Paperwork Reduction: Governmentwide Goals Unlikely to Be Met (Testimony,
06/04/97, GAO/T-GGD-97-114).

GAO updated its testimony regarding the implementation of the Paperwork
Reduction Act of 1995, as amended, focusing on: (1) the Office of
Management and Budget's (OMB) efforts to fulfill its responsibilities
under the act, particularly its responsibility for establishing and
overseeing governmentwide and agency-specific paperwork reduction goals;
(2) the likelihood of the government and particular agencies meeting
those goals; and (3) any impediments the government faces in reaching
the goals.

GAO noted that: (1) the paperwork burden that the federal government
imposes on the public was estimated to total 6.7 billion burden hours in
fiscal year (FY) 1996, down slightly from the 6.9 billion-hour estimate
for 1995; (2) Congress enacted the Paperwork Reduction Act of 1995 to
impose discipline on the management of paperwork requirements; (3) among
other things, the act requires OMB to set a goal of at least a
10-percent reduction in governmentwide paperwork burden for FY 1996 and
1997, a 5-percent reduction goal for each of the next 4 fiscal years,
and annual agency goals that reduce burden to the "maximum practicable
opportunity"; (4) in assessing progress toward achieving these goals, it
is appropriate to recognize that the basic data used to measure
paperwork burden has important limitations; (5) for instance,
considerable uncertainty exists about whether the Internal Revenue
Service's (IRS) paperwork burden-hour estimate, which has recently
accounted for about 75 percent of the government's estimated total
paperwork burden, is overstated; (6) on January 13, 1997, OMB instructed
agencies to establish goals and timetables to achieve, by the end of FY
1998, a cumulative burden reduction of 25 percent; (7) this goal does
not require the annual reductions contemplated by the act, but, if
accomplished, could result in a similar reduction by the end of FY 1998;
(8) however, primarily because IRS expects its paperwork burden-hour
estimate to decline a total of about 2 percent over the FY 1996 to 1997
period, it appears unlikely that the federal government as a whole will
meet the cumulative 25-percent reduction contemplated by the act by the
end of FY 1998; (9) in addition to IRS, GAO looked specifically into two
other agencies' progress; (10) Environmental Protection Agency (EPA)
officials said they will not achieve a 25 percent net reduction by the
end of FY 1998, while Occupational Safety and Health Administration
(OSHA) officials said they expect to meet this reduction goal; and (11)
all three agencies, IRS, EPA, and OSHA, indicated that the statutory
framework that underlies their regulations and continued actions by
Congress requiring the agencies to produce regulations were major
impediments to eliminating paperwork burden.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-97-114
     TITLE:  Paperwork Reduction: Governmentwide Goals Unlikely to Be Met
      DATE:  06/04/97
   SUBJECT:  Reporting requirements
             Congressional/executive relations
             Statistical methods
             Projections
             Data collection
             Government information

             
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Cover
================================================================ COVER


Before the Committee on Small Business
U.S.  Senate

For Release on Delivery
Expected at
9:30 a.m.  EDT
Wednesday
June 4, 1997

PAPERWORK REDUCTION -
GOVERNMENTWIDE GOALS
UNLIKELY TO BE MET

Michael Brostek
Associate Director, Federal Management and Workforce Issues
General Government Division

GAO/T-GGD-97-114

GAO/GGD-97-114T


(410127)


Abbreviations
=============================================================== ABBREV


PAPERWORK REDUCTION: 
GOVERNMENTWIDE GOALS UNLIKELY TO
BE MET
====================================================== Chapter SUMMARY

The paperwork burden that the federal government imposes on the
public, commonly measured in terms of "burden hours," was estimated
to total 6.7 billion hours in fiscal year 1996, down slightly from
the 6.9 billion-hour estimate for 1995.  Some paperwork, of course,
is necessary and can serve a useful purpose.  Nevertheless, agencies
have a responsibility to keep the amount of paperwork as low as
possible consistent with carrying out their missions. 

Congress enacted the Paperwork Reduction Act of 1995 to impose
discipline on the management of paperwork requirements.  Among other
things, the act requires the Office of Management and Budget's (OMB)
Office of Information and Regulatory Affairs to set a goal of at
least a 10-percent reduction in governmentwide paperwork burden for
fiscal years 1996 and 1997, a 5-percent reduction goal for each of
the next 4 fiscal years, and annual agency goals that reduce burden
to the "maximum practicable opportunity."

