[House Report 105-441]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-441
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 2
_______________________________________________________________________


 
        CONGRESSIONAL OFFICE OF REGULATORY ANALYSIS CREATION ACT

                                _______
                                

  June 3, 1998.--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 and 
                   Oversight, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1704]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform and Oversight, to whom 
was referred the bill (H.R. 1704) to establish a Congressional 
Office of Regulatory Analysis, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................4
 II. Need for Legislation.............................................5
III. Committee Action.................................................8
 IV. Section-By-Section Analysis.....................................10
  V. Committee Oversight Findings....................................13
 VI. Committee Recommendations.......................................13
VII. New Budget Authority and Tax Expenditures.......................15
VIII.Congressional Budget Office Cost Estimates......................15

 IX. Constitutional Authority Statement..............................17
  X. Changes in Existing Law Made By the Bill, As Reported...........17
 XI. Unfunded Mandates Reform Act; Public Law 104-4, Section 423.....20

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Congressional Office of Regulatory 
Analysis Creation Act''.

SEC. 2. FINDINGS.

  The Congress finds that--
          (1) Federal regulations have had a positive impact in 
        protecting the environment and the health and safety of all 
        Americans; however, uncontrolled increases in the costs that 
        regulations place on the economy cannot be sustained;
          (2) the legislative branch has a responsibility to see that 
        the laws it passes are properly implemented by the executive 
        branch;
          (3) effective implementation of chapter 8 of title 5 of the 
        United States Code (relating to congressional review of agency 
        rulemaking) is essential to controlling the regulatory burden 
        that the Government places on the economy; and
          (4) in order for the legislative branch to fulfill its 
        responsibilities under chapter 8 of title 5, United States 
        Code, it must have accurate and reliable information on which 
        to base its decisions.

SEC. 3. ESTABLISHMENT OF OFFICE.

  (a) Establishment.--
          (1) In general.--There is established a Congressional Office 
        of Regulatory Analysis (hereinafter in this Act referred to as 
        the ``Office''). The Office shall be headed by a Director.
          (2) Appointment.--The Director shall be appointed by the 
        Speaker of the House of Representatives and the majority leader 
        of the Senate after considering recommendations received from 
        the Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs of the Committee on 
        Government Reform and Oversight of the House of 
        Representatives, without regard to political affiliation and 
        solely on the basis of the Director's ability to perform the 
        duties of the Office.
          (3) Term.--The term of office of the Director shall be 4 
        years, but no Director shall be permitted to serve more than 3 
        terms. Any individual appointed as Director to fill a vacancy 
        prior to the expiration of a term shall serve only for the 
        unexpired portion of that term. An individual serving as 
        Director at the expiration of that term may continue to serve 
        until the individual's successor is appointed.
          (4) Removal.--The Director may be removed by a concurrent 
        resolution of the Congress.
          (5) Compensation.--The Director shall receive compensation at 
        a per annum gross rate equal to the rate of basic pay, as in 
        effect from time to time, for level III of the Executive 
        Schedule in section 5314 of title 5, United States Code.
  (b) Personnel.--The Director shall appoint and fix the compensation 
of such personnel as may be necessary to carry out the duties and 
functions of the Office. All personnel of the Office shall be appointed 
without regard to political affiliation and solely on the basis of 
their fitness to perform their duties. The Director may prescribe the 
duties and responsibilities of the personnel of the Office, and 
delegate to them authority to perform any of the duties, powers, and 
functions imposed on the Office or on the Director. For purposes of pay 
(other than pay of the Director) and employment benefits, rights, and 
privileges, all personnel of the Office shall be treated as if they 
were employees of the House of Representatives.
  (c) Experts and Consultants.--In carrying out the duties and 
functions of the Office, the Director may procure the temporary (not to 
exceed one year) or intermittent services of experts or consultants or 
organizations thereof by contract as independent contractors, or, in 
the case of individual experts or consultants, by employment at rates 
of pay not in excess of the daily equivalent of the highest rate of 
basic pay under the General Schedule of section 5332 of title 5, United 
States Code.
  (d) Relationship to Executive Branch.--The Director is authorized to 
secure information, data, estimates, and statistics directly from the 
various departments, agencies, and establishments of the executive 
branch of Government, including the Office of Management and Budget, 
and the regulatory agencies and commissions of the Government. All such 
departments, agencies, establishments, and regulatory agencies and 
commissions shall promptly furnish the Director any available material 
which the Director determines to be necessary in the performance of the 
Director's duties and functions (other than material the disclosure of 
which would be a violation of law). The Director is also authorized, 
upon agreement with the head of any such department, agency, 
establishment, or regulatory agency or commission, to utilize its 
services, facilities, and personnel with or without reimbursement; and 
the head of each such department, agency, establishment, or regulatory 
agency or commission is authorized to provide the Office such services, 
facilities, and personnel.
  (e) Relationship to Other Agencies of Congress.--In carrying out the 
duties and functions of the Office, and for the purpose of coordinating 
the operations of the Office with those of other congressional agencies 
with a view to utilizing most effectively the information, services and 
capabilities of all such agencies in carrying out the various 
responsibilities assigned to each, the Director is authorized to obtain 
information, data, estimates, and statistics developed by the General 
Accounting Office, Congressional Budget Office, and the Congressional 
Research Service, and (upon agreement with them) to utilize their 
services, facilities, and personnel with or without reimbursement. The 
Comptroller General, the Director of the Congressional Budget Office, 
and the Director of the Congressional Research Service are authorized 
to provide the Office with the information, data, estimates, and 
statistics, and the services, facilities, and personnel, referred to in 
the preceding sentence.
  (f) Assistance to the Congress.--The Director of the Office shall 
provide to the Committee on Government Reform and Oversight of the 
House of Representatives, information that will assist the committee in 
the discharge of all matters within its jurisdiction, including 
information with respect to its jurisdiction over authorization and 
oversight of the Office of Information and Regulatory Affairs of the 
Office of Management and Budget.
  (g) Information.--
          (1) Freedom of information.--The Office shall make available 
        information from its activities in accordance with section 552 
        of title 5, United States Code.
          (2) Public docket.--The Office shall maintain a publicly 
        available log of information (other than information which may 
        not be released under section 552(b) of title 5, United States 
        Code) which shall contain at a minimum--
                  (A) all written communications, regardless of format, 
                between Office personnel and any person who is not 
                employed by the Federal Government; and
                  (B) the dates and names of individuals involved in 
                all substantive oral communications, including meetings 
                and telephone conversations between Office personnel 
                and any person not employed by the Federal Government, 
                and the subject matter of such communications.
  (h) Appropriations.--There are authorized to be appropriated to the 
Office $5,200,000 for each of fiscal years 1998 through 2006. No funds 
shall be authorized to be appropriated for the Office in a year when 
the annual appropriation for the Legislative Branch exceeds the 
appropriation provided for the Legislative Branch for fiscal year 1998, 
reduced by the amount appropriated for the Office for such year.

SEC. 4. RESPONSIBILITIES.

