Federal Regulatory Directory
Publication Year: 2012
After more than a decade, the Federal Regulatory Directory continues to offer a clear path through the maze of complex federal agencies and regulations, providing to-the-point analysis of regulations. Information-packed profiles of more than 100 federal agencies and departments detail the history, structure, purpose, actions, and key contacts for every regulatory agency in the U.S. government. The Federal Regulatory Directory continues to be the leading reference for understanding federal regulations, providing a richer, more targeted exploration than is possible by cobbling together electronic and print sources.
- Front Matter
- Back Matter
- Chapter 1: Consumer Product Safety Commission
- Chapter 2: Environmental Protection Agency
- Chapter 3: Equal Employment Opportunity Commission
- Chapter 4: Federal Communications Commission
- Chapter 5: Federal Deposit Insurance Corporation
- Chapter 6: Federal Energy Regulatory Commission
- Chapter 7: Federal Reserve System
- Chapter 8: Federal Trade Commission
- Chapter 9: Food and Drug Administration
- Chapter 10: National Labor Relations Board
- Chapter 11: Occupational Safety and Health Administration
- Chapter 12: Securities and Exchange Commission
- Chapter 13: Architectural and Transportation Barriers Compliance Board
- Chapter 14: Commodity Futures Trading Commission
- Chapter 15: Consumer Financial Protection Bureau
- Chapter 16: Election Assistance Commission
- Chapter 17: Farm Credit Administration
- Chapter 18: Federal Election Commission
- Chapter 19: Federal Housing Finance Agency
- Chapter 20: Federal Maritime Commission
- Chapter 21: National Credit Union Administration
- Chapter 22: National Mediation Board
- Chapter 23: National Transportation Safety Board
- Chapter 24: Nuclear Regulatory Commission
- Chapter 25: Pension Benefit Guaranty Corporation
- Chapter 26: Postal Regulatory Commission
- Chapter 27: Small Business Administration
- Chapter 28: Social Security Administration
- Chapter 29: United States International Trade Commission
- Chapter 30: United States Postal Service
- Chapter 31: Commerce Department
- Chapter 32: Defense Department
- Chapter 33: Education Department
- Chapter 34: Energy Department
- Chapter 35: Health and Human Services Department
- Chapter 36: Homeland Security Department
- Chapter 37: Housing and Urban Development Department
- Chapter 38: Interior Department
- Chapter 39: Justice Department
- Chapter 40: Labor Department
- Chapter 41: State Department
- Chapter 42: Transportation Department
- Chapter 43: Treasury Department
- Chapter 44: Veterans Affairs Department
- Chapter 45: Regulatory Oversight and Coordination
Copyright by Sage Publications, Inc.
Thematic Table of ContentsIntroductionAgriculture
Business, Banking, and Commerce
- Agriculture Department 421
- Farm Credit Administration 348
- Agriculture Department 421
- Commerce Department 491
- Commodity Futures Trading Commission 335
- Consumer Finanancial Protection Bureau 340
- Consumer Product Safety Commission 37
- Council of Economic Advisers 778
- Federal Deposit Insurance Corporation 132
- Federal Maritime Commission 368
- Federal Reserve System 178
- Federal Trade Commission 207
- Housing and Urban Development Department 602
- Justice Department 649
- National Credit Union Administration 373
- National Economic Council 780
- Office of the U.S. Trade Representative 783
- Securities and Exchange Commission 297
- Treasury Department 752
- United States International Trade Commission 410
Disasters and Emergency Preparedness
- Health and Human Services Department 554
- Justice Department 649
- Commerce Department 491
- Defense Department 515
- Homeland Security Department 575
- Labor Department 675
- National Transportation Safety Board 381
- Transportation Department 702
- Education Department 519
- Election Assistance Commission 344
- Federal Election Commission 353
- Justice Department 649
Environment and Natural Resources
- Energy Department 538
- Federal Energy Regulatory Commission 155
- Interior Department 618
- Transportation Department 702
Federal Budget and Tax Policy
- Agriculture Department 421
- Commerce Department 491
- Council on Environmental Quality 778
- Energy Department 538
- Environmental Protection Agency 55
- Interior Department 618
Federal Government Operations and Civil Service
- Congressional Budget Office 777
- Government Accountability Office 779
- Office of Management and Budget 781
- Treasury Department 752
Health and Nutrition
- Corporation for National and Community Service 777
- Domestic Policy Council 779
- Government Accountability Office 779
- Office of Governmentwide Policy 781
- Office of Intergovernmental Affairs 781
- Postal Regulatory Commission 397
- Regulatory Information Service Center 783
- United States Postal Service 414
Housing and Urban Development
- Agriculture Department 421
- Energy Department 538
- Food and Drug Administration 229
- Health and Human Services Department 554
- Housing and Urban Development Department 602
- Occupational Safety and Health Administration 276
- Office of National AIDS Policy 782
Immigration and Border Controls
- Federal Housing Finance Agency 363
- Housing and Urban Development Department 602
- Homeland Security Department 575
- State Department 696
- Transportation Department 702
Law and Justice
- Equal Employment Opportunity Commission 84
- Labor Department 675
- National Labor Relations Board 256
- National Mediation Board 379
- Pension Benefit Guaranty Corporation 392
- Small Business Administration 400
- Social Security Administration 405
Military Personnel and Veterans
- Justice Department 649
- Office of Compliance 780
- Office of National Drug Control Policy 782
- Transportation Department 702
National Security and Defense
- Labor Department 675
- Veterans Affairs Department 769
- Commerce Department 491
- Defense Department 514
- Federal Communications Commission 106
- Homeland Security Department 575
- National Security Council 780
- National Telecommunications and Information Administration 780
- Nuclear Regulatory Commission 386
Science, Technology, and Communications
- Housing and Urban Development Department 602
- Interior Department 618
Social Services and Disabilities
- Commerce Department 491
- Federal Communications Commission 106
- National Telecommunications and Information Administration 780
- Office of Science and Technology Policy 782
- Transportation Department 702
- United States Patent and Trademark Office 511
- Agriculture Department 421
- Health and Human Services Department 554
- Social Security Administration 405
- Architectural and Transportation Barriers Compliance Board 331
- Federal Maritime Commission 368
- Homeland Security Department 575
- Transportation Security Administration 584
- National Transportation Safety Board 381
- Transportation Department 702
In 2009, President Barack Obama's administration unveiled two policy initiatives that would consume Congress and make headlines: health care reform that included new regulation of the health insurance industry and a financial regulatory reform package to expand federal oversight of financial markets, including trading in derivatives, hedge funds, and municipal bonds. This proposal also included a blueprint for the Consumer Financial Protection Bureau, which would consolidate oversight of a range of financial products (such as credit cards, mortgages, and mutual funds) marketed to consumers. These two policy initiatives were passed along partisan lines and will have far-reaching regulatory impact on the day-to-day lives of most Americans. It's been estimated that these two laws alone will generate hundreds of new rules and regulations.
Passage of health care reform legislation—specifically, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010—was characterized by intense partisan bickering. It was a divisive issue among voters as well: polls showed the country almost evenly split on the issue, with slightly more Americans opposing the legislation. Even the vote itself was controversial: the House had passed a more generous version of the legislation, which included the public option favored by liberals; the Senate version did not contain this provision. There were enough differences in the two bills that House Speaker Nancy Pelosi announced the House would not consider the Senate version. But the political landscape whereby Democrats had free reign with policy changed after Republican Scott Brown won a special election in February 2010 to replace Democrat Sen. Ted Kennedy, who had died the previous summer. Democrats no longer had a filibuster-proof super majority in the Senate. The only viable option for passing health care reform legislation was a House vote on the Senate bill. The House passed the Senate version, which the president signed into law in March 2010. Some provisions were enacted later that year; most provisions will go into effect by 2014 (see Centers for Medicare and Medicaid Services, page 560).
The controversy did not end with passage of the law. Republicans immediately vowed to make the bill a campaign issue and many of the centrist Democrats from swing districts who voted for the legislation later lost their re-election bids in November. Attorneys General from several states filed lawsuits challenging the constitutionality of the law, specifically the mandate that requires all persons to purchase health insurance. By summer 2011, Federal court rulings were divided on the issue, with some judges ruling in favor of the law and others ruling against the law. Litigation is ongoing and challenges to the law were expected to reach the U.S. Supreme Court for a final determination.
Health care reform was not the only policy initiative to make headlines. After years of failing to respond to the factors that contributed to the worst economic downturn since the Great Depression, Congress finally tackled the issue of financial reform. The president signed the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. Although this legislation stirred ideological battles and was passed strictly along partisan lines, the financial reform legislation did not stir the type of controversy among voters that health care reform legislation produced. Public sentiment was strongly aligned against banks deemed “too big to fail” and voters were not opposed to regulation that would ostensibly prevent the need for billion-dollar bailouts of financial institutions.
The greatest controversy in the Dodd-Frank legislation concerned the establishment of the Consumer Financial Protection Bureau (CFPB) (see page 340), which is charged with regulating consumer financial products or services under federal consumer financial laws. Republicans and financial industry stakeholders viewed the new CFPB as too powerful and sought to change the leadership structure and dilute the authority of the agency. House Republicans sponsored legislation that would replace the director of the agency with a five-member bipartisan board. Another bill sought to make it easier for other banking regulators to veto regulations developed by the CFPB. Republicans also successfully prevented the president's choice, Elizabeth Warren, from serving as CFPB's inaugural agency director.
Although the president enjoyed hard-won policy victories in Congress, he faced criticism over the federal government's response to the disastrous BP oil spill in the Gulf of Mexico—and equally harsh criticism for failing to reform the agency responsible for regulatory oversight of the oil and gas industry, the Department of Interior's Mines and Mineral Service (MMS), prior to the incident. Problems with MMS were already well documented. A 2008 Department of Interior Inspector General report listed serious issues with MMS employees that included: employees accepting expensive gifts and money from the industries [Page xiv]they were charged with regulating; having improper personal relationships with industry representatives; rigging oil contract bidding; and mismanaging millions of dollars in royalties.
In April 2010, after years of allowing the oil industry to self-regulate on issues of safety and environmental management, disaster struck: BP's Transocean Deepwater Horizon offshore oil rig exploded in the Gulf of Mexico, killing 11 workers and unleashing the worst environmental disaster in the nation's history. This incident came just three weeks after the president announced he would be opening the eastern seaboard to off-shore drilling, angering environmentalists.
In the aftermath of the spill, which continued to leak oil for nearly three months, the administration responded with a moratorium on most of the drilling activity in the Gulf of Mexico. Also, the administration finally undertook reforming the MMS. The agency was abolished and its responsibilities were divided between two new agencies to prevent a conflict of interest: Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), which promulgates environmental and safety regulations and the Office of Natural Resources Revenue (see page 635), which assumes the revenue collection responsibilities of the former MMS. The final stage of the reorganization of BOEMRE became effective in Fall 2011when it split into two independent entities: the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE).
As the country strained under an economic downturn characterized by long-term, consistently high unemployment and an unprecedented wave of home foreclosures, angry voters went to the polls in November 2010. The midterm elections shifted the balance of power as Republicans captured the majority in the House by picking up more than 60 seats, fueled by victories from far-right Tea Party candidates. Democrats held the Senate by a narrow margin. President Obama acknowledged that Democrats had suffered a “shellacking” at the hands of voters. The election was widely viewed as a backlash against what many voters believed to be inadequate action on the economy and against the liberal policies of the Democratic party, most notably health care reform legislation. The health care legislation sought to reform the health insurance industry and to provide access to health insurance to a majority of the 50 million uninsured Americans, but many voters were concerned about the fiscal impact to a nation already operating under the largest budget deficits in history. Following the debt-ceiling crisis and Standard & Poor's subsequent downgrade of the credit rating of the U.S. government, Americans continue to be concerned with the national debt and deficit spending. Congress and the administration will continue to spar over policy to address this issue, which will likely shape the outcomes of the 2012 elections.
List of AbbreviationsIntroduction
AARC Alternative Agricultural Research and Commercialization Center
ABA American Bar Association
ABA Architectural Barriers Act of 1968
ACAs Agricultural Credit Associations
ACF Administration for Children and Families
ACYF Administration for Children, Youth, and Families
ADA Americans with Disabilities Act
ADAAG ADA Accessibility Guidelines
ADEA Age Discrimination in Employment Act
ADR Alternative Dispute Resolution
AEC Atomic Energy Commission
AFDC Aid to Families with Dependent Children
AHP Affordable Housing Program
AIA American Institute of Architects
ALFD Advertising, Labeling and Formulation Division
ALJ Administrative law judge
AMA American Medical Association
AMID Air and Marine Interdiction Division
AMS Agricultural Marketing Service
ANDA Abbreviated New Drug Application
ANWR Alaskan National Wildlife Refuge
APA Administrative Procedure Act of 1946
APHIS Animal and Plant Health Inspection Service
APO army post office
AQI Agricultural Quarantine Inspection
ARCP Agricultural Resource Conservation Program
AS American Somoa
ASCS Agricultural Stabilization and Conservation Service
ASOS Automated Surface Observing Stations
ATBCB Architectural and Transportation Barriers Compliance Board
ATF Bureau of Alcohol, Tobacco, Firearms and Explosives
ATFI Automated Tariff Filing and Information System
ATL Alcohol and Tobacco Laboratory
ATP Advanced Technology Program
ATSA Aviation and Transportation Security Act
ATV all-terrain vehicle
AWA Animal Welfare Act
AYP adequate yearly progress
BBS electronic bulletin board system
BCIS Bureau of Citizenship and Immigration Services
BCRA Bipartisan Campaign Reform Act of 2002
BIA Bureau of Indian Affairs
BIS Bureau of Industry and Security
BJA Bureau of Justice Assistance
BJS Bureau of Justice Statistics
BLM Bureau of Land Management
BLS Bureau of Labor Statistics
BOEM Bureau of Ocean Energy Management
BOEMRE Bureau of Ocean Energy Management, Regulation, and Enforcement
BOP Federal Bureau of Prisons
BRS Bibliographic Retrieval System
BSSE Bureau of Safety and Environmental Enforcement
BXA Bureau of Export Administration (Now BIS)
CAA Civil Aeronautics Authority
CAB Civil Aeronautics Board
CAFÉ Corporate Average Fuel Efficiency
CAT catastrophic level
CBO Congressional Budget Office
CBP Customs and Border Protection
CCC Commodity Credit Corporation
CCF Capital Construction Fund
CCP Cooperative Compliance Program
CEA Council of Economic Advisers
CEBA Competitive Equality Banking Act of 1987
CEQ Council on Environmental Quality
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act (Superfund)
CETA Comprehensive Employment and Training Act
CFPB Consumer Financial Protection Bureau
CFR Code of Federal Regulations
CFTC Commodity Futures Trading Commission
CIC Consumer Information Center
CMS Centers for Medicare and Medicaid Services
CNS Corporation for National Service
COBRA Consolidated Omnibus Budget Reconciliation Act of 1985
COPS Community Oriented Policing Services
COSHI Clearinghouse for Occupational Safety and Health Information
CPD Community Planning and Development
CPSC Consumer Product Safety Commission
CRA Community Reinvestment Act
CSAB Center for the Study of American Business
CSRA Civil Service Reform Act
CSSPAB Computer System Security and Privacy Advisory Board
DEA Drug Enforcement Administration
DHS Department of Homeland Security
DOE Department of Energy
DOJ Department of Justice
DOL Department of Labor
DOT Department of Transportation
DPC Domestic Policy Council
DTV digital television
EAA Export Administration Act
EAC Election Assistance Commission
EAR Export Administration Regulations
EDA Economic Development Administration
EDGAR Electronic Data Gathering Analysis and Retrieval system
EEOC Equal Employment Opportunity Commission
EERE Energy Efficiency and Renewable Energy
EFIN Environmental Financing Information Network
EIA Energy Information Administration
EIS Environmental Impact Statement
ELAIN Export License Application and Information Network
ELVIS Electronic License Voice Information System
EM Office of Environmental Management (Energy Dept.)
E-mail PMO Electronic Messaging Program Management Office
EPA Environmental Protection Agency
EPA Equal Pay Act
EPUB Electronic Publishing System
EQC Environmental Quality Council
ERA Economic Regulatory Administration
ERDA Energy Research and Development Administration
ERIC Educational Resources Information Center
ERISA Employee Retirement Income Security Act of 1974
EROD Education Resources Organization Directory
ERS Economic Research Service
ESA Employment Standards Administration
ESEA Elementary and Secondary Education Act of 1965
ESH Office of Environment, Safety and Health
ESRL Earth Systems Research Laboratory (NOAA-Commerce)
ETA Employment and Training Administration
ETF exchange traded funds
FAA Federal Aviation Administration
Fannie Mae Federal National Mortgage Association
Farmer Mac Federal Agricultural Mortgage Corporation
FAS Foreign Agricultural Service
FASB Financial Accounting Standards Board
FBI Federal Bureau of Investigation
FCA Farm Credit Administration
FCC Federal Communications Commission
FCIC Federal Crop Insurance Corporation
FCS Food and Consumer Service
FCSBA FCS Building Association
FDA Food and Drug Administration
FDC Food, Drug, and Cosmetic Act
FDIC Federal Deposit Insurance Corporation
FEA Federal Energy Administration
FEC Federal Election Commission
FECA Federal Election Campaign Act
Fed Federal Reserve Board
FEMA Federal Emergency Management Agency
FEPC Fair Employment Practices Committee
FERC Federal Energy Regulatory Commission
FERN Food Emergency Response Network
FFIEC Federal Financial Institutions Examination Council
FGIS Federal Grain Inspection Service
FHA Federal Housing Administration
FHEO Office of Fair Housing and Equal Opportunity
FHFB Federal Housing Finance Board
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation (Freddie Mac)
FHWA Federal Highway Administration
FIFRA Federal Insecticide, Fungicide, and Rodenticide Act
FIN Federal Information Network
FIRREA Financial Institutions Reform, Recovery, and Enforcement Act of 1989
FISA Foreign Intelligence Surveillance Act
FLBA Federal Land Bank Association
FLSA Fair Labor Standards Act
FMC Federal Maritime Commission
FmHA Farmers Home Administration
FNS Food and Nutrition Service
FOI freedom of information
FOIA Freedom of Information Act
FOMC Federal Open Market Committee
FPC Federal Power Commission
FPDC Federal Procurement Data Center
FPDS Federal Procurement Data Center—Next Generation
FPO fleet post office
FRA Federal Railroad Administration
FRCS Federal Reserve Communications System
Freddie Mac Federal Home Loan Mortgage Corporation
FRP Federal Radionavigation Plan
FRSO Federal Relay Service Online
FSA Family Support Administration
FSA Farm Service Agency
FSIS Food Safety and Inspection Service
FSLIC Federal Savings and Loan Insurance Corporation
FTA Federal Transit Administration
FTC Federal Trade Commission
FTS Federal Technology Service
FWS United States Fish and Wildlife Service
GAO Government Accountability Office
GATT General Agreement on Tariffs and Trade
GFN Good Faith Negotiations
GIPSA Grain Inspection, Packers, and Stockyards Administration
GNMA Government National Mortgage Association (Ginnie Mae)
GPO U.S. Government Printing Office
GPS Global Positioning System
GSA General Services Administration
HAVA Help America Vote Act of 2002
HEW Department of Health, Education, and Welfare
HHI Healthy Homes Initiative
HHS Department of Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
HMEP Hazardous Materials Emergency Preparedness
HPCs high performance computers
HUBZone Historically Underutilized Business Zone
HUD Department of Housing and Urban Development
ICC Interstate Commerce Commission
ICE Immigration and Customs Enforcement
IHAs Indian Housing Authorities
INA Immigration and Nationality Act
INS Immigration and Naturalization Service
IOM Institute of Medicine
IRS Internal Revenue Service
ISDN Integrated Services Digital Network
ISP Internet service provider
ISTEA Intermodal Surface Transportation Efficiency Act of 1991
ITA International Trade Administration
ITD International Trade Division
ITS Information Technology Service
ITU International Telecommunication Union
JOBS Job Opportunities and Basic Skills program
JTPA Job Training Partnership Act of 1982
LEA local educational agency
LEP limited English proficiency
LIHEAP Low Income Home Energy Assistance Program
LMRDA Labor-Management Reporting and Disclosure Act
LNG Liquefied Natural Gas
LPTV low-power television
LSA local service area
LWA limited work authorization
MARAD Maritime Administration
MBS Mortgage-Backed Securities
MEDLARS Medical Literature Analysis and Retrieval System
MEP Manufacturing Extension Partnership
MMDS Multipoint Microwave Distribution Services
MMS Minerals Management Service
MP Northern Mariana Islands
M.S. mail stop
MSHA Mine Safety and Health Administration
MSPB Merit Systems Protection Board
NACOSH National Advisory Committee on Occupational Safety and Health
NAFTA North American Free Trade Agreement
NAIS National Animal Identification System
NASD National Association of Securities Dealers
NCCC National Civilian Community Corps
NCE new chemical entity
NCES National Center for Education Statistics
NCJRS National Criminal Justice Reference Service
NCLB No Child Left Behind Act of 2002
NCUA National Credit Union Administration
NCUSIF National Credit Union Share Insurance Fund
NDA new drug application
NEA National Endowment for the Arts
NEC National Economic Council
NEDRES National Environmental Data Referral Service
NEPA National Environmental Policy Act
NESDIS National Environmental Satellite, Data, and Information Service
NEXRAD next generation radar
NFA National Futures Association
NGDC National Geophysical Data Center
NGPA Natural Gas Policy Act of 1978
NHTSA National Highway Traffic Safety Administration
NIC National Institute of Corrections
NIJ National Institute of Justice
NIOSH National Institute of Occupational Safety and Health
NIRA National Industrial Recovery Act
NIST National Institute of Standards and Technology
NLB National Labor Board
NLECTC National Law Enforcement Corrections Technology Center
NLM National Library of Medicine
NLRB National Labor Relations Board
NMB National Mediation Board
NOAA National Oceanic and Atmospheric Administration
NODC National Oceanographic Data Center
NOPR Notice of Proposed Rulemaking
NPDES National Pollution Discharge Elimination System
NPR National Performance Review
NPS National Park Service
NRA Negotiated Rates Act of 1993
NRC Nuclear Regulatory Commission
NRCS Natural Resources Conservation Service
NSC National Security Council
NTIA National Telecommunications and Information Administration
NTIS National Technical Information Service (Commerce)
NTSB National Transportation Safety Board
NVOCC non-vessel operating common carrier
NVRA National Voter Registration Act of 1993
OAR Office of Air and Radiation (EPA)
OASHI Office of AIDS and Special Health Issues
OAW Office of the American Workplace
OCA Office of Consumer Affairs
OCC Office of the Comptroller of the Currency
OCR Office for Civil Rights (HHS)
OCRM Ocean and Coastal Resource Management
OCS Outer Continental Shelf
OCST Office of Commercial Space Transportation
OECD Organization for Economic Cooperation and Development
OESE Office of Elementary and Secondary Education
OFBCI Office of Faith-based and Community Initiatives
OFBNP Office of Faith-based and Neighborhood Partnerships
OFCCP Office of Federal Contract Compliance Programs
OGC Office of General Counsel
OGP Office of Governmentwide Policy
OGSM Office of the General Sales Manager
OHA Office of Health Affairs
OHMS Office of Hazardous Materials Safety
OID Office of Integration and Disposition
OIG Office of the Inspector General (HHS)
OIRA Office of Information and Regulatory Affairs
OJJDP Office of Juvenile Justice and Delinquency Prevention
OJP Office of Justice Programs
OLMS Office of Labor Management Standards
OLS online library system
OMB Office of Management and Budget
ONAP Office of National AIDS Policy
ONDCP Office of National Drug Control Policy
ONRR Office of Natural Resources Revenue
OPA Office of Public Affairs
OPHS Office of Public Health and Science
OPPT Office of Pollution Prevention and Toxics
OPS Office of Pipeline Safety
ORA Office of Regulatory Activities
ORIC online research and information center
OSC Office of Site Closure
OSHA Occupational Safety and Health Administration
OSHS Office of Safety, Health and Security
OSRA Ocean Shipping Reform Act
OSTP Office of Science and Technology Policy
OTA Office of Technology Assessment
OTS Office of Thrift Supervision
OVC Office for Victims of Crime
OWCP Office of Workers’ Compensation Programs
PAC political action committee
PBGC Pension Benefit Guaranty Corporation
PCAOB Public Company Accounting Oversight Board
PHAs Public Housing Authorities
PHMSA Pipeline and Hazardous Materials Safety Administration
PHS Public Health Service
PIH Public and Indian Housing
PL Public Law
PRA Paperwork Reduction Act
PRC Postal Regulatory Commission
PRISM Performance and Registration Information Systems Management
PSA Packers and Stockyards Administration
PSP Packers and Stockyards Programs
PTO Patent and Trademark Office
PUHCA Public Utility Holding Company Act
PURPA Public Utilities Regulation Policy Act
PWBA Pension and Welfare Benefits Administration
QHWRA Quality Housing and Work Responsibility Act of 1998
RARG Regulatory Analysis Review Group
RBC Regulatory Barriers Clearinghouse
RBS Rural Business-Cooperative Service
RCRA Resource Conservation and Recovery Act of 1976
RDA Rural Development Administration
REA Rural Electrification Administration
REAP Rural Economic Area Partnership
REFCORP Resolution Funding Corporation
REMIC Real Estate Mortgage Investment Conduit
RESPA Real Estate Settlement Procedures Act of 1974
RFA Regulatory Flexibility Act
RHS Rural Housing Service
RIMS Records and Information Management System
RITA Research and Innovative Technology Administration
RRF Ready Reserve Fleet
RSPA Research and Special Programs Administration (Transportation)
RTC Resolution Trust Corporation
RTECS Registry of Toxic Effects of Chemical Substances
RUS Rural Utilities Service
SAC Special Agent in Charge
SAIC Special Agent in Charge
SAIF Savings Association Insurance Fund
SBA Small Business Administration
SBIC Small Business Investment Company
SBREFA Small Business Regulatory Enforcement Fairness Act
SBTE Small Business Tax Education program
SCS Soil Conservation Service
SEC Securities and Exchange Commission
SESD Special Examination and Supervision Division
SILS Science Information and Library Services
SIPC Securities Investor Protection Corporation
SLSDC Saint Lawrence Seaway Development Corporation
SMI supplementary medical insurance
SMSA standard metropolitan statistical area
SPR Strategic Petroleum Reserve
SSA Social Security Administration
SSI Supplemental Security Income program
STAA Surface Transportation Assistance Act
STB Surface Transportation Board
STELA System for Tracking Export License Applications
Superfund Comprehensive Environmental Response, Compensation, and Liability Act
TA teaching assistant
TANF Temporary Assistance for Needy Families program
TCE Tax Counseling for the Elderly program
TDD Telecommunications Device for the Deaf
TEA-21 Transportation Equity Act for the 21st Century
TIRC Toxicology Information Response Center
TRR Trade Regulation Rules
TSA Transportation Security Administration
TSC Transportation Systems Center
TSR Transportation Security Regulation
TTB Alcohol and Tobacco Tax and Trade Bureau
TTRC Training Technology Resource Center
TTY text telephone
UIT unit investment trusts
UMTA Urban Mass Transportation Administration
URI University Research Institute
U.S.C. United States Code
USCIS U.S. Citizenship and Immigration Service
USDA United States Department of Agriculture
USEC United States Enrichment Corporation
USES United States Employment Service
USGS United States Geological Survey
USITC United States International Trade Commission
USN United States Navy
USPS United States Postal Service
USTR Office of the U.S. Trade Representative
UTC University Transportation Center
VA Department of Veterans Affairs
VETS Veterans’ Employment and Training Service
VITA Volunteer Income Tax Assistance program
VSS voting system standards
WHD Wage and Hour Division
WIC Women, Infants, and Children food program
WTO World Trade OrganizationKey to Congressional Addresses
U.S. Capitol. Abbreviated as CAP; the letters H and S before the room number indicate the House or Senate side of the building. Zip codes are 20510 for the Senate, and 20515 for the House.
Senate Office Buildings. Mail for delivery to Senate office buildings does not require a street address. The zip code is 20510. Abbreviations, building names, and street locations are as follows:
SD Dirksen Senate Office Bldg., Constitution Ave. between 1st and 2nd Sts. N.E.
SH Hart Senate Office Bldg., 2nd St. and Constitution Ave. N.E.
SR Russell Senate Office Bldg., Constitution Ave. between Delaware Ave. and 1st St. N.E.
House Office Buildings. Mail for delivery to House office buildings does not require a street address. The zip code is 20515. Abbreviations, building names, and street locations are as follows:
CHOB Cannon House Office Bldg., Independence Ave. between New Jersey Ave. and 1st St. S.E.
FHOB Ford House Office Bldg., 2nd and D Sts. S.W.
LHOB Longworth House Office Bldg., Independence Ave. between S. Capitol St. and New Jersey Ave. S.E.
OHOB O'Neill House Office Bldg., 300 New Jersey Ave. S.E.
RHOB Rayburn House Office Bldg., Independence Ave. between S. Capitol and 1st Sts. S.W.
Federal Regulation: An IntroductionIntroduction
For much of U.S. history, regulation was a modest and relatively obscure government function. Conflict over regulation, when it occurred, generally was muted and played out in court. Over time, as the role of regulation in American society grew, so too did the controversy that attended each manifestation of its considerable power. Because regulation continues to be a pervasive presence in American economic and social affairs, controversy [Page 2]over it provides much of the fuel for the U.S. political system.
Conflict is inevitably a part of virtually every significant element of regulation. Statutes creating or amending regulatory programs are hotly contested when under consideration by Congress. Affected parties frequently challenge regulations mandated or authorized by legislation during the agency rulemaking process or in court after the rules are completed. The implementation and enforcement of regulations generate thousands of hearings and lawsuits. Students and practitioners of regulation debate virtually all aspects of regulatory programs, from their origins in American political culture to their actual impact on society. They even disagree on an issue as basic as the definition of regulation.
Anyone asked to provide a defensible definition of regulation is well advised to err on the side of generality. Many experts, including members of the Senate Committee on Governmental Affairs and the staff of the Office of Management and Budget (OMB), have attempted to be specific. But they have found regulation is difficult to capture because of its many variations and nuances. Even efforts to develop comprehensive lists of regulatory programs or regulated activities usually are frustrated by the remarkable diversity of forms and functions. One scholar on regulation, Kenneth Meier, offers a definition that may be sufficiently general: regulation is “any attempt by the government to control the behavior of citizens, corporations, or subgovernments.” This definition encompasses programs and activities in which regulation is either the primary goal or secondary effect. After all, many programs in which the primary mission is to deliver benefits or services in fact develop eligibility criteria, reimbursement policies, and other requirements that in effect serve to regulate program participants.