In assessing progress toward achieving these goals, it is appropriate
to recognize that the basic data used to measure paperwork burden has
important limitations.  For instance, considerable uncertainty exists
about whether the Internal Revenue Service's (IRS) paperwork
burden-hour estimate--which has recently accounted for about 75
percent of the government's estimated total paperwork burden--is
overstated.  These limitations need to be borne in mind when gauging
burden and progress in reducing it. 

On January 13, 1997, OMB instructed agencies to establish goals and
timetables to achieve, by the end of fiscal year 1998, a cumulative
burden reduction of 25 percent.  This goal does not require the
annual reductions contemplated by the act, but, if accomplished,
could result in a similar reduction by the end of fiscal year 1998. 

However, primarily because IRS expects its paperwork burden-hour
estimate to decline a total of about 2 percent over the fiscal year
1996-1997 period, it appears unlikely that the federal government as
a whole will meet the cumulative 25-percent reduction contemplated by
the act by the end of fiscal year 1998.  In addition to IRS, GAO
looked specifically into two other agencies' progress.  Environmental
Protection Agency (EPA) officials said they will not achieve a 25
percent net reduction by the end of fiscal year 1998, while
Occupational Safety and Health Administration (OSHA) officials said
they expect to meet this reduction goal. 

All three agencies--IRS, EPA, and OSHA--indicated that the statutory
framework that underlies their regulations and/or continued actions
by Congress requiring the agencies to produce regulations were major
impediments to eliminating paperwork burden. 


PAPERWORK REDUCTION: 
GOVERNMENTWIDE GOALS UNLIKELY TO
BE MET
==================================================== Chapter STATEMENT

Mr.  Chairman and Members of the Committee: 

I am pleased to be here today to update our testimony before the
Committee last year regarding the implementation of the Paperwork
Reduction Act of 1995, as amended.\1 As you requested, I will focus
today on three issues:  (1) the Office of Management and Budget's
(OMB) efforts to fulfill its responsibilities under the act,
particularly its responsibility for establishing and overseeing
governmentwide and agency-specific paperwork reduction goals; (2) the
likelihood of the government and particular agencies meeting those
goals; and (3) any impediments the government faces in reaching the
goals.  At your request, we addressed these issues by reviewing
selected aspects of the act's implementation at OMB and three
agencies--the Internal Revenue Service (IRS), the Environmental
Protection Agency (EPA), and the Occupational Safety and Health
Administration (OSHA).  Participants at the 1995 White House
Conference on Small Business said these three agencies imposed the
most significant paperwork burdens on small businesses. 


--------------------
\1 Paperwork Reduction:  Burden Reduction Goal Unlikely To Be Met
(GAO/T-GGD/RCED-96-186, June 5, 1996). 


   BACKGROUND
-------------------------------------------------- Chapter STATEMENT:1

Before discussing the results of our review, I believe some
background information would provide useful context.  The Paperwork
Reduction Act of 1995 amended and recodified the Paperwork Reduction
Act of 1980, as amended.  The 1995 act reaffirmed the principles of
the original act and gave new responsibilities to OMB and executive
branch agencies.  Like the original statute, the 1995 act requires
agencies to justify any collection of information from the public by
establishing the need for and ability to use the information,
estimating the burden that the collection will impose on the
respondents, and showing that the collection is the least burdensome
way to gather the information. 

The act also reauthorized the Office of Information and Regulatory
Affairs (OIRA) within OMB.  Under the act, OIRA has overall
responsibility for determining whether agencies' proposals for
collecting information comply with the act.\2 Agencies must receive
OMB approval for each information collection request before it is
implemented.  OIRA also is required to keep Congress "fully and
currently informed" of the major activities under the act and must
report to Congress on agencies' progress in reducing paperwork.  To
do so, OIRA develops an Information Collection Budget (ICB) by
gathering data from executive branch agencies on the total number of
"burden hours" OMB approved for collections of information for the
agency at the end of the fiscal year and agency estimates of the
burden for the coming fiscal year.\3

Finally, the 1995 act made several changes in federal paperwork
reduction requirements.  For example, it requires OIRA to set a goal
of at least a 10 percent burden reduction governmentwide for each of
fiscal years 1996 and 1997, a 5 percent governmentwide burden
reduction goal in each of the next 4 fiscal years, and annual agency
goals that reduce burden to "the maximum practicable opportunity."\4


--------------------
\2 The act requires the Director of OMB to delegate the authority to
administer all functions under the act to the Administrator of OIRA
but does not relieve the OMB Director of responsibility for the
administration of those functions.  Approvals are made on behalf of
the OMB Director.  In this testimony, we generally refer to OIRA or
the OIRA Administrator wherever the act assigns responsibilities to
OMB or the Director. 