  (a) Transfer of Functions Under Chapter 8 From GAO to Office.--
          (1) Director's new authority.--Section 801 of title 5, United 
        States Code, is amended--
                  (A) by striking ``Comptroller General'' each place it 
                occurs and inserting ``Director of the Office''; and
                  (B) by striking ``the Comptroller General's report'' 
                in subsection (a)(2)(B) and inserting ``the report of 
                the Director of the Office''.
          (2) Definition.--Section 804 is amended by adding at the end 
        the following:
          ``(4) The term `Director of the Office' means the Director of 
        the Congressional Office of Regulatory Affairs established by 
        section 3 of the Congressional Office of Regulatory Analysis 
        Creation Act.''.
          (3) Major rules.--Section 801(a)(2)(A) of title 5, United 
        States Code, is amended to read as follows:
  ``(2)(A) The Director of the Office shall provide a report on each 
major rule to the committees of jurisdiction in each House of the 
Congress by the end of 30 calendar days after the submission or 
publication date as provided in section 802(b)(2). The report of the 
Director shall include--
          ``(i) an assessment of the compliance by the Federal agency 
        with the requirements in paragraph (1)(B); and
          ``(ii) an analysis of the rule by the Director, using any 
        relevant data and analyses generated by the Federal agency and 
        any data of the Office, including the following:
                  ``(I) A description of the potential benefits of the 
                rule, including any beneficial effects that cannot be 
                quantified in monetary terms and the identification of 
                those likely to receive the benefits.
                  ``(II) A description of the potential costs of the 
                rule, including any adverse effects that cannot be 
                quantified in monetary terms and the identification of 
                those likely to bear the costs.
                  ``(III) A determination of the potential net benefits 
                of the rule, including an evaluation of effects that 
                cannot be quantified in monetary terms.
                  ``(IV) A description of alternative approaches that 
                could achieve the same regulatory goal at a lower cost, 
                together with an analysis of the potential benefits and 
                costs and a brief explanation of the legal reasons why 
                such alternatives, if proposed, could not be adopted.
                  ``(V) A summary of how these results differ, if at 
                all, from the results that the promulgating agency 
                received when conducting similar analyses.''.
          (4) Nonmajor rules.--The Office shall conduct an assessment 
        and analysis, as described in section 801(a)(2)(A) of title 5, 
        United States Code, of any nonmajor rule, as defined in section 
        804(3) of such title, when requested to do so by a committee of 
        the House of Representatives or the Senate, or individual 
        Representative or Senator.
          (5) Priorities.--
                  (A) Assignment.--To ensure that analysis of the most 
                significant regulations occurs, the Office shall give 
                first priority to, and is required to conduct analyses 
                of, all ``major'' rules, as defined in section 804(2) 
                of title 5, United States Code. Secondary priority 
                shall be assigned to requests from committees of the 
                House of Representatives and the Senate. Tertiary 
                priority shall be assigned to requests from individual 
                Representatives and Senators.
                  (B) Discretion to director of office.--The Director 
                of the Office shall have the discretion to assign 
                priority among the secondary and tertiary requests.
  (b) Transfer of Certain Functions Under the Unfunded Mandates Reform 
Act of 1955 From CBO to Office.--
          (1) Cost of regulations.--Section 103 of the Unfunded 
        Mandates Reform Act of 1995 (2 U.S.C. 1511) is amended--
                  (A) in subsection (b), by striking ``the Director'' 
                and inserting ``the Director of the Congressional 
                Office of Regulatory Analysis''; and
                  (B) in subsection (c), by inserting after ``Budget 
                Office'' the following: ``or the Director of the 
                Congressional Office of Regulatory Analysis''.
          (2) Assistance to the congressional office of regulatory 
        analysis.--Section 206 of the Unfunded Mandates Reform Act of 
        1995 (2 U.S.C. 1536) is amended--
                  (A) by amending the section heading to read as 
                follows: ``SEC. 206. assistance to the congressional 
                office of regulatory analysis.''; and
                  (B) in paragraph (2), by striking ``the Director of 
                the Congressional Budget Office'' and inserting ``the 
                Director of the Congressional Office of Regulatory 
                Analysis''.
  (c) Other Reports.--In addition to the analyses of major and nonmajor 
rules described in subsection (a), the Office shall also issue an 
annual report including estimates of the total costs and benefits of 
all existing Federal regulations.

SEC. 5. EFFECTIVE DATE.

  This Act and the amendments made by this Act shall take effect 180 
days after the date of enactment of this Act.

                         I. Purpose and Summary

    The purpose of the ``Congressional Office of Regulatory 
Analysis Creation Act'' is to establish a Congressional Office 
of Regulatory Analysis (CORA) to aid Congress in analyzing 
Federal regulations. CORA would consolidate Congress' 
regulatory analysis functions, which are now performed by the 
Congressional Budget Office (CBO) and the General Accounting 
Office (GAO). CORA's responsibilities would include: (1) 
analyzing all major rules and reporting to Congress on their 
potential costs, benefits, and alternate approaches that could 
achieve the same regulatory goals at lower costs; (2) analyzing 
non-major rules, which currently are not analyzed by GAO and 
the Office of Management and Budget (OMB), at the request of 
committees or Members of Congress; and (3) annually issue a 
report on the total costs and benefits of Federal regulations 
to the economy.

