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

Highlights

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.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
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.	Closed – Implemented	Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.
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.	Closed – Implemented	Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.
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.	Closed – Not Implemented	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.
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.	Closed – Not Implemented	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.
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.	Closed – Not Implemented	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.
Congress should consider reviewing the implementation of Senate Rule 26.11(b) that requires these economic impacts of regulatory legislation to be assessed.	Closed – Not Implemented	No final action was taken in the 98th Congress.
Congress should consider clarifying presidential oversight authority in S. 1080, especially as it relates to rulemaking by independent regulatory agencies.	Closed – Implemented	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.
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.	Closed – Implemented	Relevant legislation addressing this matter was introduced in the 98th Congress but failed to pass.

See All 8 Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Office of Management and Budget	The Director of OMB should ensure that OMB plays a broader role in overseeing the regulatory analysis process.	Closed – Not Implemented 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.
Office of Management and Budget	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.	Closed – Not Implemented 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.
Office of Management and Budget	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.	Closed – Not Implemented 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.
Office of Management and Budget	The Director of OMB should ensure that OMB promotes the development of consistent methodologies for measuring regulatory impacts.	Closed – Not Implemented OMB has never commented on this recommendation and has made no public initiatives to promote the development of consistent methodologies.
Office of Management and Budget	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.	Closed – Not Implemented 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.
Office of Management and Budget	The Director of OMB should ensure that OMB oversight be conducted in the open, with public filings of OMB comments on agency analyses.	Closed – Not Implemented 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.
Office of Management and Budget	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.	Closed – Not Implemented 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.

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Full Report

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Topics

Business Regulation and Consumer Protection

Cost analysisCost controlExecutive ordersFederal regulationsProposed legislationRegulatory agenciesRegulatory analysisLegislationRegulatory reformDeregulation