Regulatory Reform: Comments on S. 981--The Regulatory Improvement Act of
1997 (Testimony, 09/12/97, GAO/T-GGD/RCED-97-250).

Pursuant to a congressional request, GAO addressed issues in regulatory
management as part of consideration of S. 981, the proposed Regulatory
Improvement Act of 1997.

GAO noted that: (1) S. 981 represents a continuation of efforts that
have been made by both the legislative and executive branches to improve
the rulemaking process and, as a result, produce better regulations; (2)
during the past 20 years, Congress has enacted a series of statutory
requirements intended to, among other things, reduce paperwork, lessen
regulatory burden on small entities, and curb mandates imposed on state,
local, and tribal governments and the private sector; (3) in the same
vein, each of the last six presidents has issued executive orders or
taken other actions intended to improve the regulatory process; (4)
Executive Order 12866, issued in September 1993, is the Clinton
administration's statement of policy on regulatory planning and review;
(5) the executive order makes the Office of Management and Budget (OMB)
responsible for carrying out regulatory reviews and, to the extent
permitted by law, for providing guidance to agencies; (6) S. 981
addresses many of the same issues as Executive Order 12866, including
cost benefit analysis, agency reviews of existing regulations,
interagency coordination, and transparency in the regulatory review
process; (7) the bill goes beyond the order's requirements on these
issues and adds some new elements to the rulemaking process; (8) GAO's
work indicates that some of the executive order's requirements have not
always been met; and (9) enactment of S. 981 would help ensure that the
underlying purposes of the order's requirements are more consistently
achieved by OMB and regulatory agencies and provide a sound basis for
congressional oversight of regulatory management issues.

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

 REPORTNUM:  T-GGD/RCED-97-250
     TITLE:  Regulatory Reform: Comments on S. 981--The Regulatory 
             Improvement Act of 1997
      DATE:  09/12/97
   SUBJECT:  Regulatory agencies
             Federal regulations
             Cost effectiveness analysis
             Proposed legislation
             Executive orders
             Agency proceedings
             Policy evaluation
             Public relations
             Government information dissemination

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


Before the Committee on Governmental Affairs
U.S.  Senate

Not to Be Released
Before 9:00 a.m.  EDT
Friday
September 12, 1997

REGULATORY REFORM - COMMENTS ON S. 
981--
THE REGULATORY IMPROVEMENT ACT OF
1997

Statement of L.  Nye Stevens
Director, Federal Management and Workforce Issues
General Government Division

GAO/T-GGD/RCED-97-250

GAO/GGD/RCED-97-250T


(410116/160388)


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

  DOT - Department of Transportation
  EPA - Environmental Protection Agency
  FRA - Federal Railroad Administration
  HUD - Department of Housing and Urban Development
  NAAQS - National Ambient Air Quality Standards
  OIRA - Office of Information and Regulatory Affairs
  OMB - Office of Management and Budget
  OSHA - Occupational Safety and Health Administration
  USCG - United States Coast Guard

REGULATORY REFORM:  COMMENTS ON S. 
981--
THE REGULATORY IMPROVEMENT ACT OF
1997
==================================================== Chapter Statement

Mr.  Chairman and Members of the Committee: 

I am pleased to be here today to assist in your consideration of S. 
981, the "Regulatory Improvement Act of 1997." The bill thoughtfully
addresses many issues in regulatory management that have long been
the subject of controversy.  We have issued reports and have ongoing
assignments on a number of those issues, including peer review,
cost-benefit analysis, reviews of existing regulations, and the
transparency of the regulatory process.  My statement discusses our
findings in these areas. 

S.  981 represents a continuation of efforts that have been made by
both the legislative and executive branches to improve the rulemaking
process and, as a result, produce better regulations.  During the
past 20 years, Congress has enacted a series of statutory
requirements intended to, among other things, reduce paperwork,
lessen regulatory burden on small entities, and curb mandates imposed
on state, local, and tribal governments and the private sector.\1 In
the same vein, each of the last six presidents has issued executive
orders or taken other actions intended to improve the regulatory
process.  Executive Order 12866, issued in September 1993, is the
Clinton administration's statement of policy on regulatory planning
and review.  The executive order makes the Office of Management and
Budget (OMB) responsible for carrying out regulatory reviews and, to
the extent permitted by law, for providing guidance to agencies. 

