On March 25, 1999, Senators Carl Levin
(D-MI) and Fred Thompson (R-TN) introduced S. 746, the
Regulatory Improvement Act of 1999. The impetus behind this
initiative is a concern about the increasing number of expensive,
one-size-fits-all rules with diminishing returns--regulators
chasing smaller and smaller risks at greater and greater costs--and
the lack of accountability of regulators to the public for
decisions they make.
As currently drafted, the Regulatory
Improvement Act would affirm broad agency discretion, fail to
improve public health, safety, and environmental outcomes
significantly, and would make it more difficult for Congress, the
courts, and the public to hold agencies accountable for their
decisions. Not surprisingly, the White House has stated its
willingness to sign the bill while opposing other regulatory
accountability bills in Congress.
The Regulatory Improvement Act of 1999
would help regulators avoid accountability and issue the
regulations they want because it:
Applies to a
small set of all rules.
The bill's requirements apply only to major rules, less than 2
percent of all final rules. According to the U.S. General
Accounting Office (GAO), between April 1, 1996, and September 30,
1999, the federal government issued 15,280 final rules. Of these,
222 were major final rules with an annual economic impact of more
than $100 million.
The bill exempts a broad range of rules that can include pesticide
and food rules. As a result, as little as 1 percent of final rules
may actually be subject to the bill's requirements.
agency rulemaking discretion.
In May 1999, the D.C. circuit court concluded in American Trucking
Association v. EPA that under the non-delegation doctrine, the
Environmental Protection Agency cannot interpret a statute so
loosely that it becomes an unconstitutional delegation of
legislative power. S. 746 would affirm an agency's discretion to
interpret a statute and justify its consideration of a limited set
of regulatory options.
There is nothing to prevent an agency from issuing a final rule
that is "not likely to provide benefits that justify the costs" or
fails to select the option that would "substantially achieve the
rulemaking objective in a more cost-effective manner, or with
greater net benefits" than other alternatives considered.
loopholes to avoid analysis requirements.
The bill allows an agency to adopt a major rule without doing
the required cost-benefit analysis if the agency finds "good cause"
that "conducting the regulatory analysis...before the rule becomes
effective is impracticable or contrary to an important public
interest." A 1999 GAO report suggests that up to one-fifth of the
final major rules--approximately 10 each year--may never be subject
to the initial or final analytical requirements based on past
Falls short on
risk assessment transparency.
Even though the risk analysis requirements are the strongest part
of this bill, weaknesses include: agency discretion about when to
inform the public of a risk assessment and to perform comparative
risk analysis; the exclusion of risks associated with declines in
income; and the failure to require agencies to fully disclose to
the public all of the data they intend to rely on in making risk
review" discretion with agencies.
Only rules that cost more than $500 million annually would be
covered. Agencies will determine what kind of peer review--formal
or informal--is warranted. Peer review is not necessary if the
agency and the Office of Management and Budget (OMB) already
determined that the rule has been subjected to "adequate" peer
agency to adopt its own analytical guidelines.
A 1998 GAO report concludes that agencies lack consistency and
clarity in their regulatory economic analysis methods and
reporting. Nevertheless, S. 746 would allow each agency to develop
it own guidelines and assumptions for regulatory analyses, rather
than follow one set of guidelines, which would make comparisons
between agencies difficult.
language on judicial review that represents the lowest level of
preemptive effect. A rule could not be remanded or invalidated by
the court because underlying analyses were weak or important
scientific information was excluded. The court would need to
determine that the entire rulemaking was arbitrary and capricious
based on the statute and not anything that is required in the
transparency double standard.
OMB must disclose to the public information regarding the status
of rules under review, changes made to rules, and communications
related to the substance of a rule or contact with anyone not
employed within the executive branch of the federal government. But
neither the agencies nor Congress are subject to similar
Fails to expand the public's right
to know about regulations.
The bill fails to acknowledge the Internet and ways to expand
public access to information about rulemaking. It continues to rely
on the poorly subscribed Federal Register and agency dockets based
in Washington, which are accessed by those who can afford to pay
lawyers to go through them.
The Regulatory Improvement Act of 1999
is fundamentally flawed and will not lead to real regulatory
improvement. The exemptions, loopholes, and lack of real judicial
review will leave the vast majority of federal rules untouched by
its analytical and reporting requirements. For the less than 1
percent of rules it will cover, S. 746 gives an agency greater
opportunity to justify any regulation but fails to give the public
greater access to information or the legal tools needed to hold an
Angela Antonelli is
the former Director of the Thomas A. Roe Institute for Economic
Policy Studies at The Heritage Foundation.