                        II. Need for Legislation

    The burden of regulations on the American public is on the 
rise as the Federal agencies continue to issue a steady stream 
of new regulations--approximately 4,000 in 1997 alone. Last 
year, the impact on the economy of just 59 of these rules 
(``major'' rules which cost at least $100 million each) was at 
least $6 billion. And total regulatory costs in 1997 were $688 
billion--up 1.6 percent from the previous year, 7.2 percent 
over the past five years, and 25.3 percent over the past ten 
years.1
---------------------------------------------------------------------------
    \1\ Clyde Wayne Crews, Jr., ``Ten Thousand Commandments: A 
Policymaker's Snapshot of the Federal Regulatory State,'' 1998 Edition.
---------------------------------------------------------------------------
    Regulation now costs over $\1/2\ trillion per year. When 
these costs are passed on to the consumer, the typical family 
of four pays approximately $6,875 per year in hidden regulatory 
costs. Families spend more on regulation than on medical 
expenses, food, transportation, recreation, clothing, and 
savings. In fact, U.S. regulatory costs in 1997 ($688 billion) 
exceeded 1996 personal income taxes ($631 billion) and 1995 
corporate profits ($601 billion). The number of regulations on 
the books continues to climb as well--45,783 final rules have 
been issued in the past decade (since 1986). Agency budgets to 
enforce regulations are on the rise as well. Budgeted 
enforcement spending for social and economic regulatory 
programs is expected to hit $17.2 billion in 1998. That is a 
223 percent increase since 1970 when enforcement spending was 
$4.6 billion.2
---------------------------------------------------------------------------
    \2\ Clyde Wayne Crews, Jr., ``Ten Thousand Commandments: A 
Policymaker's Snapshot of the Federal Regulatory State,'' 1998 Edition.
---------------------------------------------------------------------------
    Congress has delegated to the agencies the responsibility 
of writing regulations. But Congress is still responsible for 
ensuring that these regulations achieve their goals in the most 
efficient and effective way. At the National Economic Growth, 
Natural Resources, and Regulatory Affairs Subcommittee's 
hearing on the bill to establish the Congressional Office of 
Regulatory Analysis (CORA) (H.R. 1704), Robert Hahn of the 
American Enterprise Institute and Robert Litan of the Brookings 
Institute testified that, ``Congress has traditionally paid 
much less attention to the benefits and costs of regulation 
than to directly budgeted expenditures. This imbalance should 
be rectified.'' The Congressional Review Act (CRA) (5 U.S.C. 
Sec. 801), which gives Congress the responsibility to review 
Federal regulations as they are issued, helps to rectify this 
imbalance.
    But 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. Wendy 
Gramm, Director of the Regulatory Analysis Program at George 
Mason University, testified before the Subcommittee that 
``there is no organization currently up and running that is 
systematically providing careful analyses of agency rulemaking 
proposals. Thus if agencies do a poor job analyzing the costs, 
benefits, and impacts of regulations, there is little record or 
basis for preventing regulations that are overly burdensome. 
Not only does this result in more regulations whose costs 
exceed their benefits, but also poorly drafted ones that might 
actually endanger rather than promote public health and 
safety.''
    Congress and the American people have a right to know 
whether the regulations issued by the agencies are truly 
protecting health, safety, and the environment. The Committee 
recognizes that agencies frequently devote vast resources to 
developing rules that have negligible health or environmental 
benefits. In many cases, the rules may actually do more harm 
than good. By scrutinizing the integrity of agency benefit 
analyses, CORA will help bring to light the true effects of 
regulation on public health and the environment and spur debate 
on how the Federal regulatory agencies can more effectively and 
efficiently carry out their statutory mandates.
    The author of H.R. 1704, Representative Sue Kelly (R-NY), 
intends CORA to provide Congress with the resources it needs to 
execute its responsibilities under the CRA. Rep. Kelly 
testified before the Subcommittee that, due to a lack of 
reliable analyses of regulations, ``Congress is at a 
disadvantage when trying to determine just how a particular 
regulation will impact the economy, making it that much more 
difficult to effectively implement the CRA. This is a problem 
[CORA] is designed to address. If established, CORA would be 
charged with conducting its own analyses of select new rules to 
help determine their potential impact on the economy and small 
businesses. It would break the monopoly of information that has 
traditionally been held by the agencies and help Congress 
exercise its vital oversight responsibility.'' Gramm made a 
similar point that, ``[t]he benefits of the bill, if enacted, 
are the independent analyses that Congress will receive 
concerning regulations. Using this analysis, Congress will be 
able to eliminate unnecessary regulations, using the 
Congressional Review Act, and to prevent burdensome regulations 
from being imposed on states and individuals, using either the 
CRA or careful oversight of agencies.''
    Furthermore, CORA will not duplicate or impinge on the 
substantive oversight functions of the committees of 
jurisdiction. Rather, CORA will examine each new major rule 
from the standpoint of professional standards, principles, and 
methods of cost-benefit analysis, in order todetermine, on a 
comparative basis, whether each agency is producing credible analyses. 
The Committee recognizes that OIRA has failed to effectively carry out 
its responsibility to develop, and oversee the agencies' application of 
standard methods of cost-benefit analysis. As a result, the cost and 
benefit data generated government wide is a veritable patch-work quilt 
of different and contradictory assumptions and methods of wildly 
varying degrees of quality. By comparing and analyzing these data, CORA 
will provide a powerful incentive to OIRA and the regulatory agencies 
to reach agreement on the methods of cost-benefit analysis and take 
seriously their responsibilities to produce such analyses in a 
professional, credible, and intellectually honest manner.
    CORA would also have the beneficial effect of consolidating 
all the regulatory functions of Congress under one roof. 
Currently, the GAO conducts regulatory analyses under the CRA, 
and the CBO conducts analyses under the Unfunded Mandates 
Reform Act. Hahn and Litan testified that CORA ``provides a 
central focus for the Congressional study of regulatory 
activity. * * * It is better to put similar functions under one 
roof to avoid unnecessary duplication of effort.'' Although 
CORA has been criticized as creating more bureaucracy, it would 
actually streamline Congress's regulatory duties.
    The model for CORA is the CBO. In the same way that the CBO 
was established in 1975 to equip Congress to address the 
growing budget problem, CORA should be established to equip 
Congress to address the growing and significant regulatory 
problem. CORA would serve as a CBO for regulations. The CBO 
provides a constructive check on the budget estimates issued by 
the Office of Management and Budget (OMB). Litan, a former OMB 
staff member in the Clinton Administration, testified that 
``there was this creative tension, sometimes not so friendly, 
between OMB and CBO on scoring. But * * * there was value to 
it. Even while we were disagreeing all the time, I knew, and I 
think OMB knows, there's value in having an honest check on the 
numbers and the assessments. And that's why [Congress] created 
a Congressional Budget Office.''
    Just as CBO provides a check on OMB, CORA would provide a 
check on OMB's Office of Information and Regulatory Affairs 
(OIRA). OIRA's job is to help the President monitor regulatory 
and paperwork burdens and to review agency regulations before 
they are promulgated to ensure that the agencies have 
considered the potential costs and other impacts. In testifying 
about the benefits of CORA, Litan said, ``if you have an 
independent office, * * * you're going to stiffen a lot of 
backbones. Number one, you're going to stiffen the backbone of 
OIRA, because they're going to be forced to take their review 
responsibilities more seriously than they would otherwise. 
Number two, you're going to stiffen the backbone of the 
agencies, because the agencies may or may not be able to snow 
OIRA, but they're very unlikely to snow * * * [CORA]. * * * And 
so on individual rules, you're going to have stiffened 
backbones and that's a key benefit of having this separate 
institution.''
    CORA is particularly needed because OIRA is not doing its 
job. Gramm, a former Administrator of OIRA in the Reagan 
Administration, testified that, ``[i]n recent years OIRA has 
been ineffective. This conclusion is based on a review of 
regulations that have been issued by the Executive Branch. An 
effective OIRA, for example, would have required EPA to provide 
a better analysis before promulgating the 1997 proposals 
further regulating ozone and particulate matter.''
    OIRA has failed to critically review agency regulatory 
submissions. With respect to the 4,476 regulatory reviews 
completed by OIRA to date during the Clinton Administration, 
OMB only returned to the agencies 13 regulatory submissions 
(i.e., less than 0.3%), including 3 from a minor agency (the 
Railroad Retirement Board). In contrast, there were 87 returns 
during the Bush Administration and 192 returns in the first 
Reagan term.3
---------------------------------------------------------------------------
    \3\ February 25, 1998, letter from Don Arbuckle, Deputy 
Administrator, Office of Information and Regulatory Affairs, Office of 
Management and Budget, to Chairman David McIntosh, Subcommittee on 
National Economic Growth, Natural Resources, and Regulatory Affairs.
---------------------------------------------------------------------------
    OMB's 1997 ``Report on the Costs and Benefits of Federal 
Regulations'' is further evidence of the need for CORA. OMB was 
required to report to Congress on the estimated costs and 
benefits of all major rules reviewed or finalized during a 12-
month period in 1996 and 1997. But, OMB provided cost and 
benefit information for only 14 out of 59 major rules issued 
during that period, because the agencies had not provided OMB 
any estimates for the remaining 45 rules. If the agencies did 
prepare cost and benefit analyses for these rules, it is 
disturbing that OMB isn't aware of these analyses--or isn't 
willing to report the information to Congress as required by 
law.
    Clearly, Congress needs to take an active role in reviewing 
regulations to ensure that they result in the maximum benefit 
to public health, safety, and the environment, for the lowest 
cost. To do so, Congress needs an independent, reliable source 
of regulatory analyses, particularly in the absence of a strong 
OIRA. CORA would meet this need.

