Federal Rulemaking: Perspectives on 10 Years of Congressional
Review Act Implementation (30-MAR-06, GAO-06-601T).
This year marks the 10th anniversary of the Congressional Review
Act (CRA). Congressional oversight of rulemaking using the CRA
can be an important and useful tool for monitoring the regulatory
process and balancing and accommodating the concerns of American
citizens and businesses with the effects of federal agencies'
rules. This statement provides an overview of the purpose and
provisions of CRA; GAO's role and activities in fulfilling its
responsibilities under the Act; and trends on CRA within the
broader context of developments in presidential and congressional
oversight of federal agencies' rulemaking.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-601T
ACCNO: A50478
TITLE: Federal Rulemaking: Perspectives on 10 Years of
Congressional Review Act Implementation
DATE: 03/30/2006
SUBJECT: Congressional oversight
Federal law
Federal regulations
Proposed legislation
Reporting requirements
Regulatory agencies
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GAO-06-601T
Testimony
Before the Subcommittee on Commercial and Administrative Law, Committee on
the Judiciary, House of Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 2 p.m. EST
Thursday, March 30, 2006
FEDERALRULEMAKING
Perspectives on 10 Years of Congressional Review Act Implementation
Statement of J. Christopher Mihm, Managing Director, Strategic Issues
GAO-06-601T
Mr. Chairman and Members of the Subcommittee:
I am pleased to appear before you today on the 10th anniversary of the
enactment of the Congressional Review Act (CRA).1 As you know, CRA was
enacted to ensure that Congress has an opportunity to review, and possibly
reject, rules before they become effective. Under CRA, two types of rules,
major and nonmajor, must be submitted to both Houses of Congress and GAO
before they can take effect. We are required to provide Congress with a
report on each major rule concerning our assessment of the promulgating
federal agency's compliance with the procedural steps required by various
acts and executive orders governing the regulatory process.
Over the past 10 years, agencies have submitted information on thousands
of rules as required by the CRA. Although we generally found that agencies
complied with CRA's requirements, one main area of noncompliance has been
that agencies have not always delayed the effective date of their major
rules for 60 days, as required by the Act. While considerable information
on agencies' rules has been reported under CRA, to date Congress has used
the Act to disapprove only one rule, the Department of Labor's rule on
ergonomics in 2001. In contrast, our reviews indicated that efforts to
increase presidential influence and authority over the regulatory process
have become more significant and widely used over the years.
In my statement today, I will focus on three topics. First, I will provide
a quick overview of the purpose and provisions of CRA. Second, I will
discuss GAO's role in fulfilling its responsibilities under the Act and
summarize our CRA activities over the years. Finally, I will address CRA
within the broader context of developments in presidential and
congressional oversight of federal agencies' rulemaking. My statement is
based on our activities and observations implementing our responsibilities
under CRA over the past decade and our related body of work reviewing
federal regulatory issues.
15 U.S.C. S:S: 801-808. CRA was enacted as Subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No.
104-121, on March 29, 1996.
Overview of CRA Purpose, Procedures, and Requirements
Congressional oversight of rulemaking using the CRA can be an important
and useful tool for monitoring the regulatory process and balancing and
accommodating the concerns of American citizens and businesses with the
effects of federal agencies' rules. As we noted early in the
implementation of CRA, it is important to assure that executive branch
agencies are responsive to citizens and businesses about the reach, cost,
and impact of regulations, without compromising the statutory mission
given to those agencies.2 CRA seeks to accomplish this by giving Congress
an opportunity to review most rules before they take effect and to
disapprove those found to be too burdensome, excessive, inappropriate,
duplicative, or otherwise objectionable.
With certain exceptions, CRA applies to most rules issued by federal
agencies, including the independent regulatory agencies.3 Under CRA, two
types of rules, major and nonmajor, must be submitted to both Houses of
Congress and GAO before they can take effect. CRA defines a "major" rule
as one which results or is likely to result in (1) an annual effect on the
economy of $100 million or more; (2) a major increase in costs or prices
for consumers, individual industries, government agencies, or geographic
regions; or (3) significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of U.S.-based
enterprises to compete with foreign-based enterprises in domestic and
export markets. CRA specifies that the determination of what rules are
major is to be made by the Office of Information and Regulatory Affairs
(OIRA) of the Office of Management and Budget (OMB). Major rules cannot be
effective until 60 days after publication in the Federal Register or
submission to Congress and GAO, whichever is later. Nonmajor rules become
effective when specified by the agency, but not before they are filed with
Congress and GAO.
