A Confluence of Concerns with the Accumulation of Regulatory Regimens

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Requiring agencies to consider the cumulative costs of their regulation has its own cumulative costs.

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The Office of Information and Regulatory Affairs (OIRA) recently issued a two-page directive requiring agencies to engage in a new form of analysis: the cumulative impact of their rules. This directive follows Executive Order 13,563, issued in January 2011, which asked agencies to include in their rulemaking consideration of, “among other things, and to the extent practicable, the costs of cumulative regulations.” It emphasized that some “sectors and industries face a significant number of regulatory requirements, some of which may be redundant, inconsistent, or overlapping,” and directed agencies to promote “coordination, simplification, and harmonization.”

Noting that “[c]umulative burdens can create special challenges for small businesses and startups,” the new OIRA directive asks agencies to “take active steps to take account of the cumulative effects of new and existing rules and to identify opportunities to harmonize and streamline multiple rules. The goals of this effort should be to simplify requirements on the public and private sectors; to ensure against unjustified, redundant, or excessive requirements; and ultimately to increase the net benefits of regulations.” It directs them to take nine bullet-pointed steps, “where appropriate and feasible, and to the extent permitted by law:”

* Early consultation with, advance notice to, and close engagement with affected stakeholders to discuss potential interactions between rulemakings under consideration and existing regulations as well as other anticipated regulatory requirements;

* Early engagement with state, tribal, and local regulatory agencies to identify opportunities for harmonizing regulatory requirements, reducing administrative costs, avoiding unnecessary or inconsistent requirements, and otherwise improving regulatory outcomes;

* Use of Requests for Information and Advance Notices of Proposed Rulemaking to obtain public input on potentially overlapping rulemakings and on rulemakings that may have significant cumulative effects;

* Specific consideration of the cumulative effects of regulations on small businesses and start-ups;

* Identification of opportunities to increase the net benefits of regulations and to reduce administrative and other costs, while meeting policy goals and legal requirements;

* Careful consideration, in the analysis of costs and benefits, of the relationship between new regulations and regulations that are already in effect;

* Identification of opportunities to integrate and simplify the requirements of new and existing rules, so as to eliminate inconsistency and redundancy;

* Coordination of timing, content, and requirements of multiple rulemakings that are contemplated for a particular industry or sector, so as to increase net benefits; and

* Consideration of the interactive and cumulative effects of multiple regulations affecting individual sectors as part of agencies’ retrospective analysis of existing rules, consistent with Executive Order 13563.

What the directive does not consider, however, is the cumulative impact of analytic requirements on agencies. This new directive increases their administrative burden. The threat of regulatory ossification has grown as well—not only because more time must be taken, but also, more importantly, because time is money, and agencies facing budgetary stringencies cannot add hours for this requirement, without subtracting hours from another project. This problem is well known in the literature, but there is no sign that OIRA is concerned with it.

More or less coincidentally with the OIRA directive, Curtis Copeland prepared a remarkably thorough and informative study, “Regulatory Analysis Requirements,” for the Administrative Conference of the United States (ACUS). This study analyzes the “array of regulatory analysis requirements” that confront agencies when they decide to issue regulations.

The study notes that other statutes or executive orders demand a wide range of analytical requirements in addition to the notice-and-comment rulemaking requirements of the Administrative Procedure Act:

In appropriate cases, agencies must prepare a cost-benefit analysis, see Executive Orders 12,866, 13,563; a regulatory flexibility analysis, see 5 U.S.C. § 603; a federalism impact statement, see Executive Order 13,132; analyses required by the Unfunded Mandates Act, see 2 U.S.C. §§ 1532, 1535; an environmental impact statement, see 42 U.S.C. § 4332; and an evaluation of the rule’s environmental health, and safety effects on children, see Executive Order 13,045.

The study’s author, Copeland, has long focused on problems of regulation as a senior analyst first at the U.S. Government Accountability Office and then in the Congressional Research Service. His years of service in the federal government provided him recognition for solid, objective analysis throughout government, and that reputation is evident in the wide range of discussions with government officials that he reports.

It is stunning to read in Copeland’s report that “[t]he Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) declined to participate in the study.” Why does OIRA have no concern for the cumulative impact of analytic requirements? “Cumulative burdens can create special challenges” for agencies, too. The President’s constitutional obligation to take care that the laws be faithfully executed would seem to include responsibility for assuring agency efficiency in the use of diminishing resources, as well as attention to the external efficiency of regulation—another undoubted good.

OIRA should be concerned with this study, and deeply engaged in finding ways to lighten the regulatory burden on agencies as well as the public. ACUS has been reluctant to address itself to OIRA in the past; hopefully it will now, and OIRA will be willing to be engaged.

Peter L. Strauss

Peter L. Strauss is the Betts Professor of Law at Columbia Law School and is a Senior Fellow of the Administrative Conference of the United States.