Federal Agency Plans for Retrospective Reviews of Rules

9/1/2011

On Aug. 23, the Obama administration released a set of “look-back” plans from federal agencies that will reform or jettison outdated or ineffective rules. The 26 plans were drafted in response to a January executive order (E.O. 13563) that created a regulatory review initiative and instructed federal agencies to review existing regulations and revise those that are outdated, redundant, or "unnecessarily burdensome."

OMB Watch closely followed the regulatory review initiative and performed an analysis of the changes select agencies plan to make to important health and safety standards and the impact those plans are likely to have on the American people. On this page, you will find information about the regulatory review process and analyses of plans from the U.S. Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the Department of Labor (DOL). The materials also analyze agency efforts to make the retrospective review process transparent and responsive to public input.

Explanation of the Obama Administration's regulatory review initiative

ANALYSIS OF INDIVIDUAL PLANS


Introduction

The Aug. 23 release of final plans for federal agencies' retrospective reviews of rules is the culmination of eight months of work. The process began with President Obama's Jan. 18 Executive Order 13563, "Improving Regulation and Regulatory Review" (E.O. 13563), which instructed federal agencies to develop plans for the ongoing review of existing regulations to identify rules that are "outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them."

On May 26, 30 agencies submitted draft plans that reflected internal collections of rules that might need to be revisited, along with suggestions from the public about the regulations that should be reviewed. Twenty-six final plans contain the list of rules that will be revised in accordance with E.O 13563, as well as descriptions of how the agencies intend to incorporate ongoing retrospective review processes into their administrative procedures. Four independent agencies that submitted preliminary plans did not publish final versions. These and all other independent agencies are expected to release plans in November.

The analysis available on this page will take an in-depth look at the plans produced by six agencies that are most commonly involved in protecting public health and safety: the U.S. Environmental Protection Agency (EPA), the Food and Drug Administration (FDA) (in the Department of Health and Human Services (HHS)), the U.S. Department of Agriculture (USDA), the Department of the Interior (DOI), the Department of Labor (DOL), and the Department of Transportation (DOT).

Overall, the final plans closely reflect the preliminary plans released by agencies in May. Many of the agencies found inefficiencies in paperwork submission procedures, approval processes, or outdated technology requirements that can be fixed through minor changes to existing regulations. Others found that better coordination between departments or among agencies could eliminate redundancies and streamline procedures. In general, agencies stuck to their missions and did not cave to political or industry pressure to undermine their missions to establish standards and regulate activities to protect the public, as outlined by law.

In finalizing their plans, some agencies, such as the FDA, integrated specific cost saving, health benefit, and burden reduction amounts. Others added or subtracted rules to be reviewed. Many agencies also added information about the results of their requests for public comment. Most of these changes can be traced back to a June 14 Office of Information and Regulatory Affairs (OIRA) memorandum that provided guidelines for what should be part of the plans. In the memorandum, agencies were encouraged to include “specific reforms and initiatives that will significantly reduce existing regulatory burdens and promote economic growth and job creation.” The memorandum also reiterates the importance of public participation and requests that agencies include cost savings and burden reduction estimates and timelines for implementation of the changes in their plans.

Impact on Health and Safety Protections

There have been concerns that, given industry pressure for deregulation, and the fact that E.O. 13563 and subsequent guidance stressed cost savings and burden reduction, a bias was being created to repeal or weaken health and safety regulations. However, our initial analysis suggests that agencies worked to protect the primary mission of the agency while looking for cost savings.

For example, the HHS plan states, “This Department has a mission and responsibility to protect public health and safety and this mission and responsibility must take priority. It is only by maintaining a robust and healthy workforce and citizenry that the nation’s economy will grow and prosper. This Department will continue to be sensitive to the need to promote the economic health of the nation without sacrificing the health and welfare of the American people.”

While the statements of HHS and other agencies are encouraging, the effects of some of the regulatory changes may not be clear for many years. Although agencies listed the rules that they will be revising and in some cases estimated the effects the changes will have on industry and the public, the specific changes intended were not always made clear. For example, many agencies indicate they will reduce paperwork requirements by switching to electronic reporting. This seems like a reasonable, efficient change, but if the electronic reporting system does not collect all of the same information as the current system, it could deprive regulators of vital industry data.

Public Participation

A guidance document from OIRA on the retrospective review process indicated that agencies should seek public input on specific rules to be reviewed and on the retrospective review process. Of the agencies analyzed, all six published notices in the Federal Register requesting public comment on the reviews. All except USDA had two separate comment periods: one prior to the release of the preliminary plan to suggest rules to be included and one after the preliminary release, during which the public was encouraged to comment on both the rules proposed for review and on the integration of a periodic retrospective review into agency procedures.

Since the guidance document did not require agencies to collect comments in any particular way, each agency had its own approach to requesting public input, with mixed results. EPA had the longest comment period – a total of 77 days over two comment periods — and received more than 800 responses. USDA had the shortest public participation window, only accepting comments in the 30 days before the preliminary plan was released. Nevertheless, USDA received the most comments (about 1,100), most of which focused on farm programs run by the Farm Service Agency. Conversely, DOI, which accepted comments both before and after the release of the preliminary plan for a total of 61 days, received suggestions from only about 40 commenters.

