<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:29707.wais]
THE PAPERWORK REDUCTION ACT AT 25: OPPORTUNITIES TO STRENGTHEN AND
IMPROVE THE LAW
=======================================================================
HEARING
before the
SUBCOMMITTEE ON REGULATORY AFFAIRS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
MARCH 8, 2006
__________
Serial No. 109-171
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCMIDT, Ohio (Independent)
------ ------
David Marin, Staff Director
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Regulatory Affairs
CANDICE S. MILLER, Michigan, Chairman
GINNY BROWN-WAITE, Florida STEPHEN F. LYNCH, Massachusetts
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
LYNN A. WESTMORELAND, Georgia
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Ed Schrock, Staff Director
Rosario Palmieri, Deputy Staff Director
Kristina Husar, Professional Staff Member
Benjamin Chance, Clerk
Krista Boyd, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on March 8, 2006.................................... 1
Statement of:
Kovacs, William L., vice president, Environment, Technology,
and Regulatory Affairs, U.S. Chamber of Commerce; Andrew M.
Langer, manager, regulatory policy, National Federation of
Independent Business; Linda D. Koontz, Director,
Information Management Issues, U.S. Government
Accountability Office; and J. Robert Shull, director of
regulatory policy, OMB Watch............................... 38
Koontz, Linda D.......................................... 67
Kovacs, William L........................................ 38
Langer, Andrew M......................................... 51
Shull, J. Robert......................................... 104
Miller, James, chairman, Board of Governors, U.S. Postal
Service; and Sally Katzen, visiting professor, George Mason
University Law School...................................... 14
Katzen, Sally............................................ 20
Miller, James............................................ 14
Letters, statements, etc., submitted for the record by:
Davis, Hon. Tom, a Representative in Congress from the State
of Virginia, prepared statement of......................... 130
Katzen, Sally, visiting professor, George Mason University
Law School, prepared statement of.......................... 24
Koontz, Linda D., Director, Information Management Issues,
U.S. Government Accountability Office, prepared statement
of......................................................... 69
Kovacs, William L., vice president, Environment, Technology,
and Regulatory Affairs, U.S. Chamber of Commerce, prepared
statement of............................................... 40
Langer, Andrew M., manager, regulatory policy, National
Federation of Independent Business, prepared statement of.. 54
Lynch, Hon. Stephen F., a Representative in Congress from the
State of Massachusetts, prepared statement of.............. 10
Miller, Hon. Candice S., a Representative in Congress from
the State of Michigan, prepared statement of............... 4
Miller, James, chairman, Board of Governors, U.S. Postal
Service, prepared statement of............................. 17
Shull, J. Robert, director of regulatory policy, OMB Watch,
prepared statement of...................................... 106
THE PAPERWORK REDUCTION ACT AT 25: OPPORTUNITIES TO STRENGTHEN AND
IMPROVE THE LAW
----------
WEDNESDAY, MARCH 8, 2006
House of Representatives,
Subcommittee on Regulatory Affairs,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:06 p.m., in
room 2154, Rayburn House Office Building, Hon. Candice Miller
(chairman of the subcommittee) presiding.
Present: Representatives Miller and Lynch.
Staff present: Ed Schrock, staff director; Rosario
Palmieri, deputy staff director; Kristina Husar, professional
staff member; Joe Santiago, GAO detailee; Benjamin Chance,
clerk; Krista Boyd, minority counsel, Jean Gosa, minority
assistant clerk.
Mrs. Miller of Michigan. Good afternoon. I would like to
call the hearing to order here, to begin.
On March 7, 1995, the U.S. House of Representatives passed
the Paperwork Reduction Act of 1995 by a vote of 423 to 0--
which is remarkable, I believe. But here we are, 11 years and 1
day later, reviewing what we have accomplished since then and
since the PRA passed originally just over 25 years ago.
Although we have established a very strong system and
eliminated hundreds of millions of hours of unnecessary
paperwork, we have added billions of hours of paperwork burden
even faster. Since its passage in 1980, we have increased total
governmentwide burden by over 400 percent to more than 8
billion hours today. If future Members of Congress were to look
back and say that our actions today increased the burden
another 400 percent in another 25 years, to over 30 billion
hours, then I would say, unfortunately, that we have failed.
In a time of increasing global competitiveness, the United
States must be the best place in the entire world to do
business. Part of being the best place in the world to do
business means that we have to quench the Federal Government's
appetite for unnecessary information. And no one can say with a
straight face that every single form or every question or every
recordkeeping requirement of the Government is absolutely
necessary.
So we have set out as a Congress many times to put the
right structure in place to create incentives, to reduce
burden, and the disincentives to increase burden. But even now
we do not seem to have the right formula yet.
In 1995 we established a set of certification requirements
to force agencies to do the tough work of justifying their
information collections. These requirements would force
agencies to prove that they were avoiding duplication of
information, reducing burden on the public and small entities,
writing their forms in plain English, and that the information
that they were collecting was really necessary to their
programs. The GAO has conducted a comprehensive study of agency
certifications and found them wanting. Agencies were missing or
provided partial support for 65 percent of the collections in
GAO's sample. Most agencies are not fulfilling their
requirements for public consultation as well.
The watchdog for these agencies is the office we created in
1980 within the Office of Management and Budget, known as the
Office of Information and Regulatory Affairs [OIRA]. This
agency reviews each of these collections and can approve its
use for up to 3 years. The Office has also had the
responsibility of coordinating percentage reduction targets
between agencies and reporting annually to the Congress on
progress toward burden reduction.
As we have demanded more and more of OIRA, we have given it
fewer resources. As the size and scope of Government has
increased, OIRA has shrunk. It would be a different story if we
had achieved our burden reduction goals while reducing OIRA's
resources, but that is not the case. At the same time that
OIRA's budget decreased, the budgets devoted to writing,
administering, and enforcing regulations went from $11 billion
in 1980 to $44 billion today. And while OIRA's staff has
declined from 90 down to 50 employees, the staff dedicated to
writing, administrating, and enforcing regulations has
increased from 146,000 in 1980 to over 242,000 today.
I think the staff has put a chart up so you can follow what
we are saying with all these numbers. You look at the line
there.
Part of the work that we must do in our review of the PRA
is reauthorizing appropriations for OIRA which expired in 2001.
We want to make sure that they have the resources that they
need to do the job that Congress has an expectation of them to
do. And OIRA's other functions, including regulatory review,
are as critical as ever. Burden imposed by regulation is every
bit as costly and serious as burden imposed by paperwork. In
fact, they are often two sides of the same coin. New
regulations impose new paperwork requirements.
The specific burden reduction targets of the 1995 PRA were
not accomplished. That act required a target for reducing
governmentwide burden by 40 percent between 1996 and 2001. If
that would have been achieved, total burden would have measured
4.6 billion hours in 2001 rather than 7.5 billion hours--again,
I think the staff has put up an additional chart so that you
can have a visual of some of the numbers that we are talking
about here as well--and we wouldn't be on our way to more than
9 billion hours during the next year.
We have a very, very big challenge ahead of us. Chairman
Davis and I are in the process of writing legislation to
improve the PRA and our Government's efforts at burden
reduction. And that is why I am so glad today that we have such
excellent witnesses to testify before our committee. We are
certainly looking forward to your testimony and your counsel on
how we can amend the law to reduce unnecessary Government
burdens and improve our Nation's competitiveness.
[The prepared statement of Hon. Candice S. Miller follows:]
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Mrs. Miller of Michigan. And just at the right moment, my
ranking member, Representative Lynch, has arrived and we
appreciate his attendance here. He has just been a remarkable
member of our committee. I would like to recognize him for his
opening statement.
Mr. Lynch. Thank you, Chairwoman. I appreciate your kind
remarks. I am happy to support the efforts of the committee to
reauthorize and improve the Paperwork Reduction Act and the
ultimate goal of making Government paperwork less complex and
more efficient.
It is beyond argument that the promise of democracy and the
fullness of individual rights and the ideals of equal
protection and access to Government under the law can never be
attained if the communications we seek to carry out the work of
Government are drafted in such a way that their meaning and
their object remain a complete mystery after being read. The
Tax Code, which is the bane of many of us here on this
committee, which applies to every single working soul in
America regardless of their education, is today written in a
style and language that is not unlike the technical
specifications for the space shuttle. It is no surprise that
the IRS accounts for about 80 percent of the Government's
paperwork burden.
Many other Government forms that are central to the basic
rights of our citizens, by their sheer volume and complexity
place too big a burden on the citizens trying to complete them.
I think the Commission to Government by Alfred E. Smith, the
Governor of New York, said it best when they said that
Democracy does not merely mean periodic elections; it also
means that Government must be accountable to people between
elections. And in order to hold their Government to account,
the people must have a Government that they can understand.
When Americans are required by their Government to fill out
forms, they should be able to do it without spending
unnecessary hours and difficulty trying to understand and
complete these forms.
We will hear a lot today about the paperwork burden, the
estimates of how many hours Americans are spending every year
filling out various forms. OMB estimates that the current
paperwork burden is almost 10.5 billion hours. OMB also says
that the number may be somewhat inflated because of adjustments
being made to some IRS forms, but even that being said, the
paperwork burden is significantly higher than just 6 years ago.
In fiscal year 2000, the paperwork burden was 7.4 billion
hours. I can see the impact alone of the Patriot Act on so many
of our industries in compliance with various forms has probably
contributed greatly to that.
However, it is misleading to only talk about the burdens of
information collection. Information for a variety of purposes
and many information collections do provide agencies and the
public with extremely valuable information. Just a few
examples: The FDA requiring drug manufacturers to list warnings
and other safety information on prescription drug labels. The
Bureau of Customs and Border Protection requires ships to
provide cargo manifests and other information 24 hours before
loading, and we are all familiar with the security concerns in
our ports. It is based on that information that Customs can
refuse to allow high-risk cargo into the United States. Another
area as well, Mine Safety and Health Administration
requirements hold mine operators to the requirement that they
keep records of miners' exposures to toxic chemicals, and
miners then have the right to get copies of that information.
It is the role of Government to balance the power of
commercial interests against the public's right to have access
to that information. In many cases, when industry has a few
employers that are overwhelming in size and power that it is
only the role of Government that can actually intervene on
behalf of our citizens. It is our role of Government to provide
that balance.
