Sunday, March 16, 2014

Senate Hearing Reveals Growing bi-partisan Support for Retrospective Review of Federal Regulations

Hearings before a Senate panel revealed a growing and deepening bi-partisan consensus to move forward with legislative reform of the federal regulatory process, including the retrospective review of existing regulations.  Senator Jon Tester (D-MT), Chair of the Subcommittee on Efficiency and Effectiveness of Federal Programs, said that many Senators support efforts to achieve meaningful reform of the federal regulatory process to make it more transparent and responsive to congressional intent.

Senator David Pryor (D-ARK) said that it is time to review the foundations of the federal  regulatory system. He mentioned that the Regulatory Accountability Act, S. 1029, which he is co-sponsoring, if done right, would make the regulatory system better, cheaper and fairer. Under S. 1029, an agency must state its statutory authority for adopting a regulation. Senator Pryor noted that the legislation  does not go after any one agency or one specific regulation. It amends the Administrative Procedure Act to place a stronger emphasis on early engagement between regulators and those affected by the regulations they issue. S. 1029 was introduced by Senator Rob Portman , the Ranking Member of the Subcommittee.

Retrospective review. Senator Angus King (I-ME) testified before the Subcommittee about his Regulatory Improvement Act, S. 1390, co-sponsored by Senator Roy Blunt (R-MO), which would provide an additional, expeditious mechanism through which a retrospective review of old regulations could be conducted. The bill is designed to deal with what Senator King called regulatory accumulation, which is a byproduct of the increasing number of entities vested with varying missions to protect the public. It is imperative to find a way to revisit old regulations to ensure that they are still relevant to present circumstances and are not in conflict with requirements from other regulating bodies.

Currently, he acknowledged, federal agencies embark upon periodic self-reviews in order to examine the utility of older regulations. However, the existing process is limited for a number of reasons, including  restricted budgetary and personnel resources, insufficient data collection, and competing priorities. The Regulatory Improvement Act would provide an additional, expeditious mechanism through which a review of old regulations could be conducted.

The Act would create an independent Regulatory Improvement Commission that would be tasked with reviewing outdated regulations with the goals of modifying, consolidating, or repealing regulations in order to reduce compliance costs, encourage growth and innovation, and improve competitiveness. The composition of the Commission would be determined by congressional leadership and the President, and the Commission would be tasked with identifying a single sector or area of regulations for consideration. After extensive review involving broad public and stakeholder input, the Commission would submit to Congress a report containing regulations in need of streamlining, consolidation, or repeal. This report would enjoy expedited legislative procedures and would be subject to an up-or-down vote in both houses of Congress without amendment.

Howard Shelanski, Director of the Office of Information and Regulatory Affairs OIRA), testified that retrospective review of existing regulations is a top priority.  Executive Orders 13563 and 13610 make clear that flexibility and removal of unnecessary burdens are essential elements of the federal rulemaking process, as is improving rules already on the books.

The OIRA chief said that retrospective review is a crucial way to ensure that the federal regulatory system is modern, streamlined, and does not impose unnecessary burdens. Even regulations that were well crafted when first promulgated can become unnecessary or excessively burdensome over time and with changing conditions. Similarly, rules that are not achieving their objectives may be in need of revision in light of experience, new evidence, or new technology. Retrospective review of regulations on the books helps to ensure that those regulations are continuing to help promote safety, health, welfare, and well-being without imposing unnecessary costs or missing the opportunity to achieve greater net benefits.

Executive Order 13610 asks agencies to report regularly on the progress of their retrospective review activities. Federal agencies have provided updates on their initiatives, he noted, many of which are new efforts that agencies added since their July 2013 listing of look-back plans. These efforts are already saving more than $10 billion in regulatory costs in the near term, with more savings to come.

While there ha been important progress on retrospective review, said the OIRA  chief, we need to do even better. OIRA is working with colleagues elsewhere in OMB and at the agencies on several ways to further institutionalize retrospective review as an essential component of government regulatory policy. As part of this effort, OIRA is considering and developing several components that will make regulatory look-back a more systematic priority for agencies. Such institutionalization of retrospective review, both to ensure follow-through on existing plans and to help agencies develop their future plans, will be one of OIRA’s  key objectives moving forward.

Senator Portman mentioned to the OIRA head that he is concerned about a possible conflict of interest inherent in an agency conducting a retrospective review of its own regulation. Mr. Shelanski said that he has not seen this conflict of interest. Indeed, the federal regulatory agencies appear anxious to conduct retrospective reviews in good faith.