\3 Although OIRA consults with agencies in the preparation of their
ICB submissions and refers to this data collection process as a
"budget," OIRA's information collection budget does not limit the
number of burden hours an agency is permitted to impose in the way
that a financial budget limits expenditures. 

\4 The original act contained burden reduction goals, but they had
expired. 


      SOME PAPERWORK IS NECESSARY
------------------------------------------------ Chapter STATEMENT:1.1

I also believe it is important to point out that some paperwork is
necessary and can serve a useful purpose.  Information collection is
one method by which regulatory agencies carry out their missions to,
for example, collect taxes, keep workplaces safe, and clean the
environment.  Without some such information, IRS would not know the
amount of tax owed by the taxpayer, and EPA and OSHA would not know
whether the intent of statutes such as the Clean Air Act and the
Occupational Safety and Health Act is being achieved.  However, under
the act, agencies do have a responsibility to keep the amount of
paperwork as low as possible. 


   OMB AND AGENCIES SET BURDEN
   REDUCTION GOALS
-------------------------------------------------- Chapter STATEMENT:2

During the past year, OIRA published what its officials said were
governmentwide and agency-specific burden reduction goals. 
Subsequently, OMB established multiyear governmentwide and agency-
specific burden reduction goals that could, if implemented,
accomplish the burden reductions that the Paperwork Reduction Act of
1995 envisioned would occur by the end of fiscal year 1998. 


      GOAL-SETTING IS USEFUL BUT
      CAUTION NEEDED DUE TO
      IMPRECISE DATA
------------------------------------------------ Chapter STATEMENT:2.1

Before discussing the specifics of OMB and agencies' goal-setting
efforts, it is appropriate to recognize that the basic data used to
gauge paperwork burden have important limitations.  Although the
paperwork reduction concepts in the Paperwork Reduction Act of 1995
are a useful framework for imposing discipline on the government's
management of paperwork requirements affecting the public, users of
paperwork burden-hour estimates should proceed with caution. 
Estimating the amount of time it will take for an individual to
collect and provide information or how many individuals an
information collection will affect is not a simple matter. 
Therefore, the degree to which agency burden-hour estimates reflect
real burden and the factors that cause changes to the estimates are
often unclear.  For example, as I will discuss in more detail later,
considerable uncertainty exists about the accuracy of IRS' paperwork
burden-hour estimate--which has recently accounted for about 75
percent of the government's estimated total paperwork burden.  IRS'
estimates may be off by as much as billions of burden hours and to
the extent that the estimates are off, the estimates used to gauge
progress in meeting the goals of the Paperwork Reduction Act would
also be significantly flawed.  Nevertheless, these are the best
indicators of paperwork burden available, and we believe that they
can be useful as long as their limitations are borne in mind. 


      OIRA PUBLISHED ICB
      CONTAINING AGENCIES'
      BURDEN-HOUR ESTIMATES
------------------------------------------------ Chapter STATEMENT:2.2

Last year I testified that as of the end of May 1996, OIRA had not
set any burden reduction goals.  However, OIRA staff told us at that
time that OIRA would establish a governmentwide burden reduction goal
of 10 percent for fiscal year 1996 in a then soon-to-be-published
ICB.  They also said that agency goals would reflect the end of
fiscal year 1996 burden-hour estimates that the agencies would
provide in their ICB submissions, unless changed as a result of OIRA
review. 

OIRA published the ICB for fiscal year 1995 in August 1996.  The ICB
stated that the act "set an annual government-wide goal for the
reduction of total information collection burden of 10 percent during
each of fiscal years 1996 and 1997 and 5 percent during each of
fiscal years 1998, 1999, 2000, and 2001." OIRA officials told us that
they believe this statement satisfied the act's requirement that OIRA
establish governmentwide burden reduction goals. 