Unfortunately, burden reduction is sometimes used to
rationalize efforts to weaken public health and safety
protections. One recent example of this is EPA's proposed
changes to the Toxic Release Inventory Program. Last September,
EPA proposed a rule that would allow thousands of facilities to
avoid disclosing details about the toxic chemicals that they
are releasing into the environment, information that is relied
upon greatly by local communities. The EPA rationale for this
proposal was that it would reduce the time industry has to
spend filling out toxic release forms. But EPA's own analysis
found that the proposed rule would only save facilities an
average of 20 hours per year and, in monetary terms, about
$2.50 per day. Yet under EPA's proposal, as much as 10 percent
of those communities that currently had a facility reporting
under the Toxics Release Inventory could lose all the data
about local toxic chemical releases.
So agencies need to find a way to reduce the burden of
filling out paperwork, but the key is to find ways to make
reporting easier and less time consuming without sacrificing
the quality and the nature of some of the information that is
actually collected and made public. One good example is a
recent effort by the IRS to make some of its tax forms easier
to understand so that the forms will take less time to
complete. As any taxpayer knows, there is a lot more we should
do to simplify the process of filing taxes.
In the end, I look forward to working with Chairman Miller
and Chairman Davis on reauthorizing the Paperwork Reduction
Act. I believe we can work together on a bipartisan basis for
legislation that makes improvements on the Paperwork Reduction
Act without controversial provisions aimed at slowing down or
weakening the regulatory process, that part of the process that
does serve the public interest.
We have some very distinguished witnesses joining us today.
I want to thank you, and I look forward to hearing your
thoughts.
[The prepared statement of Hon. Stephen F. Lynch follows:]
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Mrs. Miller of Michigan. Thank you very much.
Now, because Government Reform is an oversight committee,
it is a practice of the committee to swear in all of our
witnesses. So if you will rise and raise your right hands.
[Witnesses sworn.]
Mrs. Miller of Michigan. Thank you very much.
Our first witness today is certainly no stranger to Capitol
Hill. Dr. Jim Miller is an expert on various public policy
issues, including Federal and State regulatory programs,
industrial organization, antitrust and intellectual property,
and the effects of various laws and regulations on the overall
economy. During the Reagan administration, Dr. Miller served in
numerous capacities, including the Administrator for
Information and Regulatory Affairs at OMB, a member of the
National Security Council, and a Director of the Office of
Management and Budget.
Dr. Miller is often seen on television and appears in
newspaper articles, where he comments on public issues. He is a
distinguished fellow of the Center for Study of Public Choice
at George Mason University, a distinguished fellow of the
Mercatus Center at George Mason University, and a senior fellow
of the Hoover Institution at Stanford University.
He and his wife Demaris live away from the hustle and
bustle of Washington, out in--how do you pronounce that?
Rappahannock County? Rappahannock County, VA. And as you just
mentioned before we began our hearing, not only do you have a
very good last name, but your daughter-in-law's name is
Candice.
Mr. Miller. Absolutely.
Mrs. Miller of Michigan. That is amazing. I have only met
one other Candice Miller in my entire life, so that is just an
interesting fact. Dr. Miller, welcome so much. We are
interested in your testimony. You do have the floor, sir.
STATEMENTS OF JAMES MILLER, CHAIRMAN, BOARD OF GOVERNORS, U.S.
POSTAL SERVICE; AND SALLY KATZEN, VISITING PROFESSOR, GEORGE
MASON UNIVERSITY LAW SCHOOL
STATEMENT OF JAMES MILLER
Mr. Miller. Thank you, Madam Chairman, and Congressman
Lynch. It is a pleasure to be here. Thank you for inviting me.
It is an honor to be here with Sally Katzen.
As you pointed out, I was head of OIRA at one point. In
fact, I was the very first administrator of OIRA. I was the
first Oiranian, as we called ourselves. And it is a memory that
I relish.
I think enacting the PRA, the Paperwork Reduction Act, was
one of the best things Congress has done. It is very important
that you did this and that you continue to support it. And the
reasons are that what is at stake is so large, as Congressman
Lynch was pointing out. The paperwork burden is so large. And,
chairman, you were pointing out there is so much in terms of
resources that are allocated by ordinary Americans to this
effort.
Also, the regulatory burden, the effects of regulatory
activity, both positive and negative, is so large, the effects
are so large, the impact is so large, that it is just really
important that you have an institutional way of dealing with
this.
Let me just give you a couple of figures I checked out. The
regulatory burden, according to Mark Crain, who is a professor
of economics, is like $1.113 billion. That is over $1 trillion
a year. The Tax Foundation has concluded that the Internal
Revenue Code imposes paperwork costs equal to something like
$256 billion a year. Now, I know that there are people that
would contest those, some have higher numbers, some lower
numbers; but the numbers are staggering when you think about
them.
Overall, I think successive administrations have done a
good job of employing the act. If you just look at the OIRA Web
page, I think you will be impressed by the variety and the
depth, the breadth of scope of activities and the depth of
activities that they have engaged in. I think the work of OIRA
and other Federal agencies in the paperwork and the regulatory
spheres should be governed by three principles.
The first is have sufficient information to know what you
are doing. Too often, Government agencies promulgate regulation
and promulgate paperwork reductions without knowing what they
are doing. Too often, people just sound the alarm and say stop,
it doesn't make any sense without knowing what the information
is. So first, have requisite information.
Second, you ought to apply the principle of cost-
effectiveness. This is very commonsensical kinds of advice.
That is to say, for any given cost of a regulation or a
paperwork requirement, you ought to achieve the maximum
benefits from that. Or alternatively, the flip side, you ought
to, for any given level of benefits, you ought to find a way to
achieve those benefits at the lowest cost. That is the second
principle.
The third principle is a little more difficult to employ in
that it sort of envisions a schedule. You think of the
stringency of a paperwork requirement or of a regulatory
requirement going from least stringent to most stringent. You
want to think of the benefits. Of course, the extra benefits
decline as the extra costs increase. But you want to secure
that level of stringency where the difference between the
benefits and the costs are greatest: the net benefits. You want
to maximize net benefits.
Now, those three principles were articulated by OIRA and by
President Reagan in the 1980's and they have been followed
pretty well since then. But as, Congressman Lynch, you pointed
out, 80 percent of the paperwork burden is from the IRS. And as
you pointed out, Madam Chairman, in your letter of invitation,
those numbers have gone up, and you just said those numbers
have gone up--why? The burden has gone up. Why?
Well, is it the fault of OIRA? I don't think that is
probable. Is it the fault of IRS? IRS has done a lot to try to
secure a lower burden, simplification and things. I think the
real fault is that Congress and the President continue to enact
tax simplifications that end up making the Tax Code longer--the
shelf that houses the Tax Code longer and longer. And so, it
means that the cost of filling out all the forms and complying
with the requirements of the Tax Code are greater.
The one thing that you could do--I am not suggesting it is
easy--but if you were to pass a flat tax, boy, would that
reduce the amount of paperwork burden. I mean, it would cut it
enormously.
Failing that, you might think of having people file with
the IRS every other year instead of every year. I once
suggested that to an IRS commissioner. I thought he was going
to fall out of his chair. But if you think about it, when you
file, it is really a settling up, isn't it? You pay your income
tax and, you know, but you just settle up once a year. That is
what filing is. And maybe file every other year and it would
reduce--it wouldn't cut it in half, but it would reduce the
paperwork burden. And there are simple rules. You know, if you
were born in an odd-number year, you file in an odd-number
year. Even-number, file in an even-number year. Of course, with
joint returns, you would have to have some rule about whose
birthday applied there.
Similarly with the regulatory area, a lot of the problem of
regulatory burden is because of mandates. Sometimes Congress
passes a law that says the agency has to promulgate a
regulation a certain way no matter what the cost. Well, I mean,
that is kind of nonsensical. They ought to be able to make some
adjustments, some judgments about the minute benefits at some
point and the enormous cost in others. I think this is
something that you really should look into.
Now, if you will permit me just a level of abstraction
here. Your committee and your sister committee over in the
Senate are really the only committees that are focused directly
on trying to limit the paperwork burden and the regulatory
burden. You are limiting. Most other committees are engaged in
activities that increase the paperwork burden and increase the
regulatory burden. And so you are at a big disadvantage. How do
you provide some institutional arrangement where the Congress,
as a whole has to make those kinds of tradeoffs?
My suggestion--it is not original with me, but I think it
is a very good one--is to have a regulatory budget; that is so
Members of Congress think of the regulation in total. Do you
realize that the total burden of regulation and paperwork is
about twice, over twice all discretionary spending? And it is
approaching half of the total Federal financial budget.
Now, again, this is an enormous resource cost. And I am
suggesting that Congress and the President impose, through
regulatory activity and paperwork activity--and it is one I
don't think Congress has the institutional equipment to really
come to grips with. And so if you had a regulatory budget, if
you had the President every year propose, along with a
financial budget, which I used to help put together as OMB
Director, a regulatory budget. So then the Congress and the
committees would have to deal with priorities and deal with the
excesses, and reduce excesses but make sure that they were
doing the right thing in promulgating and making sure the
agencies carried out the regulations that made sense and the
paperwork that made sense.
I think that a regulatory budget wouldn't solve everything,
just like reconciliation doesn't solve everything on the budget
side, but I think it would go a long way toward improving the
regulatory performance of the Federal Government.
Thank you, Ma'am.
[The prepared statement of Mr. Miller follows:]
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Mrs. Miller of Michigan. Thank you very much.
Our next witness this afternoon is Sally Katzen. Ms. Katzen
served during the administration of Bill Clinton as a Deputy
Director for Management in the Office of Management and Budget
and as Deputy Assistant to the President for Economic Policy,
and Deputy Director of the National Economic Council, and as
Administrator of the Office of Information and Regulatory
Affairs in the Office of Management and Budget. In addition,
she served in the Carter administration as General Counsel and
then Deputy Director for Program Policy of the Council of Wage
and Price Stability in the Executive Office of the President.
Before joining the Clinton administration, she was a
partner in the Washington, DC, law firm of Wilmer Cutler &
Pickering, where she specialized in regulatory and legislative
matters. She was elected in 1988 as Chair of the Section of
Administrative Law and Regulatory Practice of the American Bar
Association, and she served as a public member and vice
chairman of the adjunct professor at Georgetown Law Center. In
1990 she was elected president of the Women's Legal Defense
Fund.
We certainly--oh, you also taught at the University of
Michigan Law School. I can't pass that without going on about
that. I happened to be in Ohio yesterday and there was a lot of
talk about the Buckeyes and Go Blue.
So we certainly welcome you, Ms. Katzen. We welcome you to
the committee and look forward to your testimony.
STATEMENT OF SALLY KATZEN
Ms. Katzen. I greatly appreciate your invitation for me to
testify today, although having to follow Jim Miller is sort of
a tough act to come behind. But in any event, I have provided
written testimony which I would ask be included in the record.