S.  981 addresses many of the same issues as Executive Order 12866,
including cost-benefit analysis, agency reviews of existing
regulations, interagency coordination, and transparency in the
regulatory review process.  The bill goes beyond the order's
requirements on these issues and adds some new elements to the
rulemaking process. 

As I will discuss in more detail, our work indicates that some of the
executive order's requirements have not always been met.  Enactment
of S.  981 would help ensure that the underlying purposes of the
order's requirements are more consistently achieved by OMB and
regulatory agencies and provide a sound basis for congressional
oversight of regulatory management issues. 


--------------------
\1 These include the Paperwork Reduction Acts of 1980 and 1995, the
Regulatory Flexibility Act of 1980, the Unfunded Mandates Reform Act,
and the Small Business Regulatory Enforcement Fairness Act. 


   PUBLIC DISCLOSURE
-------------------------------------------------- Chapter Statement:1

One part of S.  981 involves public disclosure or "transparency"
requirements.  Specifically, section 643(b) requires agencies to
include in the rulemaking record before publication of any proposed
or final rule a document clearly identifying the changes made to the
draft submitted to OMB's Office of Information and Regulatory Affairs
(OIRA), including and separately identifying the changes made at the
suggestion or recommendation of OIRA.  These requirements are
intended to permit the public to understand the source of changes to
proposed rules, and are very similar to requirements in section 6 of
the executive order.  However, whereas the bill requires that the
changes be recorded in a single document in the rulemaking record,
the order does not specify how agencies must identify the changes for
the public. 

Mr.  Chairman, at your and Senator Glenn's request, we have been
reviewing the implementation of these executive order provisions at
four major regulatory agencies--the Departments of Housing and Urban
Development (HUD) and Transportation (DOT), the Department of Labor's
Occupational Safety and Health Administration (OSHA), and the
Environmental Protection Agency (EPA).  Of the 129 regulatory actions
that we reviewed in those agencies, fewer than 25 percent had a clear
and simple document in the rulemaking docket illustrating the changes
made to the rules while at OIRA for review or the changes made at
OIRA's recommendation.  Where we found documentation, it was either a
"redline/strikeout" version of the rule showing the changes made, a
memo to the file listing the changes, or a memo certifying that there
were no such changes.  While some dockets for the other rules had
indications of changes made during OIRA's review and by OIRA, it was
not clear that all changes had been recorded.  Most commonly,
however, the rulemaking dockets simply had no information on whether
changes had been made to the rules.  In those cases it was impossible
for us to know whether changes had not been made to the rules, or
whether documentation of the changes was missing. 

In some cases the agencies had clear documents that delineated the
changes made to their rules while at or by OIRA, but those documents
were not available to the public.  For example, the U.S.  Coast Guard
(USCG) in DOT often prepared detailed summaries of these kinds of
changes, but USCG officials said that these summaries were internal
communications that were not available to the public.  OSHA had
comprehensive documentation of their interactions with OIRA, but the
information was maintained in files separate from the public docket. 
OSHA officials said that they would make this information available
to the public upon request.  However, in order for individuals to
request the information they must first know that the documents
exist. 

Also, the dockets varied in the degree to which they could be used by
the public to find the information required by the executive order. 
First, it is important to realize that the docket for a single rule
can be extremely voluminous.  For example, the docket for one of the
rules we reviewed at DOT's Federal Railroad Administration (FRA)
contained 17 folders of material, some of which were nearly a foot
thick.  However, the docket for this rule and all of the others that
we examined at FRA, HUD, and some other agencies had no indexes. 
Therefore, the public would have to review the entire docket to find
any documentation of changes made at the suggestion of OIRA or
changes in the draft submitted to OIRA.  In contrast, the Office of
Air and Radiation's docket at EPA had a consistently structured index
for all its rules, with specific sections in which information
related to OIRA's reviews could be found.  At the time of our review,
the Office of the Secretary of DOT was automating its dockets so that
both indexes and eventually the entire rule making record could be
accessed on-line. 

In testimony last September before this Committee, the OIRA
Administrator, acknowledged that agencies had not "been scrupulously
attentive" to the executive order's requirement that they document
the changes made at OIRA's suggestion or recommendation.  She also
said, however, that the executive order had "created a more open and
accountable review process" and that she had heard "no complaints
about accountability and transparency."

We believe that these public disclosure requirements in the executive
order, combined with the administration's assertion of their
effectiveness, have resulted in a public perception that changes made
to a regulation while at OIRA and by OIRA are readily identifiable. 
However, our review indicated that this was usually not the case. 

