    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [March 4, 1995]
    [Pages 304-306]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Memorandum on Regulatory Reform
    March 4, 1995

    Memorandum for Heads of Departments and Agencies

    Subject: Regulatory Reinvention Initiative

        Last week, I announced this Administration's plans for further
    reform of the Federal regulatory system. This is a central part of
    reinventing our Government. All Americans want the benefits of effective
    regulation: clean water, safer workplaces, wholesome food, sound
    financial institutions. But, too often the rules are drafted with such
    detailed lists of dos and don'ts that the objectives they seek to
    achieve are undermined. Clear goals and cooperation would work better.
    Too often, businesses, especially small ones, face a profusion of
    overlapping and sometimes conflicting rules.
        We have already made real progress in reforming regulation. This
    memorandum will build on the regulatory philosophy set forth in
    Executive Order No. 12866 of September 30, 1993, ``Regulatory Planning
    and Review,'' which is premised on the recognition of the legitimate
    role of government to govern, but to do so in a focused, tailored, and
    sensible way.
        In the year and a half since that order was signed, we have opened
    the rulemaking process to the public, we have increased cooperation and
    coordination among the Federal agencies, and we have seen good processes
    produce good decisions.
        However, not all agencies have taken the steps necessary to
    implement regulatory reform. To reaffirm and implement the principles of
    Executive Order No. 12866, regulatory reform must be a top priority.
        Accordingly, I direct you to focus on the following four steps,
    which are an integral part of our ongoing Regulatory Reform Initiative.

    First: Cut Obsolete Regulations

        I direct you to conduct a page-by-page review of all of your agency
    regulations now in force and eliminate or revise those that are outdated
    or otherwise in need of reform. Your review should include careful
    consideration of at least the following issues:
        Is this regulation obsolete?
        Could its intended goal be achieved in more efficient, less
                intrusive ways?
        Are there better private sector alternatives, such as market
                mechanisms, that can better achieve the public good
                envisioned by the regulation?
        Could private business, setting its own standards and being
                subject to public accountability, do the job as well?
        Could the States or local governments do the job, making
                Federal regulation unnecessary?
        This review should build on the work already being done by your
    agencies under section 5 of Executive Order No. 12866.
        Your regulatory review task force should be headed by one of your
    appointees who should be given your full support and should, to the
    extent practicable, be freed of other duties.
        I further direct you to deliver to me by June 1 a list of
    regulations that you plan to eliminate or modify with a copy of the
    report sent to Sally Katzen, Administrator of the Office of Information
    and Regulatory Affairs (OIRA). The list should distinguish between the
    regulations that can be modified or eliminated administratively and
    those that require legislative authority for modification or
    elimination.

    Second: Reward Results, Not Red Tape

        I direct you to change the way you measure the performance of both
    your agency and your frontline regulators so as to focus on results, not
    process and punishment. For example, Occupational Safety and Health
    Administration (OSHA) inspectors should not be evaluated by the number
    of citations they write, nor should officials of the Consumer Product
    Safety Commission be judged by the number of boxes of consumer goods
    that are detained in shipment. This change in measurements should
    involve a two-step process.
        First, you should identify appropriate performance measures and
    prepare a draft in clear, understandable terms, of the results you are
    seeking to achieve through your regulatory program. The draft should be
    circulated to frontline regulators for review and comment. This is the
    same work needed to meet the requirements of the Government Performance
    and Results Act of 1993.

    [[Page 305]]

        Second, you should evaluate and reward employees based on the
    realization of those measures/goals.
        By no later than June 1, I direct you to (a) eliminate all internal
    personnel performance measures based on process (number of visits made,
    etc.) and punishment (number of violations found, amount of fines
    levied, etc.), and (b) provide to the National Performance Review (NPR)
    staff a catalogue of the changes that you are making in existing
    internal performance evaluations to reward employees. You should also
    provide material describing shifts in resource allocation from
    enforcement to compliance.

    Third: Get Out of Washington and Create Grassroots Partnerships

        I direct you to promptly convene groups consisting of frontline
    regulators and the people affected by their regulations. These
    conversations should take place around the country--at our cleanup
    sites, our factories, our ports.
        I further direct you to submit a schedule of your planned meetings
    to the NPR staff by March 30 and work with NPR in following through on
    those meetings.

    Fourth: Negotiate, Don't Dictate

        It is time to move from a process where lawyers and bureaucrats
    write volumes of regulations to one where people work in partnership to
    issue sensible regulations that impose the least burden without
    sacrificing rational and necessary protections. In September 1993, I
    asked each of you to identify at least one rule that could be conducted
    through negotiated rulemaking (or to explain why such could not be done)
    in order to promote consensual rulemaking as opposed to the more
    traditional rulemaking that has dominated the regulatory arena.
        I now direct you to expand substantially your efforts to promote
    consensual rulemaking. To this end, you should submit to OIRA, no later
    than March 30, a list of upcoming rulemakings that can be converted into
    negotiated rulemakings. I have directed Sally Katzen to review your
    lists with a view toward making clear to the regulated community that we
    want to work together productively on even the most difficult subjects.
        To facilitate our ability to learn from those affected by
    regulation, I will amend Executive Order No. 12838 (which requires
    agencies to reduce the number of advisory committees that they use and
    to limit the future use of such committees) to allow for advisory
    committees established for negotiated rulemakings.
        I also intend to take additional steps to increase our ability to
    learn from those affected by regulation. While many laws and rules that
    limit the ability to regulators to talk with those being regulated were
    imposed to curb abuse, they now often serve as a barrier to meaningful
    communication between the regulators and the regulated. To address this
    problem, and to promote consensus building and a less adversarial
    environment, I direct you to review all of your administrative ex parte
    rules and eliminate any that restrict communication prior to the
    publication of a proposed rule--other than rules requiring the simple
    disclosure of the time, place, purpose, and participants of meetings (as
    in Executive Order No. 12866). We will also begin drafting legislation
    that will carve out exemptions to the Federal Advisory Committee Act to
    promote a better understanding of the issues, such as exemptions for
    meetings with State/local/tribal governments and with scientific or
    technical advisors.
        I also ask you to think about other ways to promote better
    communication, consensus building, and a less adversarial environment.
    Please send your ideas to the Office of the Vice President.
        As I said on Tuesday, February 21, 1995, you are to make regulatory
    reform a top priority. Good government demands it and your full
    cooperation is crucial.

                                                          William J. Clinton

    Note: This memorandum was released by the Office of the Press Secretary
    on March 6.

    [[Page 306]]