That testimony endorses the reauthorization of the PRA and it
reflects a number of very specific suggestions for
strengthening the act that I hope will be useful to you all.
I would like to use the few minutes available to me for the
oral presentation to focus on what I think the goals of the PRA
should be. I think that it is more complicated than what might
appear at first glance.
Chairman Miller, you, and the invitation to testify, and
Mr. Miller, have all talked about reducing the burden. We are
told that the total burden imposed by Government information
requests is in the order of 9 billion hours. That is a big
number. I will not dispute that. There is, therefore, a natural
impulse to want to do something, whatever it would take to
reduce it. But I think that there are several intermediate
steps that we have to go through.
First, I am concerned that references to total burden hours
is somewhat misleading. That is because I believe that not all
of the 8 billion hours or 9 billion hours are the same. Mr.
Miller mentioned the IRS and the fact that it alone accounts
for over 80 percent of the total burden hours. Now, that number
is affected by the number of people Mr. Lynch mentioned who
have to fill out the 1040 or the 1040-EZ. But the large IRS
burden numbers are also a factor of the complexity of the Tax
Code and the very complicated and often quite detailed forms
that most sophisticated corporations, with their legions of
accountants and lawyers, fill out to obtain special--as in
favorable--tax treatments, which Congress has decided is wholly
appropriate, in fact desirable.
Consider the form for accelerated depreciation, or the one
for oil and gas depletion allowances. Now, surely those who
spend the hours filling out those forms have made a
calculation, however informal, that the burden of doing the
paperwork is outweighed, often greatly outweighed, by the
benefit of obtaining the resulting large, often very large, tax
advantage.
Now, assuming for present purposes that dramatically
revising the Tax Code is not within the jurisdiction of this
subcommittee, and therefore passing for the moment Mr. Miller's
endorsement of flat tax. It is within the scope of the
jurisdiction of this committee to consider whether the total
burden hours makes sense in light of the fact that individuals
struggling with a 1040-EZ to pay their taxes is not the same
thing as the hours spent by trained lawyers and accountants on
the multitude of complicated forms enabling their clients to
reduce their taxes.
So should we really keep emphasizing total burden hours?
Consider also that the burden hours attributable to the IRS are
of a wholly different sort than the burden hours represented
by, for example, filling out a form for a small business loan,
or for a student loan, or to obtain veterans benefits, or
Social Security disability payments. All of which are also
included in this total number that people keep talking about.
The IRS forms are the basis for a liability. The ones I have
just mentioned are the basis for an applicant to receive a
benefit--which, again, Congress in its infinite wisdom has
decided is a good thing.
I am not saying the latter forms should not be as
streamlined and simplified as possible so that the burden is
kept to a minimum without sacrificing information essential to
programmatic accountability. After all, we want some confidence
that only those eligible for a program are receiving payments
and that the agency has sufficient information to monitor and
evaluate whether the program is achieving its objectives.
The point I am making is that calling the paperwork
necessary for a benefits program, calling that a burden and
counting those hours required to fill out those forms to obtain
the benefits as part of the total burden hours, masks the
qualitative difference between these forms and those sponsored
by the IRS.
There are other types of burden hours included in the total
that are very different, even from the ones I just identified,
and those are called ``third-party disclosures'' requirements:
Employers must post information announcing the presence of a
toxic chemical in the workplace; that is included.
Pharmaceutical companies must supply package inserts as to the
implications of a drug; that is included. And my favorite is
the nutrition labeling for food. I can hardly get down an aisle
in a grocery store without running into some consumer standing
there with two packages, looking at the back of them and
comparing, and then tossing one of them into his cart. This is
information the American people want and use, and it enhances
their health and perhaps even their safety.
Now, this leads me to the second point that I want to make,
and that is, that burden is one side of the equation, but it is
not, and should not be the only consideration.
The 1995 act reflects another purpose, and that is to
enable ``the greatest possible public benefit . . . and
maximize the utility of information . . . collected . . . by .
. . the Government. That is designed to improve the quality of
the information that the Federal agencies need for rational
decisionmaking.''
Regrettably, this side of the equation has gotten
relatively short shrift in the discussions about the PRA. Yet,
the benefit or utility side is not a new ingredient. Both the
legislative and the executive branch have recognized that
Federal agencies need information for informed decisionmaking.
Mr. Miller's first point was that before taking action,
policymakers should have adequate information. Where do they
get it?
Actually, political leaders from both political parties--
this is not a partisan issue--have recognized that information
is a valuable, indeed essential assets, and this is true not
only for the public sector but for the private sector as well.
It is significant that a lot of the information collected by
the Government is, in fact, disseminated to the public, either
in its raw state or with some processing.
Consider, for example, weather information, census data--
stripped of its personal identifiers--and economic indicators.
This information is highly valued and sought after by industry
and the academy so that they can work this information and then
ultimately use it to enhance our safety, to decide on marketing
strategies and to make investment decisions. When we clamp down
on information, we are the losers.
Now, I also want to agree with Mr. Miller's observation
that, while you are here considering reducing the burden, there
are committees in both Houses of Congress thinking about
increasing it. They are doing it for a reason, though. It is
not just foolhardy. There is a concern about preventing fraud
in Government programs. There is a concern about enabling
informed choices, as Mr. Lynch mentioned, to enhance national
security. That was the basis of the Patriot Act, which imposed
an enormous burden if you are thinking in terms of only that
side of the equation. Presumably, Congress felt it would
produce an enormous benefit at the same time. As I say, this
should not be a surprise, because we are, after all, in an
information age.
Because the benefit side does not get the same attention
that the burden side has gotten, we are sending a message both
to the agencies and to OMB that they will satisfy congressional
concerns only if they shut down new surveys, if they close off
new inquiries and if they cut back new requests for
information. And I am aware of a significant amount of
anecdotal information that says agencies have given up. They
don't even send to OMB those information collection requests
unless statutorily mandated, and that is why the numbers are
going up, because they are statutorily mandated. That is what
the OMB reports have shown year after year. New congressional
mandates have outpaced whatever efforts the agencies have made
to cut back, but they don't send these needed inquiries through
because they feel that the burden reduction side pressure is so
great.
If this is, in fact, accurate--and I would encourage some
empirical research to decide if it is or not--then I think it
is a most unfortunate development. And your committee would do
well to help right the balance.
I would like to pick up on some of the things that Mr.
Lynch said. Without oversimplifying, all the key words begin
with ``B'': We talk burden. We should also talk benefit. And we
should talk balance. And I think that will bring us a long way
philosophically to achieving what we need.
Again, I have specific suggestions in my testimony and
would be pleased to answer any questions you might have on that
or any other subject.
[The prepared statement of Ms. Katzen follows:]
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Mrs. Miller of Michigan. All right. Thank you so much. We
appreciate that. I certainly agree with you, Ms. Katzen. We do
have to look at, as you said, the three Bs, cost/benefit
analysis, and sometimes it is difficult to make that kind of
analysis strictly monetarily. As you mentioned, some of the
food labeling and these kinds of things, we really do need to
look at it all.
You know, it is interesting because we have had a number of
hearings in this committee talking about the onerous burden of
Government regulations, and both of you, I think, referenced
cost of the burden. We have had testimony from the Small
Business Association saying that they have done some studies
that indicate that particularly in small businesses, the cost
of compliance with all of these forms and all kinds of
regulations and other kinds of burdens that are put on them
could be interpolated to $7,000 or $8,000 an employee. We have
had former Governor Engler from the great State of Michigan,
testify--he, of course, now serves as the executive director of
the National Association of Manufacturers--talking about their
analyses which seem to indicate the structural costs of
American-made goods to be 22, 23 points higher than any of our
foreign competitors, principally due to burden and governmental
regulations and what have you. So there are so many things that
we have done in our society and as a Nation that are so
important to protect the health, safety, and welfare of our
citizens, and yet we do have to look at what is reasonable, I
think, as well.
It is interesting, though, as both of you have talked, that
you can't hardly talk about this issue without, obviously,
looking at the IRS. As you mentioned, it is about 80 percent of
all the burden. And it is an unfortunate reality when you see
Members of Congress coming saying, ``We are here from the
Government. We are here to help you.'' And every time we think
about tax reform--and I no longer am going to use those terms,
``reform''--perhaps tax simplification is the way that we would
focus on the kinds of things we may be able to do to assist.
When you hear numbers, you know, over, I think, $225 billion
last year annually just for the American citizens to comply
with the tax forms, something needs to be looked at there.
I would ask my first question to Dr. Miller, you
mentioned--I was taking some notes here--what I thought was
interesting, a regulatory budget within the--and if you could
expand on that a bit, are you suggesting that there would be a
line item within the particular agencies and within the
committees? Or how would that be structured?
Mr. Miller. I would see a regulatory budget being put
together by the President, which had an overall amount and
would have the amounts by agency, and even perhaps by program,
that they could impose on the American people, things coming
up. I would, as I mentioned in my written statement, which I
hope that you will accept for the record----
Mrs. Miller of Michigan. Without objection.
Mr. Miller. Thank you. I suggested that you treat existing
regulations much as you treat entitlement programs, the
financial ones. That is, the agencies continue to have those
regulations, but new regulations would be analogous to
discretionary spending that you would have to appropriate every
year. So Congress would have to appropriate. You could also
review existing--just like Ways and Means and Finance reviews
existing entitlement programs, you could review existing
regulatory and paperwork requirements.
Madam Chairman, I would like to just comment on Ms.
Katzen's observations. I agree that there are certainly
important, legitimate uses of paperwork. I wouldn't take that
back for a moment. I think that those are--many and varied
paperwork requirements out there are very justified. There is
no question that there is very important information. Just to
touch base on the example she started off with, accountants and
lawyers and firms applying for special dispensations, etc., she
is making my point. My point is you need to simplify the Tax
Code. You need a flat tax. You should not have all this. Those
are real resources. If those lawyers and accountants were not
doing that, they could be doing something useful. Right? And
they are doing that instead of something useful because the Tax
Code is established the way it is.
So if you simplified the Tax Code, if you had a flat tax, I
think you would increase productivity a lot because you would
have people doing productive things rather than those things
today that are pushing notes around.
Mrs. Miller of Michigan. You know, to followup a little bit
on that, because this is a fascinating discussion, the concept
of a flat tax, I think it may be too much of a huge change to
go to that initially, but perhaps--and there has been some
debate in Congress about whether you would actually offer an
option to people either to do it the way we have always done it
or do a flat tax and see how it would go. But there have been
quite a few articles about that. I know we have had a lot of
debate.