Enactment of the public disclosure requirements in S.  981 would
provide a statutory foundation for the public's right to regulatory
review information.  In particular, we believe that the bill's
requirement that these rule changes be described in a single document
would make understanding regulatory changes much easier for the
public. 

Whether or not a statute is enacted, OIRA could provide the agencies
with guidance on how to improve the transparency of the regulatory
review process.  OIRA could point to existing "best practices" in how
to both document changes made while rules are under review by OIRA or
at the suggestion of OIRA, and how agencies could organize their
dockets to best facilitate public access and disclosure. 


   REVIEW OF RULES
-------------------------------------------------- Chapter Statement:2

We have also done work relevant to Subchapter III of S.  981, which
requires agencies to review existing rules identified by an advisory
committee representing a balanced cross section of public and private
interests.  The agencies must then decide whether to retain, amend,
or repeal the rules it reviews.  There have been several previous
requirements by both Congress and previous presidents that federal
agencies review their existing regulations.\2

Most recently, section 5 of Executive Order 12866 required agencies
to submit a program to OIRA by December 31, 1993, under which they
would periodically review their existing significant regulations to
determine whether any should be modified or eliminated.  According to
the order, the purpose of the review was to make the agencies'
regulatory programs more effective, less burdensome, or better
aligned with the President's priorities and the principles in the
order.  On June 12, 1995, the President announced that a page-by-page
review of the CFR had resulted in commitments to eliminate 16,000
pages from the 140,000 page CFR and modify another 31,000 pages
either through administrative or legislative means. 

Last year we testified before this Committee that most of the
administration's efforts to eliminate pages from the CFR did not
appear to reduce substantive regulatory burden.\3 Most of these
actions were being taken to eliminate obsolete regulations, many of
which did not appear to have been enforced for some time.  As for the
effort to revise the regulations, we could not determine whether
burden was likely to be reduced as a result of most of the revisions
because the agencies' descriptions of those actions were vague.  At
the same hearing, the Administrator of OIRA testified that she had
not expected the page elimination effort to reduce burden.  However,
she said that "the real savings, the reduction of burden," would come
from the CFR pages that were being revised. 

Mr.  Chairman, at your request we have been further examining the
administration's page elimination and revision effort.  We found that
the four agencies that we reviewed (HUD, DOT, OSHA, and EPA) were
adding pages to the CFR at the same time that pages were being
deleted.  As a result, although the four agencies reported to OMB
that they eliminated 5,500 pages from the CFR during this initiative,
as of April 30 of this year the agencies' net reduction in CFR pages
when page additions are taken into consideration was about 900 pages. 
Two of the four agencies' CFR parts actually grew during their page
elimination effort--DOT by about 300 pages and EPA by nearly 1,000
pages.  The four agencies pointed out that pages are often added to
the CFR because of statutory requirements or to clarify requirements
placed on regulated entities, and that pages are sometimes retained
at the request of those entities. 

Our review of 422 CFR revision efforts in the 4 agencies indicated
that about 40 percent should reduce the burden felt by regulated
entities, and another 15 percent should make regulations easier to
find or to understand.  For example,

  -- one EPA action that appeared to reduce regulatory burden
     involved changing the frequency with which states must submit
     information related to state water quality standards under
     section 303(d) of the Clean Water Act from every 2 years to
     every 5 years.  Lessening the frequency with which this
     information must be submitted should reduce the paperwork burden
     imposed on the states. 

  -- one OSHA action that appeared to be a minor burden reduction
     proposed to "eliminate the complexity, duplicative nature, and
     obsolescence" of certain standards and "write them in plain
     language."

However, about 8 percent of the actions appeared to increase the
burden felt by those being regulated, and another 27 percent did not
appear to affect regulatory burden at all.  For example,

  -- OSHA proposed revising its general industry safety standard for
     training powered industrial truck operators and to add
     equivalent training requirements for the maritime industries. 
     OSHA estimated that the first year cost of compliance with the
     proposed standard would be $34.9 million, with annual costs
     thereafter of $19.4 million. 

  -- one DOT action that did not appear to affect regulatory burden
     proposed amending the Transportation Acquisition Regulations to
     change organizational names and renumber and rename certain
     sections of the CFR. 

We could not determine what effect about 9 percent of the actions
would have on regulatory burden, either because the information
available describing the actions contained elements of both burden
reduction and burden increase that could be offsetting or because the
information was vague. 