CRA established a procedure by which members of Congress may disapprove
agencies' rules by introducing a resolution of disapproval that, if
adopted by both Houses of Congress and signed by the President, can
nullify an agency's rule. If such a resolution becomes law, the rule then
cannot take effect or continue in effect. In addition, CRA prohibits an
agency from reissuing such a rule in substantially the same form, or a new
rule that is substantially the same as the disapproved rule, unless the
reissued or new rule is specifically authorized by a law enacted after the
date of the joint resolution disapproving the original rule. Members of
Congress seldom have attempted to use this disapproval process. Over the
past decade, 37 joint resolutions of disapproval have been introduced
regarding 28 rules. Only once has Congress used this disapproval process
to nullify a rule, when it disapproved the Department of Labor's rule on
ergonomics in 2001.4
2GAO, Congressional Review Act, GAO/T-OGC-97-29 (Washington, D.C.: Mar. 6,
1997).
3In addition to some general exceptions, such as one regarding any rule
relating to agency management or personnel, CRA does not apply to any rule
promulgated under the Telecommunications Act of 1996 and the amendments
made by that Act. Nor does CRA apply to rules that concern monetary policy
proposed or implemented by the Board of Governors of the Federal Reserve
System or the Federal Open Market Committee.
GAO's Role and Activities under CRA
GAO's only stated role under CRA is to provide Congress with a report on
each major rule concerning GAO's assessment of the promulgating federal
agency's "compliance with the procedural steps" required by various acts
and executive orders governing the regulatory process. These include
preparation of a cost-benefit analysis, when required, and compliance with
the Regulatory Flexibility Act, the Unfunded Mandates Reform Act of 1995
(UMRA), the Administrative Procedure Act (APA), the Paperwork Reduction
Act, and Executive Order 12866. GAO's report must be sent to the
congressional committees of jurisdiction within 15 calendar days of the
publication of the rule or submission of the rule by the agency, whichever
is later. While the CRA is silent with regard to GAO's role concerning
nonmajor rules, we found that basic information about those rules also
should be collected in a manner that can be of use to Congress and the
public.
To compile information on all the rules submitted to us under CRA, we
established a database, available to the public on the Internet.5 Our
database gathers basic information about the 15-20 major and nonmajor
rules that we receive each day, including the title, the agency, the
Regulation Identification Number, the type of rule, the proposed effective
date, the date published in the Federal Register, the congressional review
trigger date, and any joint resolutions of disapproval that may have been
introduced. We created a standardized submission form available on the
Internet, which is used by almost all the agencies, to allow more
consistent information collection. Since CRA was enacted on March 29,
1996, we have received and submitted timely reports on 610 major rules and
entered 41,218 nonmajor rules into the database.6
4Pub. L. No. 107-5, 115 Stat. 7 (Mar. 20, 2001).
5GAO's Federal Rules Database is publicly available at www.gao.gov under
the "Legal Products" link. The reports we prepare on major rules under CRA
are also available on that site.
As noted earlier, before a rule can become effective, it must be filed in
accordance with CRA. We conduct an annual review to determine whether all
final rules covered by the Act and published in the Federal Register have
been filed with the Congress and us. We perform the review to both verify
the accuracy of our database and to ascertain the degree of agency
compliance with CRA. We forward a list of unfiled rules to OIRA for their
handling, and, in the past, they have disseminated the list to the
agencies, most of which file the rules or offer an explanation of why they
do not believe a rule is covered by CRA.
Although we reported that agencies' compliance with CRA requirements was
inconsistent during the first years after CRA's enactment, compliance
improved over time. In general, we have found the degree of compliance to
have remained fairly constant, with roughly 200 nonmajor rules per year
not filed with our office. In the 10 years since CRA was enacted, all
major rules have been filed in a timely fashion.
In the past 10 years, we also have issued eight opinions regarding what
constitutes a "rule" under CRA in response to requests from congressional
committees and members concerning various agency pronouncements and
memorandums. CRA contains a broad definition of the term "rule," including
more than the usual notice and comment rulemakings published in the
Federal Register under APA. Under CRA, "rule" means the whole or part of
an agency statement of general applicability and future effect designed to
implement, interpret, or prescribe law or policy. For example, in 1996 we
concluded that a memorandum issued by the Secretary of Agriculture in
connection with the Emergency Salvage Timber Sale Program constituted a
rule under CRA and should have been submitted to Congress and GAO before
it could become effective.7 Similarly, in 2001, we concluded that a Fish
and Wildlife Service Record of Decision entitled "Trinity River Mainstem
Fishery Restoration" was a rule covered by CRA.8 We believe these opinions
have strengthened the reach of CRA by insuring compliance with the main
thrust of the Act, which was to insure that agency actions, whether
labeled a "rule" by the agency or not, are subject to congressional
review. We have noted that certain congressional committees, such as the
Joint Committee on Taxation, were taking an active role in overseeing
agency compliance with CRA. As a result, for example, Internal Revenue
Service procedures, rulings, regulations, notices, and announcements are
forwarded as CRA submittals.