                         III. Committee Action

    The ``Congressional Office of Regulatory Analysis Creation 
Act'' (H.R. 1704) was introduced on May 22, 1997 by Rep. Sue 
Kelly, for herself and Rep. Jim Talent. After introduction, the 
bill was referred to the Committee on the Judiciary, and in 
addition to the Committee on Government Reform and Oversight. 
On March 13, 1998, the Committee on the Judiciary reported the 
bill, House Report 105-441. In March 1998, the bill was 
referred sequentially to the Committee on House Oversight. On 
May 22, 1998, the Committee on House Oversight discharged the 
bill.
    On March 11, 1998, National Economic Growth, Natural 
Resources, and Regulatory Affairs Subcommittee Chairman David 
McIntosh held a hearing to consider the bill. Witnesses at the 
hearing included: Representative Sue Kelly, (NY); Sharon 
Miller, CEO, Immediate Temporary Help, Midland, Michigan; Wendy 
Gramm, Director, Regulatory Analysis Program, George Mason 
University; Robert W. Hahn, Resident Scholar, American 
Enterprise Institute; Robert E. Litan, Director of Economic 
Studies, The Brookings Institution; and Gary Bass,Executive 
Director, OMB Watch.
    At the hearing, Rep. Kelly testified, ``H.R. 1704 is a very 
simple concept that will help Congress deal with an 
increasingly complex and burdensome regulatory system. It will 
give Congress the resources it needs to oversee the regulations 
that the Executive Branch issues on a regular basis and 
facilitate use of the Congressional Review Act.''
    Sharon Miller testified, ``CORA can serve a vital function 
for America's small business[es], and put real strength into 
SBREFA [the Small Business Regulatory Enforcement Fairness 
Act]. It would be a small budget, small staff addition to 
Capitol Hill whose impact could be far reaching.''
    Wendy Gramm emphasized the need for an independent analysis 
of regulations. She concluded that, ``A Congressional Office of 
Regulatory Analysis can help ensure that [the] resources that 
American families dedicate [to regulations] each year are used 
wisely, and * * * help ensure that regulations are written to 
implement the laws appropriately, as Congress has written them, 
and ultimately make society better off.''
    In his testimony, Robert Hahn discussed the important role 
that CORA would play--``That office could help inform the 
public and the Congress about the benefits and costs of 
regulation. Too often, we believe that legislators and agencies 
find it in their interest to highlight the benefits of 
regulation without also noting the costs. We believe it is 
important to highlight both and that the public has a right to 
know how and why regulations are implemented. This bill 
addresses a fundamental problem with the current regulatory 
effort. Despite the growing importance of Federal regulation in 
everyday life, neither the public nor Congress has sufficient 
information to fully appreciate the impact on the welfare of 
the average citizen.'' Addressing the Subcommittee members, 
Robert Litan noted that OMB's ``Report to Congress On the Costs 
and Benefits of Federal Regulations'' ``didn't help you in 
Congress with your job, which is to compare the cost 
effectiveness of different statutes and different regulatory 
efforts.'' He went on to address the inadequacy of OMB's Report 
in analyzing regulatory costs and benefits and concluded that 
``having an independent office out there to do this every year 
would prod OMB to do a lot of their work, and, at the same 
time, provide you with useful information because your business 
is legislating, not making individual rules.''
    Gary Bass testified in opposition to the bill. He was 
concerned that CORA would slow down the rule making process: 
``one of the biggest problems with the rulemaking process is we 
need to speed it up, not take it and make slower with more 
analyses.'' He also voiced doubts about CORA's ability to 
complete the analyses described in the legislation in the given 
time, with the given resources.
    After taking into account the testimony from the witnesses 
at the hearing, the Subcommittee held a mark up of H.R. 1704 on 
March 17, 1998. Chairman McIntosh offered an amendment in the 
nature of a substitute to the bill. By voice vote, the 
Subcommittee approved forwarding H.R. 1704, as amended, to the 
full Committee on Government Reform and Oversight for 
consideration.
    On May 21, 1998, the full Committee held a mark up of H.R. 
1704. Two amendments were accepted. The first, offered by Rep. 
Kanjorski, applies the Freedom of Information Act to CORA, and 
the second, offered by Rep. Blagojevich, ensures that CORA's 
funding is drawn from existing Legislative Branch funding and 
does not increase the total budget of the Legislative Branch. 
Rep. McIntosh accepted this amendment with the understanding 
that he and Rep. Blagojevich would work to change the language 
before it goes to the House floor. Rep. McIntosh intends to 
ensure that funding for CORA will not depend on funding for the 
Legislative Branch remaining at 1998 levels, but will allow for 
a natural growth in Legislative Branch appropriations. Rep. 
Blagojevich indicated that he would be pleased to work with 
Rep. McIntosh on this matter. By voice vote, the full Committee 
approved reporting H.R. 1704, as amended, to the full House.

                    IV. Section-by-Section Analysis

                         Section 1: Short Title

                          Section 2: Findings

                   Section 3: Establishment of Office

Establishment and appointment of Director

    Section 3(a) establishes a Congressional Office of 
Regulatory Analysis (CORA), and provides for the appointment of 
a Director of the Office by the Speaker of the House and the 
Majority Leader of the Senate after considering recommendations 
of the Subcommittee on National Economic Growth, Natural 
Resources, and Regulatory Affairs of the House Committee on 
Government Reform and Oversight. The appointment is to be made 
without regard to political affiliation. The term of the 
Director is four years, for a maximum of three terms. The 
Director may be removed by a concurrent resolution of the 
Congress. The Director shall be compensated at the same level 
as level III employees under the Executive Schedule.
    The Subcommittee on National Economic Growth, Natural 
Resources, and Regulatory Affairs is responsible for oversight 
of Executive Branch agencies' compliance with regulatory 
procedures, including the conduct of cost-benefit analyses and 
compliance with the requirements of the CRA. Because CORA's 
function is to assess and analyze the agencies' cost-benefit 
analyses and compliance with the CRA, the Committee expects 
that CORA and the Subcommittee will work closely together in 
overseeing the agencies' activities. Moreover, the Committee 
expects that the Subcommittee's views will be particularly 
useful in ensuring that the Director of CORA is a person of 
substantial experience and critical judgment with respect to 
agency compliance with regulatory procedures.