Regulation is also a complex and continuous process that occurs in identifiable stages—legislation, rulemaking, implementation, enforcement, judicial review, and dispute resolution. But the sequence of these stages is neither neat nor predictable. For example, any stage can lead directly to dispute resolution. Rulemaking by an agency can stimulate interest groups to demand new legislation. While the institutional focus shifts from stage to stage, regulation engages the time and resources of all the major institutions and actors in the U.S. political system: Congress, the president, agencies, departments and commissions of all sorts, the courts, the ubiquitous interest groups, the press, business, and individuals.
In a real sense, regulation is always being redefined. Once it was confined largely to economic concerns, such as entry to markets by individual companies, the rates they charged, and the products or services provided in defined industries. This form of regulation has declined in importance, overshadowed today by programs that seek broader social objectives—equity, health, safety, protection, aesthetics—and cut across all economic sectors and activities. Regulation is today the dominant form of domestic policy, and the regulatory process is the chosen method of policy making.Reasons for Regulation
Proponents of regulation justify the implicit limitations on freedom by arguing that the free market and private decisions either create inequitable and inefficient conditions or fail to achieve optimal social benefits. Opponents frequently scoff at such justifications, arguing that regulation usually substitutes one type of inequity or inefficiency for another and that purported benefits rarely are achieved because regulatory programs are either fundamentally misguided or mismanaged. The debate reached a crescendo in the late 1970s and early 1980s, when some of the most thoughtful critiques and defenses of regulation were offered by scholars and professionals.
After an ebb, the 1994 elections that brought the first Republican Congress to power since the Eisenhower administration reinvigorated the regulatory debate. As long as the Republicans controlled Congress and Democrat Bill Clinton occupied the White House, the legislative branch's efforts to bring about major regulatory change was doomed to yield more debate than legislation. But with the election of George W. Bush in 2000, the landscape changed. One of Bush's first actions on Inauguration Day in 2001 was to slap a sixty-day freeze on new rules and regulations, during which time the new White House vowed to review hundreds of measures proposed in the final months of Clinton's administration. Emboldened, the Republican Congress immediately moved to begin its review of the Clinton regulatory legacy.
While a number of the late Clinton administration regulations, such as the rules on arsenic levels in drinking water, ultimately took effect, many were rolled back permanently. The Bush administration also changed the paradigm for justifying new regulations—focusing more on cost-benefit analysis, especially on those regulations that affected businesses. But the changes under Bush were just the latest salvo in a long war between those who favor a more thorough regulatory scheme as a means to soften the sharper edges of the market economy and those who view such a scheme as an obstacle to wealth creation and prosperity. The November 2006 elections leading to Democratic majorities in both houses of Congress brought about yet another shift in emphasis. After twelve years of Republican rule on Capitol Hill, Democrats announced their intention to increase oversight of the executive branch, including federal regulatory agencies. In November 2008 the nation elected a Democratic president, Barack Obama, resulting in less tension between the legislative and executive branches over regulatory policy. Indeed, many of the people chosen for important administrative posts, especially in the smaller, more regulation-heavy agencies, have come from the staff of Democratic members of Congress.
This section reviews some of the classic arguments for and against regulation.Economic Regulation
Competition is the cornerstone of the American economy, and a major purpose of economic regulation is to ensure the proper continuation of a competitive atmosphere. The justification for regulation is that it corrects [Page 3]market failures that occur when competition either does not exist in an industry or does not allocate resources efficiently.
One such failure is the existence of a “natural monopoly,” or exclusive control of a commodity or service in a specified area. Unregulated monopolies can restrict output and elevate prices compared with those in a competitive market structure. The regulation of public utilities is the classic example of government controls on natural monopolies. A public utility commission determines what the single supplier (the monopolist) may charge for output, the minimum quality of the service, and what profit the monopolist is entitled to earn. During the late 1990s, the debate in Congress over proposed deregulation of the electricity industry highlighted the limits and lengths lawmakers and regulators have gone to end such “natural monopolies.” The electricity industry stood as the last major regulated monopoly in the country. But the deregulatory fiasco in California that led to rolling blackouts and nearly bankrupt utilities in the winter of 2000–2001 may have doomed efforts for complete deregulation of the industry.
In fact, what once seemed a natural monopoly often ceases to be one with changes in the market or the advent of new technology. The railroads, for example, were considered natural monopolies in the nineteenth century; as such, the rates they could charge, as well as other aspects of their business, were regulated. But with the development of other viable methods of transportation in the twentieth century, this natural-monopoly rationale for government regulation ceased to exist. The same held true for providers of local telephone service, which were regulated as monopolies until the Telecommunications Act of 1996 allowed the phase-in of competition for local service.
Monopolies may also occur when a company or a group of companies takes deliberate action to set prices or control supply and thus drive other competitors out of business. Since it was enacted in 1890, the Sherman Antitrust Act has made such combinations in restraint of trade illegal. Critics of this justification for regulation scrutinize any activity for which natural-monopoly status is proposed. The Department of Justice in 1998 moved against two powerful corporations consolidating power in the computer age, Intel and Microsoft. Both were accused of unfair trade practices that had left them with near-total control over their markets—microprocessors (Intel) and software (Microsoft). Intel quietly settled its antitrust case with the government, but in 1999 U.S. District Court Judge Thomas Penfield Jackson ordered a defiant Microsoft to be broken up into two companies; he set into motion the most momentous antitrust action since AT&T was broken up in the 1980s.
Although Jackson's order to break up Microsoft was overturned by a federal appeals court in 2001, his contention that the company was an illegal monopoly was affirmed. Still, the reversal gave impetus to the Bush Justice Department—which was much less enthusiastic about breaking up the software maker than was the department under President Clinton—to cut a deal with the company later that year. Under the agreement, Microsoft remained whole in exchange for altering certain business practices that had allowed it to use the monopoly it enjoyed with its Windows operating system to shut competitors out of certain parts of the software market.
Overall, antitrust activity subsided substantially by the end of President Bush's term. Huge mergers in telecommunications, media, banking, and other industries went ahead or were expected to go ahead with the blessing of the federal government. Even the Democratic takeover of Congress did little to slow this trend: in 2007 huge mergers in telecommunications, energy, and other industries were announced and expected to win regulatory approval. Ironically, European regulators have been more aggressive in their pursuit of possible U.S. monopolists. For instance, General Electric's bid to buy Honeywell was approved by U.S. regulators only to be nixed in July 2001 by their European counterparts, who worried that the two firms would unfairly dominate the world market for jetliner components. But the change in administrations has shifted the emphasis, back to the consumer and away from business. Indeed, in May 2009 the head of the Justice Department's Antitrust Division, Christine Varney, announced that she would aggressively enforce the nation's antitrust laws, particularly against large corporations.
Overly vigorous competition within an industry can lead to a deterioration in product quality, bankruptcy, and monopoly. The railroad price wars that raged in the 1870s and 1880s demonstrated the harm imposed by destructive competition—prices and services fluctuated wildly, consumer demands went unsatisfied, and industry planning became increasingly difficult. Both the railroads and the public suffered from this instability. The Interstate Commerce Commission (ICC) was created in 1887 in part to end the destructive competition.
Advocates of free markets note that such industry-threatening conditions are sometimes caused by those seeking monopoly or oligopoly through predatory pricing. For example, they argue that the savings and loan problems in the 1980s arose as much because of conflict of interest, fraud, and mismanagement as because of destructive competition. Cases of unadulterated destructive competition are rare; anticompetitive and illegal practices are usually lurking in the background.
Another form of market imperfection involves what economists call “externalities,” or spillovers, which develop when the production or use of a product has an effect on third parties. Positive externalities are benefits enjoyed by third parties; negative externalities are costs borne by third parties.
Air pollution, which harms the health of the public in general, is a negative externality. Resources such as clean air and water are scarce and exhaustible, but manufacturers treat them as a “free” input in the production process; [Page 4]consequently production costs do not include the expenses of the pollution. From a social point of view, therefore, the company's goods will not reflect the true costs of production. The public shares those costs, and the price can include illness and expensive health care.
No one seriously questions the existence of externalities or the inefficiencies and inequities they create. However, many take issue with the regulatory mechanisms that deal with them. The use of “command and control” regulation, with its uniform rules and enforcement through monitoring and sanctioning, frequently is criticized as inappropriate, ineffective, and inefficient. Critics much prefer regulations that set standards (but leave to regulated parties decisions as to how to comply). This type of system, critics argue, avoids a cumbersome bureaucracy and draws on the ingenuity of U.S. business and proven market forces to achieve important social goals such as pollution reduction. Programs launched by the Environmental Protection Agency (EPA), the Department of Agriculture, and the Occupational Safety and Health Administration (OSHA) during the Clinton administration sought to do just that, setting goals in areas as diverse as workplace safety, pollution control, and food safety, then letting industry find the way to reach those goals. Proponents of the existing mode of regulation question the ability and willingness of the private sector to find these solutions.
But, if anything, such cooperative programs are expanding. Under the Bush administration, agencies such as the EPA and OSHA have worked to increase their outreach efforts to the businesses they regulate and, in some cases, have pushed for forms of voluntary or self-regulation. An example of this is Bush's Clear Skies Initiative, a 2002 proposal that aimed to lower smog and acid rain–causing emissions by allowing utilities to buy and sell pollution credits. Introduced in Congress as the Clear Skies Act of 2003, the proposal never won passage in either house through the end of Bush's last term. Since the election of President Obama, however, the emphasis has shifted to greater and more direct regulation on environmental issues. An example is the administration's cap and trade environmental measure, which passed the House in spring 2009 and aimed to reduce carbon emissions through a complex regulatory scheme.
Special Goods and Services
Some goods and services have characteristics that prevent the free market from handling them in an efficient manner. Many socially beneficial goods or services would not be produced without government intervention, such as highways, air traffic control, national defense, and clean air. Other goods and services might be exploited, depleted, or foreclosed for other beneficial purposes if use was unregulated. The government typically regulates the use of resources such as groundwater, common grazing areas, and free-flowing rivers.
Again, critics find fault with the typical regulatory response. Some support more user charges for the goods and services government provides to ensure that those who enjoy the benefits pay the costs. Some would provide access to resources that could be threatened by unlimited use through an auction, with use going to the highest bidder. Others prefer to entrust such decisions to regulatory agencies, which are charged with the responsibility to define and defend an always elusive “public interest.”Social Aspects of Economic Regulation
Many, if not most, types of economic regulation are social in nature. The nation seeks to control damage from pollution, illness, or injuries to workers and consumers; preserve multiple uses of rivers; and protect endangered species for more than economic reasons. Issues of social equity have driven a number of other regulatory programs, notably in employment. Arguments over equal employment opportunity regulations have raged since 1964 and show no signs of abating. Charges of quotas and reverse discrimination arising from these programs are all too familiar and still unresolved.
The rationing of energy supplies or controls on their prices also can be seen as social regulation, and these practices often are attacked on efficiency grounds. “Supplement incomes,” say the critics, “and let the market determine prices.” Ultimately, they claim, the market eliminates shortages by encouraging production or generating substitutes.
There is another form of social regulation the mere mention of which triggers fierce reactions. The content of art and entertainment can offend the moral code or aesthetic sensibilities of some viewers or listeners. What might otherwise be protected by basic constitutional rights of free expression becomes a potential object of regulation when public monies or licenses are involved. The Federal Communications Commission (FCC) took similar action to prevent its radio and television licensees from exposing children to “indecent” programming. The Telecommunications Act of 1996 ordered that new televisions contain circuitry capable of blocking programs rated for violence or adult content. These new indecency rules were put to the test by a series of subsequent incidents on television and radio, particularly the exposure of part of singer Janet Jackson's breast during the February 2004 broadcast of the Super Bowl halftime show. These incidents ultimately led Congress, in summer 2006, to pass a new, tougher indecency law. The legislation, which did not regulate cable or satellite television providers, increased by tenfold the amount the FCC could fine each television or radio broadcaster for each incident of indecency, raising the total from $32,500 to $325,000.
The 1996 and 2006 telecommunications laws and the recent decision that followed them are an example of the kinds of tensions that social regulations can produce. Balancing the desire to set community standards with the need to protect liberty often leads to prolonged and difficult political and legal conflicts.
The 1996 telecommunications law also broke new and controversial ground in other, newer media by barring the transmission or display of indecent material to a minor on an interactive computer service such as the Internet. Indecency in this case extended not just to sexually explicit material but also to information about drugs and devices for [Page 5]producing abortions. The reaction to such initiatives has been predictable, with civil libertarians decrying limits to speech and social and religious conservatives calling for even greater restrictions. What is most significant about these cases is that they illustrate how deeply regulation affects fundamental constitutional freedoms and personal values.
However sophisticated and esoteric they become, the arguments for and against the regulatory system always return to fundamental questions of effectiveness, efficiency, and equity. That regulatory programs fall short of achieving the goals set for them is indisputable, but this fact ignores the extraordinary tasks set before them. The Occupational Safety and Health Act, for example, called upon OSHA to “set … standard(s) which most adequately assures to the extent feasible, on the basis of the best available evidence, that no employee will suffer material impairment of health or functional capacity even if such employee has regular exposure to the hazard dealt with by such standard for the period of his working life.”
The 1972 Clean Water Act required the EPA to issue regulations governing all point sources of water pollution within one year and to bring all regulated parties into compliance with strict standards within ten years. Realistic criteria for an “effective” program are elusive when regulatory statutes promise so much to so many. If taken literally, these laws doom their regulatory progeny to failure and the public to disappointment.Early History and Growth of Regulation
Article I, Section 8, of the U.S. Constitution empowers Congress to “regulate Commerce with foreign Nations, and among the several States.” One of the earliest cases in American administrative law involved delegation of a regulatory power—the imposition and suspension of tariffs—to the president of the United States. The federal government in its first 100 years established numerous offices that performed regulatory functions. Designed largely to promote and develop the young nation and its industries, these agencies included the Army Corps of Engineers (1824), the Patent and Trademark Office (1836), the Comptroller of the Currency (1863), the Copyright Office of the Library of Congress (1870), and the Bureau of Fisheries (1871). Two other agencies, the Internal Revenue Service (1862) and the Civil Service Commission (1883), were established to facilitate administration of the government.
In 1887, in response to widespread dissatisfaction with the state of the railroads, Congress created the Interstate Commerce Commission (ICC) to regulate that industry. The ICC can be seen as the start of the modern era of regulation for a number of reasons. It represented a shift of regulatory power from the states to the federal government, a trend that continues today, though a strong current of “federalism” is seeking to reshift the balance toward the states. The “independent commission,” multimember and politically balanced, became a model used in regulation of other industries and economic activities. The original statute, the Interstate Commerce Act, was amended several times to correct perceived defects in its design or alleged abuses and limitations in the responsible agency. Early on, the judiciary emerged as a major force in railroad regulation, as the ICC's decisions were routinely and successfully challenged by regulated parties. These aspects in the development of the ICC have been repeated to some degree in all the other regulatory agencies. The ICC's later history is less typical, though it may also provide a prototype for the critics of government regulation: deregulation in the 1980s led to the ICC's elimination in 1995, with its remaining regulatory functions being transferred to the new Surface Transportation Board in the Transportation Department.
Between 1915 and the beginning of the New Deal, Congress created seven more agencies and commissions to regulate parts of the nation's commercial and financial systems. These were the Coast Guard (1915), the Tariff Commission (1916), the Commodity Exchange Authority (1922), the Customs Service (1927), the Federal Radio Commission (1927), the Federal Power Commission (1930—to replace the Water Power Commission, which was established in 1920), and the Food and Drug Administration (1931). Some of these agencies were later absorbed into larger departments.
The New Deal marks the next major landmark in the history of regulation. A network of entities designed to regulate the economy out of the Great Depression, President Franklin D. Roosevelt's program was an unprecedented incursion by government into the private sector. The regulatory legacy of the New Deal is threefold. The first legacy is economic regulation. Some of the agencies and legislation dealing with economic regulation and created during the New Deal are:
- The Federal Home Loan Bank Board (FHLBB), established in 1932 to regulate federally chartered savings and loan associations.
- The Federal Deposit Insurance Corporation (FDIC), created in 1933 to be the primary regulator and insurer of state-chartered banks that were not members of the Federal Reserve System.
- The Securities and Exchange Commission (SEC), started in 1934 to protect the public against fraud and deception in the securities and financial markets.
- The National Labor Relations Board (NLRB), established by the Wagner Act of 1935 to prevent “unfair labor practices” and to protect the right of employees to bargain collectively.
- The Motor Carrier Act of 1935, which gave the ICC authority over the burgeoning trucking industry.
- The U.S. Maritime Administration, created in 1936 to oversee shipbuilding and ship operations during World War II. Eventually these functions, among others, were transferred to the Transportation Department and the independent Federal Maritime Commission (FMC).
At Roosevelt's urging, Congress in 1934 established the independent Federal Communications Commission to consolidate federal regulation of all common carriers in interstate communications, which then were radio, [Page 6]telephone, and telegraph. During this period, the growing competition among airlines necessitated coordination of airline routes and regulation of flight operations. Because the ICC was already heavily burdened with increased responsibility for surface transportation, Congress in 1938 created the Civil Aeronautics Authority (CAA) to promote and regulate the industry, and then replaced it in 1940 with the Civil Aeronautics Board (CAB), an independent commission.
The second legacy of the New Deal is the establishment of a federal responsibility for social welfare through Social Security and related programs. In this way the New Deal set the stage for the massive expansion of benefit programs in the 1960s and regulatory programs concerned with social problems in the 1970s. The third legacy is the revolution in administrative procedure that still influences the operation of regulatory programs. Perceived abuses by New Deal agencies in the way they made and implemented regulatory decisions led directly, if slowly, to the Administrative Procedure Act of 1946 (APA). Both social regulation and regulatory procedures will be discussed subsequently.
From the end of World War II until the mid-1960s, relatively few new programs of federal regulation appeared. The Atomic Energy Commission and the expansion of aviation regulation were the major additions.The Development of Social Regulation
The origins of much contemporary social regulation can be traced back to the 1960s. This new form of regulation is characterized by broad social objectives, greatly diversified government activities, and a vastly expanded reach into the private sector. Some mark the beginning with passage of the Civil Rights Act of 1964; others point to the National Environmental Policy Act of 1969. Whichever date is chosen as the start, the 1970s were unquestionably the most significant years in the history of regulation. More than 100 regulatory statutes were enacted during this decade alone, and many new regulatory institutions were created.Consumer Protection
The consumer movement reached its zenith in the early 1970s and made a deep imprint on American life and the marketplace. Before his foray into electoral politics—and his role as Green Party spoiler in the 2000 election, Ralph Nader was, above all, a regulatory crusader. In the 1970s consumers, led by Nader, organized to demand safer, higher-quality products, goods that lived up to advertised claims, and lower prices for food, medical care, fuel, and other products. Nader's activities influenced passage of auto safety legislation in 1966. The new law established federal motor vehicle and tire safety standards and brought the automobile industry under permanent regulation for the first time. In 1970 the National Highway Traffic Safety Administration (NHTSA) was created within the Transportation Department with authority to set auto safety and fuel efficiency standards as well as standards for state highway safety programs. Other agencies created to protect consumers of transportation included the Federal Highway Administration (FHWA) in 1966, which establishes highway safety standards, and the Federal Railroad Administration (FRA) also in 1966, which sets rail safety standards.
Financial and banking matters also came under new regulations. Between 1968 and 1977 Congress enacted the Truth in Lending Act, the Fair Credit Billing Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act, the Consumer Leasing Act, and the Fair Debt Collection Practices Act. Congress in 1975 also passed legislation strengthening regulation of consumer warranties. The National Credit Union Administration (NCUA) was created in 1970 to regulate member credit unions.
Consumers also won passage of the Consumer Product Safety Act in 1972. That law established the Consumer Product Safety Commission (CPSC) as an independent regulatory commission to protect the public against unreasonable risk of injury from hazardous products.
From the 1990s through much of the 2000s, the importance of consumer issues ebbed as conservatives in Congress, the White House, and elsewhere successfully pushed to reduce intense oversight and regulation of industry, arguing that it could leave U.S. business at a severe disadvantage over increasingly competitive rivals. But evidence of particularly unsafe or defective products occasionally brought the issue back into the headlines. For instance, problems in 2007 with Chinese products, including unsafe toys, tires, and pet food, called attention to the thin safety and inspection regime for overseas imports. As a result, politicians from both parties called for greater oversight of imported goods, particularly from China. As perhaps an indication of the swing back toward greater scrutiny of consumer goods, the Democratic Congress in 2008 passed a new consumer law, the Consumer Product Safety Improvement Act, and Republican Bush signed it. The act authorized substantial yearly budget increases for the CPSC until 2014. Besides agreeing with the increased budget for consumer safety, President Obama in 2009 showed additional support for the CPSC by increasing the number of commissioners from three to five.Environmental Quality
Paralleling consumer activism was an equally enthusiastic public voice calling for a cleaner environment. Disasters, such as the 1969 oil spill off the coast of Santa Barbara, CA, strengthened the environmentalists’ case.
One result of the environmental movement was the consolidation of the federal government's widespread environmental protection efforts into a single agency. The EPA, created in 1970 by President Richard Nixon's executive order, soon became one of the most controversial agencies in government. It remains so today. In the course of a single decade, Congress delegated vast authority to the EPA, through the Clean Air Act (1970, amendments in 1977), the Clean Water Act (1972, amendments in 1977), the Safe Drinking Water Act (1974, amendments in 1996), the Toxic Substances Control Act (1976), and the Resource Conservation and Recovery Act (1976).
Other regulatory agencies were established to protect certain elements of the environment, such as the Office of Surface Mining Reclamation and Enforcement (now the Office of Surface Mining) created in 1977 to regulate the strip-mining industry.Workplace Safety
Safety in the workplace was the focus of another new regulatory agency that had an immense impact on U.S. business. OSHA was created in 1970 as an agency within the Labor Department to promulgate and enforce worker safety and health standards. The agency was authorized to conduct workplace inspections, require employers to keep detailed records on worker injuries and illness, and conduct research. Within one month of its creation, the agency adopted 4,400 standards from existing federal regulations, industry codes, and the National Standards Institute. The agency also was authorized to issue standards for health hazards such as exposure to toxic chemicals.
Congress in 1973 established the Mining Enforcement and Safety Administration within the Interior Department to promulgate and enforce mine safety and health standards. In 1977 the agency was reorganized as the Mine Safety and Health Administration (MSHA) and placed in the Labor Department.Energy Regulation
Another major area of expanded federal regulation in the 1970s was the energy sector, in which the United States was repeatedly confronted with the twin problems of dwindling energy supply and soaring costs. In 1973 Congress set up the Federal Energy Administration (FEA) to manage short-term fuel shortages. In 1974 Congress abolished the Atomic Energy Commission (AEC), creating in its place the Energy Research and Development Administration (ERDA), which was authorized to develop nuclear power and new energy sources while maintaining the nation's nuclear arsenal. That year, Congress also created an independent Nuclear Regulatory Commission (NRC), which assumed the AEC's nuclear safety and regulatory responsibilities.
In 1977 President Jimmy Carter created the cabinet-level Department of Energy (DOE) to consolidate the array of evolving energy powers, programs, and agencies throughout the government. The DOE assumed the powers and functions of the Federal Power Commission (FPC), the FEA, and ERDA, all of which were abolished. Authority to set prices for natural gas, oil, and electricity was given to the Federal Energy Regulatory Commission (FERC), an independent commission set up within, but separate from, the DOE.The Ronald Reagan and George H. W. Bush Administrations
If the 1970s demonstrated extraordinary faith in regulation as an instrument for achieving social objectives, the 1980s were a decade of doubt, criticism, and reconsideration. Elected in 1980 on a platform highly critical of government roles in society in general and the economy in particular, President Ronald Reagan acted quickly, broadly, and decisively to alter the federal regulatory process.
In 1981 President Reagan issued Executive Order 12291 (see p. 841), which gave the OMB extensive powers over the regulatory apparatus—perhaps the single most important reform of the rulemaking process since the Administrative Procedure Act (APA) in 1946. The order empowered the OMB to identify duplication, overlap, and conflict in rules, which federal agencies then were required to rectify; and to review existing and new rules for consistency with administration policies. The order required the use of cost-benefit analysis and established a “net benefit” criterion for rulemaking. The order also called for the serious consideration of alternatives, including nonregulatory options, when attempting to solve problems, and selecting the approach that creates the least burden for affected parties.
In the 1980s both the process and substance of regulation changed. The deregulation movement, which actually had begun in the late 1970s, accelerated and engulfed airlines, telecommunications, securities, trucking, railroads, buses, cable television, oil, natural gas, financial institutions, and even public utilities. In some areas the changes were profound. For example, the ICC, the institution that started it all in 1887, was left a shadow of its former self by deregulation legislation of the early 1980s. (The ICC was finally abolished in 1995.) Almost all the areas affected by deregulation were economic: rates, entry to markets, or business practices that critics believed were better left to the free market.
The Reagan administration attacked social regulation with different, subtler means. Administration officials imposed a temporary moratorium on new rules, altered procedures, cut budgets, and questioned policy decisions. New regulations faced a more arduous path from initiation to publication in the Federal Register.
It must also be said that an examination of the 1980s also finds new regulatory statutes. But these statutes usually were amendments to earlier legislation. Examples include the Government Securities Act (1986); the Hazardous and Solid Waste Amendments of 1984, which amended the Resource Conservation and Recovery Act; the Safe Drinking Water Act Amendments (1986); and the Electric Consumers Protection Act (1986), which amended the Federal Power Act. There were some new initiatives as well, such as the Commercial Space Launch Act of 1984 and Superfund hazardous waste regulations of 1980.
During the administration of George H.W. Bush, the president was often described, perhaps unfairly, as lacking interest in domestic policy. He attempted to respond to these criticisms with numerous assertions of intent, including his widely quoted aspiration to be known as the “environmental president.” Whatever his actual interests and hopes, it was certainly true that regulatory activity during the first years of his presidency continued a revival that had actually begun in Reagan's second term.
Alarmed by apparent backsliding on the regulation issue, Bush's conservative supporters mounted an organized and concerted effort to drag their president back to [Page 8]the path of reduction and reform. He imposed and then extended a moratorium on new rules and tightened cost-benefit analysis requirements for those that were issued. He began instituting programs to set standards, then allowing businesses to develop the means to meet them. The EPA's 33/50 program, developed under the Bush administration, was one example. The program allowed more than 1,300 companies to cut back voluntarily toxic emissions 33 percent by 1993 and 50 percent by 1995. In exchange, EPA regulators would ease up on oversight and compliance rules. But Bush's most dramatic response was the creation of the Council on Competitiveness, chaired by Vice President Dan Quayle. The council was given authority to roam the full range of regulation in search of relief for U.S. business, and it soon became an aggressive advocate for relaxed requirements. A major source of controversy concerned the way the council conducted its business. It attempted to maintain strict secrecy in its deliberations and repeatedly refused to disclose those people in the private sector with whom it communicated or consulted. Those critics who were upset earlier with the possibilities of “backdoor rulemaking” were livid when they learned about the council's operations.The Bill Clinton Administration
President Clinton's arrival in Washington was greeted with relief by liberal groups who felt the Reagan and Bush administrations had eased up too much on protection for the environment, workplace safety, and public health. Clinton's actions, however, elicited both applause and concern from those groups. Ironically, business groups also gave Clinton mixed reviews, approving of many industry-friendly initiatives but decrying a few tough new regulations. Clinton geared his reforms toward easing the regulatory burden on industry, the interest group that offered him the least political support. But his advocacy of “keeping the regulatory cop on the beat” quieted the criticism of liberal interest groups, as did the more public process his agencies instituted for rulemaking. A remarkable slew of “midnight” regulations—issued in the waning days of the Clinton White House—solidified his reputation as a regulatory activist. Forty-six finalized regulations—from sweeping rules governing repetitive motion injuries in the workplace to antidiscrimination protections for homosexuals—were published between Election Day, Nov. 2, 2000, and the day Clinton left office.
From 1994 to the end of his term, Clinton's attitudes toward regulation could not be seen in isolation from those of Congress. The 1994 elections brought to power a group of Republicans whose contempt for regulation was unprecedented. Although they failed to enact their most ambitious legislative items, the self-described Republican revolutionaries forced the Democratic administration to institute regulatory changes that preempted and defused some antiregulatory zeal. The Republican Congress succeeded in invigorating Clinton's reform efforts. At times, they even pushed agencies further to the right than they would have gone otherwise. On the other hand, a hostile Congress emboldened Clinton to use his regulatory powers where his legislative powers failed him. From homosexual rights to patient protections against managed care insurers, Clinton was able to use the power of the presidency to circumvent Congress.
The Clinton approach to regulation and the regulatory process was outlined in two different documents. His Executive Order 12866, “Regulatory Planning and Review” (for text of order, see p. 846), established the principles guiding the development of regulations in federal agencies and the review of those regulations in the White House. The National Performance Review (NPR), written under the direction of Vice President Al Gore, contained a number of proposals to “reinvent” regulation. While Clinton was generally viewed as more sympathetic to regulatory programs than his Republican predecessor, Clinton's program for improving regulation contained much that is familiar from previous administrations.
The executive order, under the section titled “The Principles of Regulation,” established twelve policies that the president expected agencies to observe in their regulatory work. These included:
- Identification of problems to be addressed by regulation and their magnitude.
- Review of existing regulations for possible elimination or modification.
- Assessment of nonregulatory alternatives to solving problems.
- Use of risk assessment to establish regulatory priorities.
- Establishing steps to ensure that the benefits of regulation justify the costs and that regulations adopted are cost effective.
- Use of the best available information when developing regulations.
- Use of performance objectives whenever possible. Wide consultation with state, local, and tribal governments. Avoidance of inconsistent, incompatible, or duplicative regulations.
- Tailoring of regulations to produce the least burden possible on society.
- Writing regulations that are simple and understandable.
The NPR, in a brief chapter titled “Eliminating Regulatory Overkill,” provided a number of more specific objectives that the Clinton administration sought to achieve. These were mostly related in some way to the principles set forth in Executive Order 12866. Among these objectives were ambitious plans to reduce existing rules—50 percent—within three years and set up better interagency coordination to reduce “red tape.”
Interagency coordination would be heightened through the creation of a high-level Regulatory Working Group. An NPR report noted the need for such coordination with the example of chocolate manufacturers who faced conflicting regulations from separate agencies. OSHA demanded porous insulation to reduce noise from machinery, while the Food and Drug Administration (FDA) insisted such insulation could not be kept clean enough to meet food safety standards. The group also [Page 9]assumed the task of identifying priority rules for OMB review. By easing the review burden on OMB, the coordinating group allowed rule reviewers to consider new rules in new ways, such as using more detailed cost-benefit analyses and examining the various segments of society and the economy the rule was impacting. The group also quieted criticism of “backdoor” rulemaking by taking away from OMB some of the responsibility Reagan and Bush had given it.
