committee request is received, or in the
case of a request for review of a notice of proposed
rulemaking or an interim final rulemaking, by not later
than the end of the 60-calendar-day period beginning on
the date the committee request is received, or the end
of the period for submission of comment regarding the
rulemaking, whichever is later. The report shall
include an independent evaluation of the economically
significant rule by the Comptroller General.
(3) Independent evaluation.--The independent
evaluation of the economically significant rule by the
Comptroller General under paragraph (2) shall include--
(A) an evaluation of the potential benefits
of the rule, including any beneficial effects
that cannot be quantified in monetary terms and
the identification of the persons or entities
likely to receive the benefits;
(B) an evaluation of the potential costs of
the rule, including any adverse effects that
cannot be quantified in monetary terms and the
identification of the persons or entities
likely to bear the costs;
(C) an evaluation of any alternative
approaches that could achieve the same goal in
a more cost-effective manner or that could
provide greater net benefits, and, if
applicable, a brief explanation of any
statutory reasons why such alternatives could
not be adopted;
(D) an evaluation of the regulatory impact
analysis, federalism assessment, or other
analysis or assessment prepared by the agency
or required for the economically significant
rule; and
(E) a summary of the results of the
evaluation of the Comptroller General and the
implications of those results, including an
evaluation of any changes from the proposed
rule made by the agency in the final rule.
(4) Procedures for priorities of requests.--In
consultation with the Majority and Minority Leaders of
the Senate and the Speaker and Minority Leader of the
House of Representatives, the Comptroller General shall
develop procedures for determining the priority and
number of those requests for review under paragraph (1)
that will be reported under paragraph (2). The
procedures shall give the highest priority to requests
regarding a notice of proposed rulemaking, and to
requests regarding an interim final rulemaking.
(b) Authority of Comptroller General.--Each agency shall
promptly cooperate with the Comptroller General in carrying out
this Act. Nothing in this Act is intended to expand or limit
the authority of the General Accounting Office.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the General
Accounting Office to carry out this Act $5,200,000 for each of
fiscal years 2001 through 2003.
SEC. 6. EFFECTIVE DATE; SUNSET PROVISION.
(a) Effective Date.--This Act shall take effect 180 days
after the date of enactment of this Act.
(b) Sunset Provision.--This Act shall not apply with respect
to rules published on or after the date that is 3 years after
the effective date of this Act.