Momentum builds to reform the regulatory process

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The way agencies develop regulations is going to change. Senate lawmakers and White House officials say it’s time to transform the current process that many believe takes too long, is too complex and is not transparent enough.

“Each year, well over 70,000 pages of additional regulatory requirements are published in the Federal Register. In the past two decades, the code of federal regulations has expanded by as much as 25 percent to an astounding 180,000 pages. Many of these new rules do represent significant costs to the economy, regularly in excess of $100 million each year,” said Sen. Rob Portman (R-Ohio), ranking member of the Homeland Security and Governmental Affairs Subcommittee on the Efficiency and Effectiveness of Federal Programs and the Federal Workforce, Tuesday at a hearing on improving the federal regulatory process. “Over President [Barack] Obama’s first five years in office, his administration on average put out more than 53 of these major regulations each year, a substantial increase over what President George H.W. Bush, President [Bill] Clinton and President George W. Bush did each year — an average of about 45. The annual cost of federal regulations now we are estimating at $2 trillion, and this continues to grow substantially.”

But it’s not just the growth of regulations over the last two decades; witnesses and lawmakers say the government has built processes on top of a process that makes everything more complicated.

Katherine McFate, the president and CEO of the Center for Effective Government, said the White House’s Office of Information and Regulatory Affairs (OIRA) too often acts as a roadblock. It reviews proposals, requests more details or analyses and doesn’t adhere to its own rules to finalize the regulations in 90 days.

Plenty of ideas to fix the process

These long-standing problems are not new, but lawmakers and the administration seem ready to change the process.

On Capitol Hill there are plenty of ideas. For example, Portman and Sen. Mark Pryor (D-Ark.) introduced the Regulatory Accountability Act of 2013 last May.

Among the things the bill would do is amend the Administrative Procedures Act to require earlier engagement between agencies and the public and other stakeholders during rule development, especially on those actions that end up costing $1 billion or more.

Another idea is a bill sponsored by Sen. Angus King (I-Maine), the Regulatory Improvement Act.

“We need to find better ways to ensure we revisit regulations on a regular basis,” he said. “[Sen.] Roy Blunt and I introduced S. 1390, which basically is a BRAC commission for regulations. The idea is an independent analysis of regulations to come before the Congress with recommendations about whether they should be continued, modified or eliminated. They’d have an expedited process in Congress. This idea, by the way, came from the Progressive Policy Institute, and it’s received quite a bit of positive attention.”

Along with members of Congress, McFate said there are several ways to improve OIRA.

“Current policy sets a 90-day deadline for OIRA to review the rules and requires it to be transparent about the changes it asks agencies to make. The deadlines are often missed, and transparency is circumvented by informal review at the very beginning of the rulemaking process,” she said. “So what do we recommend? Once a rule has been formally submitted to OIRA for review, a failure to meet the 90-day deadline should be considered default approval, and the rule should be published. The scope of agency actions that require OIRA review should be limited. Congress should stipulate that OIRA may not review agency guidance documents, pre- rulemaking actions or rules that are not economically significant. This would reduce its case load and work load. Agencies should not be forced to engage in resource intensive exercises about paring back outdated rules. They need to be scanning for emerging threats and risks.”

McFate said OIRA’s staffing levels also are too low for all the work it has to do.

OIRA’s staff dropped by about half between 1981 and 2014 — from 90 people to about 45.

She said OIRA needs to stop trying to do so much and only look at economically significant rules, which would be rules that had a cost of at least $660 million to implement.

McFate said if OIRA stopped trying to do so much, it would be able to meet its deadlines better.

Three main priorities at OIRA

OIRA has been busy over the last few years trying to address this arduous process. Howard Shelanski, the OIRA administrator, told lawmakers he’s focusing on three main priorities to fix the regulatory process.

The first is ensuring the Unified Regulatory Agenda is released annually. The agenda tells the public all the rules or proposed rules under consideration over the next year and the other longer-term actions.

Shelanski said the next Unified Regulatory Agenda is expected to be out this spring.

“Of similar importance to the clarity and certainty of the regulatory environment is that rules, both new rules and those already under review, work as efficiently as resource constraints and rigorous analysis permit,” he said. “Reducing the frequency of extended regulatory reviews and working with agencies that are already under extended review are key objectives for OIRA. Thanks to the tireless work of the OIRA staff, we have significantly reduced the number of rules under reviews for more than 200 days. The number of rules under review for more than 90 days is down significantly and continues to fall.”

Shelanski said OIRA also is improving the technology of

“We continue to explore ways to make improvements to our information system that will increase transparency, including making the disclosure of information associated with regulatory review more complete, automated and user friendly,” he said.

A final priority is around agencies doing a better job of retrospective analysis to figure out whether current rules still matter.

Shelanski said he’s trying to institutionalize this effort for agencies to review existing rules on a continual basis.

“One thing is to ask agencies to get into the habit. I think they have been really excellent in getting into the habit of identifying retrospective review plans and posting them, and every six months telling us which ones have you accomplished, which new ones are you adding and which ones are ongoing,” he said. “So the retrospective review reports that we receive from agencies and review prior to posting them on their websites are a key part of institutionalizing and creating a routinized mechanism within the agencies of looking for good targets of look back.”

Success stories

He said OIRA also could do more, including making sure agencies follow through on their plans and making sure the plans and rules they identified are valuable.

Shelanski said retrospective reviews of rules are hard to do. He said it’s not easy to find high cost, low benefit rules just lying around, especially now that “most of the low hanging fruit has been harvested over the last few years.”

He said this week agencies will post their most recent efforts on regulatory look backs — the first update since July 2013.

Agencies have found success in reducing burdens on businesses, which also means saving money. The Transportation Department, for example, is getting rid of a rule that requires truck drivers to submit and retain certain kinds of inspection reports. Shelanski said discarding that rule would save $1.5 billion in annual paper work.

Agencies already have improved and simplified export control regulations in 11 of 17 targeted areas and have plans to finish the other six areas in the works, he added.

Shelanski wouldn’t comment on any of the bills discussed at the hearing that would change the regulatory process, but no one disputed the challenges of the current procedures and the fact they need to be changed.


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