The administration also let it be known, both in the NPR and at the press conference announcing Executive Order 12866, that it strongly supported the expanded use of regulatory negotiation. The administration subsequently named the EPA, OSHA, and FDA as the vanguard agencies for its reform efforts, stressing cooperation and consultation over punishment and oversight.
To complement the Bush administration's 33/50 program, the EPA under Clinton created Project XL and the Common Sense Initiative. Project XL allowed large companies with good environmental track records to demonstrate their paths toward emissions reduction outside those prescribed by EPA rule-writers. The Common Sense Initiative identified six industry sectors—automobiles, electronics, iron and steel, metal finishing, petroleum refining, and printing—and then formed teams of business, environmental, and community representatives to come up with industry-specific ways to cut red tape, reduce emissions, and end the one-size-fits-all approach to environmental regulations. Through the program, the EPA reached an agreement with the metal finishing industry, granting it regulatory relief in exchange for efforts that went beyond mere compliance with environmental law. About 11,000 metal finishing shops would be brought under the agreement, which envisions slashing emissions by up to 75 percent of 1992 levels.
Starting in 1993, OSHA's Maine 200 Program identified companies with high injury rates, then gave those firms the choice between partnering with OSHA to develop new worker safety programs or facing stepped-up enforcement. In December 1997 OSHA transformed the Maine pilot program into a national effort involving 12,250 employers, dubbed the Cooperative Compliance Program (CCP). But cooperation could only go so far. About 10,000 out of 12,000 employers invited to join the CCP had signed up by February 1998. But that month, the program was thrown out by a federal appeals court, responding to a major lawsuit by the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Trucking Associations, and the Food Marketing Institute. The court found that the program amounted to an unfair club in the hands of the regulators. OSHA could promise fewer inspections, but to participate, businesses would have to institute some workplace safety programs that had not gone through a formal rulemaking procedure. That, the court ruled, was an end run around the regulatory process.
In 1996 the FDA announced a series of new cooperative programs. One pilot effort allowed medical device manufacturers to select an FDA-recognized third-party reviewer to assess the safety of low- and moderate-risk products, thus speeding the regulatory process. A series of meetings between the FDA and medical device manufacturers produced changes to FDA inspection procedures to permit advance notification of inspections and an opportunity for firms to note on inspection records that a violation had been immediately corrected.
In July 1996 the Department of Agriculture's (USDA) Food Safety and Inspection Service announced the first overhaul of its meat and poultry inspection system in ninety years, and again, cooperation was a key component. Slaughterhouses and processing plants, with the help of USDA inspectors, were required to develop hazard analysis plans and sanitation standards. Regulators had to approve those plans and standards, and their implementation was to be monitored. But administration officials stressed that the new system allowed plants to develop strategies best suited to their situations rather than follow a system devised in Washington, D.C.
But just as it emphasized cooperation with industry, the Clinton administration also moved to protect its regulatory powers, in some cases flouting the notion of regulatory relief. By executive order, the EPA was given new authority to force polluters to clean up toxic waste sites. The USDA's new meat inspection rules may have involved cooperation, but they also tightened safety controls. The rules mandated, for instance, that slaughter plants regularly test carcasses for the generic E. coli bacteria to verify the effectiveness of plant procedures designed to prevent fecal contamination. The rules also created the first regulatory performance standard for salmonella contamination rates.
Bridling under such regulations, a coalition of industry groups in 1997 mounted perhaps the most significant challenge to the government's regulatory authority since the modern regulatory era began in 1970. The group's lawsuit was triggered by tough new smog- and soot-reduction standards adopted in 1997 by the EPA under the authority of the Clean Air Act. Industry lawyers contended that Congress had ceded too much of its lawmaking power to regulators when it approved the Clean Air Act, and that the EPA should be obligated to balance compliance costs against health benefits when setting standards. But in February 2001 the Supreme Court ruled unanimously in Whitman v. American Trucking Associations that the EPA—and by extension, all regulatory agencies—had the right to issue rules under the authority vested by Congress. Specifically, the justices ruled, the Clean Air Act bars the EPA from weighing compliance costs against health benefits. The Court would later rule in 2007 that the EPA in fact was obligated, under the Clean Air Act, to regulate greenhouse gas emissions.
The ruling was a victory for Clinton, whose second term was marked by an increasing interest in new regulatory efforts. The Department of Agriculture approved new rules to regulate food labeled “organic.” In 1997 the White House signed the international agreement reached in Kyoto, Japan, to stem global warming through strict new limits on emissions of greenhouse gases such as carbon dioxide. Although there was not enough support in Congress to ratify the Kyoto accords immediately, the [Page 10]Clinton administration continued to work on emissions piecemeal. In 1999 the White House completed new emissions standards for the rapidly growing numbers of minivans and sport utility vehicles, so-called “light trucks.” These vehicles escaped automotive regulatory standards through a loophole originally intended for trucks used for business purposes, such as hauling and construction.
A Congress once marked by antiregulatory zeal was also joining the act. Its Congressional Review Act, passed in March 1996 to give lawmakers the authority to overturn any regulation by a simple majority vote, lay dormant for the remainder of the Clinton years. That same year, the Telecommunications Act created a new discount “e-rate” that firms must provide schools, libraries, and nonprofit groups for access to the Internet. In 1998 Congress again waded into the telecommunications market and drafted legislation banning the practice of “slamming,” where companies unilaterally change an unsuspecting customer's long-distance service provider.
Any credit the Clinton administration may have gotten for regulatory innovation was swamped by the ill will of business over the increased cost of regulation. In an August 1996 report, Thomas D. Hopkins of the Center for the Study of American Business (CSAB) at Washington University in St. Louis calculated that the total costs of regulation during the Clinton administration increased from $642 billion in 1992 and 1993 to $677 billion in 1996, using constant 1995 dollars. Those costs were to climb steadily to $721 billion by 2000.
The growth in funding and staffing for both economic and social regulation was considerable from 1970 to 1980. The rate of growth slowed in the 1980s, but by the end of the decade it was increasing once again. Staffing levels during the early years of the Clinton administration declined because of cuts mandated by the NPR and others necessitated by congressional and administration budget cuts. OSHA employment declined from 2,409 in 1992 to 2,208 in 1997, bouncing back to 2,370 in 2001. EPA employment declined to 16,790 in 2000 from 18,398 in 1992. Still, by 2001, total staffing at fifty-four regulatory agencies was expected to rebound to a record 131,983, according to CSAB. The administrative costs of running those agencies were forecast to reach $19.8 billion, a 4.8 percent increase over 2000.
Another barometer of regulatory activity, the number of pages printed annually in the Federal Register, shows a similar trend. In 1970 the Federal Register had 20,032 pages; in 1980, it had 87,012. The number had declined to 47,418 by 1986, but stood at 68,530 pages in 1997. Then the numbers soared. In 2000, the final full year of the Clinton administration, 83,178 pages were published. Clinton's final three months alone saw 25,605 pages printed in the Federal Register. On Jan. 22, 2001, three days after Clinton officially left office, last-minute rules, regulations, and other measures still in the pipeline filled 944 Register pages.The George W. Bush Administration
From the day of his inauguration, George W. Bush signaled his regulatory approach would be more similar to Reagan's than Clinton's—or even his father's. As Reagan had done, Bush immediately froze all new rules and regulations, pending a sixty-day review by the new administration. He also quickly put a conservative ideological stamp on his executive decision making. In his first month in office, Bush ordered that all companies contracting with the federal government notify unionized employees that they have the right to withhold the portion of their union dues slated to be used for political purposes. Republicans had been trying for years to enact this so-called “paycheck protection” measure as a way to curb funding for union political activities that were heavily biased toward the Democratic Party. Bush also rescinded Clinton-era orders favoring unionized contractors that bid on federally funded construction projects.
President Bush tapped John Graham, a vocal critic of business regulation, to head his Office of Information and Regulatory Affairs (OIRA), the regulatory gatekeeper within the OMB. OIRA was created during the last days of the Carter administration but was first staffed and shaped during Reagan's tenure in the White House. The office aims to watch over and guide regulators. In this role, it reviews regulations—roughly 700 per year—and guards against bureaucratic overreach. A strong advocate of cost-benefit analyses, Graham lost no time in applying his tough standards to regulations under review. During his first six months in office, the new OIRA head sent twenty rules back to their agencies of origin for redrafting. During the previous seven years under Clinton, the office had sent back just seven regulations.
But Graham was not entirely predictable. For instance, early in his tenure he argued against an administration decision not to regulate carbon dioxide as a pollutant. The decision was a reversal of a pledge Bush had made during the 2000 campaign. Such regulation would have been a powerful tool to combat global climate change, but the administration argued that the cost to industry—especially to energy producers—would have been too high. Like Graham, though, Bush also defied predictions, making decisions that surprised opponents and supporters alike. For example, during his first few months in office he earned the praise of environmentalists by declining to reverse Clinton's decision to set aside millions of acres of land as national monuments.
Meanwhile, with the White House canceling or at least reviewing many Clinton-era regulations, the Republican-controlled Congress dusted off the 1996 Congressional Review Act in March 2001 and put it to use for the first time to overturn the Clinton administration's tough new rule guarding against repetitive motion disorders, such as carpal tunnel syndrome and tendonitis. The review act had passed with little fanfare as a means to diffuse stronger regulatory “reform” measures. But it granted Congress extraordinary new powers to combat regulatory efforts. The act sets aside traditional legislative procedures, such as hearings, bars filibusters, disallows amendments to so-called “resolutions of disapproval,” and forbids an agency from reissuing a regulation that is “substantially the same” without explicit congressional approval. The highly controversial ergonomics rule—developed by the [Page 11]Department of Labor during the course of a decade—would have covered 6 million workplaces and 100 million workers. Annual compliance cost estimates ranged wildly, from $4.5 billion to more than $100 billion.
But seven months before the rule was to go into force, Congress scuttled it with remarkable speed. Bush's signature sent a clear signal that the regulatory activism of the Clinton era was over. “There needs to be a balance between and an understanding of the costs and benefits associated with federal regulations,” Bush said in a statement the day the rule was officially revoked.
In 2001 the administration sought regulatory change by formalizing the process of OIRA review by actively soliciting groups—business associations, nonprofit organizations, think tanks, and universities, as well as government agencies—to suggest regulations for review and possible change. The nominated regulations, seventy-one in all, were handed over to Graham and his staff at OIRA, where they were subjected to strict cost-benefit analysis. Of these, twenty-three were categorized as “high priority” and many were eliminated or changed. For example, a Clinton-era regulation mandating greater energy efficiency on new air conditioners was scaled back. Another rule banning the use of snowmobiles in national parks was largely rescinded.
But despite the work of OIRA, regulatory activity did not grind to a halt under Bush. During the president's first year in office, the federal government issued 4,132 regulations, while 4,313 were issued in 2000, the last year of the Clinton presidency. The number of Federal Register pages, another measure of regulatory activity, declined slightly under President Bush. In 2002, 80,332 pages were published, a little less than Clinton's last year in office. That number dropped further to 75,798 pages in 2003. The numbers are a testament to the fact that though regulatory philosophy may change one way or another with the comings and goings of presidents, the work of regulating goes on. After all, most regulation is the fruit of legislation, often enacted long before a president arrives at the White House.
The shock of the terrorist attacks on Sept. 11, 2001, quickly changed the political and social dynamic of the nation. Bush and his administration asked Congress for $40 billion in new funds to help a devastated New York City and to begin waging the new war on terrorism, both at home and abroad. Legislation appropriating the funds cleared Congress a mere three days after the attack. The administration also asked for new law enforcement powers, such as new wiretapping and search authority as well as broader power to detain and deport immigrants. The USA PATRIOT Act that cleared Congress on Oct. 25, 2001, granted expanded regulatory authority to a large number of agencies, including the Immigration and Naturalization Service (INS), the Customs Service, and the Federal Bureau of Investigation (FBI).
In November 2001 Congress created the Transportation Security Administration (TSA) within the Department of Transportation, charged with administering security at airports. Under the legislation creating the new agency, the federal government replaced all 28,000 privately employed airport baggage screeners with federal workers. It was the first major agency created since 1977, the year the Department of Energy came into existence. It would not be the last.
One criticism that came out of the 2001 attacks was that federal agencies did not adequately coordinate their counterterrorism activities. The charge stuck especially to intelligence and law enforcement agencies—notably the FBI and the Central Intelligence Agency (CIA). Bush sought to overcome this handicap by creating an Office of Homeland Security, to coordinate the government's domestic response to terrorism. The president appointed popular Pennsylvania governor Thomas Ridge to fill the post. Many in Congress, however, called for legislation that would define the powers of the new office and subject the president's choice to confirmation. While Congress was beginning to float other proposals, the White House released a new plan for homeland security, one that was much broader and more far-reaching than most of the congressional proposals.
The Bush plan called for reorganizing large parts of the federal government to create a whole new department, the Department of Homeland Security. After initial congressional enthusiasm for the new department, the issue became bogged down over labor issues. The administration wanted to be able to design a new personnel system, setting pay and performance rules free of the strictures of the civil service rules. The president also wanted to be able to rearrange parts of the agencies and their budgets without congressional approval. Finally, on Nov. 22, 2002, Congress cleared a bill that virtually mirrored Bush's initial proposal and that largely gave the president his way on personnel issues.
The new Department of Homeland Security was created out of twenty-two different agencies with just under 170,000 employees and a budget approaching $40 billion. After the Department of Defense, it was the largest cabinet department (in terms of personnel) in the federal government. The new department merged agencies in four basic areas: border and transportation security; emergency preparedness; countermeasures against weapons of mass destruction; and information analysis and infrastructure protection. It included the Coast Guard, the Customs Service, the INS, the Federal Emergency Management Agency, the Secret Service, and the new TSA. The new department also absorbed smaller functions of other agencies, such as the Department of Health and Human Service's National Pharmaceutical Stockpile, the Department of Agriculture's Animal and Plant Health Inspection Service, and the Department of Energy's Nuclear Energy Search Team.
The organizational fallout from the 2001 terrorist attacks did not end with the creation of the Department of Homeland Security. Terrorism analysts had bemoaned the lack of adequate intelligence since the day of the attacks, focusing particularly on a lack of coordination between the government's fifteen intelligence-gathering agencies. These included the CIA, the FBI, the National Security Agency (NSA), the National Reconnaissance Office, the Defense Intelligence Agency, and intelligence [Page 12]bureaus in the State Department, Treasury Department, and the newly created Department of Homeland Security.
Calls for greater intelligence coordination were not new. Some forty studies in the five decades before 2001 recommended the creation of some sort of intelligence czar. But pressure for an intelligence overhaul gained momentum after the attacks, especially when it was learned that the hijackers had lived in the country for months before the attacks and had openly engaged in suspicious activities.
Pressure for change increased even more after the release of the report of the 9/11 Commission on July 22, 2004. The commission had been charged with determining why the government failed to predict and stop the terrorist attacks. The cornerstone of the commission's proposed changes was the creation of a national intelligence director (NID), who would oversee and coordinate the activities of the fifteen agencies and would be the chief intelligence liaison to the president. Most significantly, the NID would have operational control over all of the intelligence agencies’ budgets. The panel also called for the creation of a National Counterterrorism Center to act as an intelligence clearinghouse, conducting joint operational planning and analysis for use by the fifteen agencies.
Intense negotiations during fall 2004 produced a compromise on a major obstacle—control of the defense intelligence budget. Under the language eventually signed into law, the new director could only shift relatively small amounts of money—5 percent of an agency's budget and no more than $150 million—at any given time. In addition, the NID could not “abrogate” the military chain of command. The intelligence overhaul became law on Dec. 8, 2004, and within four months, the first NID, longtime diplomat John Negroponte, had been nominated by President Bush and confirmed by the Senate. In addition, the Counterterrorism Center was up and running.
While Congress and the White House spent a significant amount of time and energy focusing on terrorism-related issues, domestic concerns were not entirely set aside in this new era. Probably the most important and far-reaching action on the domestic front occurred in late 2003, when Congress passed legislation making significant changes to Medicare, the government's health insurance program for seniors. The new prescription drug benefit—estimated to cost more than $500 billion—was the largest expansion of an entitlement program since the 1960s “Great Society” legislation that created programs such as Medicare.
Meanwhile, the administration continued to push for what it called a more commonsense policy toward regulation, focusing on easing the regulatory burden on business. In August 2004 the NHTSA issued what consumer advocates claimed was an important new regulation that would prohibit the public release of some automobile safety data. Public Citizen, a consumer advocacy group, filed suit to block the new rule, claiming that motorists needed this data to make informed choices when buying a car. The administration responded that the data was rarely, if ever, seen by consumers and that regulators needed to weigh the overall utility of the information with the burden of requiring businesses to release it. But the issue received little media attention.
The NHTSA rule came on the heels of other significant rule changes that also were little noticed. For example, in May 2003 the administration killed a rule, proposed during the first Clinton administration, that would have required hospitals to establish facilities to protect their workers against tuberculosis. A month later OSHA eliminated proposed rules that would have significantly toughened ergonomic standards for employers. In both cases, the administration argued that the gains realized by the proposed rules did not outweigh the burden they would have imposed on businesses.
In August 2003 the White House relaxed Clean Air Act rules by allowing power plants to upgrade and expand without installing expensive new pollution control equipment. This move came on the heels of a rewrite of proposed new rules by the Energy Department that aimed at toughening the energy efficiency of newly manufactured air conditioners. The standards—originally proposed during the Clinton administration—were weakened, although the new Bush-era rules still required new air conditioners to be more energy efficient.
OIRA's Graham defended these and other similar decisions. While he admitted that the administration generally favored the business community, Graham claimed that the White House was willing and able to impose tough new requirements on industry when they were provided with “adequate scientific and economic justification.” He cited recent reductions in diesel-engine exhaust emissions, new more transparent nutritional labeling requirements, and tougher criteria for side-impact air bags as examples of cases in which new regulations were warranted, even though they imposed substantial costs on business.
OMB claimed that this approach was balanced and that the administration had cut back the growth of costly new regulations by 75 percent, as compared to the Clinton and first Bush administrations. But consumer advocates, Democrats in Congress, and liberal activists argued that the administration's efforts at “regulatory reform” were threatening the welfare of the American people. “Regulatory reform has generally been a way for this administration to avoid having the government act to protect the health and safety of the American public,” said Henry Waxman, ranking Democrat on the House Government Reform Committee.
Opponents of the administration's regulatory efforts won some important victories in court. At the end of 2003, for instance, a federal court of appeals blocked the administration's relaxation of Clean Air Act rules for power plants. A month later, another court of appeals ruled that the administration did not have the authority to weaken the new air conditioner efficiency rule.
One of the major initiatives of Bush's first term was bipartisan passage of the No Child Left Behind Act in 2002. The act gave major regulatory powers to the Education Department in its attempt to hold schools accountable for student achievement levels. The law required annual testing of students from third through eighth grade and withheld federal funds from failing schools. [Page 13]Some states and local school districts viewed the law as an unfunded mandate, claiming that Congress did not provide adequate funding to implement the act's provisions.
Under pressure, the Education Department began allowing flexibility in the No Child Left Behind program by 2004. These efforts continued throughout Bush's second term as groups from various states filed suits claiming, among other things, that the law was unconstitutional. While many of these legal actions were dismissed or appealed, the administration's attempt at reauthorization in 2007 failed in the face of strong Democratic attempts to make major changes to the law. While provisions of the act remained in place in 2009, the Obama administration indicated that it wanted Congress to overhaul the law to lessen its reliance on standardized testing but toughen the requirements for teacher quality and academic standards.
In August 2005 Hurricane Katrina struck the Gulf Coast, bringing devastation to the states of Louisiana, Mississippi, Alabama, and Florida. Thousands of homes and businesses were destroyed, and New Orleans suffered a catastrophic flood. The death toll eventually exceeded 1,700, and in addition to billions in property damage, the aftermath of the hurricane was characterized by chaos and looting. Problems were particularly acute in New Orleans, where many of the city's poor, largely African American residents were stranded in the flooded city with little local, state, or federal government support.
Many criticized the lumbering response of the Federal Emergency Management Agency (FEMA), the agency within the Department of Homeland Security responsible for managing federal aid to disaster-stricken areas. Bush accepted blame for the slowness in the federal response. “And to the extent that the federal government didn't fully do its job right, I take responsibility,” he stated. Still, problems associated with the government's inability to quickly alleviate the suffering caused by the hurricane damaged public confidence in Bush and in the federal government.
Indeed, the long, costly road to recovery for the Gulf Coast brought the Bush administration its greatest challenge since the terrorist attacks of 2001. One of the first acts of the administration was to loosen regulation, especially of the energy industry to keep gasoline and electricity flowing to the nation. However, it was evident that to rebuild the region, including most of the city of New Orleans, the full regulatory apparatus of the federal government would have to be employed—from agencies such as the EPA, to clean up the toxic mess left behind in New Orleans, to the Housing and Urban Development Department, to provide temporary and permanent housing to thousands of displaced residents.
Under intense scrutiny from Congress, the media, and others, Homeland Security Secretary Michael Chertoff promised to thoroughly reengineer FEMA. During this time, the government also announced that the Army Corps of Engineers would completely rebuild the floodwalls and strengthen the levees that protect New Orleans. The project was slated to be fully completed by 2010, although some initial protection was put in place by summer 2006 to ensure the city was not flooded during hurricane season, which traditionally begins in June.
In September 2006 Congress passed legislation significantly boosting FEMA's funding and expanding its role and responsibilities. Under the new law, the FEMA director became the president's chief adviser on disaster relief, superseding the authority of even the secretary of homeland security in this capacity. The statute also reversed an earlier decision by Chertoff to remove FEMA's responsibility for the nation's emergency preparedness. The agency now was charged with both emergency preparedness and emergency response—its previous role.
At the same time President Bush was struggling with the fallout from Hurricane Katrina, he also was fighting for another domestic priority: the reauthorization of the USA PATRIOT Act. Although there was little doubt that the act would be reauthorized, many in Congress, particularly Democrats, saw the debate over the bill as an opportunity to publicize and even curb what they saw as the administration's excessive disregard for civil liberties in the years following the 2001 attacks. Of particular concern, they said, was the NSA's illegal practice of monitoring the communications of terrorism suspects without a warrant from a federal court. Administration officials and others countered that the practice was not illegal and was necessary to effectively keep tabs on people who might be trying to plan and perpetrate terrorist attacks on the United States.
But while the debate over warrantless eavesdropping delayed the Patriot Act reauthorization, it did not ultimately prevent it. The bill cleared Congress in March 2006 and was signed by the president that same month. Furthermore, GOP control of Congress ensured that the president was able push through a measure that accomplished most of what he wanted. In particular, the administration was able to convince Congress to permanently reauthorize most provisions of the act. The original USA PATRIOT Act had contained a four-year authorization.
In the November 2006 elections, the Republicans lost control of both houses of Congress, giving the Democrats complete control of the legislative branch for the first time in twelve years. Congressional Democrats—through their control of committees—began much more vigorous oversight of certain industries. Congress passed the Housing and Economic Recovery Act of 2008, which tightens regulatory oversight and accounting requirements for Freddie Mac and Fannie Mae, the two government- chartered mortgage lenders. There was also a renewed effort to pass legislation allowing the FDA to regulate tobacco. The measure had bipartisan support in both houses, but stalled due to opposition from the White House.
In addition to congressional action, significant regulatory initiatives in 2007 also originated from the White House, the courts, and the agencies themselves. For instance, in January 2007 the president issued an executive order aimed at giving the White House more control over the making of regulations (for the text of order, see appendix). The order required each federal agency to have a regulatory policy office headed up by a political appointee. The idea was to have someone who shared the president's policy priorities in each agency to review and to conduct a cost-benefit analysis of regulations. The order also required that agencies only issue new business [Page 14]regulations if there was specific need for the government to intervene.
Industry groups hailed the new directive, arguing that it would be a check on a government bureaucracy that often regulates without fully considering the cost to citizens and business. But Democrats criticized it, arguing that the president was replacing the judgment of the impartial experts who staff the agencies with those who put political considerations first. They also argued that the White House was trying to compensate for the GOP loss of Congress by exerting tighter control over agency rulemaking.
Meanwhile, in April 2007 the Supreme Court ruled that the EPA was obliged, under the Clean Air Act, to regulate greenhouse gas emissions that likely cause global warming. The ruling delegated a significant new regulatory responsibility to the EPA, even though the agency, under President Bush, had not sought it. The administration reacted quickly to the ruling, announcing in May that it was ordering the EPA and three other federal agencies to write new regulations by the end of 2008 aimed at reducing greenhouse gas emissions from cars and trucks. But Democrats and many environmentalists argued that the president could immediately order a tightening of fuel efficiency and auto emissions standards. By asking agencies to take almost two years to come up with new regulations, Bush was merely delaying any meaningful action until the end of his term, they charged. The White House countered that the issue was complicated and difficult and could only be resolved with adequate time for study and deliberation.
At the same time the Supreme Court gave the EPA powers for which it had not asked, the FCC moved in the opposite direction, issuing a report, also in April 2007, urging Congress to give it more authority, in this case to regulate violence on television. The agency, which already regulated obscene language and images on broadcast television, argued that there was growing evidence that television violence could hurt children and thus should be subject to oversight and regulation. Although the proposal received a lot of attention in the media and on Capitol Hill, Congress never moved to act on the recommendation.
President Bush was not idle during his last year or so in office. Near the end of 2007, Bush successfully fought largely Democratic efforts in Congress to expand the State Children's Health Insurance Program (SCHIP), which provides federal matching funds to states to insure children from families too poor to afford health insurance but not poor enough to qualify for Medicaid. Democrats in Congress had hoped to expand SCHIP eligibility to children from higher income families who still lacked insurance, raising the number of participants in the program from 6 million to an estimated 10 million. They proposed paying for the expansion by raising the federal tax on cigarettes.
The president opposed the move on the grounds that it was a step toward socialized medicine. In October and then November of 2007, Bush vetoed measures containing the SCHIP expansion. Efforts to override the president's veto fell short and Congress ended 2007 by passing legislation reauthorizing the existing program, a measure that Bush signed. The expansion ultimately did become law in early February 2009 when newly elected Democratic President Obama signed it into law.
In April 2008 Bush lifted an executive branch ban on offshore drilling of oil and natural gas. With gasoline prices hovering around $4 a gallon at the time, the move was popular but largely symbolic since Congress had earlier passed its ban on new offshore exploration in certain areas. Bush called on Congress to follow his example and open up restricted areas to exploration and drilling, but Democratic leaders in both the House and Senate refused. Expanding offshore drilling became a 2008 campaign issue, with Republicans—including GOP presidential candidate, Arizona senator John McCain—calling for restricted areas to be opened up to drilling.
Indeed, while energy usage and its impact on the environment appeared, at one point, to be shaping up to be one of the most important issues in the campaign, it and everything else took a back seat in the minds of voters to concerns that the economy was sliding into a recession and possibly even a full-scale depression. While economists had been predicting that the United States and other parts of the world would fall into a recession sometime in late 2008 or early 2009, almost all experts believed that the downturn would be relatively short and mild. As it turned out, however, many banks and other financial firms had tied their fortunes to the U.S. housing market, buying up large numbers of subprime mortgages (loans to those with a much greater risk of default) that had been bundled together and packaged as securities.
When housing prices began to fall dramatically in 2007 and 2008, many of these subprime borrrowers could no longer pay their loans, leading to growing losses in the financial sector in both the United States and Europe. These losses were much greater than almost anyone had anticipated and soon many of the most storied names in the finanical world, including Citibank, Lehman Brothers, and American Insurance Group (AIG), faced bankruptcy. By October 2008, most banks and financial firms were hoarding what cash they had in an effort to survive, while not lending to businesses and individuals. Economists predicted that unless this situation improved, the world economy could be heading for an economic collapse that could rival the Great Depression of the 1930s.
It soon became clear to Bush's Treasury Secretary, Henry Paulson, Federal Reserve Chairman Ben Bernanke, and other high-ranking officials that many financial firms would not survive without an infusion of funds from the government. In September 2008 Paulson (himself the former president of Goldman Sachs, one of the most storied firms on Wall Street) asked Congress for up to $700 billion to allow the federal government to bail out banks and other firms. Without the money, Paulson said, the financial sector would be unable to begin lending again and the broader economy would fall deeper into recession or even depression. After the collapse of Lehman Brothers in September, Congress heeded Paulson's warning and passed legislation in early October creating the Troubled Assets Relief Program (TARP). Congress appropriated half of the [Page 15]requested funds ($350 billion) immediately and promised to give the Treasury Department the remainder, if needed, in early 2009. At the same time, the Federal Reserve under Bernanke began pumping what would eventually become a total of $2 trillion into the banking system to shore up its liquidity and encourage more lending.
Originally, the TARP money was to be used to purchase subprime loans and other troubled assets from banks, hence directly relieving them of the major cause of their problems. But soon after TARP was enacted, Paulson changed his mind and began directly lending the money to banks by purchasing preferred shares of stock in these institutions. Many in Congress, on both sides of the aisle, criticized this new direction, accusing the secretary of lying to them when he originally requested the money in September. Paulson countered that the situation in the financial sector was highly fluid and volatile and that he had changed his mind as to how to best deploy the TARP funds because his understanding of the problem and how to best solve it had changed.
As already noted, the troubled financial sector and the worsening economy became the focus of the 2008 presidential campaign during its last months. Both candidates voted in the Senate for the passage of TARP and both criticized banking executives and others in high finance for being so reckless. Senator McCain also criticized government regulators for not seeing the problem until it was too late. He even called for SEC chair, Christopher Cox, to resign. In the end many Americans blamed President Bush and, more broadly, the Republican Pary, for at least some of the problems, making it hard for McCain to cast himself as the agent of change and reform. In the November 2008 election, Obama won a convincing victory over his rival, garnering 53 percent of the popular vote.The Barack Obama Administration
President Obama came into office vowing to tackle the economic crisis with immediate and longer-term fixes. The incoming president argued that the nation needed to do more than simply prop up the banks and stimulate the economy; it needed to fix what he deemed fundamental, structural problems to make the country stronger and to avoid another economic meltdown. With this in mind, Obama linked his broader reform agenda in education, health care, energy, and other areas to the financial crisis and the recession and announced his intention to push all of his major policy initiatives in his first year in office.