Personnel

    Section 3(b) authorizes the Director of CORA to appoint 
personnel needed to carry out theduties and functions of CORA. 
Personnel appointments are made without regard to political 
affiliation. For the purposes of pay and employment benefits, rights, 
and privileges, all personnel of CORA are to be treated as if they were 
employees of the House of Representatives.

Consulting assistance

    Section 3(c) authorizes the Director to procure the 
temporary services of outside experts and consultants to assist 
in discharging the duties and functions of CORA.

Relationship to the executive branch

    Section 3(d) authorizes the Director to secure information, 
data, estimates, and statistics directly from the various 
departments, agencies, and establishments of the Executive 
Branch of the government, including the Office of Management 
and Budget (OMB) and the regulatory agencies and commissions. 
All such departments, agencies, establishments, and commissions 
shall promptly furnish the Director any available material 
which the Director deems necessary to perform his duties and 
functions. The Director is also authorized, upon agreement with 
the head of any such department, agency, establishment, or 
commission, to utilize its services, facilities, and personnel 
with or without reimbursement. The head of each such 
department, agency, establishment, or commission is authorized 
to provide CORA such services, facilities, and personnel.

Relationship to other agencies of Congress

    Section 3(e) authorizes the Director to secure information, 
data, estimates, and statistics developed by the other agencies 
of Congress, including the General Accounting Office (GAO), 
Congressional Budget Office (CBO), and the Congressional 
Research Service (CRS), and, upon agreement with them, to 
utilize their services, facilities, and personnel with or 
without reimbursement. The head of each such agency is 
authorized to provide CORA with the information, data, 
estimates, and statistics requested.

Assistance to the Congress

    Section 3(f) requires the Director of CORA to provide 
information to the House Committee on Government Reform and 
Oversight on matters pertinent to the Committee's jurisdiction, 
including the Committee's authorization and oversight of OMB's 
Office of Information and Regulatory Affairs (OIRA).
    OIRA is the central repository of information and expertise 
on regulatory affairs within the Executive Branch. OIRA is 
expected to work with and provide guidance to the regulatory 
agencies in conducting cost-benefit analyses for major rules 
and in complying with regulatory laws, including the 
Congressional Review Act. Because CORA will function as a check 
and counterpart to OIRA within the Legislative Branch, the 
Committee expects that CORA will give close attention to the 
regulatory analysis activities and methods of OIRA. 
Furthermore, because the Government Reform and Oversight 
Committee's Subcommittee on National Economic Growth, Natural 
Resources, and Regulatory Affairs is OIRA's authorizing and 
oversight committee, the Committee recognizes that CORA and the 
Subcommittee have a common interest in monitoring OIRA's 
regulatory analysis activities. It is essential to the 
effective discharge of the Subcommittee's oversight functions 
that it have accurate information on OIRA's performance of its 
regulatory analysis and guidance functions, particularly as 
they relate to Executive Branch regulatory agencies' conduct of 
cost-benefit analyses and compliance with the Congressional 
Review Act. To ensure that the Subcommittee has full access to 
such information in a usable form, the Committee expects that 
CORA will work closely with the Subcommittee and provide this 
information to the Subcommittee on an ongoing basis.

Freedom of Information

    Section 3(g) requires CORA to comply with the requirements 
of the Freedom of Information Act and maintain a publicly 
available log of written and substantive oral communications 
between Office personnel and persons not employed by the 
Federal Government.

Appropriations

    Section 3(h) authorizes appropriations of $5.2 million for 
CORA for each fiscal year from 1998 through 2006, except that 
no funds shall be authorized for the Office in the event that 
total Legislative Branch funding exceeds the amount 
appropriated for fiscal year 1998. This section ensures that 
the Office's funding is drawn from existing Legislative Branch 
funding and does not increase the total budget of the 
Legislative Branch.

                      Section 4: Responsibilities

Transfer of GAO's responsibilities under the Congressional Review Act 
        to CORA

    Section 4(a) transfers, for the purposes of the 
Congressional Review Act (CRA) (5 U.S.C. Sec. 801), the 
functions now designated to the Comptroller General of GAO to 
the Director of CORA. Specifically, the Director is required to 
submit a report to Congress for each ``major'' rule, reviewing 
the issuing agency's compliance with all applicable regulatory 
procedures in the course of developing the rule.

Additional analysis of major rules

    In addition to this procedural review, Section 4(a) also 
requires CORA to conduct its own analysis of each major rule. 
This analysis shall not duplicate the regulatory impact 
analysis conducted by the agency. Rather, CORA shall use data 
and analyses generated by the agency in developing the rule, as 
well as any data otherwise acquired by CORA. Each analysis must 
include descriptions of the projected costs and benefits of the 
rule, as well as a determination of the potential net benefits 
of the rule, a description of alternative, less costly 
approaches and the legal obstacles, if any, to adopting such 
alternatives. Finally, the analysis must summarize how CORA's 
findings differ, if at all, from the cost and benefit estimates 
of theagency. This analysis must be included in CORA's report 
to Congress on each rule.

Time allotted for completion of analysis and report

    Under the CRA, GAO has 15 days to complete its procedural 
review and report its findings to Congress. The bill amends the 
CRA to increase the amount of time CORA needs to complete both 
the procedural review and the analysis to 30 days. The 
Committee has determined that 30 days is a sufficient period of 
time for CORA to complete its review and analysis, in view of 
the fact that CORA will have authority under section 3(d) to 
obtain data and estimates from the agencies at any time. The 
Committee expects that CORA will, when necessary or 
appropriate, commence the process of obtaining and analyzing 
the relevant information for each major rule prior to the date 
on which the final rule is reported to Congress. The Committee 
considered and rejected the possibility of allowing CORA a 
longer period in which to complete its analysis. A period 
greater than 30 days would take away too much of the 60-day 
period in which Congress has to review a regulation and, if 
necessary, introduce a resolution of disapproval. It is 
essential that Congress receive CORA's report for each major 
rule in a timely manner to allow for full consideration of the 
report's findings.

Review of non-major rules upon request of committee or member

    In addition to its review and analysis of major rules, CORA 
is required to provide a review and analysis of any non-major 
rule, upon the request of any committee or individual member of 
Congress. CORA is required to give major rules first priority. 
Rules reviewed pursuant to requests by committees or individual 
members are given second and third priority, respectively. The 
Director of CORA is given discretion to assign priority among 
secondary and tertiary requests.

Transfer of certain CBO functions under the Unfunded Mandates Reform 
        Act to CORA

    Section 4(b) amends the Unfunded Mandates Reform Act, 
transferring to the Director of CORA certain functions now 
designated to the Director of CBO. The Unfunded Mandates Reform 
Act requires the Director of CBO to compare the agency's 
estimates of costs that a new regulation is expected to impose 
on state and local governments with cost estimates previously 
produced by CBO at the time the relevant authorizing 
legislation was introduced. The bill would transfer the 
comparison function to CORA (but CBO would retain the function 
of producing cost estimates at the time the legislation is 
enacted).