In the August 1996 ICB, federal departments and agencies estimated
that their burden-hour totals at the end of fiscal year 1996 (less
than 2 months later) would average less than 1 percent below the end
of fiscal year 1995 totals.\5 OIRA does not believe there is a
contradiction between the governmentwide burden-hour reduction goal
of 10 percent for fiscal year 1996 and the fact that the
agency-specific goals for that year averaged less than 1 percent. 
OIRA officials believe this apparent contradiction can occur because
the act specifies that individual agencies' goals should reduce
information collection burdens to the "maximum practicable
opportunity." The sum of these maximum practicable agency goals may
not total to 10 percent governmentwide.  Nevertheless, we believe
that it is logical to assume that agency-specific goals would be the
means by which the governmentwide goal would be achieved.  We also
believe that the 1995 act's legislative history indicates that
Congress contemplated a connection between the governmentwide and
agency-specific goals.\6


--------------------
\5 The agencies estimated that the total number of burden hours would
decline from 6.90 billion hours on September 30, 1995, to 6.85
billion hours on September 30, 1996.  Data from the Regulatory
Information Service Center as of May 1997 indicates the agencies
ended fiscal year 1996 with 6.75 billion burden hours. 

\6 The act's conference report states that "individual agency goals
negotiated with OIRA may differ depending on the agency's potential
to reduce the paperwork burden such agency imposes on the public. 
Goals negotiated with some agencies may substantially exceed the
Government-wide goal, while those negotiated with other agencies may
be substantially less."


      OMB HAS SET A 25 PERCENT
      BURDEN REDUCTION GOAL
------------------------------------------------ Chapter STATEMENT:2.3

On January 13, 1997, OMB issued Bulletin 97-03, which instructed
executive departments and agencies to prepare and implement an ICB
for fiscal year 1996 and an Information Streamlining Plan (ISP).  The
bulletin said each agency's ISP should include "goals and timetables
to achieve, by the end of (fiscal year) 1998, a cumulative burden
reduction of 25 percent from its (fiscal year) 1995 year-end level,
consistent with the governmentwide burden reduction goals in the
Paperwork Reduction Act of 1995." The bulletin also said that each
agency should identify in its ISP submission specific administrative
changes, program restructures, regulatory reinventions, and
legislative proposals that would reduce its total paperwork burden on
the public and streamline the paperwork it imposes. 

OIRA staff said that progress toward the 25-percent goal will be
measured against agency burden-hour estimates as of September 30,
1995, and that agency and governmentwide reductions would have to
take into account any burden-hour additions that occurred while the
reductions were taking place.  For example, if an agency was able to
reduce its September 30, 1995, paperwork burden by 25 percent, but
new regulations that the agency issued during that period added the
equivalent of an additional 10 percent, the agency would get credit
for having accomplished only a 15 percent reduction in burden hours. 

OMB's goal of reducing the number of burden hours by 25 percent by
the end of fiscal year 1998 could, if accomplished, achieve a similar
reduction to what the act contemplated through its requirement that
OIRA set goals of 10 percent for fiscal years 1996 and 1997 and 5
percent for 1998.  OIRA officials told us that the 3-year goal was
established because paperwork reductions typically take several years
to implement, and therefore a multiyear goal was more workable. 

OIRA officials said that as of the end of May 1997, most of the
agencies had submitted their ISPs and that OIRA staff were reviewing
their submissions.  They also said they were scheduling hearings to
review the ISPs with top officials in each agency and anticipated
that the hearings would be completed by the end of June 1997. 


      MEASURING PROGRESS TOWARD
      THE GOAL
------------------------------------------------ Chapter STATEMENT:2.4

In previous years, OIRA used ICB information to assess agencies'
progress in reducing paperwork burden.  Changes in burden-hour
estimates from year to year were classified as caused by either
"program changes" or "adjustments." Program changes were defined as
additions or reductions to existing paperwork requirements imposed
either through new statutory requirements or an agency's own
initiative.  Adjustments were changes in burden estimates that were
caused by factors other than changes in the actual paperwork
requirements, such as changes in the population responding to a
requirement or agency reestimates of the burden associated with a
collection of information.  OIRA counted both program changes and
adjustments when calculating an agency's burden-hour baseline at the
end of each fiscal year.  OIRA did not count changes due to
adjustments in determining whether an agency had achieved its burden
reduction goal. 