Still, the president determined that his priority as president would be passage of a major economic stimulus bill. Although it was becoming apparent that the TARP and other actions had saved the financial sector from total collapse, Obama and his economic team argued that without a major dollop of federal spending to boost the economy, the nation could still slide into a severe recession. The administration's stimulus measure (which in its original form would have totaled nearly $900 billion), however, hit some snags, as congressional Republicans and moderate Democrats balked at the high levels of spending. In the end, Obama settled for a $787 billion package that ultimately won the support of only three Republicans in the Senate and none in the House. The 1,100-page bill moved from first draft to law in less than a month, and three-quarters of the money was expected to reach state capitals, businesses, and individual taxpayers by the end of September 2010.
Signed into law in February 2009, a chief beneficiary of the measure (called the American Recovery and Reinvestment Act) were the unemployed, who received extended benefits and subsidies to continue health insurance coverage. The act also included tax breaks for individuals and businesses, investments in health care and alternative energy, and substantial investments in Medicaid and education. To ensure that the legislation passed, Democratic lawmakers and the White House added billions in new spending and tax breaks that benefited a handful of specific companies and industries, including $8 billion in spending for regional high-speed rail projects.
Republican opponents criticized the measure for devoting too much money to Democratic pet projects—such as health and education spending as well as money to pad state and local government budgets. At the same time, they said, there was too little money for programs that would quickly create private-sector jobs, such as road and bridge building. Oklahoma Sen. Tom Coburn spoke for many in the GOP when he said that Congress had “reverted to its bad habit of larding up bills with special interest pork projects that stimulate re-election campaigns rather than the economy.”
After his victory on the stimulus bill, Obama turned his attention to the rest of his agenda. First to be addressed was regulatory legislation aimed at lowering carbon emissions believed to cause global warming. After months of horse-trading, a climate change bill narrowly passed in the House in June 2009, but only after furious lobbying by the White House to win over Democrats from agricultural states, who complained that it would too heavily penalize farmers. The president also had to coax support from some liberals, who were complaining that the measure was too watered down to be effective. In the end, the bill passed the House swiftly but narrowly, 219 to 212.
The bill—which would regulate U.S. emissions, requiring them to decline 17 percent by 2020 and set national limits on greenhouse gases—would create a complex “cap and trade” system to allow polluters to buy and sell emission permits, and would provide tax and other incentives aimed at changing the way individuals and businesses use energy. House conservatives argued that the bill would sharply increase energy bills for American households and impose new costs on businesses that would result in the shipment of millions of jobs overseas to countries, such as China, that do not have strict climate regulations.
The president urged the Senate to follow the House's lead and take up the legislation. Obama hoped a law regulating greenhouse gas emissions would be enacted before a major climate summit in Copenhagen, Denmark, set to occur in December 2009. But the legislation faced a stiffer challenge in the Senate, where Republicans and Democrats from energy and industrial states have traditionally opposed efforts to dramatically reduce fossil fuel use.
After efforts to push through a measure that was similar to the House-passed bill failed, Senate supporters attempted to broaden its appeal by linking it with other energy initiatives, such as provisions offering new support for nuclear power and offshore oil production. But this effort also failed, and by the summer of 2010 the legislation was essentially dead. Republican gains in the Senate in November of that same year killed any hopes that the bill might be revived in 2011.
The president had better luck with the second and most important major plank of his domestic agenda: health reform. Still, the White House faced enormous difficulties in pushing its plans to reform the nation's health care system through Congress, doing so only after significantly scaling back the measure to attract enough moderate Democratic support.
A number of presidents before Obama, including Truman, Nixon, and Clinton, had tried to overhaul the nation's health care system only to find themselves stymied. Part of the difficulty in making substantial change rests in the fact that the health care industry, which is nearly one-sixth of the American economy, has huge vested interests that are naturally resistant to change. In addition, many Americans with health insurance are satisfied with their quality of care, making wholesale changes a difficult sell. Obama and others pointed out that health care costs had been rising at far above the rate of inflation for decades, making the current situation unsustainable both for the government (which insures more than 40 percent of the population via Medicare, Medicaid, and other programs) and businesses that provide insurance to their employees. In addition, by the time Obama took office at the beginning of 2009, roughly 45 million Americans had no health insurance, forcing many people to delay important medical treatments or rely on expensive visits to hospital emergency rooms for routine care.
As with the climate bill, Obama turned to his allies in Congress to actually come up with the details of the plan. In the House, Democrats produced a measure that would have allowed those without insurance to purchase it from the government—a so-called “public option.” Those in lower-income brackets would receive this public insurance at subsidized rates and no one would be denied coverage due to a preexisting condition. The measure also tried to save money by cutting $500 billion from Medicare over ten years. But by the end of 2009, the health bill had yet to pass the House, held up mostly by opposition from Republicans, who worried about cost estimates for the legislation of more than $1 trillion for the next decade. Others also worried that the public option would drive private insurers out of business and create a situation in which the government not only regulated but ran the entire national health care system. Opposition also came from moderate and conservative Democrats, over cost issues as well, but also over concerns about the possibility that a greater government role in the health system would lead to more taxpayer funded abortions.
In the Senate, three Democratic and three Repub-lican members of the Finance Committee negotiated through the summer to come up with a plan that could garner bipartisan support. The “gang of six,” led by Sen. Max Baucus of Montana, unveiled a plan in September that would expand eligibility for Medicaid, create a system of “insurance exchanges” where people could buy government-subsidized insurance, and levy fees on those who did not purchase health insurance. The bill, which would expand health insurance coverage without adding to the federal deficit, attracted little Republican support, however. Even Democrats criticized it for requiring that middle-income Americans buy expensive insurance policies. In a major address to Congress that month, President Obama reiterated his intention to get health reform passed in 2009. The White House, however, began talking about scaling back its ambitions to get a bill that many in Congress could support. In particular, the president indicated a willingness to possibly forgo the public option, a move that produced vigorous protests from the more liberal wing of his party.
In spite of the impasse on climate change and delays on health care, the president could point to some important victories during the first year of his tenure. In late January 2009, for instance, Obama signed the Lilly Ledbetter Fair Pay Act, a priority for civil rights advocates and women's groups that extended the amount of time someone could sue in pay discrimination cases. The act was named for Ms. Ledbetter, a Goodyear Rubber and Tire employee who alleged pay discrimination but was prevented from bringing legal action against her employer because she initiated the lawsuit after the statute of limitations had run out.
In May 2009 Obama signed legislation aimed at protecting consumers from excessive charges and other unpopular practices common among some credit card companies. The law, called the Credit Card Responsibility, Accountability and Disclosure Act, made it more difficult for card issuers to charge consumers penalties or excessive fees and required companies to clearly warn cardholders of any changes to the terms of their contract.
On June 11, 2009, Congress passed landmark legislation giving the FDA sweeping new powers to regulate tobacco, from the amount of nicotine in cigarettes to their packaging and marketing. President Obama, himself an occasional smoker, applauded the bill and quickly signed it. Previous attempts to regulate tobacco had been hampered by opposition from the powerful tobacco lobby, but changing social attitudes in the past decade had led to greater intolerance for a product that the medical community had long considered addictive and deadly. The legislation imposed restrictions aimed most particularly at preventing children from acquiring the smoking habit, including requiring warning labels to cover 50 percent of a cigarette pack and banning the use of Joe Camel and other cartoon characters that tobacco industry opponents say are clearly directed at children.
In spite of these legislative achievements, the administration's biggest goals remained unrealized. As already noted, legislation aimed at reducing carbon emissions would die in Congress by the middle of 2010. And the president's biggest legislative priority—health care reform—looked to be heading for a similar fate. Indeed, in August 2009, the greatest champion of health reform in Congress, Sen. Edward [Page 17]Kennedy, D-MA, died of brain cancer, dealing supporters a huge blow. But in the wake of Kennedy's death, Democratic congressional leaders made a new push to pass health care reform and succeeded, passing legislation in December of that year in both the House and Senate.
It was a victory for supporters of reform, but a victory tempered by a number of factors. First, no Republican in either the House or Senate voted for the bill, leaving the most significant legislative initiative in a generation without even token bipartisan support. Perhaps more important, the House-passed and Senate-passed versions differed in key areas. In particular, the House-passed bill contained the so-called “public option” and the Senate bill did not—a major point of contention between House and Senate Democratic leaders. Still, as Congress went home for the Christmas holiday, the president and Democratic Congressional leaders confidently predicted that these differences would be ironed out and that the legislation would be finalized and passed soon after the New Year.
At the beginning of 2010, however, this optimism collapsed, caused by the election of Republican Scott Brown to the Senate seat held by the recently deceased Kennedy. Brown, who was behind in the polls until the last few days before the election, had campaigned vigorously against health care reform. Brown's election to the seat of the most revered liberal in the Senate and in one of the most liberal states in the nation seemed to be a rebuke of the president, his party, and his plans for the nation's health care system. But his victory was more than symbolic. Replacing Kennedy with a Republican gave the Democrats only 59 seats in the Senate, one short of the 60 needed to stop a filibuster.
Many saw Brown's election and the loss of the Democrat's filibuster-proof majority as the final straw for health care reform, at least health care reform on a grand scale. As already noted, none of the Senate's Republicans supported the administration's health care reform effort, despite intense lobbying by the president of more moderate GOP senators, Obama's willingness to forgo the public option, and the efforts of the “gang of six” to hammer out a compromise that at least some Republicans could support. In addition, some national polls showed that a slim majority of the American people opposed health care reform, with many worrying that an overhaul would degrade their current health care options.
By early 2010, some supporters of the president were arguing that the best course was to attempt to pass much smaller, more incremental reforms instead of a big, sweeping bill. But Obama decided to press ahead with a comprehensive overhaul. The key obstacle remained the Senate, where the entire GOP caucus threatened to filibuster the measure, leaving the Democrats one vote short of being able to move a bill forward. To get around this obstacle, Democratic leaders used a technicality—bringing up the legislation as part of budget reconciliation—which allowed it to pass with only a simple majority. On March 21, 2010, the Senate passed the measure, over strenuous Republican protests, by a vote of 56–43. Later that day, the House passed the Senate bill, 220–207.
On the evening the measure cleared Congress, President Obama (who would sign the bill into law two days later) remarked that passage of health reform “proved that we are still capable of doing big things. We proved that this government—a government of the people and by the people—still works for the people.” Republicans countered that the law was rammed through Congress using procedural tricks and was passed in defiance of the wishes of the American people. GOP leaders promised to retake Congress in November 2010 and to make the repeal of the law their top priority.
The new law—called the Patient Protection and Affordable Care Act—more closely mirrors the original Senate-passed bill and does not contain everything that the administration had hoped for—particularly the public option. Still, the act makes dramatic changes to the health care landscape. For instance, it forbids insurers from refusing to cover someone with a pre-existing condition and allows children to continue to be covered by their parents’ insurance plan until the age of 26. The law also authorizes $875 billion over the next decade (mostly after 2014) to expand insurance coverage. This provision makes an estimated 24 million working people who lack access to affordable coverage through their employer eligible for tax credits to buy insurance. In addition, it expands Medicaid eligibility. Everyone who earns less than 133 percent of the federal poverty level—an estimated 16 million people—will become eligible for Medicaid.
The new law also calls for the creation of a health insurance “exchange” in each state aimed at offering consumers different insurance options at competitive prices. Perhaps most controversially, the act (starting in 2014) requires all uninsured adults to buy insurance or face fines of at least $750 a year. This last provision has already been the basis for a number of lawsuits challenging its constitutionality. At the end of September 2011, the Department of Justice asked the Supreme Court to hear one of these challenges, a development that almost guarantees that the high court will decide whether the requirement to purchase insurance and, indeed, potentially the entire statute, are constitutional. If the court does hear one of the cases, it will almost certainly issue a ruling before the November 2012 election.
Just months after the health care bill was signed into law, the president scored another big victory with the enactment of financial reform legislation. Introduced in the wake of the financial crisis, debated for more than a year, and signed into law on July 21, 2010, the Wall Street Reform and Consumer Protection Act of 2010 (also called “Dodd-Frank” after its chief sponsors, Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass.) was the most sweeping overhaul of the financial system since the Great Depression.
Although the law was considered a major legislative victory for President Obama and for its supporters in Congress, Dodd-Frank's journey from bill to law was not without major hurdles, especially in the Senate. Criticism for the proposal came from both sides of the aisle, with Republicans arguing that it would entail excessive and burdensome regulation that would only make it more difficult and costly for businesses and consumers to raise or borrow money. And while most Democrats saw the law as a victory that demonstrated to their constituents that they could be tough on Wall Street, some in the party felt the [Page 18]package did not go far enough and left too many critical decisions to the same federal regulators who had fatally missed the warning signs in the run-up to the financial crisis of 2008.
Among the key provisions of the new law was the establishment of a council of federal regulators to watch for and assess any potential threats to the financial system. The overhaul also gave shareholders a non-binding advisory vote on executive compensation and gave federal agencies new powers to regulate and even liquidate financial institutions that posed a threat to the nation's financial health.
Perhaps the most important and controversial provision of the new law involved the establishment of the Consumer Financial Protection Bureau (CFPB). The CFPB's mandate was to track consumer-related issues with an eye toward protecting ordinary people from unscrupulous banks and financial services firms. Although the bureau was technically part of the Federal Reserve, it was to operate independently, with a director appointed by the president who is not answerable to the Federal Reserve Board.
Democrats, consumer advocates, and others praised the creation of the new agency as a new bulwark against greedy banks and other financial services companies that prey on consumers. But many Republicans as well as business groups worried that the bureau would expand the “nanny state” to new levels and take away citizens’ rights to make their own decisions.
This debate continued after the bill became law. Democrats wanted President Obama to appoint Harvard law professor Elizabeth Warren (who is credited with coming up with the idea for the bureau) as director. Many Republicans in Congress, however, said they could not support Ms. Warren, who they saw as too stridently anti-business. Warren also did not have the full backing of the administration, where she was seen as a little too outspoken by some people on the president's economic team.
In the end, the president passed over Warren and, on July 16, 2011, nominated former Ohio Attorney General Richard Cordray to head the new agency. Cordray, who had built a reputation in his state and nationally for successfully prosecuting financial crime (particularly against mortgage lenders), also was not favored by many Republicans, some of whom declared him “dead on arrival” soon after his nomination was announced. Indeed, some senators said they would not support any nominee until the president agreed to discuss changes to the agency to make it more “accountable.” In particular, some GOP senators wanted the bureau's budget to be provided by Congress. As things stand, the CFPB receives its funding through the Federal Reserve and thus is not required to ask congressional appropriators for money, leaving Congress with little oversight authority over the agency.
While the Federal Reserve was on the sidelines of the CFPB fight, it was at the center of another battle—this one over whether to continue to “prime the economic pump” with the tools at its disposal. Throughout 2010 and into 2011, Fed Chairman Ben Bernanke resisted calls to raise long-term interest rates, which had been lowered to near-zero during the financial crisis in an effort to help jump-start the economy. By 2010, however, some prominent economists and bankers, including a number of people sitting on the Fed's Board of Governors, were warning that keeping interest rates low could lead to inflation, which in turn could stall the economic recovery. Bernanke argued that low rates were still needed because the economic recovery continued to be very tenuous.
In early November 2010, Bernanke upped the ante when he had the Federal Reserve begin a second round of quantitative easing—known as QE2. QE2 involved pumping additional money into the economy by having the Fed purchase about $600 billion in Treasury bills (T-bills) over the next six to eight months. This came on the heels of the first round of easing in 2008 and 2009, in which the Fed pumped almost $2 trillion into the American economy, also by purchasing T-bills, as well as bonds and stocks.
QE1 had been initiated during the worst days of the financial crisis, a time when many economists worried that the nation and the world would be thrust into a severe economic depression. As a result, QE1 was relatively uncontroversial. QE2, on the other hand, was initiated during a time when the economy was growing and the nation was supposedly recovering from the recession. Supporters of QE2 argued that the economy was still scarred by the financial crisis and the recession of 2008 and 2009 and that the recovery was weak. QE2, they said, would provide a necessary monetary lubricant to help keep the economy growing. In particular, Bernanke and others argued, QE2 would help keep stock prices high, which in turn would put more money in consumers hands and help drive economic growth. Others, however, warned that the Fed was playing a dangerous game with QE2. After all, they pointed out, the program was financed by simply printing more money and injecting it into the economy, a tactic that could easily devalue the currency and lead to much higher inflation. And if that happened, they said, the Fed would have to dramatically raise interest rates to tamp inflation down, which in turn would almost certainly restrain economic growth or even produce another recession.
By the summer of 2011, a consensus had formed among economy watchers that QE2 had not fulfilled the expectations of either the optimists or pessimists. The economy was growing, but slowly, and unemployment remained stubbornly above 9 percent. On the other hand, the much feared rise in inflation had largely failed to materialize. By mid-July, some economists were expressing concern that the country could be headed into another recession, and Bernanke held open the possibility of another round of quantitative easing—QE3.
These debates over interest rates and quantitative easing did not involve President Obama, who has no authority over the Federal Reserve beyond appointing its leadership. But during this time the president was also working to boost economic growth. By the time QE2 was being debated in late 2010, Obama's first big attempt to help the nation's economy—the nearly $800 billion [Page 19]stimulus package—had largely run its course. And like QE2, the stimulus had many detractors, who could point to high unemployment and uneven growth as evidence that the enormous spending package had not actually provided much help for the economy.
Many Democratic lawmakers and liberal pundits called on Obama to put together another stimulus, arguing that the economy needed an additional injection of government funds to prevent the recovery from losing steam. But the election, in November 2010, of a Republican majority in the House as well as Republican gains in the Senate, ended any chance that Congress would enact another stimulus, even a much smaller one. Instead, in December 2010, the president sat down with incoming House Speaker John Boehner and other Republican leaders and worked out an $858 billion deal that kept in place all of the tax cuts that had been enacted under President Bush, in exchange for expanded unemployment benefits and other tax incentives aimed at stimulating the economy.
The Bush tax cuts had been scheduled to expire at the end of 2010 and Republicans had campaigned to keep them in place, arguing that the nation could ill afford what amounted to a major tax increase during difficult economic times. The deal struck between Obama and GOP leaders kept all of the Bush cuts, including lower rates for the wealthiest Americans (something the president had campaigned vigorously against in 2008) and lower capital gains rates. In exchange, Republicans agreed to a $57 billion extension of emergency federal unemployment benefits, allowing the long-term unemployed to draw up to 99 weeks of benefits until the end of 2011. There was also a provision allowing businesses to deduct the cost of all equipment purchases until the end of 2011. Allowing an upfront deduction gives businesses an incentive to accelerate their capital investment plans, which in turn should benefit equipment manufacturers.
While many Democrats in Congress criticized the measure, particularly the continuation of tax cuts for the wealthy, many in the president's party ultimately voted for it because it contained the unemployment extension and a continuation of tax cuts for middle income Americans. The president acknowledged this ambivalence when he admitted that “there are some elements of this legislation that I don't like.” But, he said, “that's the nature of compromise, yielding on something each of us cares about to move forward on what all of us care about. And right now, what all of us care about is growing the American economy and creating jobs for the American people.”
Around the same time, Obama made another attempt at boosting growth, this time by looking for ways to help the nation's business community. During the first half of the president's first term, many business leaders had accused Obama of treating them with neglect and, at times, even hostility. The business community was particularly troubled by what Obama considered to be some of his signature achievements, namely the overhaul of health care and the new financial reform law.
In the wake of 2010 midterm elections, the president made it clear that he was eager for a détente with the business community. As evidence of this attitude, Obama called for federal agencies to look for rules that were “outdated, duplicative, or ‘just plain dumb.’” And by June 2011, the administration had identified hundreds of regulations that were unnecessary and burdensome to businesses. These rules would be eliminated or rewritten, the president promised, saving companies and consumers hundreds of millions of dollars annually.Regulatory Tools
The wide variety of issues and conditions dealt with by regulation requires similarly diversified mechanisms and procedures. Nevertheless, there are common elements that, taken together, form the outlines of contemporary regulation.Legislation
Contrary to views held by some, regulation does not grow mushroom-like in the dark recesses of Washington bureaucracy. All regulation starts with an act of Congress. Statutes define the goals of regulatory programs, identify the agency responsible for achieving them, and contain substantive and procedural guidance as to how the agency is to conduct its work. The first and most important tool of regulation is the law that establishes the authority and basic architecture of the program.
In the matter of guidance, regulatory statutes vary tremendously. A perennial criticism of regulatory statutes is that they are vague, giving far too much substantive and procedural discretion to bureaucrats in the programs they administer. There is no question that the provisions of some statutes are quite general. The Federal Power Act, for example, directs FERC to license those hydroelectric power projects that “are best adapted to a comprehensive plan for development of the waterway.” The comprehensive plan and what constitutes a project that is “best adapted” is left to FERC's discretion. Similarly the statutory language that created OSHA gave that agency a broad mandate.
On the other hand, statutes can be quite specific when establishing the substantive jurisdiction of agencies. The Safe Drinking Water Act amendments of 1996 upheld regulations the EPA had been drafting on the by-products of disinfectants, such as chlorine. The Delaney Amendment to the Food, Drug and Cosmetic Act gave the FDA strict guidelines for dealing with suspected carcinogens. The “zero-tolerance” standard of Delaney was replaced in 1996 by a new pesticide law establishing a uniform safety standard to ensure that the chemicals on both raw and processed foods pose a “reasonable certainty” of no harm. Such a standard is commonly interpreted to mean a lifetime cancer risk of no more than one in a million. In some instances, the subject matter of the regulatory statute is so narrow, such as the Surface Transportation Assistance Act's provisions relating to tandem truck trailers, that substantive discretion is negligible.
The trend since 1965 is toward more narrowly defined statutes and limiting amendments, which are the result of accumulated experience with programs. For example, the [Page 20]first Clean Air Act in 1970 was much less specific about hazardous air pollutants.
Procedural guidance in statutes varies as well. But as with substantive provisions, the trend is for Congress to provide more direction to agencies on how to make decisions and what factors to take into account when doing so. The 1996 safe drinking water law rescinded a requirement that the EPA set standards for twenty-five new drinking water contaminants every three years. Instead, the agency must publish every five years a list of unregulated contaminants found in drinking water. The EPA would then use that list to propose the regulation of new contaminants, taking the costs and benefits of any new regulation into account. Some statutes require agencies to balance conflicting interests or to conduct specified analyses during the process of making regulatory decisions. Amendments to the Federal Power Act tell FERC to balance power and nonpower interests in hydropower licensing, and they make it plain that environmental and recreational concerns are the nonpower interests most important to Congress. In addition to balancing multiple interests, Congress expects regulatory agencies to study different facets of proposed regulations.Rules and Rulemaking
Rulemaking is usually the most important function performed by regulatory agencies. It transforms the provisions of statutes into specific mandates that, in turn, structure the behaviors of implementing officials and affected parties in the private sector. Since the earliest Congresses, which required the president to write rules related to trade with Native Americans and uses of public lands, rulemaking has been the source of law people use to learn exactly what they can expect from government and what government can expect from them.
The process by which rules are made can be quite complex. Congress first established uniform methods for rulemaking in the APA in 1946 (for text of act, see p. 798). The rulemaking provisions of that statute stressed three principles that remain central today: information, participation, and accountability. The act required a notice in the Federal Register that described the rule the issuing agency was proposing, opportunity for the public to comment in writing on the proposal, and a notice of the final rule and its effective date. The act promoted accountability by authorizing the courts to review any rule that was challenged as illegal. Still, the provisions were quite flexible, balancing a modest degree of public scrutiny and involvement with considerable discretion for rulemaking agencies.
Since 1946 the number of legal requirements for creating new rules have grown enormously, although most requirements apply selectively to individual rulemakings. Virtually all of these additional requirements enhance in some way one or more of the principles established in the APA. There are general statutes such as the Regulatory Flexibility Act, Paperwork Reduction Act, National Environmental Policy Act, and Unfunded Mandates Act of 1995, which require additional studies and forms of public participation when rules affect the interests that these laws seek to protect. Agency- and program-specific authorizing and appropriations bills establish similar procedures. Presidential executive orders also impose additional requirements, ranging from cost-benefit analysis to special consideration of private property, the family, and state and local governments. Individual judicial decisions can require agencies to conduct special studies or consult extensively with interest groups. Overall, the weight of these requirements is to transform the APA model of rulemaking into a process that may be so encumbered that Thomas McGarrity of the University of Texas has used the term “ossification” to describe it. The pendulum has clearly swung away from agency flexibility in favor of public participation, especially by interest groups, broadly defined.
Any governmental function that is so important, frequent, and complex is bound to attract controversy and criticism, and rulemaking is certainly no exception. The complaints are numerous and, at times, contradictory. Some charge there is simply too much rulemaking and that it is choking the private sector. Others argue for more rulemaking, either because they favor more extensive regulation or they believe government too often makes law or policy without observing the proper procedures. Critics also fault the time it takes to issue rules; in some agencies the average is measured in years. Finally, there are persistent concerns in both the private and public sectors about the quality of the rules that the process ultimately produces.
The private sector has questioned the quality of information and analysis on which rules are based and has found them difficult to understand and comply with and, most disturbing, biased in favor of large, established firms and organizations. Some in the public sector undoubtedly share some or all of these views, but they focus more on the difficulties created by unrealistic deadlines set by Congress and the courts, rules that are written in Washington without regard for resources available to implement them in the field, and ambiguous or otherwise faulty language in rules that impede their enforcement. The battle between the Department of Energy and Congress over the establishment of a permanent nuclear waste repository at Yucca Mountain, Nevada, is a case in point. Members of Congress, echoing the anger of the nuclear power industry, complained bitterly when the federal government failed to meet its statutory obligation in accepting commercial nuclear waste by January 1998. But Energy Department officials snapped back that Congress created that deadline in 1982 without a realistic assessment of the difficulty in creating a repository that must remain safe and stable for 10,000 years. As of April 2011, funding for the development of the Yucca Mountain nuclear waste repository was canceled.
It should not be surprising that rulemaking is a function that requires a substantial amount of proactive management. It is now common to find priority setting, budgeting, and scheduling systems in agencies that issue a substantial number of rules. Most use some form of cross-agency working group to write rules to ensure that all relevant legal, technical, and political issues are considered. Rulemaking also attracts the attention of Congress, which [Page 21]conducts oversight by a variety of means; of the White House, which reviews both proposed and final rules; and of the courts when litigation over rules occurs.
However troubled and difficult, rulemaking is and will continue to be an elemental regulatory function that structures much of what follows.Licenses and Permits
Granting licenses and issuing permits are common regulatory activities. States license doctors, lawyers, and a variety of other professionals and service providers to protect the public from the unqualified or unscrupulous. At the federal level the focus is different. Here it is more common to find programs that license activities, usually those with implications for health, safety, or the environment. For example, licenses are required to build and operate nuclear power plants and hydroelectric facilities. The National Pollution Discharge Elimination System (NPDES) issues permits to discharge all sources of pollution into America's waterways. The handling of pesticides and hazardous wastes must be cleared through the EPA.
Control of licenses and permits serves several interrelated purposes. In some instances those seeking the government's permission to engage in certain activities, such as operating a nuclear power plant, are expected to demonstrate that they are competent to perform them or that the activity poses no risk to health, safety, or the environment. Permits and licenses also are used to impose conditions on the activity for which the permission is being granted. A pesticide registration may be accompanied by the limitations on its use or the precautions those administering it are required to take.
Because a considerable amount of environmental, health, safety, and natural resource regulation involves licenses and permits, the procedures used to issue them are painstaking. Most require an applicant to submit extensive background information. The government then evaluates the applicant's qualifications; the threats that the proposed activity might pose to health, safety, or environmental quality; and the steps the applicant will take to eliminate or mitigate the potential for harm.
For environmental, safety, and natural resource licenses, the agency's rules usually require that applicants consult in advance with other agencies or groups and report the comments they receive from these third parties in the application. In its procedures for licensing hydroelectric power plants, FERC requires preapplication consultation with federal and state agencies responsible for fisheries, wildlife, recreation, aesthetics, water quality, geology and soils, historic preservation, and Native American lands.
It is also common for the licensing agency to circulate the completed applications it receives to other agencies for formal comment. Notices to the public about the proposed action are published in the Federal Register and other outlets. Negotiations between the applicant and agencies or groups often result in agreements written into the license or permit.
At some point, the agency decides whether to issue a license or permit and what, if any, conditions to impose. Looking again at the hydropower licensing process, it is not uncommon for FERC to issue such a license containing dozens of conditions, or “articles,” designed to protect natural resources and historic sites and to preserve other values and uses of the waterway on which the project will be built. Most agencies also have procedures to reconsider the content of licenses or permits at the request of the applicant or a third party, and, as with rules, licenses and permits can be challenged in court.
Because licenses and permits have policy implications that affect multiple interests and are in effect for long periods of time, the procedures employed to issue them have come to resemble those associated with rulemaking.Implementation Techniques
Once the rules or licenses are written, their provisions must be implemented. At this stage the behavior of regulated parties becomes important, and regulatory agencies engage in a variety of activities to ensure compliance.Informing the Public
The Federal Register is the official means of communicating regulatory policies and decisions to the public, yet few in the regulated community learn about their obligations through it. Many have on-staff specialists to track new and changing requirements and to fashion approaches to compliance. Others rely on trade associations and professional newsletters to supply information; some hire expert consultants. The Internet has become a new resource for public participation. The Federal Register and the Code of Federal Regulations are available at http://www.gpoaccess.gov/fr/index.html; this site also contains a link to the federal government's Web site http://www.regulations.gov (see appendix).
To keep the public better informed, regulatory agencies provide information beyond what is found in the Federal Register. At times, agencies may communicate directly with regulated parties, especially in emergency situations, such as when defects are discovered in aircraft. Agencies also provide technical supplements to rules to assist regulated parties. The NRC provides this type of guidance with each new rule that requires significant changes in equipment or operations. The supplement tells what the NRC considers acceptable, effective means of complying with new requirements and standards. OSHA has taken this approach a step further by performing “regulatory audits” for businesses. Under this program, OSHA officials conduct a no-fault survey of the company's compliance record and make recommendations for change. In this way, the company obtains authoritative information about how to avoid noncompliance without the threat of an enforcement action. The audit program has been explored by other agencies as well; it is perhaps the most ambitious method of keeping regulated parties aware of their obligations.Monitoring
However they communicate requirements to the regulated parties, agencies do not rely solely on the provision [Page 22]of information to ensure that obligations are met. Agencies use a variety of means to monitor restricted activities and behaviors. Some programs require regulated parties to monitor their activities and to submit periodic reports. The reports might consist of raw data or summaries that follow a standard format. In some instances, data and reports may not be required routinely but must be made available to the agency on request when an inspector visits.