We recognize that directly measuring changes in regulatory burden is
extremely difficult.  However, we also believe that the
administration's chosen metric of pages in the CFR that are
eliminated or revised is a poor proxy for changes in regulatory
burden.  Eliminating or changing hundreds of pages that are obsolete
or rarely enforced can have little practical effect on regulatory
burden, whereas slight changes in wording of a single sentence can
have a tremendous effect. 

Enactment of the review requirements in S.  981 would provide a
statutory basis for periodic examinations of existing rules.  We
believe that such examinations are a good idea in that they can
determine the continued relevance of regulatory requirements and help
ensure that the requirements impose as little burden as possible. 
Identification of rules for review by the advisory committee that
would be established by the bill may lead to more substantive changes
than have heretofore been made by the agencies on their own. 


--------------------
\2 For example, in 1979, President Carter issued Executive Order
12044 ("Improving Government Regulations"), which required agencies
to review their existing rules "periodically." The Regulatory
Flexibility Act of 1980 required agencies to publish in the Federal
Register a plan for the periodic review of rules that "have or will
have a significant economic impact upon a substantial number of small
entities." In 1992, President Bush sent a memorandum to all federal
departments and agencies calling for a 90-day moratorium on new
proposed or final rules during which agencies were "to evaluate
existing regulations and programs and to identify and accelerate
action on initiatives that will eliminate an unnecessary regulatory
burden or otherwise promote economic growth."

\3 Regulatory Reform:  Implementation of the Regulatory Review
Executive Order (GAO/T-GGD-96-185, Sept.  25, 1996.)


   REGULATORY ANALYSIS
-------------------------------------------------- Chapter Statement:3

Although both S.  981 and Executive Order 12866 require agencies to
conduct cost-benefit analyses for major rules and to make the results
available to the public, the bill goes farther than the order in
requiring disclosure of how those analyses are conducted.  For
example, one of the bill's "findings" states that cost-benefit
analyses and risk assessments "should be presented with a clear
statement of the analytical assumptions and uncertainties including
an explanation of what is known and not known and what the
implications of alternative assumptions might be." Section 623 of the
bill requires agencies to include an executive summary of the
regulatory analyses, including the benefits and costs of reasonable
alternatives and "the key assumptions and scientific or economic
information upon which the agency relied."

In January 1996, OMB issued guidance to executive agencies on
preparing the economic analyses called for in Executive Order 12866. 
Although the OMB guidance provided agencies with substantial
flexibility in how such analyses should be conducted, the guidance
sounded some of the same themes as S.  981. 

     "Analysis of the risks, benefits, and costs associated with
     regulation must be guided by the principles of full disclosure
     and transparency.  Data, models, inferences, and assumptions
     should be identified and evaluated explicitly, together with
     adequate justifications of choices made, and assessments of the
     effects of these choices on the analysis.  The existence of
     plausible alternative models or assumptions, and their
     implications, should be identified."

Our previous work examining agencies' cost-benefit analyses indicated
that the studies are often not as transparent as either the bill or
the OMB guidance contemplates.  For example, in our report earlier
this year on EPA's analyses that support air quality regulations, we
found that certain key economic assumptions--such as discount rates
and assumed values of human life--were often not identified.\4 Even
in those cases in which the assumptions were identified, the reasons
for the values used were not always explained.  For example, one
analysis assumed a value of life that ranged from $1.6 million to
$8.5 million while another--prepared in the same year--assumed a
value of life that ranged from $3 million to $12 million.  In neither
case did the analyses clearly explain why the values were used.  We
also found that about one-quarter of the analyses that we reviewed
examined only one alternative--the regulatory action being
considered. 

S.  981's call for executive summaries in the cost-benefit analyses
echoes a recommendation we made 13 years ago.  In a 1984 report, we
recommended that EPA's cost-benefit analyses include executive
summaries that identify (1) all benefits and costs--even those that
cannot be quantified; (2) the range of uncertainties associated with
the benefits and costs; and (3) a comparison of feasible
alternatives.\5 However, about one-half of the 23 EPA analyses
supporting air quality regulations that we reviewed last year did not
have executive summaries. 

Mr.  Chairman, at your and Senator Glenn's request we are currently
evaluating executive agencies' preparation and use of regulatory
analyses.  Although our work to date has focused primarily on EPA and
DOT, we are finding some significant variations both between and
within the two agencies' analyses and their presentation of these key
components.  For example, the base-case discount rates used in the 11
analyses we have reviewed ranged from 2.1 to 7 percent.  The reasons
for the rate chosen were frequently not explained nor were the
implications of using alternative rates discussed in the analyses. 
As a result, agency decisionmakers, Congress, and the public may not
be aware that the results of these analyses could have been
significantly different if different assumptions had been used. 