Report on total costs of Federal regulations

    Section 4(c) requires CORA to issue an annual report 
providing estimates of the total costs and benefits of all 
Federal regulations.

                       section 5: effective date

                    V. Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                     VI. Committee Recommendations

    On March 17, 1998, the Subcommittee on National Economic 
Growth, Natural Resources and Regulatory Affairs met in open 
session and ordered favorably reported the bill H.R. 1704, in 
the form of an amendment in the nature of a substitute, by a 
voice vote, a quorum being present. On May 21, 1998, the 
Committee met in open session and ordered favorably reported 
the bill H.R. 1704, in the form of an amendment in the nature 
of a substitute by a voice vote, a quorum being present.

Vote of the Committee

    There were recorded votes on two amendments during the 
Committee's consideration of H.R. 1704, as follows:

                             rollcall no. 1

    1. An amendment offered by Mr. Kanjorski to the amendment 
in the nature of the substitute reported by the Subcommittee 
regarding redesignating subsection (g) as subsection (h) and 
insert after line 3 the following: (g) Information.-- Approved 
21-17.
        YEAS                          NAYS
Mrs. Morella                        Mr. Burton
Mr. Shays                           Mr. Gilman
Mr. Sanford                         Mr. Hastert
Mr. Waxman                          Mr. Cox
Mr. Lantos                          Ms. Ros-Lehtinen
Mr. Wise                            Mr. McHugh
Mr. Owens                           Mr. Horn
Mr. Towns                           Mr. Mica
Mr. Kanjorski                       Mr. Davis (VA)
Mr. Condit                          Mr. McIntosh
Mr. Sanders                         Mr. Souder
Mrs. Maloney                        Mr. Shadegg
Mr. Barrett                         Mr. Sununu
Ms. Norton                          Mr. Pappas
Mr. Cummings                        Mr. Barr
Mr. Kucinich                        Mr. Miller
Mr. Blagojevich                     Mr. Lewis
Mr. Davis (IL)                      Mr. Tierney
Mr. Turner                          Mr. Allen
Mr. Ford

                             rollcall no. 2

    2. An amendment offered by Mr. Kucinich to the amendment in 
the nature of a substitute reported by the Subcommittee 
regarding the appointment and vacancy of the Director of CORA. 
Defeated 20-16.
        NAYS                          YEAS
Mr. Burton                          Mr. Waxman
Mr. Gilman                          Mr. Owens
Mr. Hastert                         Mr. Kanjorski
Mrs. Morella                        Mr. Condit
Mr. Shays                           Mr. Sanders
Mr. Cox                             Mrs. Maloney
Ms. Ros-Lehtinen                    Mr. Barrett
Mr. McHugh                          Ms. Norton
Mr. Horn                            Mr. Cummings
Mr. Mica                            Mr. Kucinich
Mr. Davis (VA)                      Mr. Blagojevich
Mr. McIntosh                        Mr. Davis (IL)
Mr. Souder                          Mr. Tierney
Mr. Shadegg                         Mr. Turner
Mr. Sanford                         Mr. Allen
Mr. Sununu                          Mr. Ford
Mr. Pappas
Mr. Barr
Mr. Miller
Mr. Lewis

             VII. New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of rule XI of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

            VIII. Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 1704, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 1, 1998.
Hon. Dan Burton,
Chairman, Committee on Government Reform and Oversight, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1704, the 
Congressional Office of Regulatory Analysis Creation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mary 
Maginniss.
            Sincerely,
                                          June E. O'Neil, Director.
    Enclosure.

H.R. 1704--Congressional Office of Regulatory Analysis Creation Act

    Summary: H.R. 1704 would create a Congressional Office of 
Regulatory Analysis (CORA), to provide the Congress an 
independent analysis of the costs and benefits or rules that 
agencies issue as part of the regulatory process. The bill also 
would require CORA to report annually on the total cost of 
federal regulations to the U.S. economy. It would transfer to 
CORA certain functions now assigned to the General Accounting 
Office (GAO) and the Congressional Budget Office (CBO). To 
carry out these functions, the bill would authorize the 
appropriation of $5.2 million a year for the 1998-2006 period. 
CBO estimates that implementing H.R. 1704 would have no 
budgetary impact for 1998 and a cost of about $3 million in 
1999 because the bill's provisions would not take effect until 
180 days after enactment. We estimate outlays of about $5 
million in each of the fiscal years 2000 through 2006, assuming 
appropriation of the authorized amounts.
    Enacting H.R. 1704 would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures would not apply. 
H.R. 1704 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: H.R. 1704 would 
establish a new Congressional office, CORA, to analyze all 
major federal rule, and, upon request of a Member of Congress 
or a committee, any nonmajor rule. The Speaker of the House and 
the Majority Leader of the Senate would appoint the director, 
who could serve up to three terms of four years each. The 
director would be authorized to hire staff, experts, and 
consultants, and to secure data and support from executive and 
Congressional agencies. The bill would transfer to the director 
certain functions of the CBO, which, under the Unfunded 
Mandates Reform Act (Public Law 104-4), is required, 
ifrequested, to compare its cost estimates for regulations with those 
transmitted by OMB. It also would transfer to CORA the responsibility 
of GAO to review procedures that federal agencies follow in preparing 
regulations as required by the Congressional Review Act (Public Law 
104-21). Finally, CORA would be required to assist the House Committee 
on Government Reform and Oversight in carrying out its 
responsibilities.
    Section 4 of the bill would require CORA to analyze major 
regulations issued by federal agencies using relevant agency 
data to evaluate the costs and benefits of complying with 
federal regulations. Descriptions of alternative approaches, 
along with their costs and benefits, would also be included in 
the analysis. CORA would be required to issue its report on 
each major rule within 30 calendar days after an agency's 
submission or publication of a proposed rule. H.R. 1704 would 
authorize the appropriation of $5.2 million in each of the 
fiscal years 1998 through 2006 to carry out the duties of the 
new office, except that the authorization for CORA would 
decline to zero if appropriations for the legislative branch 
for a particular year exceed the 1998 appropriation reduced by 
the amount appropriated for CORA.
    Assuming appropriation of the authorized amounts, CBO 
estimates that outlays would total about $3 million in fiscal 
year 1999 and $5.2 million in each of the fiscal years 2000 
through 2006. Because the bill's provisions would not take 
effect until 180 days after enactment, CBO assumes that no 
appropriations would be made available for CORA in 1998.
    We estimate that GAO would save about $500,000 beginning in 
1999 if its regulatory review functions were shifted to CORA. 
CBO currently catalogues regulatory impact analyses (RIAs) but 
has received no requests to date to prepare a cost estimate for 
an RIA; as a result, we expect that savings to CBO would be 
negligible if H.R. 1704 were enacted.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 1704 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On March 13, 1998, CBO transmitted a 
cost estimate for H.R. 1704, as ordered reported by the House 
Committee on the Judiciary on March 4, 1998. The two versions 
of the bill are similar, but the version approved by the 
Committee on the Judiciary would require that CORA conduct a 
regulatory impact analysis of each major regulation issued by a 
federal agency, whereas the version approved by the Committee 
on Government Reform and Oversight would require CORA to 
analyze each major rule (but would not require the new office 
to complete RIAs). Both versions of the bill would limit the 
annual authorization of appropriations to about $5 million. We 
estimated that the Judiciary Committee's version of the bill 
could cost as much as $30 million a year if CORA were to 
complete independent and comprehensive RIAs of all major rules, 
but only about $5 million annually if it were to conduct 
analyses consisting largely of reviews of agency studies.
    Estimate prepared by: Mary Maginniss.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                 IX. Constitutional Authority Statement

    Pursuant to rule XI, clause 2(l)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, section 1 and Article I, section 
8 of the Constitution.