Mr. Miller. Yes. Madam Chairman, I think that is an
excellent idea. It was one of my most important things when I
campaigned and lost for the U.S. Senate, saying that people
should have an option. They could file under the existing Tax
Code if they want, or file under a new flat tax if they want.
And if you gave people the option, I suspect most people would
elect to file under the flat tax because it would be, in
effect, so much easier.
I was invited to be on a TV show 2 days ago, and I had to
say no. You know why? Because I was working to put together all
this stuff for the tax--my personal income tax and my wife's
personal income tax. I mean, it is a big burden.
Mrs. Miller of Michigan. It absolutely is.
One other question on that, not to keep getting off the
subject, but this is a fascinating area, I think. Do you have
any opinion on the President's commission on tax
simplification, not tax reform, tax simplification? You know,
everybody thought that would be of great benefit and that we
were all very anxious to see what kinds of recommendations they
would come forward with to get away from some of this burden,
and immediately, when they started saying they were going to do
away with the mortgage deductions and those kinds of things,
off we all went.
Mr. Miller. Right, right. Well, Madam Chairman, I am kind
of reluctant to criticize it. I know some people who are on the
Commission, some very, very smart people that I think work very
hard. They probably, from the word go, realized or took to
heart the point you made, that going to a flat tax might be too
radical, so they tried to do something to simplify the Tax Code
and make it more efficient without going that far. So it is
kind of a halfway measure, in that sense, and it is very
important who thought what--I do not endorse either of their
two alternatives that they came up with.
Mrs. Miller of Michigan. I might ask a question of both of
you, I suppose. I had the staff put up these graphs earlier
about OIRA, since we have two experts here on that agency. When
you were there--this is something we have heard, I have heard,
since I have had this chairmanship, over and over and over
again about the inadequate resources that OIRA has. When you
were there, did they have adequate resources? Has this been
sort of a common element there? Do you have any comment on
where all of that is going, what you think it might need today
to be able to do the job that we have asked them to do?
Ms. Katzen. I think that OIRA has a lot of
responsibilities, as does OMB, and they are physically and
psychologically closer to the President than any of the other
agencies, and they act as a watchdog, is I think the word you
used, for the work of the Federal Government. And I don't think
you could ever have too many resources there.
The idea is to use the resources that you have in the most
efficient and effective way. One of the suggestions that I
included in my written testimony was that, rather than
reviewing all paperwork requests, the Congress authorize OMB to
review only those that are significant so that they can focus
their attention on the ICRs, the information collection
requests, that are the most important and significant.
You cited the fact that the Reagan administration, I
believe had something like 90. I think when I was there, we had
50, and in the most recent past, the Administrator has
increased it by another 5 or 6.
Another body or two would undoubtedly help, but another
body or two is not going to make a huge amount of difference. I
think thinking about what it is you are trying to achieve and
focusing the limited resources that you have would be better
emphasis on the right syllable, as they say.
I would, if I could, use this opportunity to make two
points about the previous conversation, the colloquy that you
had with Mr. Miller. The first is that these many tax
complications--the oil and gas depletion amounts, the
accelerated depreciation forms, which I used, as examples--
industry doesn't resist them. As far as I know, they are up
here asking for them. They want them. They want them so that
their lawyers and accountants can spend their time on those
things, and it would be--as you said, once you start getting
rid of a mortgage deduction, which affects a lot of people, or
even a special interest, if I could use that term, tax
provision, you are going to find that people, corporations,
businesses, including sometimes small businesses that take
advantage of accelerated depreciation, for example, will be
very concerned because they want those complications.
The second point has to do with the regulatory budget. It
sounds good, but--and it is a big ``but''--analysis is only as
good as the data is a truism in this field. You have a
regulatory budget. You put down a certain cost. Where is the
information for that? The cost that everybody is talking about
of the huge amount of $1 trillion in regulatory expenses, those
are calculated under the basis of ex ante, estimates of what
the cost will be if the regulation comes into effect. In fact,
most of the empirical work shows that once the regulation is
issued, American ingenuity kicks in, and it takes less cost.
Now, I am not saying that the cost is trivial. I am not
saying that it is not seriously consequential. But while he
cites $1.1 trillion, there are lots of other figures which are
in the $30 and $40 billion range rather than trillion dollar
range.
The disparity reflects the fact that the data is not that
good. We do not have a really firm handle. That being the case,
a regulatory budget based on that kind of data would be, I
think, problematic.
Mrs. Miller of Michigan. OK. Thank you very much.
I recognize Representative Lynch.
Mr. Lynch. Thank you very much. And just to followup on
that point, it is difficult. It sounds great about, you know,
cost/benefit analysis on any one of these proposals, but when
you get down to measuring that--and I know that Dr. Miller
mentioned Professor Crain. But when we have tried to replicate
his numbers to basically get what he got and go through the
process that he implemented, it has been very difficult getting
information from him in terms of allowing us, on this committee
to basically parse out his whole process in arriving at this
mass of numbers. So a lot of that is still very much in debate.
And, again, on a lot of this information that we get, it is
totally the cost side. There is no calculation made for lives
saved or accidents prevented or, you know, contamination to our
environment or, you know, even in the nuclear regulatory
sphere, the worst-case scenarios that could develop in the
absence of some of these regulations.
So I am not so much sold on the idea that there is a
quantifiable amount that we could point to and say we are going
to save this and get rid of regulation. I do agree that there
is a whole lot out there that is completely useless, and we
need to figure out how to get rid of it, and that we ought to
try to work on those parts of the regulatory framework in this
country that could be eliminated with, I think, a bipartisan
and fairly unanimous consensus. I think there is a lot that we
agree on.
The other thing that I would like to see tapped into is
some of the agencies themselves, if we could somehow
incentivize cleaning up the regulatory framework that is out
there--and these, you know, folks at the IRS know better than
anyone the redundancy that is there, the complexity that is
there, to no purpose, and things that we could actually get
some of the folks in the agency to say--you know, somehow
incentivize it, to have them reporting to us how they best can
clean up their own shop, how we could reduce the regulatory
burden for people who worked through those agencies. And I
think we can do a lot to reduce the burden without ever--well,
eventually we have to get to some of the issues that are
contentious, but I think there is a whole lot of work that can
be done right off the bat, right from the get-go, just to
eliminate the regulatory burden without putting any of the
controversial stuff in play. I think it is just so burdensome
out there and so complex, and some of it has just built over,
you know, as a matter of time and from one administration to
another. There seem to be layers and layers of bureaucracy and
complexity that, you know, have built up like a residue over
our entire economy.
What I would like to do is just ask you both, what do you
think the best way of getting at the agencies to help us make
the reporting easier, but retaining the quality of the data and
the value of information that we are getting through these
ICRs? And you mentioned, Ms. Katzen, about the fact that we
have a lot that we are doing on, let's call them,
insignificant--ICRs that are not really going to give us the
bang for their buck in terms of the number of people or the
number of requests or the number of--the degree of scope for
these different information collection requests. How do we
approach that issue within the wider question, which is, how do
we get the agencies to help?
Ms. Katzen. One suggestion that I make in the written
testimony that I would like to emphasize is that currently OMB
approval last 3 years, so at the end of a current information
collection request, the agency comes back in and it says they
would like to extend it for another 3 years, and there is a
little rubber stamp that says ``Granted,'' and then they come
back 3 years later.
What I suggest is building on a phrase that is in the act
now that says the agency shall show how it is useful. You
incentivize the agencies by saying: We are going to take that
seriously. You make a showing, a compelling showing, that it is
used and useful. And we will give you not a 3-year extension
but a 5-year extension or a 7-year extension or a 10-year
extension.
It then is to their benefit to make the showing and, by the
way, knowing that this will happen, maybe they should be
focusing on how they are using the information that they are
getting.
It also would have the salutary effect of reducing or
streamlining OMB's processes so, again, the routine ones that
are being used and useful would not clutter up and take the
time from the others. I think that is one way of doing it.
Another way of doing it is pure anecdotal, and that is, one
moment when I was Administrator of OIRA, a staff member
complained about a particular form, that it was
incomprehensible and that it just--you could not follow it. And
so almost--I am not sure why I did this, I picked up the phone
and I called the person who had certified this. And I said, ``I
do not understand Question 17 here. What are you getting at or
why are you getting at it?'' And there was silence at the other
end of the phone as the person scurried to figure out, what
form is she talking about?
I then said, ``I tell you what. Let me fax this over to
you. You have estimated this will take 20 minutes to fill out.
Let me fax it to you and then call me in 20 minutes and tell me
how you are doing.''
I did get a call within 20 minutes to withdraw the form.
Now, that is just one incident, but I think if you can
reach the people who are responsible at the agencies, that is
where--it does not have to all be at OMB. It should start with
the culture at the agencies. And one of the other suggestions I
make--I am sorry I seem to be running on, but one of the other
suggestions I make is that we vested this in the CIO's office
in the 1995 act, that they should be the internal agency
watchdog, because we wanted an office that was dispassionate,
not attached to the programmatic office, so that they could
say, ``Hey, why do you really need that?'' And have the stature
and the clout within the agency to be able to say that.
CIOs have had a mixed--and I think GAO has said CIOs have
had mixed results. Some of them have taken the job seriously.
Some of them are more interested in the technology side. Some
of them are more interested in other aspects. And I think that
one ought to consider giving the agencies some flexibility from
an internal office that would really do the job right and have,
if you want, OMB approve their other kinds of operations.
Those kinds of ways to get to the agency would, I think, be
very beneficial.
Mr. Lynch. Yes. Well, I agree with your first and last
assessments that creating that incentive, giving them a waiver
from the 3-year review, if they can show that, you know, a
given regulation is necessary and is rock solid and, you know,
there is general consensus that it is necessary and it serves a
valuable purpose. I also think the idea of having that--and I
do not know if you call it a task force or whatever it is, if
you want to take it out of the CIO's office and give it to a
task force that is going to say, ``You know what, we are going
to help ourselves.'' We are going to jettison these regs that
are just absolutely slowing productivity or just, you know,
stopping us from doing our job.
Those are two great ideas. I don't think there is much cost
in that either, in going through that process. One is merely,
as I say, incentivizing through the process, and the other is
really an organizational function, just shifting it and giving
it to somebody who will actually do the job.
Thank you for your testimony.
Mrs. Miller of Michigan. Thank you. Before we move on to
the next panel, Dr. Miller, when I had asked the question
previously about whether or not you thought there were adequate
resources in OIRA when you were there, Ms. Katzen answered but
you did not. Could you for the record tell me what your
thoughts were on that?
Mr. Miller. Well, I thought we did. I thought we did.