In several of the analyses we reviewed, various key components were
either missing altogether, difficult to find, or located in documents
other than the analyses themselves.  Some of the analyses consisted
of several separate documents that were never consolidated in a clear
manner.  For example, agency officials told us that one of the
economic analyses was actually 12 separate memoranda. 

We are also finding that many of the analyses are actually
cost-effectiveness studies rather than cost-benefit analyses. 
Cost-effectiveness analyses generally look for ways to meet a given
goal at the least cost, while cost-benefit analyses usually involve a
systematic identification of all costs and benefits associated with
the proposed regulation and alternative approaches.  Although
cost-effectiveness analyses permit comparison of the costs of
regulatory options relative to a given objective, these analyses
generally do not address the merits of the objective itself.  Agency
officials explained that they often prepare cost-effectiveness
analyses in cases where Congress has mandated the development of
specific regulations--such as new emission standards for locomotives. 
According to the officials, in such cases it makes more sense to look
for the most cost- effective approach to achieve that result rather
than assessing all of the benefits and costs of alternative
approaches. 

In some cases, despite relatively specific statutory mandates that
even prohibit the agency from considering costs in developing
regulations, the agency determined that a more systematic
cost-benefit analysis was warranted.  For example, even though the
Clean Air Act, as interpreted by the courts, prohibits EPA from
considering costs in promulgating National Ambient Air Quality
Standards (NAAQS), the agency prepared fairly comprehensive
cost-benefit analyses for its recent proposed and final ozone and
particulate matter standards.  According to the agency, the more
systematic cost-benefit analyses will aid EPA and the states when the
standards are implemented--at which time costs can be considered.  In
addition, the more systematic analyses provide important information
to the Congress and the public on the likely costs and benefits of
mandates where the agencies are limited in their regulatory
decisions. 

Our findings are similar to those of others who have recently
examined cost-benefit studies.  In its March 1997 report on economic
analyses, the Congressional Budget Office concluded that there is no
such thing as a typical analysis, and that even determining what
constitutes an economic analysis is difficult.\6 In its July 1997
draft report on governmentwide costs and benefits, OMB said that it
found "a wide variety in the type, form, and format" of the
information generated and used by the agencies, including "enormous
data gaps in the information available on regulatory benefits and
costs," problems with establishing baselines, and a lack of consensus
on how to value items or qualities not generally traded in the
marketplace.\7 OMB concluded that "we need to ensure that the quality
of data and analysis used by the agencies improves, [and] that
standardized assumptions and methodologies are applied more uniformly
across regulatory programs and agencies..." A diverse panel of
renowned economists made a similar recommendation in a 1996 paper
prepared under the auspices of the American Enterprise Institute, the
Annapolis Center, and Resources for the Future.\8 Among other things,
the panel recommended that agencies present their results using a
standard format that summarizes the key results and highlights major
uncertainties. 

Enactment of the analytical transparency and executive summary
requirements in S.  981 would extend and underscore Congress'
previous statutory requirements that agencies identify how regulatory
decisions are made.  We believe that Congress and the public have a
right to know what alternatives the agencies considered and what
assumptions they made in deciding how to regulate.  Although those
assumptions may legitimately vary from one analysis to another, the
agencies should explain those variations. 


--------------------
\4 Air Pollution:  Information Contained in EPA's Regulatory Impact
Analyses Can Be Made Clearer (GAO/RCED-97-38, April 14, 1997).  A
discount rate used in these analyses represents the interest rate
used to determine the present value of future benefits and costs. 

\5 Cost-Benefit Analysis Can Be Useful in Assessing Environmental
Regulations, Despite Limitations (GAO/RCED-84-62, Apr.  6, 1984). 

\6 Regulatory Impact Analysis:  Costs at Selected Agencies and
Implications for the Legislative Process, Congressional Budget
Office, Mar.  1997. 

\7 Draft Report to Congress on the Costs and Benefits of Federal
Regulations, OMB, July 22, 1997.  See 62 Fed.  Reg.  39352 (1997). 

\8 Benefit-Cost Analysis in Environmental, Health, and Safety
Regulation:  A Statement of Principles, Arrow, Cropper, et.  al.,
1996. 