        X. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *


CHAPTER 8--CONGRESSIONAL REVIEW OF AGENCY RULEMAKING

           *       *       *       *       *       *       *


Sec. 801. Congressional review

  (a)(1)(A) Before a rule can take effect, the Federal agency 
promulgating such rule shall submit to each House of the 
Congress and to the [Comptroller General] Director of the 
Office a report containing--
          (i) a copy of the rule;
          (ii) a concise general statement relating to the 
        rule, including whether it is a major rule; and
          (iii) the proposed effective date of the rule.
  (B) On the date of the submission of the report under 
subparagraph (A), the Federal agency promulgating the rule 
shall submit to the [Comptroller General] Director of the 
Office and make available to each House of Congress--
          (i) * * *

           *       *       *       *       *       *       *

  [(2)(A) The Comptroller General shall provide a report on 
each major rule to the committees of jurisdiction in each House 
of the Congress by the end of 15 calendar days after the 
submission or publication date as provided in section 
802(b)(2). The report of the Comptroller General shall include 
an assessment of the agency's compliance with procedural steps 
required by paragraph (1)(B).]
  (2)(A) The Director of the Office shall provide a report on 
each major rule to the committees of jurisdiction in each House 
of the Congress by the end of 30 calendar days after the 
submission or publication date as provided in section 
802(b)(2). The report of the Director shall include--
          (i) an assessment of the compliance by the Federal 
        agency with the requirements in paragraph (1)(B); and
          (ii) an analysis of the rule by the Director, using 
        any relevant data and analyses generated by the Federal 
        agency and any data of the Office, including the 
        following:
                  (I) A description of the potential benefits 
                of the rule, including any beneficial effects 
                that cannot be quantified in monetary terms and 
                the identification of those likely to receive 
                the benefits.
                  (II) A description of the potential costs of 
                the rule, including any adverse effects that 
                cannot be quantified in monetary terms and the 
                identification of those likely to bear the 
                costs.
                  (III) A determination of the potential net 
                benefits of the rule, including an evaluation 
                of effects that cannot be quantified in 
                monetary terms.
                  (IV) A description of alternative approaches 
                that could achieve the same regulatory goal at 
                a lower cost, together with an analysis of the 
                potential benefits and costs and a brief 
                explanation of the legal reasons why such 
                alternatives, if proposed, could not be 
                adopted.
                  (V) A summary of how these results differ, if 
                at all, from the results that the promulgating 
                agency received when conducting similar 
                analyses.
  (B) Federal agencies shall cooperate with the [Comptroller 
General] Director of the Office by providing information 
relevant to [the Comptroller General's report] the report of 
the Director of the Office under subparagraph (A).

           *       *       *       *       *       *       *


Sec. 804. Definitions

  For purposes of this chapter--
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``Director of the Office'' means the 
        Director of the Congressional Office of Regulatory 
        Affairs established by section 3 of the Congressional 
        Office of Regulatory Analysis Creation Act.

           *       *       *       *       *       *       *

                              ----------                              


UNFUNDED MANDATES REFORM ACT OF 1995

           *       *       *       *       *       *       *


TITLE I--LEGISLATIVE ACCOUNTABILITY AND REFORM

           *       *       *       *       *       *       *


SEC. 103. COST OF REGULATIONS.

  (a) * * *
  (b) Statement of Cost.--At the request of a committee 
chairman or ranking minority member, [the Director] the 
Director of the Congressional Office of Regulatory Analysis 
shall, to the extent practicable, prepare a comparison 
between--
          (1) an estimate by the relevant agency, prepared 
        under section 202 of this Act, of the costs of 
        regulations implementing an Act containing a Federal 
        mandate; and
          (2) the cost estimate prepared by the Congressional 
        Budget Office for such Act when it was enacted by the 
        Congress.
  (c) Cooperation of Office of Management and Budget.--At the 
request of the Director of the Congressional Budget Office or 
the Director of the Congressional Office of Regulatory 
Analysis, the Director of the Office of Management and Budget 
shall provide data and cost estimates for regulations 
implementing an Act containing a Federal mandate covered by 
part B of title IV of the Congressional Budget and Impoundment 
Control Act of 1974 (as added by section 101 of this Act).

           *       *       *       *       *       *       *


TITLE II--REGULATORY ACCOUNTABILITY AND REFORM

           *       *       *       *       *       *       *


[SEC. 206. ASSISTANCE TO THE CONGRESSIONAL BUDGET OFFICE.]

SEC. 206. ASSISTANCE TO THE CONGRESSIONAL OFFICE OF REGULATORY 
                    ANALYSIS.

  The Director of the Office of Management and Budget shall--
          (1) collect from agencies the statements prepared 
        under section 202; and
          (2) periodically forward copies of such statements to 
        [the Director of the Congressional Budget Office] the 
        Director of the Congressional Office of Regulatory 
        Analysis on a reasonably timely basis after 
        promulgation of the general notice of proposed 
        rulemaking or of the final rule for which the statement 
        was prepared.

           *       *       *       *       *       *       *


    XI. Unfunded Mandates Reform Act; Public Law 104-4, Section 423

    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).

                             Minority Views

    The bill would create a new entity in the legislative 
branch--the Congressional Office of Regulatory Analysis 
(CORA)--to take over some of the duties of the Government 
Accounting Office and the Congressional Budget Office relating 
to the review of agency cost/benefit analyses. It would also 
conduct its own independent cost/benefit analysis for all major 
regulations and at the request of a member of Congress or a 
committee, nonmajor regulations. The bill authorizes $5.2 
million per year for this new bureaucracy.
    We are concerned that the bill creates an unnecessary new 
bureaucracy, establishes a partisan process for appointing 
CORA's Director, and may place a greater value on costs than on 
benefits. We are pleased with the changes adopted during the 
full Committee mark-up, which open the activities of CORA to 
the public eye and limit appropriations in an effort to prevent 
duplicative funding, but believe that additional changes are 
needed in the legislation.

