[Weekly Compilation of Presidential Documents Volume 31, Number 10 (Monday, March 13, 1995)]
[Pages 363-365]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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,''

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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regulations now in force and eliminate or revise those that are outdated 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:
<bullet>    Is this regulation obsolete?
<bullet>    Could its intended goal be achieved in more efficient, less 
            intrusive ways?
<bullet>    Are there better private sector alternatives, such as market 
            mechanisms, that can better achieve the public good 
            envisioned by the regulation?
<bullet>    Could private business, setting its own standards and being 
            subject to public accountability, do the job as well?
<bullet>    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.
    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.

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    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.