Inspection is the customary way to monitor for workplace safety, protection of natural resources, and compliance in some environmental programs. For some programs, such as OSHA's, the number of regulated premises far outnumber the available staff. OSHA's 2,000 inspectors cannot possibly visit all 7 million workplaces that fall under their jurisdiction. Such programs rely on complaints from the public when establishing their inspection priorities. An inspection program can become so intensive that it resembles supervision of the regulated activity. The USDA's 7,600 food safety inspectors in 2009 are a constant presence at the nation's 6,500 slaughterhouses and processing plants. There tends to be a direct relationship between the potential danger to the public posed by the regulated activity and the amount of agency monitoring.Intervention and Enforcement
When an agency discovers that a violation has occurred, it must intervene to bring the offending party into compliance. Some inspectors, notably those associated with occupational safety, have been criticized for issuing citations for minor offenses and, in the process, trivializing the program and infuriating the affected businesses. But many cases have been reported of inspectors overlooking minor, often inadvertent violations to get quick agreements from regulated parties to correct more serious problems. Citations may or may not be issued in such instances. In a few cases, corruption—inspectors overlooking violations in return for personal rewards—is uncovered and programs are revamped.Sanctions
The approach an agency takes to intervention depends to some extent on the nature and severity of sanctions it can impose on parties who fail to comply. Generally, regulatory statutes establish a range of sanctions that agencies can impose. Agencies match the type of sanction to the type of noncompliance through rules and management directives to their inspection staff.
Sanctions come in the form of warnings, fines, more frequent inspections, product recalls, temporary or permanent cessation of activities, suspension or termination of licenses or permits, and criminal penalties. Sanctions also have serious indirect consequences. An airline, such as ValuJet in 1996, that has its airworthiness certification suspended by the Federal Aviation Administration (FAA) can suffer a loss of consumer confidence. ValuJet shut down and reopened under the name AirTran. A manufacturing plant cited for polluting a waterway can suffer serious public relations problems. Both may expect to lose business.
The mechanisms by which sanctions are imposed also vary across programs. Some regulatory statutes grant significant authority to agencies to impose sanctions; others require the responsible agency to seek court orders. The EEOC had to file a federal lawsuit against Mitsubishi in April 1996 to take action on one of the biggest sexual harassment cases in history. When criminal penalties may be involved, the agency usually refers the matter to the Department of Justice for prosecution. The FDA in June 1996 asked Justice Department prosecutors to investigate whether the Upjohn Co. hid safety concerns about its controversial sleeping pill Halcion. In 1999 the Justice Department, using a racketeering statute created to pursue organized crime, sued the tobacco industry for health care costs incurred by taxpayers. In 2000 the Department of Housing and Urban Development, with the Justice Department's help, threatened to sue gun manufacturers if they did not cooperate with state and local governments pursuing their lawsuits to restrict the sale and marketing of firearms.
In recent years, financial services and accounting firms have come under increased state and federal scrutiny as a result of a series of scandals ranging from shady accounting practices to the defrauding of investors. As a result, an increasing number of fines have been levied against these companies. For instance, in March 2003 Merrill Lynch, one of the nation's top brokerage houses, paid an $80 million fine to the SEC in exchange for the agency's dropping charges against the firm. Merrill had been accused of aiding bankrupt energy giant Enron in its efforts to hide losses and inflate earnings. In May 2003 the SEC fined telecommunications giant WorldCom $500 million for its uncovered accounting fraud. At the end of 2004 corporate giant American International Group (AIG) was fined $126 million for accounting and other financial irregularities. In fall 2006 Boeing agreed to pay a $615 million fine to avoid prosecution related to a host of alleged improprieties in its bid to replace the nation's military air refueling fleet. Three years later, in 2009, pharmaceutical giant, Eli Lilly, was fined $1.5 billion for marketing one of its drugs for uses not approved by the FDA.Dispute Resolution
Conflict is common between an agency enforcing regulations and the regulated parties. Disputes arise regarding alleged violations and the sanctions imposed for noncompliance. Congress has established a two-tiered system for resolving these disputes. The first tier is based in the agencies; the second is in the federal court system.
Adjudication of disputes in agencies is governed by provisions in the APA and the procedural regulations of individual agencies that apply to the conduct of hearings. Adjudication usually involves fewer parties and is more judicial in nature than other forms of regulatory procedure. Formal adjudication involves a court trial in which the agency charges a named individual or company with violating a law or regulation. The APA outlines a strict format of notice, hearings, procedures, evidence, oral argument, and formal judicial decision that adjudication proceedings must follow. Consequently, adjudication is often a time-consuming and cumbersome process.Participation
Companies and industries affected by federal regulations always have been well represented at agency proceedings. But intervention by citizens and consumer groups involves the question of standing—whether petitioners have a legitimate right to be heard before an agency because their interests and well-being are affected. While the right to appeal an agency decision before the courts is subject to limits imposed by the Constitution and court decisions, agencies enjoy broad discretion in setting and enforcing rules for participation in their proceedings.
The ability of groups other than the regulated industries to participate has been influenced by the regulatory system itself. Delay in the procedure is costly, and many small businesses and interest groups have found that they cannot afford to participate in a lengthy series of hearings and appeals. Although notice is required to be given in the Federal Register, unless a group has been following a particular issue closely, it may not be aware of a proposed ruling. Moreover, there might not always be adequate notice of a pending case, necessitating a hasty response by interested parties. In general, the regulated industries are better equipped to keep themselves abreast of forthcoming rules that fall within their interests.
The expense of participation has raised the question of whether there is a need to facilitate representation by consumer and citizen groups. It has been argued that their greater representation would provide the agencies with new or different information and lead to better informed judgments. Others have contended that because regulation exists to protect consumers and workers as well as industry interests, such views should be heard. Congress, however, has been unwilling to create an agency to represent consumer interests before other regulatory agencies. Programs to reimburse citizens who take part in agency proceedings also have met with mixed success and spotty government support. The Clinton administration broadened federal outreach to “stakeholder” groups, including activists and citizens, but with mixed results. Business groups complained that the citizens participating in hearings and roundtable discussions were really the representatives of special interests, such as environmental groups. The citizens complained that their opinions carried no weight in the final decision.Adjudicatory Process
Many disputes are resolved by consent order, which is a regulatory “plea bargain.” Using this device a regulated party agrees to cease violation of regulations. A proposed order is drafted, published in the Federal Register for comment, and then recommended by the agency. Comments are considered part of the record of the case and, based on them, the agency may issue a consent order in final form. This substantial role for the public is another manifestation of the importance of participation in regulatory procedure. If a case is not dropped or settled through a consent order, the agency may initiate adjudicatory proceedings by issuing a formal complaint against the alleged violators.
Formal adjudication is conducted in a manner similar to a court proceeding. After the agency's complaint has been served, the charged party (the respondent) must provide a written response within a stipulated time. The case is assigned to an administrative law judge (ALJ) who presides over the trial. The litigating parties usually meet in an informal pretrial conference, at which oral arguments are presented and documents exchanged.
After the case has been narrowed to the substantive issues involved, the formal trial begins. The APA requires the agency to notify the affected parties of the hearing's time and place, the statute involved, and the factual dispute to be decided. The parties may submit oral or written evidence, present a defense and rebuttal, and cross-examine witnesses. The ALJ is prohibited from consulting any party on an issue of fact unless all parties have a chance to participate. Generally, regulatory agencies are more lenient than law courts on the evidence that may be admitted; this leniency is based on the assumption that regulatory officials are experts and thus highly qualified to evaluate evidence. But agencies must be careful that the evidence they admit will stand in a court of law should the decision in the case be appealed.
The record is closed when the hearing ends. Each party then submits a memorandum to the ALJ and responds to the other side's presentation. After reviewing the record, the ALJ issues a decision with respect to the facts of the case and the applicable law. A proposed order to remedy any found violations of law is then served on the involved parties.Appeals
After an agency order has been served, the parties may appeal the ALJ's decision to the full commission or the agency administrator. After completion of its review, which may range from cursory to thorough, the agency can adopt the ALJ's decision, reject it, or return it for further consideration. At this point the agency's determination of the facts of the case is considered final.
This review of regulatory tools, while brief, underscores the complexities of the regulatory process, which is properly seen as a process by which a fundamental decision to regulate passes through successively finer procedural filters until the obligations of individual parties are established in specific terms. The procedures vary at each stage and become more formal when they shift from essentially legislative decisions and executive actions to judicial determinations. Perhaps the most compelling characteristic of regulatory procedure is the interdependence of the procedural steps and its appearance of perpetual motion. Decisions made at each point are being continually reexamined, altered, or supplemented at the next. At each stage of the regulatory process, analysis of some kind is being conducted.Analysis in the Regulatory Process
Analysis plays a role at each stage of every significant decision made during the regulatory process. Congressional staffers perform analyses when regulatory legislation is considered; the clerks of federal judges prepare [Page 24]analyses of conflicting testimony when a policy or decision is challenged in a lawsuit. But in terms of cumulative effect, the analyses performed in agencies by bureaucrats and their surrogates during the rulemaking process are the most important and wide-ranging in regulatory program operations.Legal Analysis
Every rulemaking begins with an assessment of the provisions in legislation or judicial decisions that will govern the development of the regulation. What the statute mandates or allows the agency to do must be determined. Legislation may impose deadlines, require certain types of studies, or call for specific forms of public participation beyond the written comment mandated by the APA. Usually, this legal analysis is straightforward because the legislative provisions are easy to understand. At times, the staff responsible for writing the rule may have to consult the agency's office of general counsel to determine what is expected under the statute. Legal analysis of this sort is an essential prerequisite to other rulemaking activities.Policy Analysis
As noted earlier, President Reagan at the outset of his first term announced a set of “regulatory principles” that he expected agencies of the executive branch to follow when they developed rules or made other regulatory decisions. Other presidents have done the same. In addition to the president's general policies, rule-writers must be aware of the priorities and preferences of the political leadership of their agency. During the Clinton administration, EPA rule-writers showed a keen awareness of EPA Administrator Carol M. Browner's background as an environmental agency chief for the state of Florida when they crafted their state “performance partnership grants,” which give state governments more flexibility with federal environmental funds. While many of Clinton's agency heads have been relatively low-key, FDA Commissioner David A. Kessler was notably aggressive in his regulatory role. FDA rule-writers took their cue, especially with their tough tobacco regulations. In contrast, a succession of free market FERC chairs kept that regulatory agency's hands off the increasingly deregulated wholesale electricity market. When California began facing severe electricity shortages and soaring power costs during the 2000–2001 winter, state officials implored FERC to step in to cap wholesale electricity prices, at least temporarily. First, FERC's Clinton-appointed chair, James Hoecker, then FERC's Bush-appointed chair, Curt Hebert Jr., declined. Indeed, throughout the crisis that lasted into 2002, the White House argued that such controls would only discourage the building of new power-generating facilities and prolong the shortage.
Failure to incorporate policy preferences into rules can lead to problems when the rules are reviewed at higher levels. Therefore, at the outset of rulemaking, agencies analyze the policy issues associated with the regulation to determine whether a particular substantive approach or set of procedures should be adopted.Scientific and Technical Analysis
Every rule has a purpose that its substantive content is expected to achieve. In many cases the content deals with comparatively minor matters, and staff draws on readily available information. Analysis is minimal. For example, when it first came into being, OSHA simply adopted as rules more than 4,000 standards that a panoply of testing and professional societies had developed to protect worker safety. Other rules respond to individual problems as they arise. An airline disaster caused by a technical malfunction usually brings a wave of new rules, as aviation experts in the FAA analyze the problem and take steps to prevent its recurrence.
In still other cases, rules change to incorporate state-of-the-art practices and innovations. In fact, the NRC has been criticized for engaging in the serial “ratcheting up” of engineering requirements that draw on newly developed equipment or practices that promise increases in safety. Similarly, the EPA is required to locate and mandate the “best available technology” to limit pollution or its discharge into the water and air. This requirement also involves analysis of available means and how they perform. As science develops techniques capable of detecting the presence of even minute traces of a pollutant, industries and even the scientists themselves fear regulators will become more and more strict with allowable exposures.
On the other hand, technical analyses to support new rules are most difficult to perform when Congress mandates regulatory solutions for problems about which little is known. Environmental and worker health programs frequently are pushed beyond available knowledge. For example, the disputes over regulation of benzene in the workplace, asbestos in schools, and radon in houses hinge, at least in part, on studies of long-term health effects that cannot be conducted quickly or cheaply. Congress has thus far prevented OSHA from developing regulations on repetitive stress injuries in the workplace, fearing that effective solutions could be difficult to find and expensive to implement.
Agencies are organized to perform these analyses in a variety of ways. Many have offices of research and development to conduct studies. In a distinctive arrangement, all worker health regulations written by OSHA originate with research conducted by the National Institute for Occupational Safety and Health (NIOSH), a separate agency. More common is the use of contractors to supplement agency staff in conducting the basic data collection and analysis. Bottlenecks develop in studies when the necessary data is in the hands of the very industries to be regulated. Claiming proprietary rights, these sources often are loath to release information to help the agency write a rule that will end up costing them money.
Delays in completing rules, and successful legal challenges to completed ones, often result from the unavailability of information or its poor quality. But technical analysis is about more than time or potential litigation. The accuracy of technical analysis determines the success of a regulatory program. If problems are inadequately assessed or their solutions improperly devised, regulations will fail to achieve their goals.Risk Analysis
Environmental, health, and safety regulatory programs are premised on conceptions of risk to human life or to valuable animal and plant life. Determining the nature and degree of risk posed by a given substance or activity is essential to any regulatory effort aimed at its elimination, reduction, or mitigation. This is the goal of a scientific technique known as risk analysis or risk assessment. A number of statutes require agencies to conduct studies of risk and use the results as the basis for regulation.
A number of high-profile regulatory disputes, such as occupational exposure to benzene and dioxin contamination in the food chain, have hinged on the quality of risk assessments. In those cases determining acceptable levels of exposure or ingestion has been stalled by protracted disagreements among scientists regarding the conduct of the risk analyses. Overall research designs, the ability to measure minute amounts of substances thought to be highly toxic, methods of data collection, statistical techniques used to analyze available data, conclusions drawn from statistical analyses, and proposed levels of pollution control based on the results of analyses have all been disputed in these and other cases. Further, Congress has not adopted uniform standards to guide risk assessment. Even in a single agency the criteria can vary across programs. EPA administers at least three statutes—the Safe Drinking Water Act; the Federal Insecticide, Fungicide and Rodenticide Act; and the Toxic Substances Control Act—that seek different levels of risk reduction. Clinton's Executive Order 12881 established the National Science and Technology Council within the White House. The council's risk assessment subcommittee has been reviewing federal risk assessment research to help improve its quality and implementation.
Beginning in 1995 Congress dramatically raised the issue's profile when it made risk assessment and cost-benefit analysis cornerstones of its regulatory efforts. The 1996 safe drinking water law mandated that EPA publish a nonbinding analysis of the costs, benefits, and risks of new drinking water regulation. In response, some regulators have complained that Congress should not call for increased risk assessment while simultaneously cutting agency budgets.
While the overuse of risk analysis can stop or slow the regulatory process, high-quality risk analysis and assessment remains a powerful tool in efforts to build regulatory programs that work. As a scientific technique it is developing rapidly. But these methodological advances do not transfer automatically to the regulatory process, and the day that risk analyses are no longer disputed is well in the future.Cost-Benefit Analysis
If there was a dominant theme in the Reagan administration's assault on the regulatory process, it was the simple, appealing notion that a regulatory action should generate more benefit than cost. That theme reemerged in 1995 with the swearing in of the Republican-led 104th Congress. The vehicle offered by the Republicans to ensure “net benefit” was cost-benefit analysis. This technique had been in use long before the Reagan administration. President Gerald R. Ford in 1974 directed agencies to prepare “inflation impact statements” to accompany their rules. At the end of 1976 the program was extended and its title changed to the economic impact statement program. Although the cost estimates were reasonably accurate, the assessment of benefits usually was weak, as was the study of alternatives. Agencies found that the program was useful in formulating their regulations and that the paperwork and time involved were not excessive.
President Carter also supported this approach. Shortly after taking office in 1977 he asked that full consideration be given to the “economic cost of major government regulations, through a more effective analysis of their economic impact.” In March 1978 Carter issued Executive Order 12044, which set criteria for agencies to follow in performing regulatory impact analyses (for text of order, see p. 839). The analysis had to include a description of the major alternative ways of dealing with the problem that were considered by the agency; an analysis of the economic circumstances of each of these alternatives; and a detailed explanation of the reasons for choosing one alternative over the others. The order did not extend to independent commissions, nor did it require a strict cost-benefit analysis.
Carter also created the Regulatory Analysis Review Group (RARG), chaired by a member of the Council of Economic Advisers, to improve such analysis. The Carter administration “always took pains to stress that its requirements for regulatory analysis should not be interpreted as subjecting rules to a [strict] cost-benefit test,” said former RARG chair George C. Eads.
In contrast, in February 1981 Reagan issued Executive Order 12291, which replaced Carter's Executive Order 12044, and required a cost-benefit analysis from agencies. It required executive agencies to prepare a regulatory impact analysis for all new and existing major regulations. Major rules were defined as those likely to have an annual effect on the economy of $100 million or more, lead to a major increase in costs or prices, or have “significant adverse effects” on business.
Regulatory analyses had to be submitted to OMB for review sixty days before publication in the Federal Register. However, OMB was empowered to waive the regulatory impact analysis for any rule. Agencies had to apply cost-benefit analyses to all rulemaking and adopt the least costly alternative.
The rise of cost-benefit analysis as a decision-making tool in the development of specific regulations remains controversial. As an analytical technique, cost-benefit analysis is limited, sometimes severely, by the lack of data or skepticism about the data's sources and accuracy. Even more fundamental are problems in measuring benefits and costs that may occur over a long period of time or involve intangibles that are difficult to value. It has been widely reported, for example, that different agencies use different estimates for the value of a human life that might be saved by a given regulatory intervention. Many people are appalled by the very notion of placing dollar values on life, health, or safety. The fact that studies are conducted [Page 26]before regulations are actually implemented means agencies should be estimating compliance rates, another complicating factor.
The administration of George H.W. Bush retained Executive Order 12291 approach to cost-benefit analysis. The Clinton administration embraced the technique as well, often using it as a means to justify many of its regulatory initiatives. For instance, in 1997 the Clinton administration estimated the cost of a new nutritional labeling campaign for food at $4 million per year, with a benefit ranging from $275 million to $360 million a year. The FDA's proposed regulations of tobacco were estimated to cost $180 million a year at a benefit of up to $10.4 billion.
But it was the Republican 104th Congress that pushed hardest for its broad implementation, and with some success. The unfunded mandates law of 1995 requires the Congressional Budget Office (CBO) to estimate the impacts of all new mandates that would cost state or local governments $50 million or more a year. The CBO also must estimate the impacts of any mandate that would cost private companies $100 million or more a year. Before issuing rules that would cost businesses more than $100 million yearly, regulatory agencies now must prepare a cost-benefit analysis. A rider attached to a 1996 law raising the federal debt ceiling instructs the EPA and OSHA to collect advice and recommendations from small businesses to improve their analyses of a proposed regulation's impact.
Such mandates are not necessarily cheap. A 1998 study by CBO found that eighty-five randomly selected “regulatory impact analyses” finished in 1997 cost federal agencies anywhere from $14,000 to $6 million to implement. OSHA spent as much as $5 million performing risk assessments and regulatory analyses on the single rule it issued in 1997. The EPA spends about $120 million a year on regulatory analyses.
Not surprisingly, compliance with these mandates has been spotty at best. In a 2000 report, the CSAB concluded that OMB has largely failed to supply independent cost-benefit analyses, relying instead on the regulatory agencies’ efforts—efforts that have been suspect. For instance, in 1997 EPA reported—and OMB dutifully repeated—that the annual benefits of environmental regulation were worth $3.2 trillion. At EPA's request, the number was revised radically downward, to $1.45 trillion in 2000 to respond to charges of gross exaggeration.
Meanwhile the cost to businesses of all regulation has remained high. According to a study issued by the Weidenbaum Center at Washington University in St. Louis, regulations cost the private sector $1.13 trillion in 2002. Possibly in response to these continuing concerns, President Obama appointed Harvard Law professor Cass Sunstein to head up the OIRA. Sunstein, although politically liberal, is known for his advocacy of cost-benefit analysis in the regulation of business, and his appointment surprised and even angered some on the left.Other Analyses Required by Statutes
As noted above, several types of analysis may be required by legislation. For example, the Regulatory Flexibility Act (RFA) requires agencies to determine the effects of rules on small business. The National Environmental Policy Act (NEPA) may require an environmental impact statement (EIS) if the rule is likely to have major ecological effects.
An EIS is a significant analytical task and is governed by guidelines issued by the Council on Environmental Quality (CEQ). In addition to covering a wide range of potential impacts, the EIS must be made available in draft form for review and comment by the public. Hence, the process side of NEPA is substantial, as well.
Since its passage in 1980, one piece of analytical legislation has created tremendous controversy and difficulty for the regulatory process. The Paperwork Reduction Act (PRA) was intended to force discipline in the government's information collection efforts (for text of act, see p. 821). The act established the OIRA as a principal unit of OMB. Its main task is to oversee the actions of regulatory agencies to determine if the paperwork required in any regulatory effort is the least burdensome, not duplicative, and “of practical utility.” The goal of obtaining good quality, useful information was as important as the more widely known objective of reducing the burden of paperwork on the public. Clearly the PRA requires agencies to think carefully about their information requests. But OMB's role in this process has been the object of intense controversy in Congress. (See Accountability and Oversight, p. 28.)Regulatory Personnel
Much of the debate on reforming the federal regulatory process centers on two important areas—the people chosen to direct the agencies and the procedures they use to regulate. The president appoints and the Senate confirms the heads of most regulatory agencies, but there are few guidelines for the selection process. Many critics believe that federal regulators are not as well qualified for their jobs as they should be.
Numerous experts, task forces, and study commissions have examined the twin problems of the quality of administrators and regulatory procedures, and they have made hundreds of recommendations for improvements. But few of these recommendations have been implemented in any formal way, and the debate on how to solve these problems is likely to continue.Selection of Officials
Most regulatory agency heads and commissioners are selected in accordance with Article II, Section 2, of the Constitution, which states that the president “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States.” Dividing the power of appointment between the president and the Senate was one of the checks the Framers of the Constitution felt was necessary to ensure that one branch of government did not dominate the others.
The president may remove for any or no reason heads of regulatory agencies who are within the executive branch. Once the Senate has confirmed a nominee and he or she has been sworn in, the Senate may not reconsider the nomination. Independent regulatory commission members generally may be removed only for cause, such as inefficiency, neglect of duty, or misconduct.
The Constitution does not specify any qualifications to be a regulator. Congress, however, has required that appointees to particular agencies sit for fixed terms and meet certain criteria. For example, the act establishing the Federal Reserve Board stipulates that members be chosen with “due regard to a fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country.” The requirements can be even more precise. For example, the FAA administrator is to “be a civilian and shall have experience in a field directly related to aviation.”
To ensure a degree of bipartisanship in regulatory decisions, Congress has required that most independent regulatory commissions have no more than a simple majority of commissioners from the same political party. The president is authorized to designate the chairs of most independent regulatory commissions, and most presidents choose someone of their political party.
There is no established formal process for the selection of presidential appointees, although recent administrations have followed roughly the same procedures. Generally the president has an appointments adviser who oversees the process of searching out, screening, and recommending potential nominees. Members of Congress and special interest groups are often consulted in an effort to obtain informal clearance for the candidate. But few people will be nominated who are not politically acceptable to the White House, and in some cases politics and patronage may be the chief determinant in a person's selection.
The president, along with advisers, will consider several other points in deciding whom to nominate to a regulatory agency. These factors can include the potential nominee's educational background and employment record, familiarity with the matter to be regulated, age, health, minority status, and the region of the country from which he or she comes.
Another connection that has been useful to dozens of regulatory agency appointees is congressional sponsorship. In its study of thirty-eight regulatory appointments to four agencies over a fifteen-year period, the Senate Governmental Affairs Committee found that congressional sponsorship was often an important, if not the predominant, factor in the selection process.
President Clinton explicitly introduced diversity as a criterion in presidential appointments. In order to form a government that “looks like America,” his White House personnel office sought qualified women, African Americans, Hispanics, and other minorities to fill vacancies in regulatory and other agencies. Presidents George W. Bush and Barack Obama carried on the practice, appointing women and minorities to top positions, including cabinet posts and heads of White House offices, such as secretary of state and attorney general.
The purpose of congressional confirmation proceedings is to determine the character and competence of the nominee. The committee with oversight for the agency holds hearings at which the nominee and others may testify. Once the committee has approved a nominee, the name is submitted to the full Senate. The Senate may approve, reject, or recommit a nomination to the committee that considered it. Controversial nominations sometimes are debated at length, but few are brought to the floor if there is any chance the nominee will be rejected. A nominee having that much opposition usually withdraws before the full Senate considers the appointment.
The Senate's advice-and-consent role gives Congress an important mechanism for monitoring the quality of regulatory agency appointments. Critics have charged, however, that the Senate does not take full advantage of this power. In general, the Senate does not closely examine presidential choices for regulatory positions in the executive branch on the theory that presidents should be allowed to choose their staffs. A check of the candidate's basic qualifications, rather than a full-scale examination of his or her views, generally suffices.
Appointments to the independent regulatory commissions are a somewhat different matter. Until the early 1970s presidential nominations to the independent agencies also were routinely confirmed. But after the Watergate scandal heightened sensitivity to potential abuses of government office, the Senate began to scrutinize nominations more carefully, looking at a nominee's economic views and political philosophy, as well as potential conflicts of interest.
Question of Quality
The quality of regulatory commissioners has been an issue for many decades. James M. Landis, President John F. Kennedy's regulatory adviser, wrote in 1960 that poor administrators can “wreak havoc with good law.” Landis attributed many of the agencies’ shortcomings to “a deterioration in the quality of our administrative personnel” since World War II, “both at the top level and throughout the staff.”
Studying the problem seventeen years later, the Senate Governmental Affairs Committee did not find the situation much improved. “[T]here is something lacking in overall quality,” the committee wrote. “It is not a matter of venality or corruption or even stupidity; rather, it is a problem of mediocrity.”
There is little agreement on the reasons for the lack of quality and even less agreement on what should be done about it. Some have argued that the multimember structure of the independent commissions, not the personnel, is responsible for mediocrity. “Even if the best qualified person filled each position, the collegial structure would [Page 28]impede effective performance,” the Ash Council, a task force set up by President Nixon, wrote in 1971.
The selection process is also blamed for the lack of qualified regulators in government service. Critics say it is haphazard and too often governed by factors other than a candidate's professional qualifications. Finding a candidate who is politically acceptable is oftentimes more important than finding one who is technically qualified.The Regulatory Civil Service
The quality of political leadership in regulatory institutions is unquestionably important. These individuals have the power to influence the policies implemented by their agencies and are constantly involved in important decisions. But concern for top officials should not obscure the crucial importance of career staff in the performance of regulatory agencies. It is the civil servant whose work determines if and how well higher-level policies are carried out and priorities met. They draft the rules, carry out the inspections, and resolve most disputes. The problems associated with these regulatory personnel are different from, but every bit as serious as, those that affect the political leadership of any agency.
The education, skills, and experiences that are represented in the professional staff of regulatory agencies constitute a microcosm of American society. For every regulated activity there must be appropriate expertise. A large number of professions are represented in the regulatory civil service. The FCC requires the services of a substantial number of attorneys as well as engineers, economists, accountants, and electrical technicians. A review of the professional backgrounds of employees of the EPA would find attorneys, economists, engineers, chemists, biologists, statisticians, and persons with advanced degrees in public administration and policy analysis.
Additionally, those working in each of these agencies, whatever their academic training, must have, or acquire on the job, intimate working knowledge of the private industry or activity they are engaged in regulating. It goes without saying that persons with these combinations of education, skills, and experience are often sought after by the private or nonprofit sectors. Attracting highly qualified persons to government service is only part of the challenge; keeping them there when government salaries, benefits, working conditions, and promotional opportunities may lag behind the private sector has become difficult. Qualified persons must be recruited for public service, and once in place they must be retained.
The report of the National Commission on the Public Service, “Leadership for America: Rebuilding the Public Service,” points to a gradual erosion in the caliber of government personnel due mainly to the difficulty of attracting and keeping qualified workers. Those familiar with regulatory requirements, procedures, and compliance techniques are much in demand in affected industries, businesses, and organizations where salaries, benefits, and opportunities are greater. This dilemma has no easy solution. The investment the nation needs to make to attract experienced and talented professionals to leave the private sector for careers in regulatory agencies is substantial indeed.Accountability and Oversight
There is intense conflict over the accountability of those who make regulatory decisions. A few observers find nothing less than a total perversion of the constitutional system, with unelected bureaucrats wielding vast regulatory powers essentially unchecked by direct popular will. Others find the governmental agencies greatly hindered by external checks. There is no question that bureaucrats in regulatory agencies make important decisions, but in doing so they are constrained. They are accountable to the popular will, but indirectly, through the actions of elected representatives—Congress and the president—and those of the unelected branch of government—the judiciary.Presidential Influence
Presidents sought to exert control over regulation almost as soon as the first agency came into being. In 1908 President Theodore Roosevelt urged that all independent commissions be placed in the executive branch under the immediate supervision of a cabinet secretary. A task force appointed in 1937 by Franklin Roosevelt amplified that view. It found that “important powers of policy and administration” were routinely parceled out “to a dozen or more irresponsible agencies.”
In 1949 the Hoover Commission recommended that the “purely executive functions of quasi-legislative and quasi-judicial agencies” be brought within the regular executive departments. In 1971 the Ash Council proposed that rulemaking functions of the independent commissions be placed directly under the president. Although Congress ignored these proposals, the powers of the president remained formidable.
The appointment process (discussed in a previous section) obviously is an important mechanism to ensure accountability of regulatory officials to the president. The use of the budget and executive orders are other controls available.
The budget is one of the most important controls presidents have over the regulatory agencies. Presidents, not the agencies, decide how much money to request from Congress and for what purposes. In this way presidents can cut back regulatory efforts they disapprove of and give a boost to those they favor. Although the budget is one of its main oversight tools, Congress in the past generally made only insignificant changes to the presidential budget request for the regulatory agencies. That changed dramatically in 1995. The Republican-led Congress used the appropriations process to try to curb regulations through attrition. House appropriators tried to slash the EPA's budget by a third. OSHA's budget was slated for a 16 percent cut. Budgetary attacks on regulatory agencies, coupled with riders on appropriations bills to curb the agencies’ enforcement powers specifically, helped lead [Page 29]to the government shutdowns of 1995 and 1996. Most of the funds were eventually restored. The EPA, for instance, wound up with a 9.8 percent cut. But fiscal uncertainties during the budget battles had the temporary effect of curbing much regulatory action.
