June 26, 1998 | Executive Summary on Regulation
Since 1994, Congress has taken modest steps toward improving the federal regulatory system through such laws as the Unfunded Mandates Reform Act of 1995, the Small Business Regulatory Enforcement Fairness Act, the Congressional Review Act (CRA), and Office of Management and Budget (OMB) Regulatory Accounting Reports. Yet, despite these good intentions, the number of final rule documents published in 1996 in the Federal Register was the highest since 1984.
Even worse, between April 1, 1996, when the U.S. General Accounting Office (GAO) began to track the final rules issued by federal agencies under the CRA, and April 30, 1998, Congress received 8,675 new final rules for review. But even though the CRA allows Congress to review each new rule and consider a joint resolution of disapproval to overrule it, only a handful of such resolutions were introduced, and none came close to a floor vote. The result: Not one new rule was disapproved. In addition, 126 of these 8,675 rules qualified as "major" rules, each of which would impose a cost of at least $100 million annually on the American economy. These 126 major rules--only 1.0 percent of all final rules crafted during this period--will cost American consumers, employers, employees, and taxpayers at least $12.6 billion.
In many cases, the only information on a new rule that is available to Members of Congress is provided by the agency that is promulgating the rule. The limited information that currently exists about the costs and benefits of regulation, and the sheer volume of final rules issued, have led several legislators to demand that Congress do a better job of carrying out its constitutional responsibility of full regulatory oversight. But Congress is at a disadvantage: The current federal regulatory system encompasses more than 50 federal agencies, more than 126,000 workers, and annual spending of $14 billion; at best, Congress employs only a handful of people to monitor federal regulatory activity. Moreover, the federal agencies have the pertinent information that Congress needs, and Congress must rely on the information that each agency is willing to provide. Obviously, no federal agency with an interest in seeing a particular rule instituted is going to be inclined to maximize the availability of information that might bring that rule into question.
Congress needs reliable mechanisms to facilitate a balanced and informed discussion of the merits of each rule as early as possible, preferably before the rule is issued. But Congress has failed to put in place any structure, such as a coordinated committee review mechanism, or set aside any resources to help it carry out the requirements of the Congressional Review Act. As a result, many Members remain unaware of, or ill-informed about, the volume and types of rules that federal agencies have generated since 1996. Members often engage in the costly and time-consuming exercise of submitting detailed requests to agencies for basic information about their rulemaking activity, and responses may not come for years, let alone weeks or months. This puts Congress at an inherent disadvantage in trying to oversee federal regulatory activity.
To address this problem, Representatives Sue Kelly (R-NY) and James Talent (R-MO) and Senators Richard Shelby (R-AL) and Christopher Bond (R-MO) have introduced the Congressional Office of Regulatory Analysis Creation Act (H.R. 1704/S. 1675). These bills would establish a nonpartisan Congressional Office of Regulatory Analysis (CORA) to bring balance to the regulatory review process and break the virtual monopoly on regulatory analysis that federal regulatory agencies now enjoy. CORA's sole priority would be to monitor the federal regulatory system for Congress. Currently, higher priority budget and program audit activities often prevent the Congressional Budget Office (CBO) and GAO from focusing effectively on the federal regulatory system. H.R. 1704/S. 1675 would transfer the functions of the GAO under the Congressional Review Act, and certain functions of the CBO under the Unfunded Mandates Reform Act, to CORA. Together, the functions of the CBO and CORA would become the congressional counterparts of the existing budget and regulatory functions of OMB.
Receive copies of all rules issued by federal agencies;
Undertake an independent analysis of each major rule;
As resources permit, undertake analyses of other rules requested by Members; and
Produce an annual report on the total costs of regulation to the U.S. economy. This report would be the legislative version of the White House OMB report required by Congress in 1997 and 1998.
Despite providing such detailed assessments of regulatory costs, the Congressional Office of Regulatory Analysis Act could be improved to require that CORA report on the benefits of each regulation as well as its costs. The bill authorizes funding for CORA through FY 2006 at $5.2 million annually, an amount roughly equivalent to funding for the Office of Information and Regulatory Affairs (OIRA) in FY 1998. The CBO reported that H.R. 1704 would not affect direct spending or receipts and that pay-as-you-go procedures would not apply.
After receiving more than 8,600 new rules in the two years since passage of the CRA, Congress cannot possibly assure the American people that it is able to address the substance of each rule effectively. The establishment of a Congressional Office of Regulatory Analysis--whether as a free-standing office, as proposed in H.R. 1704/S.1675, or as part of the CBO--represents the next logical step in Congress's efforts to improve the regulatory system and foster sensible rulemaking based on facts. The information provided by such an office would help legislators understand the financial and economic impact of their decisions before they approve each rule or pass a new law.
Angela Antonelli is former Director of The Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.