Again, the role of OIRA is not to do all the analysis but to
review the analysis. Just like an editor of a major law journal
or an economics journal or statistical journal is not supposed
to perform all the analysis themselves, but to basically review
the analysis presented to them and decide which is worth
publishing.
The high number at the beginning of the Reagan
administration is a reflection of the fact that, if I am not
mistaken, there was a statistical group that came over from
Commerce that was attached to OIRA and then was later moved, I
think to Labor or back to Commerce. So that 90 figure is
somewhat inflated. They were not really doing this OIRA kind of
thing, so that moved.
You know, as Ms. Katzen was saying, they could certainly
use a few more people there, but I don't think there is a
tremendous shortage of personnel at OIRA. But I would like to
respond on the question of incentives, if I might, that Mr.
Lynch, Congressman Lynch raised.
Mrs. Miller of Michigan. Certainly.
Mr. Miller. If you had a regulatory budget, even without a
regulatory budget, if you allow the agency to zero sum, that is
to say, you tell the agency you have a burden of such and such
on such and such, but you would like to issue a new regulation,
new paperwork burden, if you can reduce the paperwork burden,
the regulatory burden in this area, you can increase it here.
And so allow them to prioritize--just like agencies when they
come to OMB with their budgets during the budget season, you
know, they have to justify these things, and they tradeoff. You
know, they say, well, the President has agreed you can increase
your budget 0.1 percent, or something like that. Well, they
have to have priorities and they make those kinds of judgments.
So I think that would be helpful.
On the question of Mark Crain, I must admit to a little
favoritism here because Mark is not only--he is the Simon
professor of economics at Lafayette College. He is a former
colleague of mine at George Mason University. He is a former
student of mine when I taught economics at Texas A&M. And if
Ms. Boyd could give him a call--I talked to him 2 days ago--I
am sure that he would be more than happy to respond, and his
telephone number is 610-330-5315. He would be more than happy
to respond to any question you might have. I am, of course,
looking at the paper he did, I guess for the Small Business
administration.
Mrs. Miller of Michigan. OK. Well, I certainly want to
thank you on behalf of the entire committee very, very much for
coming. We certainly appreciate it, and we will ask you to move
aside for the next panel.
Mr. Miller. Thank you.
Ms. Katzen. Thank you.
Mrs. Miller of Michigan. Thank you both so very, very much.
[Witnesses sworn.]
Mrs. Miller of Michigan. Thank you very much. We are going
to probably be called for votes here. It could be in 10
minutes, it could be in 20 minutes, at which time we will be
voting for quite a long time. So I would like to start with the
panel and see if we cannot get all the testimony on before that
happens, and I would ask you to sort of keep an eye on the
timers that you have before you and try to adhere to our 5-
minute rule, if you could, in this circumstance.
Our next witness is Mr. William Kovacs, who is the vice
president of Environment, Technology, and Regulatory Affairs
for the U.S. Chamber of Commerce. Mr. Kovacs is the primary
officer responsible for developing the Chamber's policy on
environment, energy, natural resources, agriculture and food
safety, regulatory and technology issues, and we are certainly
glad to have you join the committee today, Mr. Kovacs. We look
forward to your testimony, sir.
STATEMENTS OF WILLIAM L. KOVACS, VICE PRESIDENT, ENVIRONMENT,
TECHNOLOGY, AND REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE;
ANDREW M. LANGER, MANAGER, REGULATORY POLICY, NATIONAL
FEDERATION OF INDEPENDENT BUSINESS; LINDA D. KOONTZ, DIRECTOR,
INFORMATION MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE; AND J. ROBERT SHULL, DIRECTOR OF REGULATORY POLICY, OMB
WATCH
STATEMENT OF WILLIAM KOVACS
Mr. Kovacs. Thank you, Madam Chairman, Congressman Lynch,
and the committee for inviting the Chamber to testify here
today. I am going to submit my testimony for the record and
just summarize some of the key points.
As we all know and we have heard, the Paperwork Reduction
Act is more than about reduction. It is really about the
reduction of paperwork, the collection of necessary paperwork,
and it is also about the use and dissemination of good quality
data, which is something that really is the highlight of what
the Chamber has been focusing on.
When we talk about paperwork reduction, this has really
been a burden and a challenge that the Congress and OMB have
had to deal with. It started with the Federal Reports Act, and
since then, Congress and OMB have seen the Paperwork Reduction
Act in 1980, 1986, 1995. We have seen the Data Quality Act,
which was an amendment to the Paperwork Reduction Act. We have
seen Data Access. We have seen a number of regulatory reform
efforts out of OMB, which is both peer review, risk assessment,
good guidance, as well as Executive orders. Just to followup on
a question that Congressman Lynch asked, we have also seen
efforts by Congress to really get the agencies to do exactly
what you ask: identify those regulations that are really no
longer needed. And we have seen that through Section 610 of the
Regulatory Flexibility Act. We have seen it in the nomination
process. And we have seen it in Executive orders. And so where
are we after 64 years of effort? I think that is really what
the question is.
I think on the paperwork reduction side, it is a very mixed
bag. You do have Congress putting more and more requirements on
agencies, and you will see at this point in time about 10
billion hours, so that is going to be the largest in history.
On the information colleague side, I think where we, you
can really make a difference, there is an enormous amount of
frustration. GAO is here and they are going to talk about it,
but they have done the analysis on what the CIOs do, and the
CIOs are to certify that the efforts taken by the agencies are
really efforts to get at the kind of data that they need and
that is necessary. And there are actually 10 criteria, and GAO
found that in 2005 that 98 percent of the CIOs certified the
eight--98 percent of the 8,211 certifications requested were
actually approved by the agencies and accepted by OMB. However,
when GAO decided to do a review, they found 65 percent of those
actually had missing or no data at all to support it. So that
really is a problem, and I will be back to that in my
recommendations.
And, finally, what we think is the most important is the
Data Quality Act. Here is an example where Congress in 2001
said to the agencies we do have the kind of burden that we
have, whether it is $1.1 trillion or maybe it is $500 billion,
who cares? The fact is it is enormous. There are 4,000
regulations a year, 102,000 regulations out there, and they
cannot all be necessary, and no human being can read them. That
is the problem. And so the Data Quality Act took the position
that the agencies were to use the best quality data, the
objective data, the most useful data. And 2 days ago, as I
think you know by this time, the Fourth Circuit Court of
Appeals ruled that the Data Quality Act was not enforceable,
that there was absolutely no human being on Earth that had the
standing to pursue it, and that it is an act that is solely
between OMB and the agencies. So if you are looking for
guidance as to how to move forward, you have to keep that
process in mind.
So what do we do? Well, we have three options that I think
are practical. One is if you want private parties to really
support you on it and take action against the agencies to deal
with the paperwork issue, then you have to put judicial review
at the center. It is just that simple.
If you want this to continue to be between OMB and the
various agencies, several things have to happen. OMB has to be
serious about the process. This is the first thing. And it can
be serious in two ways. One, it can tell the agencies, look,
you have--when you file these certifications or when you do
this data quality request, you have to have a mechanism of
somewhat independent review, and that can be either an
administrative law judge or--we don't care, but it has to be
someone independent of the agency.
In terms of the certification process, I think you have a
serious chance there of doing something that really could be
monumental, and that is, if you have all the CIOs rubber-
stamping all of these issues, there seems to be just a complete
lack of concern, and if anyone has ever looked at one of the
paperwork submission requests, it actually gives you the
criteria on the back side in very simple, plain English, and
yet the CIOs rubber-stamp it. You know, if a corporate official
did this--you know, they worry about Sarbanes-Oxley. Even if
you were a small builder in Michigan and you worried about
storm water and you didn't--let's say you didn't have your Zip
Code on it. Well, if you didn't have your Zip Code on the
submission, they would hit you for $50. If you did not talk
about weather conditions, just omitted it the day you filed the
form, that is $500. And if you did not pay it within 30 days,
the fine then would be $32,500 a day.
So what I am saying is the simple answer is I think you
need to make the CIOs accountable, and I think you can do that
through the Office of Personnel Management. Anyway, I think my
time has expired, but I would be glad to answer any questions.
Thank you.
[The prepared statement of Mr. Kovacs follows:]
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Mrs. Miller of Michigan. Thank you very much.
Our next witness is Andrew Langer, who is the manager of
Regulatory Policy for the National Federation of Independent
Business. He is in charge of making the voices of small
businesses heard whenever new regulations would have a negative
impact on Main Street. Mr. Langer.
STATEMENT OF ANDREW M. LANGER
Mr. Langer. Thank you. I want to thank you for the
opportunity to testify on this. I have testified before this
committee and several congressional committees on this issue a
number of times, and we are really at a crossroads here in
terms of reducing paperwork and the paperwork burden on small
businesses. So I am really thankful that I have the opportunity
today.
NFIB, of course, is the Nation's largest small business
trade association with 600,000 members whose average employee
size is five employees. So we represent the smallest of the
small.
The problem of paperwork is two-pronged. We focus on two
sides of the issue: we focus on paperwork that has to do with
regulations that are coming down the pipeline, and we focus on
the problem of paperwork from regulations that are already on
the books. We have a great many tools available to deal with
reducing the burden of regulations that are coming down the
pipeline, and those systems, when they work, work fairly well.
They do need improvement. But we spend very little time dealing
with the issue of the paperwork that is already on the books,
which is the vast preponderance of the problem, frankly, as
Bill said.
Everyone involved in regulations--the regulated community,
activist stakeholders, Members of Congress and their staffs,
the Federal agencies and their personnel--all must ask the same
question: What is it that we want from the regulated community
in the end? After all, I am not here, NFIB is not here, we are
not here engaged in this discussion on an academic basis. I
have not grown frustrated with the regulatory process and the
paperwork caused by it on mere philosophical grounds. We are
here to talk about real solutions to a real problem, a problem
that has real impacts for real people. You have called this
hearing because you want to explore real solutions, meaningful
relief for those small businesses. So I repeat the question:
What is it that we want?
The answer, at least in NFIB's estimation, is simple: we
want the regulated community to understand what their
responsibilities are, what paperwork they need to fill out, in
as simple and as easy a manner as possible. We want them to
spend as little time as possible having to figure out what
their responsibilities are, what they need to do to comply, and
then going out and complying with them.
What is more, our members want to be in compliance with the
law. They want to keep their workers and their communities safe
and secure, and the last thing they want is for a Government
inspector to show up at their offices to fine them for some
minor transgression.
But, unfortunately, we have created a regulatory state that
is so complex that it is next to impossible for any business,
any small business, to be in compliance with 100 percent of the
law 100 percent of the time. It is a grossly unfair situation.