OIRA officials told us that they will continue to use information
from the ICBs in judging agencies' progress toward the goal of
reducing burden by 25 percent by the end of fiscal year 1998.  The
ICB for fiscal year 1996 is currently scheduled to be published in
June 1997.  OIRA officials also told us that they will measure and
report on both program changes and adjustments, but they have not
decided whether to count adjustments when judging agencies'
accomplishments.  If OIRA decides to count adjustments, agencies
could meet their 25 percent burden reduction goals by reestimating
the burden of their existing information collections. 


   RECENT CHANGES IN PAPERWORK
   BURDEN SUGGEST BURDEN REDUCTION
   GOALS UNLIKELY TO BE MET
-------------------------------------------------- Chapter STATEMENT:3

OMB's January 13, 1997, bulletin stated that "agencies have made
substantial progress in reducing paperwork burden" since the original
Paperwork Reduction Act was enacted in 1980.  However, the
governmentwide burden-hour estimate actually rose substantially
during that period.  Figure 1 shows changes in reported burden-hour
estimates governmentwide and at IRS between September 30, 1980, and
September 30, 1996.  The figure also shows IRS's estimate of its
burden-hour total at the end of fiscal year 1997 that was presented
in its ICB submission for fiscal year 1996. 

   Figure 1:

   (See figure in printed
   edition.)

Note:  Data are as of September 30 each year. 

Source:  Regulatory Information Service Center and Department of the
Treasury. 

As you can see, the governmentwide burden-hour estimate rose from
about 1.5 billion hours in 1980 to more than 6.7 billion hours in
1996.  However, the near tripling of the governmentwide burden-hour
estimate during fiscal year 1989 was primarily because IRS adopted a
new methodology for computing burden, which increased its paperwork
estimate by about 3.4 billion hours.  In each year since fiscal year
1989, IRS' estimated paperwork burden has accounted for more than
three-quarters of the governmentwide total.  Because the current
estimate of IRS' paperwork burden is such a large portion of the
governmentwide estimate, increases or decreases in IRS' estimated
number of burden hours have had--and may in the future have--a
dramatic effect on the governmentwide estimate. 

The governmentwide 6.7 billion burden-hour estimate for 1996 is down
from just over 6.9 billion hours in 1995.  Notably, this decline
occurred despite the fact that IRS's burden-hour estimate rose
slightly between 1995 and 1996 (from 5.28 billion hours to 5.30
billion hours).\7 In general, however, reducing the burden imposed by
IRS will be an important component of any governmentwide effort to
reduce paperwork burden. 

Figure 2 shows the month-by-month changes in the estimated
governmentwide paperwork burden between September 30, 1995, (the day
before the 1995 act's effective date) and April 30, 1997 (the most
recent date for which data were available).  The figure also shows
what the burden-hour totals would have been if the agencies had
achieved the 10 percent reductions contemplated in the act for fiscal
years 1996 and 1997 and the required additional 5 percent reduction
for fiscal year 1998. 

   Figure 2:

   (See figure in printed
   edition.)

Note:  Data are as of the end of each month. 

Source:  Regulatory Information Service Center and GAO. 

The figure shows that as currently measured, the federal government
had not achieved the 10-percent reduction in burden hours
contemplated by the act by the end of fiscal year 1996.  Also,
because IRS expects to achieve only a 1-percent reduction in its
burden total by the end of fiscal year 1997, and because IRS
officials told us that they anticipated achieving another 1-percent
reduction by the end of fiscal year 1998, it appears unlikely that
the federal government as a whole will meet the 25-percent reduction
contemplated by the act by the end of fiscal year 1998.  If IRS
cannot reduce its burden-hour total by more than 2 percent between
fiscal years 1995 and 1998, achieving a 25-percent reduction in the
governmentwide burden-hour total during that period would require
that all other federal departments and agencies virtually eliminate
their information collections. 


--------------------
\7 OIRA officials noted that except for IRS, the paperwork estimate
for the rest of the government declined by more than 10 percent
during the act's first year of implementation. 