               I. Amendments Adopted in Committee Mark-Up

             a. disclosure provisions open cora to sunshine

    We are pleased that the Committee adopted the amendment 
offered by Rep. Kanjorski that ensures that CORA will be open 
to public scrutiny by making basic information about CORA and 
its analyses available for review.
    Regulatory review provides an opportunity for special 
interests to seek to influence the rulemaking process. In the 
executive branch, there are safeguards to protect against 
inappropriate influence such as the Federal Register Act, 
Administrative Procedure Act (which includes both the Sunshine 
Act and the Freedom of Information Act), and Executive Order 
12866, all of which open the regulatory process to public 
scrutiny. These laws help ensure that agency decisions are a 
product of an open process and that the government is 
accountable for its actions. Interested parties on either side 
influence regulations by submitting written comments to the 
agency decisionmaker. These comments are included in a public 
docket, allowing others to review and rebut them.
    These protections do not automatically apply to legislative 
entities like CORA. However, the amendment offered by Rep. 
Kanjorski provides that the Freedom of Information Act (FOIA) 
and the disclosure provisions in Executive Order 12866 will 
apply to CORA. As a result of the amendment, CORA must maintain 
a public docket that discloses contacts between CORA and 
outside groups.

             b. funding limits protect against duplication

    We are also pleased that the Committee adopted the 
amendment offered by Rep. Blagojevich that limits 
appropriations for CORA in an effort to preserve taxpayer 
dollars. Under this amendment, no funds will be authorized for 
CORA unless total legislative branch appropriations, including 
CORA, do not exceed current funding levels. This amendment 
ensures that funds for CORA will be subtracted from the 
appropriations for the legislative branch. Itcould save the 
American taxpayer more than $5 million per year.
    It is appropriate to deduct funding for CORA from the 
legislative branch appropriations because the functions of CORA 
could be performed by Congressional committees and existing 
Congressional support agencies. The Government Reform and 
Oversight Committee, for example, is charged with overseeing 
the executive branch and the Subcommittee on National Economic 
Growth, Natural Resources, and Regulatory Affairs has oversight 
over regulatory affairs. When the Subcommittee is concerned 
that an Administration's cost/benefit analysis is inadequate, 
it can hold a hearing on the issue. In fact, last year, the 
Subcommittee held a hearing on the adequacy of the EPA's 
analysis of the clean air standards on ozone and particulate 
matter.
    Unfortunately, the Subcommittee has been more concerned 
with pursuing partisan political investigations than overseeing 
the regulatory process. It held a total of only three hearings 
last year. It did not hold any hearings between July 1997 and 
March 1998. During that nine month time period, most of the 
Subcommittee's resources were devoted to the investigation of 
the White House Database, which many consider to be a purely 
partisan investigation.
    We should not fund both CORA and Congressional committees 
to do the same job. If the Government Reform Committee and 
other committees choose to abrogate their regulatory oversight 
to CORA, they should not be given funds to duplicate CORA's 
efforts. This amendment protects against such double funding.

                         II. Remaining Concerns

    The passage of the amendments offered by Reps. Kanjorski 
and Blagojevich addressed important problems with H.R. 1704. 
Other problems remain, however, and should be addressed on the 
House floor.

               A. CORA is an Unnecessary New Bureaucracy

    Most of CORA's duties are already being handled by the 
promulgating agencies, the General Accounting Office (GAO), the 
Congressional Budget Office (CBO), the Office of Information 
and Regulatory Affairs (OIRA), and the Committee on Government 
Reform and Oversight. Under current law, agencies must prepare 
thorough cost/benefit analyses (Regulatory Impact Analyses or 
RIAs) for major regulations. These analyses are reviewed by 
OIRA and reviewed again by the GAO. Furthermore, for the last 
two years, OIRA has estimated the total cost and benefit of 
regulations. CORA would assume GAO's duty to review the agency 
analyses, one of the CBO's duties under the Unfunded Mandates 
Act, and OIRA's duty to estimate the annual cost and benefit of 
regulations.
    The creation of a new bureaucracy runs contrary to earlier 
efforts to streamline government. In FY96, Congress took the 
controversial step of eliminating funding for the Office of 
Technology Assessment (OTA), which advised Congress on 
scientific and technological issues. In support of elimination, 
Senator Connie Mack said, ``This information is available to 
the Congress from many other sources. * * * We have to be 
willing to say there are some things we can do without.'' These 
same arguments apply to the creation of CORA. Considering the 
numerous analyses that are already performed by the agencies, 
OIRA, and others, the need for CORA is difficult to 
demonstrate.

                   B. Appointment Process is Partisan

    The bill provides that the Director of CORA would be 
appointed by the Speaker of the House and the Majority Leader 
of the Senate. This process is modeled after the appointment 
process for the Director of the Congressional Budget Office.
    The majority has been under criticism in the media for 
using the CBO's appointment process to encourage its political 
agenda. According to press accounts, the majority has 
threatened to replace the current CBO Director, June O'Neill, 
in part because she would not apply dynamic scoring--the 
process used to project economic growth produced by tax cuts--
when scoring the budget. Commenting on this situation, The Hill 
editorialized. ``Perhaps it is naive to argue that the CBO 
should be above the political fray. But Congress and its 
leaders risk damaging their own credibility when they bring 
pressure on the CBO to produce budget projections that support 
their political ideology.''
    Not all legislative support agencies are appointed in this 
manner. For instance, the Comptroller General of the GAO is 
appointed by the President, by and with the advice and consent 
of the Senate. A vacancy is filled with the recommendation of a 
commission comprised of the Speaker of the House, the President 
pro tempore of the Senate, the majority and minority leaders of 
the House and Senate, and the chairmen and ranking members of 
the Senate Government Affairs and the House Government Reform 
Committees. The Director of the Congressional Research Service 
is appointed by the Librarian of Congress. The Librarian of 
Congress is appointed by the President, by and with the advice 
of the Senate.
    Representative Kucinich offered an amendment to adopt these 
bipartisan appointment procedures. Unfortunately, his amendment 
was rejected along party lines.

  C. CORA Places More Emphasis on Costs of Regulation than on Benefits

    CORA would be required to determine the potential ``net 
benefits'' of the rule. Under current law, agencies are not 
required to calculate net benefits. They perform a cost/benefit 
analysis which includes a description of costs and benefits. 
However, a net benefits calculation greatly undervalues 
unquantifiable benefits, because they cannot be included in a 
numerical calculation. Many of the most important benefits of 
regulations--lives saved, increased quality of life, a more 
pristine environment, and the knowledge of a safer 
environment--cannot be quantified. Thus, a net benefits 
calculation can be misleading, placing greater emphasis on 
costs than on benefits.

                                   Henry A. Waxman.
                                   John F. Tierney.
                                   Tom Lantos.
                                   Major R. Owens.
                                   Edolphus Towns.
                                   Paul E. Kanjorski.
                                   Bernard Sanders.
                                   Carolyn B. Maloney.
                                   Tom Barrett.
                                   Eleanor H. Norton.
                                   Elijah E. Cummings.
                                   Dennis J. Kucinich.
                                   Rod R. Blagojevich.
                                   Danny K. Davis.
                                   Tom Allen
                                   Harold Ford, Jr.

                                