It creates the situation where any small business could become
the victim of an erstwhile Federal regulator interested in
playing a game of ``gotcha.'' And in an era where an increasing
number of Federal inspections are being driven by disgruntled
former employees filing meritless complaints against their
employers, small businesses are growing more vulnerable each
and every day with each and every new regulation that comes
out. And the stakes are much higher because of the way the laws
work.
Consider for a moment the fact that most Federal
environmental regulations--and Mr. Lynch talked about TRI. For
most Federal environmental regulations, they carry criminal
penalties. And these criminal penalties are under what is
called strict liability, the concept that you need not know
that what you are doing is a crime in order for you to be
charged as a criminal. Instead, under strict liability, all the
Government needs to do is prove that you knew that you were
doing the act that you were doing at the time you were doing
it.
So what does this mean for paperwork? Let's say you are a
small business owner filling our Clean Water Act paperwork
forms and you make a mistake. You leave off your Zip Code, you
make some clerical error, you transpose two numbers, and you
sign the bottom. And all of a sudden a Federal inspector comes
out and looks through your paperwork--paperwork you have spent
blind hours doing, you have been doing other paperwork as well.
You can be charged criminally under the Clean Water Act for
making that mistake under strict liability because all the
inspector would have to do is say, ``You knew you were filling
out a form, right?'' ``Of course, I did. I signed the bottom of
it.'' You are guilty. And this is not an abstract thing. People
have gone to jail because of this.
So I want you to consider this as we think about going
about reducing the amount of paperwork. Because the regulatory
state continues to grow and the paperwork continues to
increase, it is ever more important that we strengthen those
gatekeeping roles, which is why NFIB, in my written comments, I
said--and I want to submit those for the record, obviously--
that OIRA needs to be fully funded. And I don't think I need to
repeat the arguments of those that came before me because I
agree with all of them as to why OIRA needs to be fully funded,
obviously because one of the reasons, the main reasons, is
because as the number of regulations and those writing them
continues to grow, the resources at OIRA have continued to
shrink.
I think clearly--and I have spoken on this before--
something needs to be done about tax paperwork, and I can talk
about that as we move forward. But one of the things I want to
focus on very, very briefly--and it is absolutely important--is
one of these real solutions, and I talk about it extensively in
my testimony. It is the issue of the business compliance one-
stop, or business.gov or the Business Gateway, as it is called,
the idea being very, very simple, and it really gets to the
heart of the matter. We want small businesses to be able to go
to a Web site, those that use computers--and about 92 percent
of small businesses use computers in some aspect of their
business. And so if they choose to do so, they go to a Web
site, they enter in some very simple plain-English data about
their business, maybe their industrial classification code, the
number of employees, and their Zip Code, and a data base spits
out every Federal regulation that applies to them. It spits out
everything that they need to do to comply with that regulation
in very simple--no more than two pages of information. And if
we are lucky, it walks them through how they go about
complying. It allows them, if they so voluntarily choose to do
so, to fill out that information on the computer itself. And it
spits edit, gets all the information organized for them and it
sends it out.
Now, the SBA has been working on this for a number of
years. We supported them through it, and we have something
called business.gov that is out there. But it is just in its
infant stages, and the time is now to take that seriously. We
have an opportunity on our hands as you move forward with
reducing Federal paperwork, through the reauthorization of the
Paperwork Reduction Act, to take this in hand, and it is going
to take congressional leadership and leadership from the
executive branch in order to do this. But we have to start
somewhere, and we have to start now.
I look forward to taking any questions, especially if you
have any on the Toxics Release Inventory, and I will conclude
with that.
[The prepared statement of Mr. Langer follows:]
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Mrs. Miller of Michigan. I thank you. I think what we are
going to do is recess at this time. We have a series of six
votes, so we will probably be, I would say, a good hour. We
need to recess for about an hour, with your indulgence. I don't
know if you can stay until we come back. If you could do that,
that would be very much appreciated, and thank you very much.
We will adjourn for an hour.
[Recess.]
Mrs. Miller of Michigan. Calling the hearing back to order,
our next witness is Linda D. Koontz, Director, Information
Management Issues at the Government Accountability Office. At
the GAO she is responsible for issues concerning the
collection, the use, and the dissemination of Government
information in an era of rapidly changing technology. She has
been heavily involved in directing studies concerning the
Paperwork Reduction Act's implementation, information access
and dissemination, e-government, electronic records management,
data mining, and privacy. And in addition to all of this, she
has lead responsibility for information technology management
issues at various agencies, including the Department of
Veterans Affairs and Housing and Urban Development and the
Social Security Administration as well.
We certainly welcome you to the committee today, and the
floor is yours.
STATEMENT OF LINDA KOONTZ
Ms. Koontz. Thank you very much for inviting us here today
to participate in the subcommittee's hearing on the Paperwork
Reduction Act. I will be very brief.
Last year, we reported to you the results of our study on
implementation of agency review requirements. We found, quite
simply, that agencies have not implemented the rigorous review
process envisioned by the Congress. Specifically, we reported
that governmentwide agency CIOs generally reviewed information
collections before they were submitted to OMB and certified
that the required standards in the act were met. However, our
review of 12 case studies shows that CIOs provided these
certifications despite often missing or inadequate support from
the program offices sponsoring the collections. Further,
although the law requires CIOs to provide support for
certifications, agency files contained little evidence that CIO
reviewers had made efforts to get program offices to improve
the support they offered. Numerous factors had contributed to
these problems, including a lack of management support and
weaknesses in OMB guidance. As a result, we concluded that OMB,
agencies, and the public had reduced assurance that the
standards in the act were consistently met.
To address these weaknesses, we recommended that OMB and
the agencies take steps to improve review processes and
compliance with the act. The agencies we reviewed have since
taken action to respond to each of our recommendations.
In our report, we also noted that IRS and EPA had
established additional evaluative processes that focused
specifically on reducing burden. In contrast to the CIO
reviews, which did not reduce burden, both IRS and EPA have
reported reductions in actual burden as a result of their
targeted efforts. There appeared to be a number of factors
contributing to their success.
First, these efforts specifically focused on results,
reducing burden, and maximizing the utility of the information
collected.
Second, they benefited from high-level executive support
within the agency, extensive involvement of program office
staff with appropriate expertise, and aggressive outreach to
stakeholders.
In our report, we concluded that these approaches to burden
reduction were promising alternatives to the current process
outlined in the PRA, and we suggested that the Congress
consider mandating pilot projects to target some collections
for rigorous review along these lines.
We also cautioned, however, that such approaches would
probably be more resource-intensive than the current process
and might not be warranted at all agencies since not all had
the level of paperwork issues that face agencies like IRS and
EPA. Consequently, we advised that it was critical that any
efforts to expand the use of these approaches consider these
factors.
In summary, Madam Chairman, the information collection
review process appeared to have little effect on information
burden. As our review showed, the CIO review process as
currently implemented tended to lack rigor, allowing agencies
to focus on clearing an administrative hurdle rather than on
performing substantive analysis. Although we made
recommendations in our report regarding specific process
improvements, the main point that I would like to make today is
that it is not enough to tweak the process. Instead, we would
like to refocus agency and OMB attention away from the current
concentration on administrative procedures and toward the goals
of the act, minimizing burden while maximizing utility. By
doing this, we could help to move toward the outcomes that the
Congress intended.
I look forward to further discussion on how the law and its
implementation can be improved. This completed my statement,
and I will be happy to answer questions at the appropriate
time.
[The prepared statement of Ms. Koontz follows:]
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Mrs. Miller of Michigan. All right. Thank you very much.
The final witness of the day is Mr. Robert Shull, who
joined OMB Watch in 2004 as its director of Federal regulatory
policy. Prior to going to OMB Watch, Mr. Shull was a training
specialist and child advocate where he worked at Children's
Rights, which is a nonprofit organization in New York. This
organization works nationwide filing class action civil rights
suits on behalf of abused and neglected children in order to
reform foster care. He holds degrees from the University of
Virginia as well as Stanford Law, and we certainly welcome you
to the committee today and look forward to your testimony as
well, Mr. Shull. The floor is yours.
STATEMENT OF ROBERT SHULL
Mr. Shull. Now it is on. All right. All those fancy
degrees, and I can't get a mic on.
I want to say it is actually easy for me to come here and
fumble about with the mic, because Professor Katzen came in and
gave such a nuanced and very thorough discussion of many of the
same points that I would like to raise.
I would like to pick up on something that Mr. Langer said.
He said that these issues that we are talking about today--
information and burden--are not an abstract thing because
people have been arrested. And I want to add my wholehearted
agreement that these are not abstract issues, because in
addition to the people who have been arrested, people have
died. Think about all the people who built their homes in Love
Canal who did not know where their homes were being built and
what was underneath them. Or think today about the first
responders who rushed to the World Trade Center after September
11th not knowing what they were breathing and not knowing that
they needed to bring certain protective equipment with them.
Information does come with a burden, but information comes
with benefits. And that is the point that Professor Katzen
wanted to make, and it is the point that I want to underscore.
I think that there is cause for alarm, not because of the
reports of burden hour increase, but because we have come here
to talk about reauthorization of the Paperwork Reduction Act,
and I have heard at least three panelists talk about issues
beyond regulation, talking about regulatory policy and changes
to the regulatory process that would be very controversial, and
I say very harmful to the public.
The first point that I would like to stress is that the
reports of burden hour increases may be exaggerated, in large
part because, as the GAO pointed out in its testimony last
time, there is no science that goes into the calculation of
these burden hours. They may not be a reliable estimate of
anything.
Professor Katzen also elaborated very thoroughly some other
issues that need to be raised if we are going to assess burden
hours, at least from a governmentwide perspective. I would like
to stress that the causes for burden hour increases can be
things like changing priorities. After September 11th, the
Nation realized we need to put more attention on the security
of the food supply and the safety of our ports, and that is
going to mean more information and that will in turn mean more
burden that gets calculated in these burden hour increases.
Additionally, there are outside factors like Hurricane
Katrina. There are more people who are filing for national
flood insurance benefits or public benefits, and those people
who file--when the populations who file increase, the reported
burden hour increase governmentwide will also increase. That
particular factor has already been designated by OMB every year
in its adjustments category, but the program changes, although
OMB stresses that new statutes and such factors can be
responsible for those burden hour increases, they are not
always precisely measuring just how much a factor that is. And
so I just want to caution that when we consider burden hour
increases, that is another very important factor.
I also need to say that burden hours, above all, without
context, cannot be the basis of our policy discussions because
they can lead to misguided policy. Mr. Miller spoke about
changing to a flat tax, and it is absolutely true that changing
from our progressive income tax to a flat tax or even
eliminating Federal income taxes altogether would absolutely
drive down governmentwide reports of burden hours. But that
would also mean less revenue to the Federal Government to do
the things that we expect the Federal Government to do. It
would mean losing something really valuable like the
progressive income tax that protects people at the low end and
asks people at the high end of the economic strata to pony up
their fair share in a fair way.
