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E-M:/ S.981 -- Reg Reform ALERT
Enviro-Mich message from Vicki Levengood <email@example.com>
>From Reece Rushing at OMB Watch, the latest on S.981, Senator Carl
Levin's so-called Regulatory Reform bill.
National Environmental Trust / Michigan
********************** CSS ALERT ***************************
BIG DEAL ON REG 'REFORM'
After weeks of negotiation with Sens. Fred Thompson (R-TN) and
Carl Levin (D-MI), the Clinton Administration has agreed to end
its opposition to a comprehensive regulatory "reform" bill (S.
981) that has been strongly opposed by the public interest
community ever since its introduction more than a year ago.
In a letter to Thompson, OMB's acting director, Jack Lew,
wrote, "[T]he changes you indicate that you are willing to make
would resolve our concerns, and if the bill emerges from the
Senate and House as you now propose, with no changes, the
President would find it acceptable and sign it."
However, now it is unclear if the business community and more
conservative members like Sen. Don Nickles (R-OK) will remain
Among the changes worked out with the Administration, Thompson
and Levin have agreed to:
* completely remove the look-back provision of the bill,
which would have put agencies on a treadmill of re-reviewing
rules already on the books;
* add language so that courts do not review the content
of an agency's rulemaking analysis;
* raise the threshold for peer review of cost-benefit
analysis to cover rules exceeding $500 million instead of $100
* add a stronger "savings clause" so that S. 981 does not
override underlying statutes.
While Citizens for Sensible Safeguards recognizes these
improvements, the bill still does not meet the test outlined in
a March 6 letter to Thompson from the Administration, and
therefore must still be strongly opposed.
In that letter, Franklin Raines, then director of OMB, wrote,
"We want to be sure that any new law meets a simple test: that
it truly improves the regulatory system, and does not impair --
by creating more litigation, more red tape, and more delay --
the agencies' ability to do their jobs."
Even with the recent modifications, S. 981 would still result
in added litigation, delay rulemakings in health and safety
areas, and generally tilt the regulatory playing field in
favor of the regulated community. More to the point, the bill
does nothing to strengthen the rulemaking process from a public
interest perspective or address unmet public needs.
The Administration believes it has succeeded in vastly
improving the bill. But the issue is not whether the agreement
is better than the original S. 981 or any other bill; it is
whether it will improve the regulatory process as it currently
exists. Today, it takes OSHA an average of more than 10 years
to issue a major regulation. Environmental regulation takes
almost as long, and it often requires a court order to get EPA
to act. Too many lives are lost before adequate food safety
and other consumer protections are put in place. The modified
Levin bill will do nothing to improve this situation. The bill
also does nothing to identify areas where the government should
take regulatory action to protect the public.
As the Administration said in its March 6 statement, "One of
the problems with comprehensive legislation is that so many
different kinds of rulemakings are affected." Given this bill
does not improve the regulatory process, and may, in fact, do
damage, it makes little sense to pursue a comprehensive
regulatory "reform" measure.
Moreover, over the past few years Congress has enacted more
than 20 new agency requirements that benefit the regulated
community, slow down the rulemaking process, and seek to turn
health and safety protections into an economic, mechanistic
At no time in the debate over these issues has there been
serious discussion about addressing the resource needs of
agencies, strengthening the rulemaking process through more
public involvement, addressing unmet health and safety needs,
improving enforcement of and compliance with existing rules,
finding ways to streamline the process to speed things up, and
bringing greater accountability and transparency to the public.
In the current political environment, better rules mean cheaper
This may be why the Administration has not endorsed the
modified S. 981, but rather has simply removed its opposition
to the bill. The Administration's negotiators have made a bad
bill less bad. But they have not attempted to craft a bill
that would be helpful or even supportable.
Now the Administration finds itself in a very tenuous position.
Concluding his letter, Lew wrote, "I should note ... that our
experience with past efforts to resolve these differences
suggests that good ideas and the resolution of differences can
be destroyed during the long process of getting a bill to the
President's desk, and the nuances and balance that we have all
sought in this legislation could be easily disrupted. Many of
the terms used carry great meaning, and further modification is
likely to renew the concerns that have animated our past
opposition to bills of this type. Accordingly, we look forward
to working with you to ensure that any bill the Congress passes
on this subject is fully consistent with the one on which we
have reached agreement."
Beyond the overall major problems identified above, there
remain a number of specific substantive concerns with the
modified S. 981:
* PEER REVIEW. Under the modified bill, agencies are
required to establish peer review panels to review nearly every
risk assessment as well as cost-benefit analyses that have
annual costs of $500 million or more. The regulated community
-- that is, those with a financial interest in the outcome of
the rule -- may serve on peer review panels that help shape the
outcome of the rule. Yet agency experts may not serve on such
panels. This fox-in-the-hen-house approach to rulemaking is
dangerous to the public interest.
Additionally, some agencies, such as OSHA, have a system for
reviewing technical work that do not incorporate the
traditional peer review model envisioned in the bill. It is
unlikely that such agencies can substitute their methods for
the requirements in the modified bill.
* OMB REVIEWS. The bill codifies authority for OMB to
review agency rules, which it has exercised since Executive
Order 12291 was issued in 1981. Over that period of time, but
most particularly in the years before the Clinton
Administration, OMB would delay its review if it did not
support a particular rule. This delay tactic received national
attention during the operation of the Quayle Council on
Competitiveness. The modified bill gives OMB 90 days to review
a rule, but allows unlimited extensions on this deadline. In
effect, it creates an unacceptable opportunity for the delay
tactics exercised in the 1980s.
* SUNSHINE AT OMB. The bill codifies public disclosure
procedures currently employed by OMB. These procedures are
inadequate. The public is unable to trace activities related
to a particular rule, identify specific substantive concerns
raised by OMB, or adequately search through the regulatory
materials posted by OMB to the World Wide Web.
* RISK ASSESSMENTS. The modified bill requires rules
that are not based on risk assessments, such as those involving
the toxics right-to-know law, to perform risk assessments.
This is a problem with a one-size-fits-all bill.
* COST ESTIMATES THAT MISLEAD. The modified bill
requires agencies to include "indirect" costs, but does not
define the term. The regulated community has long wanted to
include indirect costs in estimates to drive costs up when
determining whether to regulate. Additionally, although it is
well documented that cost estimates are inflated for many
reasons (e.g., cannot know about newer technologies that are
developed as a result of a regulation), there are no
instructions on how to handle such issues. As a result,
cost-benefit analyses will be skewed in a manner to suggest
less public protection.
CSS Coordinator, OMB Watch
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