   SPECIFIC BURDEN REDUCTION
   ACTIONS AT IRS, EPA, AND OSHA
   AND LIKELIHOOD OF AGENCIES
   REACHING THEIR GOALS
-------------------------------------------------- Chapter STATEMENT:4

We examined the ICB and ISP submissions for IRS, EPA, and OSHA to
determine what actions they said they have taken to reduce their
estimated paperwork burden and whether the agencies believe they will
meet the 25 percent burden reduction goal by the end of fiscal year
1998.  Although all three agencies indicated they had undertaken
numerous burden reduction efforts, the agencies differed in the
degree to which they expected those efforts to reduce their
burden-hour estimates. 


      IRS SAID IT HAS TAKEN
      ACTIONS BUT CANNOT ACHIEVE
      THE 25 PERCENT BURDEN
      REDUCTION GOAL
------------------------------------------------ Chapter STATEMENT:4.1

IRS's draft ISP submission describes a number of actions the agency
said it has taken to reduce its information collection burden.  For
example, IRS said it produced a set of streamlined instructions for
its Form 1040, switched over 400,000 filers from Schedule C to
Schedule C-EZ, and deleted 20 entries from Form 1040 and its
instructions that resulted in a reduction of nearly 60 million burden
hours.  In another change, IRS said that it was raising the threshold
for which a receipt is required for substantiation of a business
expense for travel from $25 to $75, reducing the burden on taxpayers
by an estimated 12.4 million hours. 

However, after reviewing its 15 largest information collections as of
September 30, 1995, IRS said it was unable to identify burden
reductions that would allow it to achieve a 25-percent reduction in
its baseline of 5.3 billion hours.  As I mentioned earlier, the
agency estimated that its total information collection burden by
September 30, 1997, will decline by about 1 percent from the previous
year.  However, IRS estimated its information collection total would
still stand at nearly 5.25 billion hours.  IRS officials told us that
the agency would probably be able to accomplish another 1-percent
reduction in its burden-hour totals by September 30, 1998. 

In its draft ISP, IRS said it could not reach the 25 percent burden
reduction goal because its major information collections

     "request information that is mandated by the Internal Revenue
     Code and which IRS needs to collect the required amount of
     individual and corporate income tax revenue.  Reducing the
     paperwork burden of these items would make it more difficult, if
     not impossible, to administer the Internal Revenue Code.  We
     will continue to search for new opportunities to reduce burden,
     but the only way to achieve major burden reduction is to
     simplify the tax laws."

However, in considering such simplifications, Congress must weigh
several, sometimes competing, issues.  These include the revenue
implications of any change, the goal to promote equity and fairness,
and the desire to achieve certain social and economic goals. 
Achieving a balance among these issues while making it easier for
taxpayers to comply presents a significant challenge to Congress.\8

IRS officials also told us that many of the burden reduction efforts
the agency has made are not reflected in the burden-hour estimates
because they are not counted.  For example, they said that 32 notices
and letters that were previously sent out 22 million times a year
were eliminated this year, reducing taxpayer burden and saving IRS
over $17 million.  They said that this burden reduction was not
reflected in IRS's burden-hour estimates because the notices and
letters that were eliminated were not subject to the Paperwork
Reduction Act.  They also said that some taxpayers are not taking
full advantage of IRS initiatives to reduce burden, such as TeleFile
and electronic submission of tax information.  As noted later in my
testimony, IRS is working on a new methodology to measure taxpayer
burden. 


--------------------
\8 Tax System Burden:  Tax Compliance Burden Faced by Business
Taxpayers (GAO/T-GGD-95-42, Dec.  9, 1994). 


      EPA SAYS IT HAS TAKEN
      ACTIONS BUT WILL NOT ACHIEVE
      THE 25 PERCENT BURDEN
      REDUCTION GOAL
------------------------------------------------ Chapter STATEMENT:4.2

EPA has had its own effort to reduce paperwork that began before the
Paperwork Reduction Act of 1995 took effect.\9 However, despite this
effort and actions designed to meet the burden reduction goals
contemplated in the act, EPA said it will not achieve a 25 percent
net reduction of its fiscal year 1995 information collection burden
by the end of fiscal year 1998. 