In the latter years of the Clinton administration, many regulatory agencies made remarkable budgetary recoveries. With his March 2001 budget blueprint, President George W. Bush signaled a return to austerity for some agencies, while other, more politically favored offices would thrive. The EPA and the Labor Department faced budget cuts, while the EEOC would remain flush, a sign of the new president's outreach to minorities. These trends continued in the president's succeeding budget requests, although the EEOC in Bush's second term faced cuts as well. The new Democratic Congress from 2007 to 2009, however, indicated its willingness to confront Bush over cuts to regulatory agencies. President Obama has moved to increase some regulatory budgets, at agencies such as OSHA and the CPSC, even though the federal government's debt has risen dramatically in recent years.
Since 1921, when the Budget and Accounting Act was passed, presidents have had the authority to review and revise budget estimates for all executive branch agencies before they were submitted to Congress. In 1939 that authority was extended to the independent regulatory commissions.
Congress did not object to this executive control over the independent commissions’ budgets until President Nixon created the OMB in 1970. Built around the nucleus of the old Budget Bureau, OMB was given new authority to coordinate the executive branch budget requests and legislative proposals. Unlike its predecessor, which had retained an image of neutrality, OMB was quickly identified as the president's agency, a tool for pushing the presidential budget and legislative proposals through Congress.
President Reagan, for example, used the budget to promote his antiregulation policies. The biggest cuts in regulatory spending, 37 percent from 1981 to 1985, occurred in agencies that regulate specific industries such as airlines, trucking, railroads, and intercity bus lines. On the other hand, the budgets of agencies concerned with banking and finance and general business matters, such as the FDIC, the SEC, and the Patent and Trademark Office, increased substantially during Reagan's first term. Staffing reductions occurred across the board, but safety, health, and energy and environmental programs took the biggest cuts. The CPSC lost 225 employees between 1981 and 1985. OSHA had lost 654 full-time staffers by the end of Reagan's first term, and the EEOC, 285. Most of the cuts occurred during the first year Reagan had full control over agency budgets and personnel.
After 1985 the cuts slowed down and in some cases were reversed. The change in direction was attributed to several factors. Observers of the regulatory scene noted that the analytical requirements called for by Executive Order 12291 would be expensive for the agencies to implement. In addition, the Democratic-controlled Congress appeared to be less willing to acquiesce in regulatory budget cutting after the EPA was convulsed by scandal in 1983. Stung by charges of being anti-environment, the Republican 104th Congress began showing similar reluctance to cut in 1996.
In addition to the appointments and budget powers, presidents also are free to issue directives and statements to the agencies in the form of executive orders. In February 1981 President Reagan issued Executive Order 12291, which imposed strict new rules on cabinet and agency regulators, gave OMB extensive powers, and required the use of cost-benefit analysis. In January 1985 Reagan issued Executive Order 12498, which required agencies to clear their regulations with OMB while they were in the early stages of development (for text of order, see p. 844). The order called for each agency to submit to OMB in January of each year lists of significant regulatory actions it expected to propose in the coming year. According to OMB, this procedure would give the agency the opportunity to clear regulations while they were under development instead of when they were about to be proposed to the public. The executive order also called for the annual publication of the rules each agency planned to propose.
The changes wrought by these executive orders were among the most significant alterations in the regulatory process since passage of the APA. Their significance was underscored by the firestorm of criticism, litigation, and political conflict they generated. OMB critics charged that the agency improperly altered proposed regulations and was a secret conduit for industry lobbyists who wished to weaken regulatory proposals. Lawsuits challenged the constitutionality of OMB's intervention. Although the use of OMB by the president to manage the regulatory process emerged largely intact from this litigation, the controversy did not go away.
Soon after taking office, President Clinton issued Executive Order 12866, which repealed the Reagan executive orders and outlined the Clinton approach to presidential oversight of rulemaking. In addition to articulating a number of principles to guide rulemakers, he limited the use of OMB review and cost-benefit analysis to “significant” rules, as determined by a number of criteria set out in the order. The president required that the OIRA disclose all manner of communication with agencies and outside parties during the course of its review and imposed strict time periods for completion of the review process. The order also established a “Regulatory Working Group,” consisting of the vice president, the director of OIRA, and the heads of all government agencies involved in domestic regulation, which was charged with developing “innovative regulatory techniques.”
Like Reagan and Clinton before him, President George W. Bush also put his stamp on the rulemaking process. At the beginning of 2007, Bush issued an executive order requiring each federal agency to have a regulatory policy office headed up by a political appointee. The aim was to have someone who shared the president's policy priorities in each agency to review and to conduct a cost-benefit analysis of regulations. While business leaders and many [Page 30]economists praised the new directive, Democrats, consumer advocates, and others argued that the president was politicizing the rulemaking process. In similar fashion, when President Obama arrived at the White House, he quickly reached for an executive order to help set his regulatory agenda. Ten days after he became president, Obama issued Executive Order 13497, which revoked several of his predeccesor's executive orders on regulatory planning, including Bush's 2007 order.
In all, Clinton issued 364 executive orders during his eight years in office, fewer than Reagan's 381 but still a respectable total. In his eight years in office, President George W. Bush issued the most executive orders of any recent president, 491. President Obama issued 21 executive orders by June of his first term—an annual pace similar to Reagan and Clinton.Congressional Oversight
Although any president can exert a strong influence on the regulatory process through the powers of appointment, budget, and executive order, congressional powers are also substantial. In its 1977 study of regulation, the Senate Governmental Affairs Committee listed six primary goals of congressional oversight. They were (1) ensuring compliance with legislative intent; (2) determining the effectiveness of regulatory policies; (3) preventing waste and dishonesty; (4) preventing abuse in the administrative process; (5) representing the public interest; and (6) preventing agency usurpation of legislative authority.
“[O]versight is not simply hindsight,” the report noted. “Oversight involves a wide range of congressional efforts to review and control policy implementation by regulatory agencies. Congressional oversight thus includes both participation before agency action and review after the fact.”
The fundamental congressional control over independent and executive branch regulatory agencies is statutory—the passage of legislation establishing new agencies and commissions, and spelling out their powers and limitations. Once the agencies are created, Congress exercises its control by assigning new responsibilities to them. Members of Congress also may influence the selection of nominees to head the commissions and agencies, and even more important is the Senate's authority to confirm them.
After the agencies are established and their members confirmed, Congress uses several tools to ensure that the agencies remain politically accountable to the legislative branch. One tool is investigation: Congress can examine agency practices in light of possible abuses, costs and benefits of regulation, potential reforms, and agency responsiveness to the elusive “public interest.” But the two principal tools are appropriations and authorization statutes.
The appropriations process enables the House and Senate appropriations committees to scrutinize proposed agency budgets. Oversight through appropriations has been strengthened through the annual review of most agency budgets. In approving them, Congress may specify the purposes for which funds are to be used—a direct and unambiguous method of control.
At times, Congress has been unable to ensure that appropriated funds actually are spent. Nevertheless, Congress has used the appropriations process to order the agencies to take specific regulatory actions or to refrain from them. For example, Congress repeatedly used a rider to an appropriations bill to prevent the Agriculture Department from abolishing certain marketing orders targeted for elimination by Reagan's OMB staff in the early 1980s. In 1995 House members tried to use a rider to bar OSHA from developing standards or issuing regulations on repetitive motion injuries, such as carpal tunnel syndrome. After Republicans battled for months with the Clinton administration, a compromise was reached to allow the standards to be developed but to block new regulations. After the GOP came to power in 1995, a little-noticed provision in the energy and water development appropriations bill prevented federal regulators from tightening corporate average fuel efficiency (CAFE) standards for automakers. The congressional prohibition has recently taken on more urgency with the booming popularity of “light trucks”—sport utility vehicles and minivans—because such vehicles are exempt from the tougher CAFE standards for cars. In 1998 House Republicans inserted a provision into the spending plan for the departments of Veterans Affairs and Housing and Urban Development blocking the Consumer Products Safety Commission from developing a new standard for upholstery flammability.
Traditionally, the appropriations review has not focused on the agencies’ policies and goals. If it has occurred at all, such scrutiny has come during the authorization process when Congress determines whether to continue the agency. Again, the 104th Congress broke from this tradition, although it ultimately failed to get its plans enacted. Riders on its fiscal 1996 appropriations bill would have severely curtailed OSHA's enforcement power while increasing funds for counseling and technical assistance, essentially changing it from an enforcement agency to one focused on safety awareness and technical support. The House's original 1996 budget for the EPA contained seventeen legislative provisions aimed at limiting EPA's ability to enforce regulations on sewer systems, wetlands, refineries, oil and gas manufacturing, radon in water, pesticides in processed foods, lead paint, and water pollution. The budget wars of 1995 and 1996 chased Congress back to the position that substantive changes to agency policies should be the purview of authorizing committees. A number of agencies have been given permanent authorization status, among them the FCC and the EPA. Aware that permanent authorizations decrease its ability to oversee regulatory actions, Congress in recent years has required periodic authorization for some of the more controversial agencies, including the CPSC and the Federal Trade Commission (FTC).
More often than not, Congress gives up some of its control by couching agency authorizing statutes in vague generalities, giving the regulators considerable leeway in the performance of their functions. Occasionally, agencies [Page 31]have taken actions that ran counter to congressional intent. In a few such cases, Congress then has felt obliged to narrow the agency's mandate.
Besides these “formal” oversight powers, Congress has other ways to regulate the regulators, among them hearings, informal contacts, and directives contained in committee reports, sunset provisions, and individual casework. These nonstatutory controls may be the most common form of congressional oversight. A number of statutes require regulatory agencies to submit detailed reports to committees. Committee investigations not only provide information but also publicize the performance of agencies.
Casework is intervention by a member of Congress on behalf of a constituent who is involved in a proceeding before an agency. There are no reliable figures on the number of times members attempt to assist constituents with regulatory problems. Anecdotes suggest that a significant percentage of “congressional mail” received by some regulatory agencies involves this type of inquiry. It may be too strong to characterize this political ombudsman role as oversight, but it clearly puts affected agencies on notice that Congress is watching their decisions as they affect individuals, as well as overall programs and general policies.
The legislative veto, once a popular device, allowed Congress to manage the regulatory process through rejection of individual rules. In 1983 the Supreme Court ruled its use unconstitutional in Immigration and Naturalization Service v. Chadha.Limits on Oversight
The Senate Governmental Affairs Committee in 1977 detailed a number of major roadblocks to effective oversight, which remain in place today. These include:
Committee Structure. Because several committees usually share jurisdiction over an agency, oversight is fragmented, and coordination and cooperation among legislative panels is difficult to achieve, particularly among House and Senate committees.
Information Lag. Committees sometimes have experienced difficulties and delays in obtaining requested information. Agencies may refuse to supply information, or they simply may not have it available. Moreover, filtering most regulatory agency budget and legislative requests through OMB reduces the ability of Congress to obtain independent information.
Inadequate Staff. According to the committee report, the professional staff members on legislative committees having oversight responsibility for the regulatory agencies numbered only several hundred, reflecting the great disparity in size between congressional staffs and the agencies they oversee. Perhaps more important is the problem of developing the necessary staff expertise for effective oversight, the committee said.
Other intangible factors can hinder congressional oversight, among them the demand on members’ time and the belief that members gain more politically from sponsoring new legislation than from policing what has already been enacted. Bonds that develop between congressional committees and agencies also may impede a full and critical review of regulatory performance.Judicial Review
As with the other branches, the courts have always been significantly involved in regulatory decision making. The Supreme Court's decisions invalidating New Deal regulatory programs set the stage for the APA. More recently, the courts have played a profoundly important role in setting the limits of congressional, presidential, and even judicial influence over regulatory policy making in the agencies. Their rulings have altered whole regulatory programs and countless individual decisions. Although critics of judicial activism deplore such decisions, judicial review is not without substantial constraints.
The judiciary is the most passive branch, awaiting the filing of lawsuits before it can take action. The courts are empowered to hear a variety of challenges to regulatory decisions, ranging from the delegation of authority to agencies by Congress to the legality and fairness of agency dealings with individual regulated parties. There are, however, criteria that must be satisfied before the courts can hear a case brought by a complaining party.
Litigants must establish standing to sue; the court must agree that the timing of the lawsuit is correct; and all other possible remedies must be exhausted. To establish standing, potential litigants must demonstrate that they have a personal stake in the outcome of the lawsuit and that the damage suffered is related to the regulatory action in dispute. Courts will not entertain a lawsuit until an agency has completed its work on the matter in question. The principles of “finality” and “ripeness for review” are well- settled tenets of administrative law; they prevent premature review of issues that may be resolved by agency deliberations. “Exhaustion of remedies” is a similar concept that forecloses court review if there are opportunities remaining in the administrative process to redress the grievances. Lawsuits also must be brought to the proper level of court. Most regulatory statutes contain provisions that determine which federal courts have the authority to hear cases arising from different types of regulatory actions.
If a litigant satisfies these criteria and presents the lawsuit in the proper court, a decision of some sort will be rendered on the merits of the case. A critical question is the extent to which courts will question the judgment of regulators when they are sued. This is the “scope of review” issue, and on this matter the judiciary has sent decidedly mixed signals. In 1983 the Supreme Court announced in the case of Motor Vehicle Manufacturers v. State Farm that the courts would take a “hard look” when regulators made decisions to ensure that they were doing what Congress had intended in a careful and well-reasoned manner. One year later, however, the Court appeared to back off from this aggressive approach in its decision in Chevron USA v. NRDC, which stated that the judicial inquiry should end as soon as the judges satisfied themselves that the agency had interpreted the statute in question in a manner that is “permissible.”
Courts continue to shape regulatory issues. A 1996 Supreme Court ruling in Seminole Tribe v. Florida could [Page 32]affect the enforcement of federal statutes and regulations against states deemed in violation. The ruling did not directly involve regulation. Instead, it was prompted by a dispute over Native American gaming. But if the decision is broadly interpreted, regulators may be unable to sue states in federal court. States could find themselves protected against federal regulations by the 11th Amendment, which states in part, “The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States.” Protections for state governments against federal regulation were bolstered again in 2001, when a divided Supreme Court ruled 5–4 that a woman employed by the state of Alabama could not sue the state under the Americans with Disabilities Act.
A wide variety of decisions are possible when a court reviews actions of regulatory agencies. Courts can uphold the agency decision, invalidate the agency decision, or specify corrective procedures for the agency or litigant. Courts may even decide whether an agency has jurisdiction at all, as in 1997, when a federal court in Greensboro, NC, ruled that the FDA could regulate tobacco and its contents as a drug but did not have the power to regulate tobacco advertising. Both the Clinton administration and the tobacco industry appealed the ruling, and understandably so. Different courts facing different circumstances at different times will reach different results. In 1998 a three-judge panel from the 4th Circuit U.S. Court of Appeals in Richmond overturned the ruling. Finally, in 1999 the Supreme Court ruled that the FDA had no jurisdiction over tobacco.
But just as the judiciary can restrict regulatory activity, it can affirm the power of regulators to do their jobs. The Supreme Court's February 2001 Whitman v. American Trucking Associations decision may prove to be a landmark. The ruling unambiguously found that the EPA was not taking too much lawmaking power away from Congress by filling in the blanks left by vague congressional requests in the Clean Air Act. Such fill-in-the-blank exercises have become part of the daily routine for all federal regulatory agencies.
Whatever the prevailing general philosophy of judicial review, there is no question that judges and their decisions influence the regulatory process. In some instances, courts have been quite aggressive in substituting their judgment for those of agency experts. In July 1998 U.S. District Court Judge William Osteen of North Carolina undercut all regulation of indoor smoking by striking down a landmark 1993 EPA finding that secondhand tobacco smoke increases the risk of cancer. Almost fifteen years later, the Supreme Court ruled in 2007 that the EPA had erred when it claimed that it did not have the authority to regulate carbon dioxide emissions from cars. The Court went on to rule that the agency must either use this authority or give good reasons why it will not. In other cases, courts have ordered a redistribution of agency resources, a reduction in agency discretion, and redistributions of power among the various types of professionals in regulatory agencies.
Overall, then, the view that holds that regulatory agencies are subject to an elaborate network of controls is most certainly true. The issue is not whether agencies are accountable; rather, the issue is how agencies sort out the multiple and often conflicting messages they get from the president, Congress, the courts, and interest groups.Reform and the Future
Frequently, reform triggers reaction. Consider the calls in 1990 for reregulation in many areas deregulated since 1975. To varying degrees, reform restored unfettered market forces in civil aviation, trucking, telecommunications, energy, and banking. These returns to the free market have indeed paid dividends. The CSAB estimated the consumer benefits of airline deregulation amount to $10 billion annually while accident rates have fallen. Deregulation of railroads has led to savings of between $3.5 and $5 billion a year for shippers. Trucking deregulation more than doubled the number of carriers, increased jobs by 30 percent, and saved the economy $7.8 billion per year. But experience with some of the side effects of deregulation—concerns for safety in air travel, poor quality service in cable television, the monumental mismanagement and fraud in the savings and loan industry, and the distributional consequences of market-based prices generally—have convinced many that only a return to regulation will restore satisfaction with and confidence in these industries.
Consider also the reaction to presidents’ attempts to better manage the regulatory process, particularly rulemaking. President Reagan's uses of OMB review of new rules, cost-benefit analysis, the Paperwork Reduction Act, and regulatory planning were attacked by powerful, vocal critics who saw them as thinly veiled efforts to usurp congressional powers, delay essential regulations, and provide a convenient back channel by which special interests could influence the content of regulatory policy. Bitter exchanges between Congress and the White House over continued authorization and funding for some of these OMB functions became a hallmark of the late 1980s and early 1990s. Legislation proposed in the 104th Congress would have shifted responsibility for rulemaking from the regulatory agencies back to the Capitol, a reaction to growing presidential power but a recipe for legislative gridlock, critics contend.
Regulatory negotiation, an innovation in rulemaking, may offer a way to alleviate conflict. But even ideas that have wide appeal may take a long time to put into practice. This idea, developed in the early 1980s, calls for the development of rules through a form of collective bargaining. Regulatory negotiation brings together parties interested in the content of a new rule with the responsible agency in an effort to draft the rule in a collective and consensual process. The advantages to this approach are many. It eliminates the distant and often adversarial relations between the regulators and the regulated that characterize much important rulemaking. Information flows freely, and the resulting rule is based on an informed consensus, which eases the task of implementation, compliance, and enforcement.
Regulatory negotiation is not appropriate for all rules. There are limits on the types of issues and numbers of [Page 33]affected parties that this form of rulemaking can accommodate. Nevertheless, in 1990 Congress enacted legislation that required agencies to consider this method of rulemaking for new regulations. Several agencies, including the EPA, OSHA, and the FAA, have used the device. The OSHA Compliance Act of 1998, signed by President Clinton that summer, directed OSHA by statute to establish and fund consultation programs that allow employers to identify violations and correct them without penalty. But this innovation has not caught on in the regulatory agencies to the extent justified by its many apparent advantages.
Although the regulatory negotiations attempted to date have not been uniformly successful, at the worst they should be characterized as encouraging. Why, then, with the thousands of regulations written and planned since the concept first emerged have only a few dozen such negotiations taken place? There is no definitive answer, but in all likelihood a complex mix of economic, political, and bureaucratic factors have retarded its growth. Up-front costs of participating in regulatory negotiation for an interest group may be higher than those of participating in conventional rulemaking. For groups working with limited budgets and concerned with a large number of issues, cost may be an obstacle. Moreover, some groups may prefer the distance and tension of conventional rulemaking to the collaboration and tacit acceptance of regulation that involvement in negotiation implies. Corporate attorneys fear that a regulatory compliance plan negotiated with an agency may not protect their clients from third-party lawsuits. If the EPA allows a company to operate outside its rigid regulatory framework to reduce emissions, who is to say an environmental group will not file suit to force the firm back into that framework? Clinton administration officials found just such wariness.
Agencies may resist change because of bureaucratic inertia or because regulatory negotiation involves the sacrifice of the obscurity and relative autonomy of normal rulemaking. Analysts working on Vice President Al Gore's NPR team in the 1990s conceded they had been asking regulatory agencies to change an entrenched, confrontational culture, a process that has been far slower than they had anticipated. Whatever the reasons, the acceptance of regulatory negotiation is widespread in theory but so far limited in practice.
While eschewing the harsh rhetoric of Reagan and George H.W. Bush and seemingly dedicated to a better, more open process, Clinton set in motion a number of initiatives that created great stress in the regulatory process. Compounded by congressional attacks, his proposals in the NPR to cut 252,000 federal jobs, reduce the number of existing regulations by 50 percent, and eliminate the deficit meant leaner, more difficult times for regulators. Agencies complained that the ongoing reviews of existing rules took huge amounts of their time, leaving precious little left for traditional enforcement or nontraditional negotiations. Because rule-writers tend to be the more powerful, senior members of staff, budget cuts may be taking a disproportionate toll on enforcement staff.
Clinton's success in implementing his ambitious agenda was also spotty. On the NPR's fifth anniversary in April 1998, Vice President Gore appeared to have plenty to boast about: the elimination of more than 200 federal programs, the cutting of more than 16,000 pages of regulations, and the saving, by Gore's estimate, of more than $137 billion. The surge in new regulations during the administration's final days, however, showed the limits of Clinton's efforts.
As it turns out, many of these last-minute regulations were overturned by the incoming administration of George W. Bush. New workplace ergonomic standards and 175 new environmental regulations were nullified. Bush justified the action by arguing that he should not be bound by decisions made by his predecessor at the last minute.
The process of rolling back previous regulations gathered steam in the Bush administration. The OIRA reviewed 267 rules in 2002 and 189 in 2004. The numbers greatly exceeded the 71 regulations chosen in 2001 for its first referendum on regulations to review. Most of the regulations nominated for review came from just a few agencies: the Departments of Health and Human Services, Labor, and Transportation as well as EPA and the FCC.
In other areas, regulatory activity has increased dramatically, largely as a result of the 2001 terrorist attacks, and mostly from agencies now under the Homeland Security Department's umbrella. Indeed, new rules have touched all areas of domestic security. For instance, the new TSA promulgated a large number of new regulations—from tougher baggage screening requirements to the rules on the storage of guns in airliner cockpits—all aimed at improving air travel security.
A host of other new regulatory schemes have arisen since the enactment of the 2001 Patriot Act. The Customs Service, for example, implemented new safety guidelines for freight shippers and movers in an effort to improve security without slowing down the speed of shipping. The INS also promulgated new regulations requiring men visiting the United States, from twenty-five mostly Muslim countries, to register with the agency. The men also are fingerprinted and questioned by INS agents. The Department of Homeland Security took this a step further when it began in 2004 to fingerprint and photograph all foreign visitors arriving with visas in the United States. The department hoped this would allow it to screen for possible terrorists and to keep track of visitors during their U.S. stay.
Even in realms other than domestic security, the administration moved the regulatory ball forward. The EPA, for instance, added tough new standards to reduce pollution from diesel fuel as well as regulations requiring higher fuel efficiency for light trucks. Meanwhile the FDA announced that it would regulate ephedra, a popular diet drug that was deemed harmful by some. Under the 1994 Dietary Supplement and Health Education Act, the agency must prove a health supplement, such as a diet aid or vitamin pill, is harmful before taking it off the market. The reverse is true with prescription drugs; pharmaceutical companies must prove their safety before winning FDA approval to market it to the public.
Indeed, one of the biggest outcomes of the terrorist attacks and subsequent war on terrorism, many analysts said, was a change in the administration's philosophy that was previously focused on limiting the role of government in people's lives. Still, the impetus to rein in regulation did not disappear after September 2001. In addition to the work of OIRA, many agencies have sought alternatives to regulation on their own. For instance, when the Department of Homeland Security announced that it was going to create a huge database to catalog and track all of the nation's vital infrastructure in sectors such as transportation and energy, it indicated it wanted to avoid drafting new regulations to do so. Deputy Secretary Gordon England told business leaders at a U.S. Chamber of Commerce meeting that the department would instead create incentives for businesses to cooperate. Clinton-era officials would have been more likely to set down disclosure and reporting requirements for businesses.
The coming years will likely see new challenges for the regulatory community. Recently enacted laws include the Telecommunications Act, the pesticide and safe drinking water amendments, the Patriot Act, and the Consumer Product Safety Improvement Act. Some of these laws, such as the safe drinking water amendments, call for increased flexibility, more cost-benefit analysis, and the novel “right to know” concept. Others, such as the Patriot Act, allow for the more direct imposition of requirements on the private sector, in the name of domestic security. Indeed, the Justice Department and new Homeland Security Department were likely to grapple with new regulations, on issues ranging from immigration requirements to search and seizure rules in terrorism-related cases, for years to come.
The coming years may also see a host of completely new regulatory challenges. If President Obama succeeds in enacting his legislative agenda—which, in part, calls for overhauls of the health care, energy, finance, and education sectors—many agencies will have new regulatory and oversight duties. Even if some of the president's legislative agenda is not enacted, the volume of regulation is likely to increase. Democrats have been eagerly hoping for their party to retake the White House, in part, to reverse what they see as the lax regulatory regime of the Bush administration.
But regardless of which party or president is in power, regulation will remain a primary vehicle for domestic public policy in America. The varied processes of rulemaking will continue to attract the interest and efforts of powerful political forces. Americans will rely on it to formulate and implement solutions to some of the most serious, intractable, and contentious problems that face society. Regulation will command ever-increasing shares of the attention and resources of public and private institutions. The results it achieves will have a profound effect on the quality of American life.
AppendixFederal World Wide Web SitesMajor Regulatory Agencies
Consumer Product Safety Commission,
Environmental Protection Agency,
Equal Employment Opportunity Commission,
Federal Communications Commission,
Federal Deposit Insurance Corporation,
Federal Energy Regulatory Commission,
Federal Reserve System,
Federal Trade Commission,
Food and Drug Administration,
National Labor Relations Board,
Occupational Safety and Health Administration,
Securities and Exchange Commission,Other Regulatory Agencies
Architectural and Transportation Barriers Compliance Board (United States Access Board),
Commodity Futures Trading Commission,
Consumer Financial Protection Bureau
Election Assistance Commission,
Farm Credit Administration,
Federal Election Commission,
Federal Housing Finance Agency,
Federal Maritime Commission,
National Credit Union Administration,
National Mediation Board,
National Transportation Safety Board,
Nuclear Regulatory Commission,
Pension Benefit Guaranty Corporation,
Postal Regulatory Commission,
Small Business Administration,
Social Security Administration,
United States International Trade Commission,
United States Postal Service,Departmental AgenciesAgriculture Department
Agricultural Marketing Service,
Animal and Plant Health Inspection Service,
Farm Service Agency,
Food and Nutrition Service,
Food Safety and Inspection Service,
Foreign Agricultural Service,
Grain Inspection, Packers, and Stockyards Administration,
Natural Resources Conservation Service,
Risk Management Agency,
Rural Development,Commerce Department
Bureau of Industry and Security,
Economic Development Administration,
International Trade Administration,
National Oceanic and Atmospheric Administration,
United States Patent and Trademark Office,Education Department
Office for Civil Rights,
Office for Federal Student Aid,
Office of Elementary and Secondary Education,
Office for Postsecondary Education,
Office of Special Education and Rehabilitative Services,Health and Human Services Department
Administration for Children and Families,
Administration on Aging,
Centers for Disease Control and Prevention,
Centers for Medicare and Medicaid Services,
Office for Civil Rights,
Office of the Inspector General,
Office of Public Health and Science,Homeland Security Department
Federal Emergency Management Agency,
Immigration and Customs Enforcement,
Transportation Security Administration,
U.S. Citizenship and Immigration Services,
U.S. Coast Guard,
U.S. Customs and Border Protection,Housing and Urban Development Department
Office of Community Planning and Development,
Office of Fair Housing and Equal Opportunity,
Office of Healthy Homes and Lead Hazard Control,
Office of Housing,
Office of Public and Indian Housing,Interior Department
Bureau of Indian Affairs,
Bureau of Land Management,
Bureau of Ocean Management Regulation & Enforcement,
Bureau of Reclamation,
National Park Service,
Office of Natural Resources Revenue
Office of Surface Mining, Reclamation and Enforcement,
United States Fish and Wildlife Service,
United States Geological Survey,Justice Department
Bureau of Alcohol, Tobacco, Firearms, and Explosives,
Civil Rights Division,
Drug Enforcement Administration,
Federal Bureau of Prisons,
Office of Justice Programs,
United States Parole Commission,Labor Department
Employee Benefits Security Administration,
Employment and Training Administration,
Employment Standards Administration,
Mine Safety and Health Administration,
Veterans’ Employment and Training Service,Transportation Department
Aviation and International Affairs,
Aviation Enforcement and Proceedings,
Federal Aviation Administration,
Federal Highway Administration,
Federal Motor Carrier Safety Administration,
Federal Railroad Administration,
Federal Transit Administration,
National Highway Traffic Safety Administration,
Office of Hearings,
Pipeline and Hazardous Materials Safety Administration,
Research and Innovative Technology Administration,
Saint Lawrence Seaway Development Corporation,
Surface Transportation Board,Veterans Affairs DepartmentRegulatory Oversight and Coordination
Congressional Budget Office,
Corporation for National and Community Service,
Council of Economic Advisers,
Council on Environmental Quality,
Domestic Policy Council,
Government Accountability Office,
National Economic Council,
National Security Council,
National Telecommunications and Information Administration,
Office of Compliance,
Office of Governmentwide Policy,
Office of Information and Regulatory Affairs
Office of Intergovernmental Affairs,
Office of Management and Budget,
Office of National AIDS Policy,
Office of National Drug Control Policy,
Office of Science and Technology Policy,
Office of the U.S. Trade Representative,
Regulatory Information Service Center,Government Information
Federal Citizen Information Center,
Federal Data Catalogs (searchable datasets)
National Technical Information Service,
THOMAS: Legislative Information from the Library of Congress Web site,
U.S. Government Printing Office,
AppendixOrdering Government Publications
In addition to the publications contacts listed in each agency profile, the federal government maintains the following general offices for the distribution of publications:Federal Citizen Information Center (FCIC)
Part of the General Services Administration. Distributes free publications, including the Consumer Information Catalog and consumer booklets from many federal agencies. Also distributes new releases on consumer issues to the media, consumer organizations, and state and local consumer agencies. Orders for publications and catalogs are filled by the Pueblo office; orders are no longer accepted by phone and can be placed online via the FCIC's Web site at http://www.publications.usa.gov. The Washington office provides services to the U.S. Government Printing Office and other federal agencies.