Another point that needs to be stressed is that we need
this information for a purpose, and if we focus on burden hour
reductions above all, we could be just shifting this
informational burden. Because we need this information, we need
food safety labeling, we need information to protect the
public, the States might have to pick up the role that the
Federal Government might be abdicating in the event of across-
the-board burden reduction targets.
Another problem that has not been brought up is that the
PRA itself is an act that comes with its own bureaucracy. It
really is in many ways the worst--it brings out the worst of
Government. There is paperwork involved in the Paperwork
Reduction Act. There are technicalities of all sorts that I
explain my written statement and would be happy to submit more
information on.
I would like to stress that the real focus should be
shifting to information resources management. There are many
fixes, even just simply changing the name of the bill that gets
put forward to reauthorize the PRA, that could refocus OIRA's
attention on the ``I'' of OIRA, on information technology and
information resource management, which could reduce burden in
many ways without reducing the quality or level of information
that we receive.
I have gone over time. I apologize. I would be happy to
answer questions.
[The prepared statement of Mr. Shull follows:]
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Mrs. Miller of Michigan. Thank you very much.
You know, one of the reasons I wanted to actually get on
this committee when I first came to Government, I liked the
name of the committee, ``Government Reform.'' I like to think
of myself as a Government reformer, and I like to think of
myself as sort of a common-sense approach to Government. And we
had a hearing last week that I was going to ask a question on.
Actually, I thought it was sort of an interesting hearing and
certainly a topic--and Mr. Lynch and I have introduced a piece
of bipartisan legislation about some of the--talking about all
of the burden with the paperwork and everything. In this case,
we were talking about plain English, where somebody that was
actually trying to comply could understand what the Government
was trying to ask them to comply with. And the testimony was
fascinating. In fact, one of the fellows, who happened to be
from Michigan, Cooley Law School, had written this book,
``Lifting the Fog of Legalese: Essays on Plain Language.'' And
as I said, I thought it was just a fascinating evaluation of
how much time is spent in compliance, and again, you know, he
articulated some various examples. He had given the first
example, you could not understand--even if you were an
attorney, you could not understand in many cases what the
Government was asking you to comply with on some of these
things.
I guess I would just ask all of you generally if you think
that the possibility of having some of these various
collections written in plain English would be an advantageous
act as well.
Mr. Langer. Yes, I think that would definitely be helpful.
One of the problems that we deal with--and I am NFIB's sort of
principal liaison with the executive branch folks--is this idea
both of plain English and putting a limit on compliance guides.
You know, OSHA, for instance, put out a compliance guide on
communication of hazardous materials. We all can agree that,
you know, what is communicating what is hazardous and what
isn't hazardous is an important thing. But if you are a small
business owner, having something the size of a telephone book
to go through to learn what you need to do to comply is
ridiculous. Someone is going to look at that and just go--you
know, they are going to go blank.
We talked about TRI earlier, and Mr. Lynch brought it up.
And the issue--you know, one of the issues that we had to deal
with as they were reformulating TRI was the fact that they
would not put executive summaries into the changes that were
being advocated, and all I wanted was for them to simply put
out, you know, a couple of pages saying here is a guide, here
is what you need to do, maybe attached to the Table of Contents
or with an index, for more information go here; but here are
the basic things that you need to do.
And I would just point out, you know, just a couple of
things Mr. Shull brought up, just very quickly. With regards to
Love Canal, Hooker Chemical let the community know what was
hazardous there. They didn't have to, and what they were doing
was fully in accordance with the law. So Love Canal I don't
think is really apropos. Neither is September 11th only because
September 11th was not an issue of paperwork burden and
paperwork reduction. And the thing is, you know, what mistakes
EPA might have made in terms of letting the public know had
nothing to do with small businesses' burdens in filling out
paperwork. So I don't think those are terribly accurate issues.
We have no beef about the idea of protecting lives, but
when you are talking about small businesses and--you have a
situation where small businesses are different than larger
businesses. When you have a business that has only five
employees, invariably it is the owner who has to divine what
the regulations say and what they need to do. They are not the
large companies that are out there that are even building
buildings like the World Trade Towers. You know, those
companies can hire compliance specialists. My folks can't. They
don't. They simply can't afford it. And yet they are being
treated in the same way. That is one of our big issues with the
TRI. And I am sorry Congressman Lynch isn't here for me to talk
about that because, you know, one of the things with reforming
the TRI that we have been dealing with is this issue that the
reforms being proposed would account for 99 percent of the data
that is currently out there, and the vast majority of the
businesses that would be impacted emit 50 pounds--they emit
either nothing or they emit less than 50 pounds of any
chemical, and they should be treated differently.
So with that, I will conclude. I know I went way over with
that, but, yes, plain English would help.
Mrs. Miller of Michigan. I would like to ask Mr. Kovacs as
well: have you had discussion over there at the Chamber about
plain English or something along those lines?
Mr. Kovacs. Well, we like plain English. Our CEO requires
everything that we send around to be less than one page. So no
matter how complex it is, we have to break it down. And I think
the theory is that unless you can break it down and explain it,
you really don't understand.
When we look at the regulations--my shop is also the
regulatory side--I mean, they occupy shelves. I don't know how
a small business person--I am just saying this. I have a
group--I have a team of lawyers, and we have problems with
them. And so if you give it to a small business that is worried
about running it, it is really very difficult.
The point I tried to make to Congressman Lynch was the
Congress has been very good about--you have a lot of these laws
to really help get a handle on this. You have to figure out a
way to get cooperation from the agencies. They have the
expertise. They are the ones who know what regulations are
right, what regulations are wrong, what regulations do not
work, and they have Section 610 of the Reg. Flex. Act, which
they are supposed to come back to you with a plan and say this
works, this--no one ever does it, and that is where I think the
frustration is.
Mrs. Miller of Michigan. Mr. Shull.
Mr. Shull. We actually fully agree that plain language
would be a very important step to take. In fact, we
wholeheartedly encourage and we support the bill that you
introduced, and I think that it is exactly the kind of thing
that I wanted to stress--after fumbling about with the mic--
that really the goal of improving, taking things to the next
step with the Paperwork Reduction Act, we really should be
focusing on not just some across-the-board burden hour
reduction target but how we can reduce the burden of supplying
information without actually reducing the information itself.
And I think that plain language is an example of the kind of
thing that would make it much easier for businesses to find out
what information they need to provide and actually provide it.
I think that other examples might be--the Toxics Release
Inventory has come up, and EPA has produced the TRI-ME software
that is supposed to make it easier for businesses to report the
toxics that they have released into our air and our water and
in our own backyards.
There are other things that we could do. For example, if
businesses have to complete a lot of forms that require the
same bits of information, even name, address, that kind of
thing, there possibly should be a data base that allows them to
get all of that information pulled out and filled out
automatically on every form that they fill out that requires
that information. That is something that would save businesses
time and money, but not rob the public of the information that
it needs to keep itself safe and healthy.
When I brought up, arguably inapposite, examples of Love
Canal and September 11th, I really meant to make a broader
point that the Paperwork Reduction Act is about so much more
than just the paperwork clearance process. It is meant to be a
comprehensive information resources management law, and there
are many components of the PRA that include dissemination
requirements, that include information security privacy,
electronic records and archiving, and these are aspects that
GAO has reported over the years OMB has been deficient--I mean
really from the very beginning of the life of the PRA--OMB has
been deficient in paying sufficient attention to these aspects
of its responsibility. And we could really significantly
advance the very things that we have just talked about using,
say, information technology to make reporting easier if OMB
started shifting more of its resources away from regulatory
reviews that are not sanctioned by any law or away from the
paperwork clearance process even, and into this broader
universe of activities that really is responsible for the law.
Mrs. Miller of Michigan. Yes, I appreciate all those
comments. You know, I am a firm believer that obviously
Government does not create jobs, the private sector does, and
it is for us to try to create an environment to encourage
entrepreneurship, etc. I think on to this plain English thing,
because I really believe that it is a psychological barrier for
small businesses and people that want to start their own
businesses and those kinds of things. So I was very glad that
Representative Lynch and I were able to, as I say, have that
hearing, and I appreciate your comments on the legislation.
One of the questions that I asked the other panel and that
we are still not--I am a person who believes generally less
Government is better and less Government regulation is better,
less taxes are better, etc. That is my ideology. But at the
same time, you know, Government certainly has a role to play in
so many areas, as we were talking about here today, and
particularly OIRA. And so I guess I would ask the panel as
well, as I asked the previous panel, do you think that they
currently have enough resources or are you finding some
difficulty in the amount of resources that the Government has
provided them in order for them to do their jobs? If anyone has
any comment on that, I would be interested.
Mr. Kovacs. My comment is simple. What is lacking over at
OIRA or even within the agencies is the will. I don't think we
need any more laws. I don't think we need--maybe if you had
more oversight, and you are certainly doing that. But at the
end of the day, the question comes down to whether or not they
want to do it. And I used the example before of certifications.
It is very simple. You look at it, and then at the end it gives
you--and it says, ``On behalf of the Federal agency, I certify
that this request complies with 5 CFR 13.9.'' What is it? You
know, does it avoid duplication? Does it get at information
that is only necessary? Is this a proper agency function? These
are really simple questions.
So if you have 65 percent of the CIOs filing requests that
do not have any of the supporting information, that is a
willpower question. When you go to OMB or OIRA and you ask them
about the data quality--you know, they have done a great job,
if you read their regulations, on good practices or risk
assessment, peer review, it is good. It is well written. And
they talk about how you integrate the science and how you make
sure that it is the best-quality information and it is not 10
years out of date. It is not a question of whether they--it is
a question of they don't implement--they don't have the
willpower, nor have they set up the mechanisms. And yet the
courts are telling us it is their responsibility. So this is a
willpower question, not more laws.
Mr. Langer. From a procedural aspect of it, I will talk
about two specific examples. No. 1, on the paperwork side of
things--and I will just blanket say, no, I don't think OIRA has
enough resources. One of the issues--the last time I testified
before this subcommittee, I brought a bootleg form, and it is a
bootleg form that has not gone through the approval process
yet; nevertheless, it is being used by agency personnel.
If we are not to sort of--you know, to repeat what Sally
said earlier about, you know, garbage in, garbage out, or she
says in her testimony, if you are not getting an accurate
picture of what is actually out there and what is actually
being used in terms of paperwork, you are not going to get an
accurate, you know, sort of idea of what the total burden is. I
think if OIRA had more resources, they would be about to ferret
out those forms much more easily.