   PEER REVIEW
-------------------------------------------------- Chapter Statement:4

S.  981 also requires agencies to provide for peer review of all
required cost-benefit analyses and risk assessments.  Peer review is
the critical evaluation of scientific technical work products by
independent experts.  The bill states that the peer review panels
should be "broadly representative and balanced," and that the results
of the reviews should be made available to the public. 

We believe that important economic analyses should be peer reviewed. 
In response to questions raised at a March 1997 hearing on peer
review at EPA, we said that, given the uncertainties associated with
predicting the future economic impacts of various regulatory
alternatives, the rigorous, independent review of economic analyses
should help enhance the products'--and the associated agency
decisions'--quality, credibility, and acceptability.\9

However, in our 1996 review of peer review at EPA, whose own policies
and procedures call for such reviews, we concluded that
implementation of these policies and procedures had been uneven.\10
In some cases important aspects of the agency's peer review policy
were not followed or peer review was not conducted at all.  Our
current work examining regulatory analyses at executive branch
agencies is yielding similar evidence.  None of the nine EPA analyses
that we have reviewed thus far have been peer reviewed, even though
all of the associated rules have an estimated annual impact on the
economy of at least $100 million. 

Some agency officials acknowledged that although peer review could
enhance the quality and credibility of some economic analyses,
statutory or court-imposed time constraints limit their ability to
conduct them.  In a recent article co-authored by EPA's Associate
Assistant Administrator for Policy, Planning, and Evaluation
(currently a visiting scholar at Resources for the Future), the
authors stressed the importance of conducting economic analyses in a
more open manner, involving outside experts and stakeholders.  They
also suggested that, time constraints notwithstanding, this could be
done more often if economic analyses were initiated at the beginning
of the rulemaking process.\11

The peer review requirements in S.  981 provide agencies with
substantial flexibility.  Agency heads may certify that adequate peer
review has already been conducted, and avoid the bill's requirements. 
However, agencies will need to carefully plan for such reviews given
the bill's requirement that they be done for each cost-benefit
analysis and risk assessment, which must be done at both proposed and
final rulemaking.  Agencies will also need to ensure that all
affected parties are represented on the panels and that panel reports
reflect the diversity of opinions that exist. 

Mr.  Chairman, our work has demonstrated that, although there is
broad consensus about the value of conducting peer reviews of
cost-benefit analyses used in the regulatory process, such reviews
are often not done.  In our view, systematic peer review as mandated
by S.  981 would go a long way toward improving the quality of
agencies' cost-benefit analyses. 


--------------------
\9 The previously mentioned panel of noted economists also concluded
that peer review of economic analyses should be used for regulations
with potentially large economic impacts and recommended that the
reviewers be selected on the basis of their demonstrated expertise
and reputation.  The importance of peer review of key economic
documents was also raised in a recent report by The
Presidential/Congressional Commission on Risk Assessment and Risk
Management.  The Commission found that the quality and interpretation
of economic analyses did not receive enough attention by agencies and
recommended that they receive adequate peer review. 

\10 Peer Review:  EPA's Implementation Remains Uneven (GAO/RCED-
96-236, Sept.  24, 1996). 

\11 "Economic Analysis:  Benefits, Costs, Implications" in Economic
Analyses at EPA:  Assessing Regulatory Impact, 1997. 


   CONCLUSIONS
-------------------------------------------------- Chapter Statement:5

S.  981 contains a number of provisions to improve regulatory
management.  Requiring agencies to clearly describe in a single
document changes made at the suggestion of OIRA or while under OIRA
review can improve the transparency of the review process. 
Establishing advisory committees to identify rules for review could
result in the elimination or revision of burdensome requirements. 
Improving the transparency and understandability of cost-benefit
analyses by using executive summaries and other devices will help the
public comprehend why regulatory decisions are made.  Peer reviews of
those analyses can help ensure that regulatory proposals are
scientifically grounded.  Although other provisions in the bill, such
as comparative risk assessment and interagency coordination, may have
similarly beneficial results, we have not done specific work in those
areas. 

Passage of S.  981 would provide a statutory foundation for such
principles as openness, accountability, and sound science in
rulemaking.  The key to achieving those principles is successful
implementation, which will require strong guidance from OIRA and
oversight from this and other Committees in Congress.  Enactment of
S.  981 would provide a sound basis for that oversight. 


------------------------------------------------ Chapter Statement:5.1

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

*** End of document. ***