The FCIC also administers the National Contact Center, a toll-free service for questions in English and Spanish about all aspects of the federal government. Agents are available at 1-866-487-2365 between 8 A.M. and 8 P.M. E.T. Recorded information on popular topics is available around the clock.National Technical Information Service (NTIS)
Part of the Commerce Department. Distributes or sells publications, subscriptions, and other information from most federal departments, many independent agencies, and a number of foreign governments. Publications can be retrieved online, in print, and in various electronic formats. Publication catalogs are available for download at the NTIS Web site.
In addition to the main order lines above, key telephone contacts include:
A division of NTIS and a central access point for federal online information, including government jobs, scientific and technical publications, 30 million government Web pages, the text of Supreme Court decisions issued between 1937 and 1975, and archived Internal Revenue Service forms and publications.
National Audiovisual Center (NAC)
A division of the NTIS that distributes over 9,000 federal media-based products, including videotapes, [Page 792]audiocassettes, and CD-ROMs. Training materials cover occupational safety and health, foreign languages, law enforcement, and fire services. Educational materials cover topics in history, health, agriculture, and natural resources.U.S. Government Printing Office (GPO)
Produces publications for Congress and the federal departments and agencies. The superintendent of documents distributes or sells products, including catalogs, books, and subscriptions; booklets and other frequently requested publications are generally available from the agencies themselves. An increasing number of GPO products are available in electronic formats. The agency's Web site provides indexes of GPO products and access to a variety of government databases. The GPO also maintains two government bookstores in the DC metropolitan area, which stock selected government publications, and a network of Regional Federal Depository Libraries, which receive a copy of all federal government documents that must be made available for public inspection. For the location of these libraries, please go to http://www.gpoaccess.gov/libraries.html.
In addition to the main order lines above, some key GPO contacts include:
U.S. Government Printing Office
P.O. Box 979050
St. Louis, MO 63197–9000
710 N. Capitol St. NW
Washington, DC 20401–0001
AppendixHow to Use the Federal Register and the CFR
The basic tool for finding out about agency rulings, proposed rules, meetings, and adjudicatory proceedings is the Federal Register, which is published daily. The Federal Register system of publication was established by the Federal Register Act of 1935 (44 U.S.C. Ch. 15) and was further enlarged and amended by the Administrative Procedure Act of 1946 (5 U.S.C. 551).
Contained in the Federal Register are federal agency regulations and other legal documents of the executive branch, including presidential documents (among them the texts of proclamations and executive orders).
The system of codifying federal regulations parallels that of legislation. Laws enacted by Congress are compiled annually in the U.S. Statutes at Large and are then codified in the U.S. Code by subject titles. Rules and regulations to implement the legislation are published daily in the Federal Register and are then codified by subject title in the Code of Federal Regulations (CFR), which is updated annually. Working with the Federal Register and the CFR, a person may find an up-to-date account of all regulations pertaining to a particular agency or subject.Organization of the CFR
The CFR, a compilation of the current general and permanent regulations of federal agencies, is divided into fifty titles, according to broad subject areas affected by regulatory action. For example, Title 1 concerns “General Provisions”; Title 3, “The President”; Title 12, “Banks and Banking”; Title 15, “Commerce and Foreign Trade”; Title 21, “Food and Drugs”; and so forth. (The subject of a title may change as regulations are rescinded and different regulations are issued. Not all titles are in use at one time.)
Within each title (consisting of one or more volumes), subjects are further broken down into chapters (numbered in roman capitals as I, II, III, etc.). Chapters are further subdivided into parts, numbered in Arabic numerals (1, 2, 3, etc.). Parts are normally assigned to chapters as follows: Chapter I, Parts 1 to 199; Chapter II, Parts 200 to 299; and so forth. Each part contains a number of sections, set off by a decimal point preceded by the symbol §. The notation “§ 32.5” would refer to section 5 of part 32. The “section” is the basic unit of the CFR and ideally consists of a short, simple presentation of one proposition.
As an example: Title 36 of the CFR, composed of one volume, concerns all regulations pertaining to “Parks, Forests, and Public Property.” The table of contents of the volume divides the title into fourteen chapters. Chapter I contains regulations affecting the “National Park Service, Department of the Interior.” There is a table of contents for each chapter, giving the subject matter of each part and the page number on which it may be found. Part 4 of Chapter I, for example, concerns “Vehicles and traffic safety.” Within Part 4, there are a number of sections. Section 4.30, for example, concerns “Bicycles.”
Each CFR volume contains front matter on how to use the code, effective dates and whom to contact for further information. The “CFR Index and Finding Aids” is revised annually and is contained in a separate volume. The index section contains a list of CFR titles, chapters, and parts; an alphabetical listing of agencies appearing in the CFR; and lists of current and superseded CFR volumes. The finding aids section consists of additional information and guides to material in the CFR. Included is a parallel table of statutory authorities and rules that lists all sections of the U.S. Code and the United States Statutes at Large, cited as the rulemaking authority for CFR regulations.
The CFR also publishes monthly a cumulative list of changes in regulations since they were published in the latest annual code. The listing contains the title, chapter, part, and section of the amended regulation and the page number in the Federal Register where the change was published. There is no single annual issue of the cumulative list; rather, four of the monthly issues include cumulative lists for certain titles. The December issue contains changes for Titles 1–16; the March issue is the annual revision for Titles 17–27; the June issue contains changes in Titles 28–41; and the September issue notes changes in Titles 42–50.
The entire CFR is revised annually according to the following schedule: Titles 1–16, as of January 1; Titles 17–27, as of April 1; Titles 28–41, as of July 1; Titles 42–50, as of October 1.The Federal Register
Published daily, the Federal Register serves to update the Code of Federal Regulations. In order to determine the most recent version of a rule, the latest edition of the CFR, the CFR cumulative list of revisions, and the Federal Register must be used together.
Each issue of the Federal Register includes preliminary pages of finding aids. Documents are arranged under various headings: “Presidential Documents,” “Rules and Regulations,” “Proposed Rules,” “Notices,” and “Sunshine Act Meetings.”
Final Rules. This section on final rules usually contains for each entry the following information: the part (title, chapter, etc.) of the CFR affected; a brief descriptive heading for the change; the agency proposing the action; the type of action involved (for example, a final rule, a termination of rulemaking or proceeding, or a request for further public comment); a brief summary of the nature of the action; the effective date; and the person to contact for further information. This is followed by more or less detailed supplementary information, including the text of the change in the regulation.
Agencies are required to publish rules in the Federal Register thirty days before they are to take effect. Exceptions to this requirement, found in section 553 of the Administrative Procedure Act, include: “(1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule.”
In publishing the supplementary information on the final rule, agencies must summarize comments received about the rule, what action was taken on them, and why. On occasion, agencies may allow further comment on a final rule and will give notice of such in the Federal Register.
Proposed Rules. The format for publishing a proposed rule is similar to that for final rules. The entry is headed by the name of the agency initiating the action; the CFR sections affected; a brief descriptive title of the action; the nature of the action (proposed rulemaking, extension of public comment period, etc.); a summary of the proposed rule; the deadlines for receiving public comments and/or dates of public hearings; the person to contact for further information; and a more detailed supplementary section. Also included is the agency's “docket” number under which its files on the proposed action may be identified and examined.
Occasionally, agencies will publish an “advance notice of proposed rulemaking” in cases where a rule is being considered but where the agency has not developed a concrete proposal.
Requests may be made for an extension of the deadline for public comment, but agencies are not required to grant them.
Notices. Contained in this section of the Federal Register are documents other than rules or proposed rules that are applicable to the public. Notices of hearings and investigations, committee meetings, agency decisions and rulings, delegations of authority, filing of petitions and applications, issuance or revocation of licenses, and grant application deadlines are examples. Announcements of advisory committee meetings are also required to be published in the “Notices” section. An example of an application notice is a request by an airline company to establish a new route or service. Notice of filings of environmental impact statements are also included in this section.
Sunshine Act Meetings. Notices of open agency meetings are printed in the Federal Register in accordance with the provisions of the Government in the Sunshine Act (see p. 816). Each entry contains the name of the agency; time, date, and place of the meeting; a brief description of the subject; status (open or closed); the person to contact; and supplementary information. Agencies that have closed a meeting are required to list those that are closed, citing the relevant exemption under the Sunshine Act.
Finding Aids. There are several kinds of finding aids that are published each day in the Federal Register. These include:
- Selected Subjects: a list of the subjects affected by rules and proposed rules included in each issue.
- Contents: a comprehensive list of documents in the issue and their page numbers arranged by agency and type of document (rule, proposal, or notice).
- List of CFR parts affected: a numerical guide listing each title of the CFR affected by documents published in the day's issue, giving the citation to the CFR and the page number in that day's Federal Register where the action may be found.
- Cumulative list of CFR parts affected, monthly: rules and proposals that have appeared so far in that month's Federal Register, arranged in similar fashion to the above.
- Federal Register pages and dates: a parallel table of the inclusive pages and corresponding dates for the Federal Registers of the month.
In addition to information provided in each daily Federal Register, there are other monthly, quarterly, and annual publications. The first Federal Register of each month contains a table of effective dates and time periods for the month. The first issue of each week includes the CFR checklist, which shows the revision date and price of CFR volumes issued to date. The Federal Register also publishes a monthly index of all the documents appearing in a given month arranged alphabetically by agency name and thereunder by rules, proposed rules, and notices; broad subject headings are inserted alphabetically among agency headings. The index also includes a list of Freedom of Information Act indexes and a table showing the relationship between Federal Register dates and pages. The index is cumulated quarterly and annually.
The List of CFR Sections Affected (LSA) directs users to changes to the CFR that were published in the Federal Register. Entries for rules are arranged numerically by CFR title, chapter, part, section, and paragraph. A descriptive word or phrase indicates the nature of the amendatory action such as additions, revisions, or removals. The [Page 795]number at the end of each entry gives the page in the Federal Register where the amendatory action appears. Proposed rules are listed at the end of the appropriate titles. The proposed rule entries are to the part number. They do not contain a descriptive word or phrase.
The LSA is published monthly in cumulative form and keyed to the annual revision schedule of the CFR volumes. The issues of December, March, June, and September are annual cumulations for certain CFR titles. If a particular LSA is an annual cumulation, a notation appears on the cover.
Each LSA also contains a detailed introductory explanation on how to use the publication. In addition, the LSA contains a parallel table of authorities and rules, which shows additions and removals of authorities, and a table of Federal Register issue pages and dates.
The Office of the Federal Register has published a booklet, “The Federal Register: What It Is and How to Use It,” which may be obtained from the Government Printing Office, and also offers seminars on how to use the Federal Register. These are announced in the Federal Register.GPO Access
GPO Access is an online information-dissemination service that provides access to the Federal Register (http://www.gpoaccess.gov/fr/) and to the CFR (http://origin.www.gpoaccess.gov/cfr) using multiple browse and search features. The electronic version of the Federal Register is updated daily and includes volumes from fifty-nine (1994) to the present. CFR volumes are added to the online service concurrent with the release of the print editions. Issues are available from 1996 (partial) to the current year. Both publications’ documents are available in PDF and ASCII text files. Also available is the Electronic Code of Federal Regulations (e-CFR) (http://ecfr.gpoaccess.gov), a daily updated version of the CFR that incorporates information from the CFR,Federal Register, and the List of CFR Sections Affected. The e-CFR is not an official legal edition of the CFR.
AppendixSearching and Commenting on Regulations: Regulations.gov
The President's Management Agenda was launched in 2001 as a collection of government-wide initiatives for improving the management and performance of the federal government. One of the five main initiatives was Expanded Electronic Government, known as the E-Government Act of 2002. It is an ongoing effort by federal agencies to use Internet-based technology to make it easier for citizens and businesses to interact with the government and modernize citizen-to-government communications.
The E-Government Act (116 Stat. 2899, 44 U.S.C. 3601 et seq.) authorized the eRulemaking Initiative, which focuses on improving citizen access and participation in the rulemaking process and streamlining the efficiency of internal agency processes. The three key objectives are:
- To expand public understanding of the rulemaking process.
- To improve the quality of rulemaking decisions.
- To increase the amount, breadth, and ease of citizen and intergovernmental participation in rulemaking by using the Internet to enhance public access to information.
The eRulemaking Initiative continues to consolidate existing federal information technology systems into a single federal system and integrate 135 federal agencies that use or used paper-based rule-writing processes.Background
Rulemaking is the process followed by federal departments and agencies to formulate, amend, or repeal a regulation. The rulemaking process generally consists of two stages: the proposed and the final regulation. More than 8,000 rules are created each year by approximately 300 different federal agencies, with as many as 500 regulations open for comment at any given time. For most categories of rulemaking, the department or agency provides notice of a proposed regulation and any person or organization may review this document and submit comments on it during a specified period (usually thirty, sixty, or ninety days).
As part of the rulemaking process, the department or agency is required to consider the public comments received on the proposed regulation.
A docket serves as the depository for documents or information related to an agency's rulemaking activities. Agencies most commonly use dockets for rulemaking actions, but dockets may also be used for various other activities. The docket generally contains the materials referenced in the Federal Register, any received public comments, or other information used by decision makers related to the agency rulemaking activity. Some agencies maintain their dockets electronically with access via the Internet, while other agencies maintain hard copies of materials submitted to their docket.Regulations.Gov
Help desk hours: 8 A.M. to 6 P.M. ET, Mon.–Fri.
http://Regulations.gov, a federal regulatory clearinghouse, was launched in January 2003 as the first achievement of the eRulemaking Initiative—a cross-agency effort authorized under the E-Government Act. The initial goal of http://Regulations.gov was to provide online access to every open rule published by the federal agencies. The eRulemaking Initiative is managed by the Environmental Protection Agency in conjunction with more than twenty-five federal departments and agency partners.
In fall 2005 http://Regulations.gov launched its Federal Docket Management System (FDMS). FDMS enables the public to access entire rulemaking dockets from participating federal departments and agencies. With this system, federal departments and agencies can post Federal Register documents, supporting materials, and public comments on the Internet. The public can search, view, and download these documents.
http://Regulations.gov initially made available the dockets for the Department of Housing and Urban Development, the Animal and Plant Health Inspection Service of the [Page 797]Department of Agriculture, a portion of the Department of Homeland Security, and the Office of Personnel Management. In 2005 http://Regulations.gov began adding federal departments and agencies, including the following:
- Additional sections of the Department of Homeland Security
- Department of Housing and Urban Development
- Environmental Protection Agency
- Federal Emergency Management Agency, Department of Homeland Security
- Federal Trade Commission
- Internal Revenue Service
- National Archives and Records Administration
- U.S. Citizenship and Immigration Services, Department of Homeland Security
- U.S. Customs and Border Protection, Department of Homeland Security
http://Regulations.gov allows the public to view a description of rules currently open for comment, read full texts of the accompanying documents, and submit comments to the appropriate federal department or agency. This interactive site now provides online access to every rule published and open for comment, from more than 300 different federal agencies. This includes all federal documents that are open for comment and published in the Federal Register, the official daily publication for final regulations, proposed regulations, and other notices of federal departments and agencies and organizations, as well as executive orders and other presidential documents. Through the Web site, some agencies post comments back to the public site.
The http://Regulations.gov Web site allows users to:
- Search for open regulations and documents.
- Comment on open regulations and documents.
- Request e-mail notifications on dockets.
- Access further help in using the Regulations.gov Web site.
The Web site also provides visitors with a variety of means to search for and retrieve those documents and also allows visitors to submit a comment on any open rulemaking, which is then forwarded to the appropriate agency. All public comments received are then reviewed by that department or agency and taken into account when the final regulation is developed.
Each Federal Register regulatory action that is open for comment through the http://Regulations.gov Web site contains specific instructions on how to submit comments for that particular rulemaking action.
http://Regulations.gov provides four predefined searches to access documents and regulations open for comment:
- All documents open for comment.
- Documents published for comment today.
- Regulations open for public comment by topic.
- All documents for which the comment period closes today.
http://Regulations.gov is updated daily by the National Archives and Records Administration using electronic versions of the same Federal Register documents printed every business day to ensure that regulations open for comment are available for public access.
AppendixAdministrative Procedure Act
The Administrative Procedure Act (APA) had its genesis in the proliferation of regulatory agencies during the New Deal. Passed in 1946, the act was the product of a nine-year study of administrative justice by congressional committees, the Justice Department, and lawyers’ organizations. On enactment, Pat McCarran, D-NV, chair of the Senate Judiciary Committee, described it as a “bill of rights for the hundreds of thousands of Americans whose affairs are controlled or regulated in one way or another by agencies of the federal government” and said it was designed “to provide guaranties of due process in administrative procedure.”
Major provisions of the act:
- Required agencies to publish in the Federal Register a description of their organization and rulemaking procedures and to hold hearings or provide other means of public comment on proposed rules.
- Prescribed standards and procedures for agency adjudications, including licensing and injunctive orders. (Among the requirements: adequate notice to parties concerned; separation of prosecution and decision functions through a ban on investigatory or prosecuting officials deciding cases; discretionary authority for agencies to issue declaratory orders.)
- Spelled-out hearing procedures, including a requirement that the proponent of a rule or order should have the burden of proof and that no decision could be made except as supported by “relevant, reliable and probative evidence.”
- Provided that any person suffering legal wrong because of any agency action would be entitled to judicial review, except where statutes precluded judicial review or where agency action was by law committed to agency discretion, but required the aggrieved party to exhaust administrative remedies first. The court was to set aside agency actions “unsupported by substantial evidence,” and was to review the whole record and take “due account” of the rule of prejudicial error.
- Directed each agency to appoint competent examiners to act as hearing officers and to make, or recommend, decisions.
The act established minimum requirements that all agencies would have to meet. Based on these requirements, agencies have developed their own procedures, which are spelled out in statutes contained in the Code of Federal Regulations. Amendments to the APA include the Government in Sunshine Act, the Freedom of Information Act, and the Privacy Act.
The APA divides administrative proceedings into two categories: rulemaking and adjudication. A “rule” is defined by Section 551 as “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” “Adjudication” is the process of formulating an order, which is defined as a “final disposition … of an agency in a matter other than rule making but including licensing.”Rulemaking
Section 553 sets forward the basic requirements for rulemaking. General notice of a proposed rulemaking is to be published in the Federal Register, unless persons subject to the rule “are named and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include (1) a statement of the time, place, and nature of public rule making proceedings; (2) reference to the authority under which the rule is proposed; and (3) either the terms or substance of the proposed rule or a description of the subjects and issues involved.” The APA provides an opportunity for public participation through written or oral comment (the act does not require agencies to hold hearings).
There are two kinds of rulemaking: formal and informal. If a particular statute calls for “on the record” or formal rulemaking, the agency must go through a trial-type procedure. Decisions must be based on the record of transcripts of oral testimony or written submissions. Unlike adjudicatory proceedings, however, the initial and recommended decision of the hearing examiner may be omitted. Under the informal rulemaking process, the decision need not be based on the record and, unless the agency decides [Page 799]otherwise, only the minimum requirements of the APA must be met.
Under Section 553 of the Administrative Procedure Act, a “substantive rule which grants or recognizes an exemption or relieves a restriction” must be published at least thirty days before it becomes effective. However, there are many exceptions to this, among them interpretative rules or general statements of policy. Such notice is not required if it would defeat the purpose of the rule or if immediate action is required to protect property.Formal Hearings
Where the APA requires a formal hearing—as in a formal rulemaking or adjudicatory proceeding—usually an administrative law judge (hearing examiner) presides and receives evidence. (However, the act also provides that the agency or one or more members of the body that constitutes the agency may do so.) The act requires that each agency “shall appoint as many hearing examiners as are necessary for proceedings required to be conducted” under adjudicatory or formal rulemaking procedures. Hearing examiners, or presiding officers, have the power to administer oaths and affirmations; issue subpoenas authorized by law; rule on offers of proof and receive relevant evidence; regulate the hearings; hold conferences to settle or simplify issues; handle procedural requests; make or recommend decisions; and take other action authorized by agency rules.
Following the hearing, the examiner makes an initial or recommended decision, but the agency makes the final determination.Adjudication
In contrast to the more generalized character of rule-making, adjudication usually involves a more limited number of parties (between the agency and a private party, or among two or more private parties) and is more judicial in nature. Section 554 of the APA requires that the agency notify the affected parties of the hearing's time and place, the statute involved, and the factual dispute that will be decided. The parties involved may submit oral or written evidence, present a defense and rebuttal, and cross-examine witnesses. The hearing examiner is prohibited from consulting any party on an issue of fact unless all parties have a chance to participate.Judicial Review
Section 702 of the APA provides that: “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” The reviewing court may “compel agency action unlawfully withheld or unreasonably delayed,” and rule unlawful any agency action found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; unconstitutional; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; taken “without observance of procedure required by law”; and unsupported by substantial evidence.
The provisions of the Administrative Procedure Act are contained in the U.S. Code, Title 5, Chapter 5, Subchapter II, and Title 5, Chapter 7.
The following text includes Subchapter II, section 551 and sections 553–559 as well as Chapter 7.
Section 552, known as the Freedom of Information Act, may be found on p. 805; section 552a, known as the Privacy Act, may be found on p. 829; and section 552b, known as the Government in the Sunshine Act, may be found on p. 816.
Subchapter II Administrative Procedure § 551. Definitions
For the purpose of this subchapter—
- (1) “agency” means each authority of the Government of the United States, whether or not it is within or subject to review by another agency, but does not include—
- (2) “person” includes an individual, partnership, corporation, association, or public or private organization other than an agency;
- (3) “party” includes a person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in an agency proceeding, and a person or agency admitted by an agency as a party for limited purposes;
- (4) “rule” means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing;
- (5) “rule making” means agency process for formulating, amending, or repealing a rule;
- (6) “order” means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing;
- (7) “adjudication” means agency process for the formulation of an order;
- (8) “license” includes the whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption, or other form of permission;
- (9) “licensing” includes agency process respecting the grant, renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditioning of a license;
- (10) “sanction” includes the whole or a part of an agency—
- (11) “relief” includes the whole or a part of an agency—
- (12) “agency proceeding” means an agency process as defined by paragraphs (5), (7), and (9) of this section;
- (13) “agency action” includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act; and
- (14) “ex parte communication” means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by this subchapter.
§ 553. Rule making
- (a) This section applies, according to the provisions thereof, except to the extent that there is involved—
- (b) General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include—
- (c) After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. When rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.
- (d) The required publication or service of a substantive rule shall be made not less than 30 days before its effective date, except—
- (e) Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.
§ 554. Adjudications
- (a) This section applies, according to the provisions thereof, in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is involved—
- (b) Persons entitled to notice of an agency hearing shall be timely informed of—
- (c) The agency shall give all interested parties opportunity for—
- (d) The employee who presides at the reception of evidence pursuant to section 556 of this title shall make the recommended decision or initial decision required by section 557 of this title, unless he becomes unavailable to the agency. Except to the extent required for the disposition of ex parte matters as authorized by law, such an employee may not—
- An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision, or agency review pursuant to section 557 of this title, except as witness or counsel in public proceedings. This subsection does not apply—
- (e) The agency, with like effect as in the case of other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty.
§ 555. Ancillary matters
- (a) This section applies, according to the provisions thereof, except as otherwise provided by this subchapter.
- (b) A person compelled to appear in person before an agency or representative thereof is entitled to be accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative. A party is entitled to appear in person or by or with counsel or other duly qualified representative in an agency proceeding. So far as the orderly conduct of public business permits, an interested person may appear before an agency or its responsible employees for the presentation, adjustment, or determination of an issue, request, or controversy in a proceeding, whether interlocutory, summary, or otherwise, or in connection with an agency function. With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it. This subsection does not grant or deny a person who is not a lawyer the right to appear for or represent others before an agency or in an agency proceeding.
- (c) Process, requirement of a report, inspection, or other investigative act or demand may not be issued, made, or enforced except as authorized by law. A person compelled to submit data or evidence is entitled to retain or, on payment of lawfully prescribed costs, procure a copy or transcript thereof, except that in a nonpublic investigatory proceeding the witness may for good cause be limited to inspection of the official transcript of his testimony.
- (d) Agency subpoenas authorized by law shall be issued to a party on request and, when required by rules of procedure, on a statement or showing of general relevance and reasonable scope of the evidence sought. On contest, the court shall sustain the subpoena or similar process or demand to the extent that it is found to be in accordance with law. In a proceeding for enforcement, the court shall issue an order requiring the appearance of the witness or the production of the evidence or data within a reasonable time under penalty of punishment for contempt in case of contumacious failure to comply.
- (e) Prompt notice shall be given of the denial in whole or in part of a written application, petition, or other request of an interested person made in connection with any agency proceeding. Except in affirming a prior denial or when the denial is self explanatory, the notice shall be accompanied by a brief statement of the grounds for denial.
§ 556. Hearings; presiding employees; powers and duties; burden of proof; evidence; record as basis of decision
- (a) This section applies, according to the provisions thereof, to hearings required by section 553 or 554 of this title to be conducted in accordance with this section.
- (b) There shall preside at the taking of evidence—
- (c) Subject to published rules of the agency and within its powers, employees presiding at hearings may—
- (d) Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof. Any oral or documentary evidence may be received, but the agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence. A sanction may not be imposed or rule or order issued except on consideration of the whole record of those parts thereof cited by a party and supported by and in accordance with the reliable, probative, and substantial evidence. The agency may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the agency, consider a violation of section 557(d) of this title sufficient grounds for a decision adverse to a party who has knowingly committed such violation or knowingly caused such violation to occur. A party is entitled to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. In rule making or determining claims for money or benefits or applications for initial licenses an agency may, when a party will not be prejudiced thereby, adopt procedures for the submission of all or part of the evidence in written form.
- (e) The transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 of this title and, on payment of lawfully prescribed costs, shall be made available to the parties. When an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary.
§ 557. Initial decisions; conclusiveness; review by agency; submissions by parties; contents of decisions; record
- (a) This section applies, according to the provisions thereof, when a hearing is required to be conducted in accordance with section 556 of this title.
- (b) When the agency did not preside at the reception of the evidence, the presiding employee or, in cases not subject to section 554(d) of this title, an employee qualified to preside at hearings pursuant to section 556 of this title, shall initially decide the case unless the agency requires, either in specific cases or by general rule, the entire record to be certified to it for decision. When the presiding employee makes an initial decision, that decision then becomes the decision of the agency without further proceedings unless there is an appeal to, or review on motion of, the agency within time provided by rule. On appeal from or review of the initial decision, the agency has all the powers which it would have in making the initial decision except as it may limit the issues on notice or by rule. When the agency makes the decision without having presided at the reception of the evidence, the presiding employee or an employee qualified to preside at hearings pursuant to section 556 of this title shall first recommend a decision, except that in rule making or determining applications for initial licenses—
- (c) Before a recommended, initial, or tentative decision, or a decision on agency review of the decision of subordinate employees, the parties are entitled to a reasonable opportunity to submit for the consideration of the employees participating in the decisions—
- (2) This subsection does not constitute authority to withhold information from Congress.
§ 558. Imposition of sanctions; determination of applications for licenses; suspension, revocation, and expiration of licenses
- (a) This section applies, according to the provisions thereof, to the exercise of a power or authority.
- (b) A sanction may not be imposed or a substantive rule or order issued except within jurisdiction delegated to the agency and as authorized by law.
- (c) When application is made for a license required by law, the agency, with due regard for the rights and privileges of all the interested parties or adversely affected persons and within a reasonable time, shall set and complete proceedings required to be conducted in accordance with sections 556 and 557 of this title or other proceedings required by law and shall make its decision. Except in cases of willfulness or those in which public health, interest, or safety requires otherwise, the withdrawal, suspension, revocation, or annulment of a license is lawful only if, before the institution of agency proceedings therefor, the licensee has been given—
When the licensee has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency.
§ 559. Effect on other laws; effect of subsequent statute
- (a) This subchapter, chapter 7, and sections 1305, 3105, 3344, 4301(2)(E), 5372, and 7521 of this title, and the provisions of section 5335(a)(B) of this title that relate to hearing examiners, do not limit or repeal additional requirements imposed by statute or otherwise recognized by law. Except as otherwise required by law, requirements or privileges relating to evidence or procedure apply equally to agencies and persons. Each agency is granted the authority necessary to comply with the requirements of this subchapter through the issuance of rules or otherwise. Subsequent statute may not be held to supersede or modify this subchapter, chapter 7, sections 1305, 3105, 3344, 4301(2)(E), 5372, or 7521 of this title, or the provisions of section 5335(a)(B) of this title that relate to hearing examiners, except to the extent that it does so expressly.
Chapter 7—Judicial Review
§ 701. Applications; definitions
- (a) This chapter applies, according to the provisions thereof, except to the extent that—
- (b) For the purpose of this chapter—
§ 702. Right of review
A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action [Page 804]within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party. The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States: Provided, That any mandatory or injunctive decree shall specify the Federal officer or officers (by name or by title), and their successors in office, personally responsible for compliance. Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; of (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.
§ 703. Form and venue of proceeding
The form of proceeding for judicial review is the special statutory review proceeding relevant to the subject matter in a court specified by statute or, in the absence or inadequacy thereof, any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction or habeas corpus, in a court of competent jurisdiction. If no special statutory review proceeding is applicable, the action for judicial review may be brought against the United States, the agency by its official title, or the appropriate officer. Except to the extent that prior, adequate, and exclusive opportunity for judicial review is provided by law, agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement.
§ 704. Actions reviewable
Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsiderations, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.
§ 705. Relief pending review
When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.
§ 706. Scope of review
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
- (1) compel agency action unlawfully withheld or unreasonably delayed; and
- (2) hold unlawful and set aside agency action, findings, and conclusions found to be—
AppendixFreedom of Information Act
The 1966 Freedom of Information Act (100 Stat. 3207–48, 5 U.S.C. 552 note) requires executive branch agencies and independent commissions to make available to citizens, upon request, all documents and records—except those that fall into the following exempt categories:
- Secret national security or foreign policy information;
- Internal personnel practices;
- Information exempted by law;
- Trade secrets or other confidential commercial or financial information;
- Interagency or intra-agency memos;
- Personal information, personnel, or medical files;
- Law enforcement investigatory information;
- Information related to reports on financial institutions; and
- Geological and geophysical information.
Following passage of the FOIA, studies of its operation noted that major problems in obtaining information were bureaucratic delay, the cost of bringing suit to force disclosure, and excessive charges levied by the agencies for finding and providing the requested information. Congress in 1974 amended the act to remove some of the obstacles to public access.
Chief among the provisions of the amendments were those allowing a federal judge to review a decision of the government to classify certain material. Another provision set deadlines for the agency to respond to a request for information under the law. Another amendment permitted judges to order payment of attorneys’ fees and court costs for plaintiffs who won suits brought for information under the act.
