Federal Agencies Release Retrospective Review Plans

On Aug. 23, federal agencies released their final plans for conducting retrospective reviews of regulations as directed by a January executive order from President Obama. Overall, the final plans closely reflect the preliminary plans released by agencies in May. Agencies stuck to their missions and did not cave to political or industry pressure to undermine their responsibilities to establish and enforce standards to protect the public.

The release of final plans for federal agencies' retrospective reviews of rules is the culmination of eight months of work. The process began with 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 executive branch agencies submitted draft plans that reflected internal assessments of rules that might need to be revisited, along with suggestions from the public about the regulations that should be reviewed. The four independent agencies that submitted preliminary plans in May (the National Labor Relations Board, the Railroad Retirement Board, the Surface Transportation Board, and the Office Thrift Supervision) did not publish final versions in August. These and all other independent agencies are expected to release plans in November. The Securities and Exchange Commission (SEC) announced Sept. 6 that it is accepting public comment through Oct. 6 on its plan to conduct retrospective reviews.

The plans of the 26 federal agencies that report directly to the president contain the list of rules that will be revised in accordance with the executive order, as well as descriptions of how the agencies intend to incorporate ongoing retrospective review processes into their administrative procedures. Many of the agencies found inefficiencies in paperwork submission procedures, approval processes, or outdated technology requirements that can be fixed through minor changes to existing regulations.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 finalizing their plans, some agencies integrated specific cost savings and burden-reduction benefits in their estimates of overall savings. 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 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 memo 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.

OMB Watch reviewed 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). The plans were reviewed under various criteria including their impacts on health and safety protections, public participation, and transparency. (See our webpage for highlights, detailed analyses of three plans (EPA, FDA, and DOL), and background materials.)

Impact on Health and Safety Protections

Given industry pressure for deregulation and the fact that E.O. 13563 and subsequent guidance stressed cost savings and reducing paperwork requirements for regulated entities, the public interest community was concerned that the look-back process would have a chilling effect on agencies and cause them to repeal or weaken health and safety regulations. However, the analysis suggests that agencies worked to protect their primary missions 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."

However, 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 indicated 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 and the public of vital industry data.

Public Participation

OIRA's guidance 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.

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). 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 using Federal Register notices, 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. 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

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. 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. 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.

The vast majority of comments were from industry members and associations. 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.

The Institute for Policy Integrity at the New York University School of Law submitted comments to both EPA and DOT. The authors 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.

Continuing Concerns

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.

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 plans 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 with 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 on regulatory review, most agencies have regulatory review procedures in place. Agencies also annually list the rules they intend to review in the fall regulatory agenda. Most of the final plans stated 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 a requirement that each bureau include a retrospective review of one major rule in its regulatory agenda each year.

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.

back to Blog