In addition to the familiar Federal Register notice, some agencies reached out to the public in other ways. EPA held twenty public meetings and listening sessions before the release of its draft look-back plan, and DOT held one meeting that participants could attend in person, over the Internet, or by phone. DOT and DOL also created interactive websites through Ideascale, a program similar to a message board or comment section of a blog that allows participants to post suggestions, respond to others' posts, and “agree” or “disagree” with submissions.

Inclusion of Public Suggestions

Regardless of the number of comments an agency receives, public input is only useful if the agencies incorporate the suggestions into their plans. As with the rest of the review process, each agency took a different approach to including and reacting to public comments. DOT attached an appendix to its plan that listed every comment it received. The appendix was divided into three categories: actions being taken, further study required, and no further action. For each rule that a commenter suggested revisiting, DOT provided an explanation for why it was or was not including it in the retrospective review. Of the 79 rules DOT proposes to review, 51 were suggested by commenters. The agency listed 55 rules that would require further study, of which 51 came from comments submitted by the public. Other agencies, such as FDA, also had clear descriptions of comments and explanations for action or inaction where appropriate. The Food Safety and Inspection Service (FSIS) in USDA and DOI, on the other hand, summarized common suggestions from the public but did not explain why certain rules were selected for review while others were not.

Across the agencies analyzed here, the vast majority of comments were from industry members and associations. Opportunities for business groups to weigh in the look back process were actively utilized by them. Industry groups and trade associations have resources and staff dedicated to following the regulatory process and attempting to influence its outcomes. In other words, business groups and industries with a specific material interest in reducing certain rules are more likely to actively participate in the rule-making process than public interest groups with a broad mandate to protect the public. This is true in the general process and was true in the retrospective look back.

The industry comments tended to recommend two types of revisions: eliminating or easing regulations they saw as burdensome and standardizing or clarifying rules in which compliance was redundant or confusing.

An exception was the collection of recommendations submitted by the Institute for Policy Integrity at the New York University School of Law. The comments, its authors submitted to both EPA and DOT, suggested that the retrospective review process should be used to identify lapses in regulation and cautioned that instigating reviews based on the “extent of public complaints,” one of DOT’s criteria for determining reviews, could lead to agencies caving to the demands of special interests instead of creating good policies.

Transparency

Despite certain agencies' efforts to make as much information as possible available to the public, significant parts of the review process still lacked transparency. Notably, the E.O. and subsequent guidance specifically asked agencies to list rules to be “modified, streamlined, expanded, or repealed.” None of the plans analyzed included specific breakdowns of which rules fell into which categories. In addition, agencies often wrote vague and overly technical descriptions of the proposed revisions to rules. As a result, the full impact of the retrospective review process will not become clear until the scheduled revisions are completed.

Continuing Concerns

OIRA required agencies to submit their plans for review in advance of publication, but the results have not been made public.

Despite instructions that the reviews should cover only “existing significant regulations,” many agencies included proposed rules in the review process. Approximately one of every four rules in the look-backs of DOL, DOI, and FDA were in the proposal stage. While DOI and FDA acknowledge the inclusion of proposals in their plans, the Labor “Scope of Plan” section incorrectly states that the reviews will only include existing regulations.

The inclusion of these proposed rules in the review process is problematic because the purpose was to find inefficiencies in the existing regulatory system, not to allow special interests to have another opportunity to influence the rulemaking process or cause delay in the implementation of new safeguards.

Creating an Ongoing Retrospective Review Process

In addition to this initial retrospective review, the executive order directed agencies to set procedures for the periodic review of existing rules. The Regulatory Flexibility Act (RFA) already requires agencies to review all rules that have a “significant economic effect upon a substantial number” of small businesses every 10 years. During an RFA review, the agency must consider whether or not the rule is necessary, public complaints about the rule, the complexity of the regulation, whether it conflicts or duplicates other federal or state regulations and the extent to which the climate (technology, economic conditions, etc.) of the regulated entities has changed since the rule was last revised.

To comply with the RFA, the Small Business Regulatory Enforcement Fairness Act, and Executive Order 12866, most agencies already have regulatory review procedures in place. Each year, agencies also list the rules they intend to review in the fall regulatory agenda. Due to these requirements, most review plans state that the retrospective review process demanded by E.O. 13563 will be integrated into the agency’s existing system. For example, DOI requires each bureau within the agency to review every section of the Code of Federal Regulations under its purview every five years. In order to incorporate a retrospective review into the larger review process, DOI is adding the requirements that each bureau include a retrospective review of one major rule in its regulatory agenda each year; the criteria for choosing a rule for review will include whether or not the rule is considered “burdensome or unnecessarily restrictive based upon public or internal comments.”

This approach seems to be a good compromise. With so many existing review requirements already in place, imposing additional backward looking review demands on agencies could divert dwindling agency resources from addressing new health, safety, and environmental challenges, from completing rules to implement existing laws, or from critical enforcement activities.