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E-M:/ S.981 -- Reg Reform ALERT

Enviro-Mich message from Vicki Levengood <vlevengood@voyager.net>

>From Reece Rushing at OMB Watch, the latest on S.981, Senator Carl
Levin's so-called Regulatory Reform bill.  

Vicki Levengood
National Environmental Trust / Michigan
fax: 517.332.0363

********************** 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 
million; and

*       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.      

Reece Rushing
CSS Coordinator, OMB Watch 
Phone: 202-234-8494
Fax: 202-234-5150
E-mail: rushingr@ombwatch.org
Date: 07/16/98
Time: 19:33:29

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