6Number of major and nonmajor rules are as of March 24, 2006.
7See B-274505, Sept. 16, 1996.
8See B-287557, May 14, 2001.
The one major area of noncompliance with the requirements of the Act has
been that agencies have not always delayed the effective date of major
rules for 60 days as required by the Act.9 Agencies have filed 610 major
rules with our office, and, for 71 of those rules, the agencies did not
delay the effective date for the required 60 days.
One reason for noncompliance with the 60-day delay is that the agencies
have misapplied the "good cause" exception which waives the delay of the
rule if it would be impracticable, unnecessary, or contrary to the public
interest.10 Since the enactment of CRA, our office has consistently held
that the "good cause" exception is only available if a notice of proposed
rulemaking was not published and public comments were not received.11 Many
agencies, following a notice of proposed rulemaking and receipt of
comments, have stated in the preamble to the final major rule that "good
cause" existed for not providing the 60-day delay.
The other reason for noncompliance is that the statute that an agency is
implementing by issuing the final major rule contains a date by which the
Secretary or Administrator must issue the regulation, and the date, in
many instances, does not permit the 60-day delay. However, the CRA states
that it shall apply notwithstanding any other provision of law.12
95 U.S.C. S: 801(a)(3)(A).
105 U.S.C. S: 808(2).
11See B-275549; B-275552, Dec. 9, 1996.
125 U.S.C. S: 806(a).
Trends in Presidential and Congressional Review of Rulemaking
Agencies and GAO have provided Congress a considerable amount of
information about forthcoming rules in response to CRA. The limited number
of CRA joint resolutions introduced might suggest that this information
generates little additional oversight of rulemaking. However, as we found
in our review of the information generated on federal mandates under UMRA,
the benefits of compiling and making information available on potential
federal actions should not be underestimated.13 Further, as we also found
regarding UMRA, the availability of procedures for congressional
disapproval may have some deterrent effect. The Congressional Research
Service has reported that several rules have been affected by the presence
of the review mechanism, suggesting that the CRA review scheme has had
some influence.
Still, as I noted in my testimony before this Subcommittee last November,
efforts to enhance presidential oversight of agencies' rulemaking appear
to have been more significant and widely employed in recent years than
similar efforts to enhance congressional oversight.14 In particular, our
reviews have noted the growing influence and authority of OIRA in the
oversight of the regulatory process.15 Some of this increased activity
reflects administration initiatives, but it also includes some new
responsibilities assigned by Congress through statute, such as the
requirement for OMB to issue governmentwide guidance to implement the
Information Quality Act.16
In contrast, there does not appear to have been a similar expansion of
direct congressional influence and authority over the regulatory process,
although bills have been introduced over the years to enhance the
mechanisms available for congressional oversight of agencies' rulemaking.
Some recent legislative proposals have focused on expanding the
information and analysis available to Congress on pending rules, while
others focus on enhancing the mechanisms that Congress could employ for
its own review-and potential disapproval-of agencies' rules.
13See GAO, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637
(Washington, D.C.: May 12, 2004) and Unfunded Mandates: Views Vary About
Reform Act's Strengths, Weaknesses, and Options for Improvement,
GAO-05-454 (Washington, D.C.: Mar. 31, 2005).
14See GAO, Federal Rulemaking: Past Reviews and Emerging Trends Suggest
Issues That Merit Congressional Attention, GAO-06-228T (Washington, D.C.:
Nov. 1, 2005).
15See GAO, Rulemaking: OMB's Role in Reviews of Agencies' Draft Rules and
the Transparency of Those Reviews, GAO-03-929 (Washington, D.C.: Sept. 22,
2003).
16The Information Quality Act is also known as the Data Quality Act.
Consolidated Appropriations Act, 2001, Pub. L. No. 106-554, 114 Stat.
2763, 2763A-153-54 (Dec. 21, 2000).
As the major example of the first category of proposals, Congress passed
the Truth in Regulating Act (TIRA) in 2000 to provide a mechanism for it
to obtain more information about certain rules.17 In contrast to the
essentially procedural reviews that GAO now conducts under CRA, TIRA
contemplated a 3-year pilot project during which GAO would perform
independent evaluations of "economically significant" agency rules when
requested by a chairman or ranking member of a committee of jurisdiction
of either House of Congress. However, during the 3-year period
contemplated for the pilot project, Congress did not enact any specific
appropriation to cover TIRA evaluations, as called for in the Act, and the
authority for the 3-year pilot project expired on January 15, 2004.