According to its draft ISP, a primary focus of EPA's burden reduction
efforts has been on the agency's 21 information collections with the
greatest estimated burdens.  Of these, EPA said 16 will have their
burdens reduced significantly by the end of fiscal year 1998, and 2
others will be reduced by the end of the decade.  For example, EPA
said the burden associated with its Discharge Monitoring Reports
would be reduced by nearly 4.7 million hours.  EPA said that the
information collections associated with its September 30, 1995, total
estimated paperwork burden of 104.1 million hours would be reduced by
21.8 million hours by the end of fiscal year 1998--a 21-percent
reduction.  EPA also said that it would reduce 4.1 million hours from
new additions to the baseline, so its total projected reduction was
25.9 million hours. 

However, EPA's draft ISP also said that these reductions would be
more than offset by 30.3 million burden hours added during this
period.  EPA estimated in its draft ICB that its burden as of
September 30, 1997, would be more than 115 million hours.  (See fig. 
3.) EPA's draft ISP estimated that its total paperwork burden by
September 30, 1998, would be 108.5 million hours--a decrease from the
1997 estimate but an increase of about 4 percent from the fiscal year
1995 baseline.  However, EPA noted that this estimate did not include
"a potentially large increase related to the Safe Drinking Water
Consumer Confidence Report."

   Figure 3:

   (See figure in printed
   edition.)

Note:  Data are as of the end of each month. 

Source:  Regulatory Information Service Center and EPA. 

EPA's draft ISP said the increases in its estimated burden hours
between fiscal years 1995 through 1998 were driven by four factors: 
(1) 5.5 million burden hours associated with the Toxic Release
Inventory's Form R that had not been counted in the past;\10 (2)
recalculations of burdens for existing information collections (e.g.,
a 2.4 million hour increase for the Hazardous Waste Manifest); (3)
nearly 14 million hours added in support of expanded
community-right-to-know efforts;\11 and (4) new regulations under the
Clean Air Act Amendments and other rules. 


--------------------
\9 Environmental Protection:  Assessing EPA's Progress in Paperwork
Reduction (GAO/T-RCED-96-107, Mar.  21, 1996). 

\10 The 1993 appropriations bill for EPA (P.  L.  102-389)
effectively provided an exemption from the Paperwork Reduction Act
for EPA's Form R until such time as revisions to the form are made in
accordance with law.  OMB subsequently dropped this information
collection from its ICB tracking system when its information
collection clearance expired.  The recent revision of Form R and the
reinstatement of OMB clearance for this collection will add 5.5
million hours to EPA's burden-hour total but will not impose any
additional burden on the public because the form was used
continuously throughout this period. 

\11 Right-to-know requirements involve the disclosure of health and
environmental information to the public and are contained in such
statutes as the Safe Drinking Water Act, the Emergency Planning and
Community Right-to-Know Act, and the Residential Lead-based Paint
Hazard Disclosure Act. 


      OSHA SAYS ITS ACTIONS WILL
      ACHIEVE THE 25 PERCENT
      BURDEN REDUCTION GOAL
------------------------------------------------ Chapter STATEMENT:4.3

In contrast to IRS and EPA, OSHA said it has already made substantial
progress toward achieving a 25-percent reduction in its fiscal year
1995 paperwork burden estimate.  As figure 4 shows, OSHA's paperwork
burden estimate increased dramatically just prior to the 1995 act's
effective date.  This increase occurred because OSHA and other
agencies were trying to get proposed information collections approved
before the new act took effect on October 1, 1995.  However, the
Department of Labor's ICB submission indicated that OSHA had reduced
its September 30, 1995, baseline of 207.6 million hours by 25.1
million hours (12 percent) as of September 30, 1996, and estimated
that OSHA would be able to reduce its total by another 17.3 million
hours by September 30, 1997.  If so, OSHA will have reduced its total
paperwork burden by more than 42 million hours--a 20-percent decrease
from its fiscal year 1995 baseline.  OSHA officials told us that they
expect the agency to achieve the 25 percent burden reduction goal by
the end of fiscal year 1998. 

   Figure 4:

   (See figure in printed
   edition.)

Note:  Data are as of the end of each month. 

Source:  Regulatory Information Service Center and the Department of
Labor. 

The Department of Labor's draft ICB and ISP identified a number of
specific actions that it said caused the sharp decline in burden
hours.  For example, the documents indicated that OSHA had achieved
an estimated 18 million-hour reduction in its paperwork burden as a
result of changes to its Process Safety Management standard.  They
also indicated that OSHA had reduced the burden associated with its
Hazardous Waste Operations and Emergency Response standard from 18.7
million hours to about 2.2 million hours. 