And then from a general regulatory standpoint, again the
answer is no, and I point to OIRA's annual picture of the costs
and benefits of regulation. The fact is I take great stock in
Mark Crain's report, and the reason why I do is because it is a
comprehensive look at the state of Federal regulation, and it
goes along with what a lot of folks on the outside are saying
about the regulatory state. But when you get to OIRA's annual
snapshot of the costs of regulation, they are only looking at
major rules, and the reason why is because they don't have the
resources to look beyond those major rules.
So you get these different numbers, and the media looks at
them and they say, OK, OIRA is saying it is X, Crain is saying
it is Y, Crain is clearly overstating it and OIRA is saying--
you are saying that OIRA is understating it. Well, the reason
why OIRA is understating it is because they are only looking at
a dozen rules, when, as we know--how many rules did you say
there were, Bill?
Mr. Kovacs. 192,000.
Mr. Langer. 192,000. So, I mean, if you are looking at 11
major rules--and for our, for our members, it is never one
rule, it is never one big rule that they can point to. It is
always 1,000 little itty, bitty things they have to do. You
have TRI, which takes 100 hours to do the paperwork for, or 60
hours, depending who you talk to. You have this, and you have
that. So, you know, you are looking these cumulative things,
and to look at the major rules presents a hugely inaccurate
picture. So, yes, more resources for OIRA.
Mr. Shull. First of all, I have to say that I take the
position that both OIRA and Crain and Hopkins are wildly
overestimating regulatory compliance costs, but that is a
debate for another time.
I really think that it would be incredibly inappropriate to
ask for more resources devoted to OIRA at this time. I mean,
this is a time in which we are cutting budgets or trying to
eliminate programs like Evenstart, public housing. I mean, at
such a time to devote more resources to the office that focuses
on Government paperwork, I think many people in the public
would find obscene. There are just way too many problems that
actually this information paperwork reviews would help us
determine more about and would help us focus more of our
Government resources on that at such a time to focus on OIRA's
budget and getting more people to do more regulatory reviews or
more paperwork reviews would not well serve the public.
It is actually not even clear that if OIRA had more
resources and more staffing that they would actually devote
more time to the paperwork clearance process. They have devoted
significant amounts of time to regulatory reviews that they
haven't been asked by Congress to do. Moreover, there is this
large universe of activities that even from the beginning with
what has been called full funding, OIRA still didn't pay
sufficient attention to on the information resource management
side of things. And it means that there are a lot of wasted
opportunities.
We could have more things like TRI-ME that makes the Toxics
Release Inventory reporting easier. We could have--I mean, if
OIRA really devoted its resources to information resource
management, maybe we would have this business gateway that
would make it easier for businesses to comply with regulations
without reducing the public's protection that it needs. OIRA is
really letting us down with the resources that it has, and it
has been doing that from the beginning. It has a real job on
information resources management, and I think it is time for
Congress to send that signal to OIRA.
Ms. Koontz. I just wanted to add that what we found in our
study was that 65 percent of the certifications that were made
were supported with either no--the certification was made
without any support or with only partial support. And I think
as some of the other witnesses have said, this is not all a
matter of resources. I sat down and looked at these files as
well, and when you see that the certification was made and then
you go to the place where the support was supposed to be
provided and it is one sentence or it is very little
information, it would not take much time on the part of OIRA to
say that the support was not there for the certification, we
are going to give it back to you, agency, maybe we would like
to see something a little better next time.
Mrs. Miller of Michigan. I appreciate that. I have a number
of other questions, but looking at the hour, it is almost 5
o'clock. You have been so patient with us this afternoon. We
appreciate that. Rather than asking any additional questions, I
might just ask you generally, is there a question that I should
have asked you that we haven't that you would like to put on
the record? I will start with Mr. Kovacs. It is a free question
for you.
Mr. Kovacs. As long as it is a free question, let me try.
You know, when you look at the regulatory process and what
Congress has done, one of the things that comes to mind is that
the system right now is almost--not almost, it is literally
overwhelming. It is overwhelming to me, and I run an
organization that deals with this all the time. I am sure it is
overwhelming to you when you look at it. And it is
overwhelming, frankly, to the agencies.
I think with the tools that you have, like the Performance
and Results Act, with Regulatory Flexibility, you almost, as a
Congress, could turn around and say, look, we have fooled with
this for 64 years, and we obviously are playing a game, and the
agencies are winning because they are at the controls--to a
large extent, there is nobody at the control other than what
you tell them to do through the budget, but other than that,
once they get their money, they go home and do what they want.
And I think you could say to them, you know, we are going
to give you so much in appropriations and you are going to have
to really run this as a business; you are going to have to set
up your priorities, and you are going to have to tell us what
performance you are going to go for and what you will expect
and what the business community will expect, and that gives you
some regulatory certainty, but we are not going to try to deal
with every issue that affects everything in the world because I
think we waste a tremendous number of resources on that.
I guess just the example that I would like to use, if you
want to the EPA--and we have testified about this before. We
have this data quality indication where they have 16 data bases
and all the data bases are inconsistent with each other. They
just--they don't need 16 data bases that are inconsistent. They
need to have the right answers. And that is where their
resources should be.
Second, they have hundreds of models for how they model air
pollution, and water pollution. They don't need hundreds so
that every staff person has their favorite model and can take
it off the shelf. They need to get the models together, and
there is so much waste. And I don't want to get into waste,
fraud, and abuse, but what they need to do is focus on what the
priorities are, where they can protect public health the most,
and that is where they need to do it. And if they don't get
everything done but they get the major things done, that is a
huge step forward, and not fight around the edges.
So that would be my free suggestion. Thank you.
Mrs. Miller of Michigan. Thank you. I appreciate that.
Mr. Langer.
Mr. Langer. You know, it is funny because as I am sitting
here listening to Mr. Shull, I am talking about costs and
benefits and how much we spend and how much time we spend
measuring the costs. And it seems to me that on the other side
of this issue there is the costs and benefits of what we are
doing in terms of reducing paperwork. And it is not just in the
abstract. We are not cutting costs of small businesses for the
sake of small businesses. It is what we are gaining down the
road.
And so we might be cutting certain--we might be expending
resources on OIRA at the sake of some other social programs
that many Americans might not find acceptable. But what we are
doing down the road is we are freeing up businesses' greater
time and greater resources so they can hire those people so
that we might not have to give them, you know, housing
allowances because they are getting a better wage because they
are going to have a better job.
So I want to just leave you with that idea, that we are not
just, again, doing this for the sake of just cutting it, that
there are benefits down the road in terms of the American
economy. The American Shareholders Association is about to come
out with a report discussing the drag that regulation has on
capitalization. The National Association of Manufacturers has
come to you and talked to you about the impact of regulation on
the manufacturing sector.
To me, there was never any mystery during the 2004 election
as to why Ohio's economy tanked. There was a reason why
manufacturing fled Ohio, and it had everything to do with the
great regulatory state that was created over the last 30 years.
There is a direct relationship there.
And in the end, what we are talking about here is
prioritization, as Bill said. We want government to prioritize
what is important and what is not important. One of those
things that I like about OIRA and what they are doing now, they
have a great guidance that they have just put out on
comparative risk assessment, which next to cost/benefit
analysis is the hallmark of good regulation. And, frankly, I
want an OIRA that is doing more of that because the Government
needs somebody to look over the shoulders of the regulated
entities, the regulated community to determine whether or not
they are doing the right thing. I think the American people
want that. I think that is the hallmark of good government.
You know, the fact is that down the road we want a
government that protects the rights and interests of the
citizens of this country, and OIRA does that and should do more
of that.
Thank you.
Mrs. Miller of Michigan. Thank you.
Ms. Koontz.
Ms. Koontz. I would just like to summarize some of the
things that we think need to be done from this point on because
of the work we have done.
Obviously, first of all, we do think that Congress should
consider the pilot projects that we mentioned in our report and
in doing so empower agencies to experiment in sort of a
controlled fashion some alternative ways of reducing burden.
And we outline our full statement all the different
considerations that would have to go into that.
Second, the second issue deals with public consultation.
Public consultation is very important in terms of burden
reduction, and one of the things that we saw particularly in
the IRS model that was very effective was this sort of
sustained outreach to the affected community, to trade groups,
to the public, and others. And right now most of the public
consultation is focused on the use of the Federal Register, and
what we would like to see through pilot projects or some other
means is some experimentation or some use of alternative ways
of reaching the public, including using the Web sites, which I
think the public is becoming much more accustomed to that being
the public--the agency's face to the public. So we would like
to see more of that.
And, third--and this does not have to do with amending the
law. It has to go with putting in place the kind of rigorous
processes in the agencies that Congress had in mind when they
passed the amendments in 1995, and to ensure that the
certifications are based, in fact, on justifications.
Mrs. Miller of Michigan. Thank you.
Mr. Shull.
Mr. Shull. I would like to make two final points.
One is that there is still a need for more transparency in
OIRA's implementation of its responsibilities under the
Paperwork Reduction Act. It is really unacceptable that in the
information age, the Office of Information and Regulatory
Affairs does not have an online docket where the public can go
to file comments, to get copies of the information collections
that are under review, and to get copies of OIRA's feedback to
the agencies. That is possible. It is possible, as we know,
with the electronic dockets for rulemaking. It really should be
happening now for the Paperwork Reduction Act and the paperwork
clearance process.
The other is that, again, we started by talking about the
Paperwork Reduction Act is information resources management
law, and many times in the course of this discussion, we have
been talking about regulation. And I have seen some suggestions
from the prepared statements from NFIB and from the Chamber,
and I really want to stress that those ideas would really harm
the public. They are really harmful, and above all, they are
really controversial, and ultimately bipartisan, and would
really divert too much attention away from the crucial issues
of information resources management during the reauthorization
of the Paperwork Reduction Act. And I really want to strongly
suggest that this be a clean reauthorization without
extraneous, non-germane riders that would put the public health
and safety at risk.
Mrs. Miller of Michigan. Well, again, thank you so very,
very much, all of you. I sincerely appreciate your attendance
here at the hearing today at the committee. I think it has been
fascinating from my perspective, at any rate, and as we move
forward with this reauthorization of the PRA, we certainly will
take your input and suggestions into consideration. And we have
some ideas for even possibly some other legislation that may
come out of some of this testimony as well today.
So, again, we thank you so very, very much. The meeting is
adjourned.
[Whereupon, at 5:03 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Tom Davis follows:]
[GRAPHIC] [TIFF OMITTED] T9707.094
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