Therefore, we have no information on the potential effectiveness of this
mechanism.
Congress has considered reauthorizing TIRA, and we have strongly urged
that any reauthorization of TIRA continue to contain language requiring a
specific annual appropriation for GAO before we are required to undertake
independent evaluations of major rulemakings. Such an expansion of GAO's
current lines of business without additional dedicated resources would
pose a serious problem for us, especially in light of what will likely be
increasing budgetary constraints in the years ahead. It would also likely
serve to adversely affect our ability to provide the same level of service
to the Congress in connection with our existing statutory authorities. We
have also recommended that TIRA evaluations be conducted under a pilot
project basis.
Members of Congress have also introduced several bills over the past year
that would provide additional mechanisms for direct review and approval
(or disapproval) of agencies' rules.18 Some of these proposals would
modify how Congress reviews information submitted under CRA and how the
disapproval procedures would work. These bills could, for example, create
a joint committee that would be tasked with reviewing all rules to
determine whether a disapproval resolution under CRA should be introduced.
We have conducted no work that would provide information on the potential
effectiveness of such changes.
17Pub. L. No. 106-312, 114 Stat. 1248 (Oct. 17, 2000), 5 U.S.C. S: 801
note.
18See, for example, H.R. 576, H.R. 931, and H.R. 3148.
Mr. Chairman, this concludes my prepared statement. Once again, I
appreciate the opportunity to testify on these important issues. I would
be pleased to address any questions you or other Members of the
Subcommittee might have at this time.
If additional information is needed regarding this testimony, please
contact J. Christopher Mihm, Managing Director, Strategic Issues, at (202)
512-6806 or mihmj@gao.gov .
(450485)
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To view the full product, click on the link above. For more information,
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Highlights of GAO-06-601T , testimony to the Subcommittee on Commercial
and Administrative Law, Committee on the Judiciary, House of
Representatives
March 30, 2006
FEDERAL RULEMAKING
Perspectives on 10 Years of Congressional Review Act Implementation
This year marks the 10th anniversary of the Congressional Review Act
(CRA). Congressional oversight of rulemaking using the CRA can be an
important and useful tool for monitoring the regulatory process and
balancing and accommodating the concerns of American citizens and
businesses with the effects of federal agencies' rules. This statement
provides an overview of the purpose and provisions of CRA; GAO's role and
activities in fulfilling its responsibilities under the Act; and trends on
CRA within the broader context of developments in presidential and
congressional oversight of federal agencies' rulemaking.
CRA gives Congress an opportunity to review most rules before they take
effect and to disapprove those found to be too burdensome, excessive,
inappropriate, duplicative, or otherwise objectionable. Under CRA, two
types of rules, major and nonmajor, must be submitted to both Houses of
Congress and GAO before they can take effect. The Office of Information
and Regulatory Affairs (OIRA) of the Office of Management and Budget
specifies which rules are designated as major rules based on criteria set
out in the CRA. Major rules cannot be effective until 60 days after
publication in the Federal Register or submission to Congress and GAO,
whichever is later. Congress may disapprove agencies' rules by introducing
a resolution of disapproval that, if adopted by both Houses of Congress
and signed by the President, can nullify an agency's rule. Members of
Congress seldom have attempted to use this process.
GAO's role under CRA is to provide Congress with a report on each major
rule concerning GAO's assessment of the promulgating federal agency's
compliance with the procedural steps required by various acts and
executive orders governing the regulatory process. GAO compiles
information on the rules it receives under CRA in a database containing
basic information about major and nonmajor rules. GAO also conducts an
annual review to determine whether all final rules covered by the Act and
published in the Federal Register have been filed with the Congress and
GAO. Although we reported that agencies' compliance with CRA requirements
was inconsistent during the first years after CRA's enactment, compliance
improved over time.
There have been a limited number of CRA joint resolutions, but the
benefits of compiling and making information available on potential
federal actions should not be underestimated. The procedures for
congressional disapproval also may have some deterrent effect. Efforts to
enhance presidential oversight of agencies' rulemaking appear to have been
more significant and widely employed in recent years than similar efforts
to enhance congressional oversight. Some recent legislative proposals have
focused on expanding the information and analysis available to Congress on
pending rules, while others focus on enhancing the mechanisms that
Congress could employ for its own review-and potential disapproval-of
agencies' rules.
*** End of document. ***