Nevertheless, the draft ISP also indicated that burden reductions for
a number of its standards would not be possible without statutory
change.  For example, the ISP said that OSHA's review of one of its
standards "did not identify any method of reducing paperwork that
does not simultaneously increase significant risk.  OSHA is precluded
from taking any regulatory action that will increase such risk." The
ISP also noted that OSHA's Lead in Construction and Hazardous Waste
Operations and Emergency Response rules were congressionally mandated
and "would require the consent of Congress to revise."


   IMPEDIMENTS TO REACHING BURDEN
   REDUCTION GOALS
-------------------------------------------------- Chapter STATEMENT:5

Although each of their burden reduction experiences differed, IRS,
EPA, and OSHA all indicated in their ICB or ISP submissions that the
statutory framework that underlies their regulations and/or continued
actions by Congress requiring the agencies to produce regulations
were major impediments to eliminating paperwork burden.  As I
mentioned earlier, IRS said that it cannot reach the 25 percent
burden reduction goal of eliminating more than 1 billion burden hours
of paperwork under the current statutory framework and still carry
out its mission.  The agency said paperwork reductions of that scale
are possible only through a major simplification of the tax laws. 
EPA said that its burden reduction efforts have allowed the agency's
baseline to remain relatively constant "despite the passage of new
legislation and the increasing call by the public for additional
information." The Department of Labor said "reductions in information
collection requirements which are statutorily mandated can only be
achieved through legislative changes" and subsequently identified
several such instances in OSHA regulations. 

As I mentioned earlier, information collection is one method by which
agencies carry out their missions, and those missions are established
by Congress through legislation.  If agencies' paperwork requirements
are truly statutorily mandated, then burden- hour reductions of the
magnitude envisioned by the act may not be achievable without changes
in the legislation underlying those requirements.  However, we have
not assessed the extent to which the paperwork burden that agencies
impose is directly attributable to statutory requirements and,
therefore, is out of the agencies' control.  Even though a statute
may require an agency to take certain actions, the agency may have
discretion regarding whether paperwork requirements need to be
imposed and, if so, the manner or frequency with which the
information is collected.  For example, although several statutes
require employers to provide training to employees, OSHA may have
discretion to determine whether employers need to generate paperwork
to demonstrate their compliance with these provisions. 

Another factor that we believe affects agencies' ability to
meaningfully reduce paperwork burden is the difficulty agencies have
experienced in measuring that burden.  The paperwork metric agencies
currently use is "burden hours," which is supposed to reflect how
long it takes respondents to complete agencies' information
collections.  However, the frequency with which agencies reestimate
their burden-hour totals and the magnitude of those adjustments
indicate that those measurements are far from precise. 

For example, the huge increase in the governmentwide burden-hour
total in 1989 was a consequence of IRS reestimating the burden
associated with its information collections.  However, a recent
analysis of the methodology that formed the basis of the 1989
reestimate concluded that IRS may now be significantly overstating
businesses' paperwork burden.\12 IRS recently drafted a statement of
work for a new study of IRS tax compliance burden, but the results of
that study will probably not be available for several years.  If the
study confirms that IRS's current burden-hour estimates are, in fact,
significantly overstated, the agency's and the governmentwide
burden-hour totals could fall back to their pre-1989 levels--far
below the burden reduction goals contemplated in the act.  However,
because only the measurement system would have been altered, the
actual paperwork burden felt by the public would remain unchanged. 


--------------------
\12 In the early 1980s, IRS commissioned Arthur D.  Little, Inc., to
develop a methodology to estimate the burden each tax form imposed on
taxpayers.  In a paper prepared for a 1996 Brookings Institute forum,
Professor Joel Slemrod concluded that the Little methodology
overstated business taxpayer paperwork burden by a factor of five. 
IRS officials said that after working with analysts in the Office of
Tax Analysis in the Department of the Treasury, Professor Slemrod now
believes the appropriate adjustment factor for business taxpayer
paperwork burden is about 3.8. 


------------------------------------------------ Chapter STATEMENT:5.1

Mr.  Chairman, this completes my prepared statement.  I would be
pleased to answer any questions. 

*** End of document. ***