As amended in 1974, the act:
- Required federal agencies to publish their indexes of final opinions on settlements of internal cases, policy statements, and administrative staff manuals—or, if the indexes were not published, to furnish them on request to any person for the cost of duplication. The 1966 law simply required agencies to make such indexes available for public inspection and copying.
- Reworded a provision of the 1966 law to require agencies to release unlisted documents to someone requesting them with a reasonable description. This change was to ensure that an agency could not refuse to provide material simply because the applicant could not give its precise title.
- Directed each agency to publish a uniform set of fees for providing documents at the cost of finding and copying them; the amendment allowed waiver or reduction of those fees when in the public interest.
- Empowered federal district courts to order agencies to produce improperly withheld documents—and to examine the contested materials privately (in camera) to determine if they were properly exempted under one of the nine categories. This amendment removed the barrier to court review, which the Supreme Court had pointed out, giving courts the power to hold that a document had been improperly classified and therefore should be released. The government was required to prove that contested material was properly classified.
- Set time limits for agency responses to requests: ten working days for an initial request; twenty working days for an appeal from an initial refusal to produce documents; a possible ten working-day extension that could be granted only once in a single case.
- Set a thirty-day time limit for an agency response to a complaint filed in court under the act, provided that such cases should be given priority attention by the courts at the appeal, as well as at the trial, level.
- Allowed courts to order the government to pay attorneys’ fees and court costs for persons winning suits against them under the act.
- Authorized a court to find an agency employee acted capriciously or arbitrarily in withholding information. Such a finding would set into action Civil Service Commission proceedings to determine the need for disciplinary action. If the commission found such a need, the relevant agency would take the disciplinary action which the commission recommended.
- Amended the wording of the national defense and national security exemption to make clear that it applied only to properly classified information, clarifying congressional intent to allow review of the decision to stamp something “classified.”
- Amended the wording of the law enforcement exemption to allow withholding only of information which, if disclosed, would interfere with enforcement proceedings, deprive someone of a fair trial or hearing, invade personal privacy in an unwarranted way, disclose the identity of a confidential source, disclose investigative techniques, or endanger law enforcement personnel. Also protected from disclosure all information from a confidential source obtained by a criminal law enforcement agency or by an agency conducting a lawful national security investigation.
- Provided that segregable nonexempt portions of requested material be released after deletion of the exempt portions.
- Required an annual agency report to Congress including a list of all agency decisions to withhold information requested under the act, the reasons, the appeals, the results, all relevant rules, the fee schedule, and the names of officials responsible for each denial of information.
- Required an annual report from the attorney general to Congress listing the number of cases arising under the act, the exemption involved in each case, and the disposition, costs, fees, and penalties of each case.
All agencies of the executive branch have issued regulations to implement the Freedom of Information Act, which may be found in the Code of Federal Regulations (consult the general index of the code under “Freedom of Information”).
FOIA and presidential records. During the Nixon administration, Congress enacted legislation to protect presidential papers for historical reason, the Presidential Recordings and Materials Preservation Act of 1974. In 1978, Congress expanded the protection of historic presidential documents by passing the Presidential Records Act, which authorized the preservation of all presidential records and declared public ownership of such documents. Various executive orders have amended public access to presidential documents. In 1989, President Ronald Reagan issued Executive Order 12667, which established policies and procedures governing the assertion of executive privilege by incumbent and former presidents in connection with the release of presidential records by the National Archives and Records Administration pursuant to the Presidential Records Act. In November 2001, President George W. Bush issued Executive Order 13233, which expanded the executive privilege coverage and revoked President Reagan's Executive Order 12667. The move was denounced by open government advocates. Upon his first day in office, Jan. 21, 2009, President Barack Obama issued Executive Order 13489 which revoked Executive Order 13233 and reinstated the text of President Reagan's Executive Order 12667.
Electronic FOIA provisions. The passage of the Electronic Freedom of Information Act of 1996 amended the FOIA by expanding coverage to government information stored electronically. In addition, the act specified that federal data should be placed in electronic form when possible. The 1996 act also set about to improve the public's access to government data by speeding up the time government agencies are allowed to take in responding to a request, and by requiring that indexes of government records be made available to the public.
FOIA and Homeland Security. The Homeland Security Act of 2002, which established the Department of Homeland Security (DHS), granted broad exemption to the FOIA in exchange for the cooperation of private companies in sharing information with the government regarding vulnerabilities in the nation's critical infrastructure. Subtitle B of the act (the Critical Infrastructure Information Act) exempted from the FOIA and other federal and state disclosure requirements any critical infrastructure information that is voluntarily submitted to a covered federal agency for use in the security of critical infrastructure and protected systems, analysis, warning, interdependency study, recovery, reconstitution, or other informational purpose when accompanied by an express statement that such information is being submitted voluntarily in expectation of such nondisclosure protection. The Homeland Security Act required the secretary of DHS to establish specified procedures for the receipt, care, and storage by federal agencies of such critical infrastructure information and to provide criminal penalties for the unauthorized disclosure of such information.
After passage of the Homeland Security Act in 2002, many lawmakers voiced concern that the new law might limit disclosure of some government information. Initial attempts to update the FOIA were not successful in 2003. With Democrats in majority in the 110th Congress, Sen. Patrick Leahy (D-VT) re-introduced the Openness Promotes Effectiveness in Our National (OPEN) Government Act of 2007, on Dec. 14 2007; the president signed it Dec. 31, 2007. The legislation did not include any new information to be released under the FOIA but instead focused on making it easier for the public to make FOIA requests. Among the legislation's provisions:
- Provides definitions of “representative of the news media” and “news” for purposes of request processing fees.
- Provides that, for purposes of awarding attorney fees and litigation costs, a FOIA complainant has substantially prevailed in a legal proceeding to compel disclosure if such complainant obtained relief through either a judicial order or an enforceable written agreement or consent decree; or a voluntary or unilateral change in position by the agency if the complainant's claim is not insubstantial.
- Directs the Attorney General to notify the Special Counsel of civil actions taken for arbitrary and capricious rejections of requests for agency records; and submit annual reports to Congress on such civil actions. Directs the Special Counsel to submit an annual report on investigations of agency rejections of FOIA requests.
- Requires the 20-day period during which an agency must determine whether to comply with a FOIA request to begin on the date the request is received by the appropriate component of the agency, but no later than 10 days after the request is received by any component that is designated to receive FOIA requests in the agency's FOIA regulations. Prohibits the tolling of the 20-day period by the agency (with some exceptions). Prohibits an agency from assessing search or duplication fees if it fails to comply with time limits, provided that no unusual or exceptional circumstances apply to the processing of the request.
- Requires agencies to establish a system to assign an individualized tracking number for each FOIA request received that will take longer than 10 days to process and a telephone line or Internet service that provides information on the status of a request.
- Revises annual reporting requirements on agency compliance with FOIA to require information on: (1) FOIA denials based upon particular statutes; (2) response times; and (3) compliance by the agency and by each principal component thereof.
- Redefines “record” under FOIA to include any information maintained by an agency contractor.
- Establishes within the National Archives and Records Administration (NARA) an Office of Government Information Services to (1) review compliance with FOIA policies; (2) recommend policy changes to Congress and the President; and (3) offer mediation services between FOIA requesters and administrative agencies as a non-exclusive alternative to litigation. Authorizes the office to issue advisory opinions if mediation has not resolved the dispute.
- Requires each agency to designate a chief FOIA officer and authorizes responsibilities for this position.
- Requires the Office of Personnel Management (OPM) to report to Congress on personnel policies related to FOIA.
- Sets forth requirements to describe exemptions authorizing deletions of material provided under FOIA.
Prior to congressional revisions to the FOIA, President George W. Bush issued Executive Order 13392: Improving Agency Disclosure of Information on Dec. 14, 2005 (see p. 853). The order sought to streamline the effectiveness of government agencies in responding to FOIA requests and to reduce backlogs of FOIA requests. The order did not expand the information available under FOIA.
The executive order provided that
- A chief FOIA officer (at the assistant secretary or equivalent level) of each government agency monitor FOIA compliance throughout the agency. The chief FOIA officer was required to inform agency heads and the attorney general of the agency's FOIA compliance performance.
- A FOIA Requester Service Center serve as the first point of contact for a FOIA requester seeking information concerning the status of the person's FOIA request and appropriate information about the agency's FOIA response.
- FOIA public liaisons or supervisory officials facilitate further action if a requester has concerns regarding how an initial request was handled by the center staff.
- The chief FOIA officer review and evaluate the agency's implementation and administration of FOIA pursuant to the executive order. The agency head was mandated to report the findings to the attorney general and to the director of the Office of Management and Budget. The report also must be published on the agency's Web site or in the Federal Register. Annual reports are posted on the Justice Department Web site.
- The attorney general review the agency-specific plans and submit to the president a report on government-wide FOIA implementation.
On December 29, 2009, President Obama signed Executive Order 13526, which prescribes a uniform system for classifying, safeguarding, and declassifying national security information, including information relating to defense against transnational terrorism. It replaces the provisions of previous Executive Order 12958 (signed by President Bill Clinton) and Executive Order 13292 (signed by President George W. Bush). Executive Order 13526 established a National Declassification Center at the National Archives and Records Administration. The center is tasked with clearing the backlog of referrals in reviewed documents both in federal records and in presidential materials.
Congress also addressed transparency and classification regarding information shared among federal, state, local, and tribal agencies and private-sector partners. In 2010, the Reducing Over-Classification Act was enacted to increase transparency, decrease over-classification, and promote information sharing across the federal government and with state, local, tribal, and private sector entities. The legislation was in response to the 9/11 Commission report, which noted that over-classification and inadequate information sharing contributed to the government's failure to prevent the attacks of September 11, 2001.
FOIA and Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to expand federal oversight of financial markets, including trading in derivatives, hedge funds, and municipal bonds. Section 929I of the Dodd-Frank Act exempted the Security and Exchange Commission's (SEC) regulatory and oversight activities from the Freedom of Information Act. The intent was to shield institutional and trade-secret information, such as client lists, from competitors. This was included to cover entities that were not previously subject to SEC regulation, such as hedge funds. Other financial institutions previously regulated by the SEC did enjoy some protections through the FOIA exemption 8, which allows exemption for information “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”
However, critics said the language was too broad and could potentially exempt all of the SEC's regulatory and investigative activity and related documents. The critics garnered bi-partisan support for their position; just three months after the Dodd-Frank Act was signed, Congress passed legislation to repeal the SEC's exemption from disclosing records or information obtained from registered [Page 808]persons pursuant to its regulatory or oversight activities. The legislation broadened the definition of “financial institution” to include new entities that the SEC will regulate under the Dodd-Frank Act to allow for FOIA exemption 8 protections.
The following is the text of the Freedom of Information Act, as amended, as it appears in the U.S. Code, Title 5, Chapter 5, Subchapter II, section 552.
§ 552. Public information; agency rules, opinions, orders, records, and proceedings
- (a) Each agency shall make available to the public information as follows:
- Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection. The amount of information deleted, and the exemption under which the deletion is made, shall be indicated on the released portion of the record, unless including that indication would harm an interest protected by the exemption in this subsection under which the deletion is made. If technically feasible, the amount of the information deleted, and the exemption under which the deletion is made, shall be indicated at the place in the record where such deletion is made.
- (f) For purposes of this section, the term—
- (g) The head of each agency shall prepare and make publicly available upon request, reference material or a guide for requesting records or information from the agency, subject to the exemptions in subsection (b), including—
- (h)(1) There is established the Office of Government Information Services within the National Archives and Records Administration.
- (i) The Government Accountability Office shall conduct audits of administrative agencies on the implementation of this section and issue reports detailing the results of such audits.
- (j) Each agency shall designate a Chief FOIA Officer who shall be a senior official of such agency (at the Assistant Secretary or equivalent level).
- (k) The Chief FOIA Officer of each agency shall, subject to the authority of the head of the agency—
- (l) FOIA Public Liaisons shall report to the agency Chief FOIA Officer and shall serve as supervisory officials to whom a requester under this section can raise concerns about the service the requester has received from the FOIA Requester Center, following an initial response from the FOIA Requester Center Staff. FOIA Public Liaisons shall be responsible for assisting in reducing delays, increasing transparency and understanding of the status of requests, and assisting in the resolution of disputes.
AppendixGovernment in the Sunshine Act
A four-year campaign to open the government to more public scrutiny achieved its goal in 1976, with enactment of legislation requiring most federal agencies to open their meetings to the public.
Called “Government in the Sunshine Act,” the bill (90 Stat. 1241, 5 U.S.C. 552b note) required for the first time that all multiheaded federal agencies—about fifty of them—conduct their business regularly in public session. The unprecedented open-door requirements embraced regulatory agencies, advisory committees, independent offices, the Postal Service—almost all executive branch agencies except the cabinet departments.
The only exception to the rule of openness was for discussion of ten kinds of matters, such as court proceedings or personnel problems, specifically listed in the bill.
A separate section of the legislation also placed a ban on informal—ex parte—contacts between agency officials and interested outsiders to discuss pending agency business. Calling that provision a sleeper, some Washington lawyers suggested that it could have a broad impact on what had come to be an accepted practice in regulatory proceedings.
The final version of the bill represented a victory for advocates of tough open-meeting requirements. The definition of meetings included almost any gathering, formal or informal, of agency members, including conference telephone calls. Agencies also were required to keep transcripts of closed meetings. However, the bill did allow agencies discussing very sensitive matters, such as monetary policy, to keep either minutes or transcripts.
Among its key features, the bill:
- Required all agencies headed by two or more persons, a majority of whom were appointed by the president and confirmed by the Senate, to open all meetings to the public unless a majority voted to close a meeting. (The Environmental Protection Agency is among the single-headed agencies not covered by the act.)
- Defined a meeting as the deliberations of at least the number of members required to take action for an agency where such deliberations determined or resulted in the joint conduct or disposition of agency business.
- Specified that a meeting could be closed only for discussion of the following ten matters: (1) national defense, foreign policy, or matters classified by executive order; (2) agency personnel rules and practices; (3) information required by other laws to be kept confidential; (4) trade secrets or financial or commercial information obtained under a pledge of confidentiality; (5) accusation of a crime or formal censure; (6) information whose disclosure would constitute an unwarranted invasion of personal privacy; (7) certain law enforcement investigatory records; (8) bank examination records and similar financial audits; (9) information whose premature disclosure could lead to significant financial speculation, endanger the stability of a financial institution, or frustrate a proposed agency action; or (10) the agency's involvement in federal or state civil actions or similar legal proceedings where there was a public record.
- Allowed a meeting to be closed by a majority record vote of all members, barring use of proxies; permitted a single vote to be taken to close a series of meetings on the same subject to be held within a thirty-day period.
- Permitted an agency to close a meeting at the request of a person affected by the agency's deliberations if the discussion could be exempted under exemptions 5, 6, or 7.
- Required an agency to disclose its vote to close a meeting within one day of the vote and to make public in advance of a closed meeting a written explanation of the closing, with a list of all persons expected to attend the closed meeting.
- Permitted agencies that regularly must meet in closed session to devise general regulations to expedite closed meetings and exempted such agencies from many procedural requirements for closed meetings.
- Required advance public notice (seven days) of the date, place, subject matter, and open-closed nature of all meetings, as well as the person to contact for information.
- For closings of meetings, required the general counsel or chief legal officer of an agency to certify it was properly closed according to a specific exemption under the bill.
- Required all agencies to keep and make public complete verbatim transcripts of closed meetings, with deletions of material exempted under the act; agencies closing meetings under exemptions 8, 9, or 10 could elect to keep minutes instead of a transcript.
- Provided for district court enforcement and review of the open-meeting requirements and placed the burden of proof in disputes upon the agency; permitted the court to assess an agency found in violation of the act for the plaintiff's attorneys’ fees and court costs and permitted the court to charge a plaintiff for such costs if his suit was found to be “frivolous or dilatory.”
- Allowed federal courts reviewing a non-Sunshine agency action, upon request of a party in the proceeding, to inquire into a Sunshine law violation and afford appropriate relief.
- Specified that the provision of this act would take precedence over the Freedom of Information Act (100 Stat. 3207–48, 5 U.S.C. 552 note) in cases of information requests.
- Required each agency to report annually to Congress the numbers of open and closed meetings, reasons for closings and descriptions of any litigation against an agency under the bill.
- Prohibited ex parte communications between agency officials and outsiders affected by pending agency business, required an official to make public any such contact, and made ex parte communications grounds for ruling against a party in an agency proceeding.
Agencies covered by the act have established their own regulations to implement it. They are required by the act to publish notice of all meetings—open and closed—in the Federal Register.
The following is the text of the Government in the Sunshine Act as it appears in the U.S. Code, Title 5, Chapter 5, Subchapter II, section 552b.
§ 552b. Open meetings
- (a) For purposes of this section—
- (b) Members shall not jointly conduct or dispose of agency business other than in accordance with this section.
- (c) Except as provided in subsection (c), every portion of every meeting of an agency shall be open to public observation. Except in a case where the agency finds that the public interest requires otherwise, the second sentence of subsection (b) shall not apply to any portion of an agency meeting, and the requirements of subsections (d) and (e) shall not apply to any information pertaining to such meeting otherwise required by this section to be disclosed to the public, where the agency properly determines that such portion or portions of its meeting or the disclosure of such information is likely to—
- (d)(1) Action under subsection (c) shall be taken only when a majority of the entire membership of the agency (as defined in subsection (a)(1)) votes to take such action. A separate vote of the agency members shall be taken with respect to each agency meeting, a portion or portions of which are proposed to be closed to the public pursuant to subsection (c), or with respect to any information which is proposed to be withheld under subsection (c). A single vote may be taken with respect to a series of meetings, a portion or portions of which are proposed to be closed to the public, or with respect to any information concerning such series of meetings, so long as each meeting in such series involves the same particular matters and is scheduled to be held no more than thirty days after the initial meeting in such series. The vote of each agency member participating in such vote shall be recorded and no proxies shall be allowed.
- (e)(1) In the case of each meeting, the agency shall make public announcement, at least one week before the meeting, of the time, place, and subject matter of the meeting, whether it is to be open or closed to the public, and the name and phone number of the official designated by the agency to respond to requests for information about the meeting. Such announcement shall be made unless a majority of the members of the agency determines by a recorded vote that agency business requires that such meeting be called at an earlier date, in which case the agency shall make public announcement of the time, place, and subject matter of such meeting, and whether open or closed to the public, at the earliest practicable time.
- (f)(1) For every meeting closed pursuant to paragraphs (1) through (10) of subsection (c), the General Counsel or chief legal officer of the agency shall publicly certify that, in his or her opinion, the meeting may be closed to the public and shall state each relevant exemptive provision. A copy of such certification, together with a statement from the presiding officer of the meeting setting forth the time and place of the meeting, and the persons present, shall be retained by the agency. The agency shall maintain a complete transcript or electronic recording adequate to record fully the proceedings of each meeting, or portion of a meeting, closed to the public, except that in the case of a meeting, or portion of a meeting, closed to the public pursuant to paragraph (8), (9)(A), or (10) of subsection (c), the agency shall maintain either such a transcript or recording, or a set of minutes. Such minutes shall fully and clearly describe all matters discussed and shall provide a full and accurate summary of any actions taken, and the reasons therefore, including a description of each of the views expressed on any item and the record of any roll call vote (reflecting the vote of each member on the question). All documents considered in connection with any action shall be identified in such minutes.
- (g) Each agency subject to the requirements of this section shall, within 180 days after the date of enactment of this section, following consultation with the Office of the Chairman of the Administrative Conference of the United States and published notice in the Federal Register of at least thirty days and opportunity for written comment by any person, promulgate regulations to implement the requirements of subsections (b) through (f) of this section. Any person may bring a proceeding in the United States District Court for the District of Columbia to require an agency to promulgate such regulations if such agency has not promulgated such regulations within the time period specified herein. Subject to any limitations of time provided by law, any person may bring a proceeding in the United States Court of Appeals for the District of Columbia to set aside agency regulations issued pursuant to this subsection that are not in accord with the requirements of subsections (b) through (f) of this section and to require the promulgation of regulations that are in accord with such subsections.
- (h)(1) The district courts of the United States shall have jurisdiction to enforce the requirements of subsections (b) through (f) of this section by declaratory judgment, injunctive relief, or other relief as may be appropriate. Such actions may be brought by any person against an agency prior to, or within sixty days after, the meeting out of which the violation of this section arises, except that if public announcement of such meeting is not initially provided by the agency in accordance with the requirements of this section, such action may be instituted pursuant to this section at any time prior to sixty days after any public announcement of such meeting. Such actions may be brought in the district court of the United States for the district in which the agency meeting is held or in which the agency in question has its headquarters, or in the District Court for the District of Columbia. In such actions a defendant shall serve his answer within thirty days after the service of the complaint. The burden is on the defendant to sustain his action. In deciding such cases the court may examine in camera any portion of the transcript, electronic recording, or minutes of a meeting closed to the public, and may take such additional evidence as it deems necessary. The court, having due regard for orderly administration and the public interest, as well as the interests of the parties, may grant such equitable relief as it deems appropriate, including granting an injunction against future violations of this section or ordering the agency to make available to the public such portion of the transcript, recording, or minutes of a meeting as is not authorized to be withheld under subsection (c) of this section.
- (i) The court may assess against any party reasonable attorney fees and other litigation costs reasonably incurred by any other party who substantially prevails in any action brought in accordance with the provisions of subsection (g) or (h) of this section, except that costs may be assessed against the plaintiff only where the court finds that the suit was initiated by the plaintiff primarily for frivolous or dilatory purposes. In the case of assessment of costs against an agency, the costs may be assessed by the court against the United States.
- (j) Each agency subject to the requirements of this section shall annually report to Congress regarding its compliance with such requirements, including a tabulation of the total number of agency meetings open to the public, the total number of meetings closed to the public, the reasons for closing such meetings, and a description of any litigation brought against the agency under this section, including any costs assessed against the agency in such litigation (whether or not paid by the agency).
- (k) Nothing herein expands or limits the present rights of any person under section 552 of this title, except that the exemptions set forth in subsection (c) of this section shall govern in the case of any request made pursuant to section 552 to copy or inspect the transcripts, recordings, or minutes described in subsection (f) of this section. The requirements of chapter 33 of title 44, United States Code, shall not apply to the transcripts, recordings, and minutes described in subsection (f) of this section.
- (l) This section does not constitute authority to withhold any information from Congress, and does not authorize the closing of any agency meeting or portion thereof required by any other provision of law to be open.
- (m) Nothing in this section authorizes any agency to withhold from any individual any record, including transcripts, recordings, or minutes required by this section, which is otherwise accessible to such individual under section 552a of this title.
The Administrative Conference of the United States was abolished by Congress in 1995; the consultation requirement of this provision was not transferred to any other agency.
AppendixPaperwork Reduction Act
The Paperwork Reduction Act of 1980 (94 Stat. 2812, 44 U.S.C. 101 note) was enacted during the administration of Jimmy Carter on the recommendation of the Commission on Federal Paperwork, which issued a report in 1977 calling for major reforms of federal information collection practices. The act was intended to reduce the burden of federal government paperwork, to ensure that information collected by the federal government was necessary, and to establish uniform federal policies and efficient procedures for the collection, storage, and dissemination of information. It established the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB) to carry out the provisions of the act.
Major provisions of the Paperwork Reduction Act:
- Authorized OMB to develop and implement federal information policies, principles, standards, and guidelines.
- Required agencies to submit to OMB for review and approval any requests for information that will be solicited from ten or more individuals or businesses.
- Provided that agencies must submit to OMB copies of any proposed rule that contains a request for information for review no later than when the rule is published in the Federal Register.
- Established a requirement that requests for information must include a control number issued by OMB and must state why the information is being collected.
- Exempted members of the public from penalties for failing to comply with an information request issued after Dec. 31, 1981, that does not display a current OMB control number.
- Required agencies to designate a senior official to carry out their responsibilities under the act.
- Prohibited agencies from requesting information unless they had determined that: the information is necessary for their mission; it is unavailable elsewhere in the federal government; and they have reduced the burden of the request as much as possible.
- Set a goal for reduction of the paperwork burden by 15 percent by Oct. 1, 1982, and by an additional 10 percent by Oct. 1, 1983.
- Established a Federal Information Locator System at OMB to serve as a directory of information resources and an information referral service.
- Required OMB to complete actions on recommendations of the Commission on Federal Paperwork.
- Authorized OMB to oversee compliance with records management provisions of the act and to coordinate records management policies and programs with information collection policies and programs.
- Permitted OMB to monitor compliance with the Privacy Act and to develop and implement policies concerning information disclosure, confidentiality, and security.
- Authorized OMB to develop policies for automatic data processing and telecommunications within the federal government.
- Required OMB to report to Congress annually on implementation of the act.
The following is the text of the Paperwork Reduction Act as it appears in the U.S. Code, Title 44, Chapter 35, section 3501.
§ 3501. Purpose
The purpose of this chapter is—
- (1) to minimize the Federal paperwork burden for individuals, small businesses, State and local governments, and other persons;
- (2) to minimize the cost to the Federal Government of collecting, maintaining, using, and disseminating information;
- (3) to maximize the usefulness of information collected by the Federal Government;
- (4) to coordinate, integrate and, to the extent practicable and appropriate, make uniform Federal information policies and practices;
- (5) to ensure that automatic data processing and telecommunications technologies are acquired and used by the Federal Government in a manner which improves service delivery and program management, increases productivity, reduces waste and fraud, and, wherever practicable and appropriate, reduces the information processing burden for the Federal Government and for persons who provide information to the Federal Government; and
- (6) to ensure that the collection, maintenance, use and dissemination of information by the Federal Government is consistent with applicable laws relating to confidentiality, including section 552a of title 5, United States Code, known as the Privacy Act….
§ 3503. Office of Information and Regulatory Affairs
- (a) There is established in the Office of Management and Budget an office to be known as the Office of Information and Regulatory Affairs.
- (b) There shall be at the head of the Office an Administrator who shall be appointed by, and who shall report directly to, the Director. The Director shall delegate to the Administrator the authority to administer all functions under this chapter, except that any such delegation shall not relieve the Director of responsibility for the administration of such functions. The Administrator shall serve as principal adviser to the Director on Federal information policy.
§ 3504. Authority and functions of Director
- (a) The Director shall develop and implement Federal information policies, principles, standards, and guidelines and shall provide direction and oversee the review and approval of information collection requests, the reduction of the paperwork burden, Federal statistical activities, records management activities, privacy of records, interagency sharing of information, and acquisition and use of automatic data processing telecommunications, and other technology for managing information resources. The authority under this section shall be exercised consistent with applicable law.
- (b) The general information policy functions of the Director shall include—
- (c) The information collection request clearance and other paperwork control functions of the Director shall include—
- (d) The statistical policy and coordination functions of the Director shall include—
- (e) The records management functions of the Director shall include—
- (f) The privacy functions of the Director shall include—
- (g) The Federal automatic data processing and telecommunications functions of the Director shall include—
- (h)(1) As soon as practicable, but no later than publication of a notice of proposed rulemaking in the Federal Register, each agency shall forward to the Director a copy of any proposed rule which contains a collection of information requirement and upon request, information necessary to make the determination required pursuant to this section.
§ 3505. Assignment of tasks and deadlines
In carrying out the functions under this chapter, the director shall—
- (1) upon enactment of this Act—
- (2) within one year after the effective date of this Act—
- (3) within two years after the effective date of this Act—
§ 3506. Federal agency responsibilities
- (a) Each agency shall be responsible for carrying out its information management activities in an efficient, effective, and economical manner, and for complying with the information policies, principles, standards, and guidelines prescribed by the Director.
- (b) The head of each agency shall designate, within three months after the effective date of this Act, a senior official or, in the case of military departments, and the Office of the Secretary of Defense, officials who report directly to such agency head to carry out the responsibilities of the agency under this chapter. If more than one official is appointed for the military departments the respective duties of the officials shall be clearly delineated.
- (c) Each agency shall—
- (d) The head of each agency shall establish such procedures as necessary to ensure the compliance of the agency with the requirements of the Federal Information Locator System, including necessary screening and compliance activities.
§ 3507. Public information collection activities—submission to Director; approval and delegation
- (a) An agency shall not conduct or sponsor the collection of information unless, in advance of the adoption or revision of the request for collection of such information—
- (b) The Director shall, within sixty days of receipt of a proposed information collection request, notify the agency involved of the decision to approve or disapprove the request and shall make such decisions publicly available. If the Director determines that a request submitted for review cannot be reviewed within sixty days, the Director may, after notice to the agency involved, extend the review period for an additional thirty days. If the Director does not notify the agency of an extension, denial, or approval within sixty days (or, if the Director has extended the review period for an additional thirty days and does not notify the agency of a denial or approval within the time of the extension), a control number shall be assigned without further delay, the approval may be inferred, and the agency may collect the information for not more than one year.
- (c) Any disapproval by the Director, in whole or in part, of a proposed information collection request of an independent regulatory agency, or an exercise of authority under section 3504(h) or 3509 concerning such an agency, may be voided, if the agency by a majority vote of its members overrides the Director's disapproval or exercise of authority. The agency shall certify each override to the Director, shall explain the reasons for exercising the override authority. Where the override concerns an information collection request, the Director shall without further delay assign a control number to such request, and such override shall be valid for a period of three years.
- (d) The Director may not approve an information collection request for a period in excess of three years.
- (e) If the Director finds that a senior official of an agency designated pursuant to section 3506(b) is sufficiently independent of program responsibility to evaluate fairly whether proposed information collection requests should be approved and has sufficient resources to carry out this responsibility effectively, the Director may, by rule in accordance with the notice and comment provisions of chapter 5 of title 5, United States Code, delegate to such official the authority to approve proposed requests in specific program areas, for specific purposes, or for all agency purposes. A delegation by the Director under this section shall not preclude the Director from reviewing individual information collection requests if the Director determines that circumstances warrant such a review. The Director shall retain authority to revoke such delegations, both in general and with regard to any specific matter. In acting for the Director, any official to whom approval authority has been delegated under this section shall comply fully with the rules and regulations promulgated by the Director.
- (f) An agency shall not engage in a collection of information without obtaining from the Director a control number to be displayed upon the information collection request.
- (g) If an agency head determines a collection of information (1) is needed prior to the expiration of the sixty-day period for the review of information collection requests established pursuant to subsection (b), (2) is essential to the mission of the agency, and (3) the agency cannot reasonably comply with the provisions of this chapter within such sixty-day period because (A) public harm will result if normal clearance procedures are followed, or (B) an unanticipated event has occurred and the use of normal clearance procedures will prevent or disrupt the collection of information related to the event or will cause a statutory deadline to be missed, the agency head may request the Director to authorize such collection of information prior to expiration of such sixty-day period. The Director shall approve or disapprove any such authorization request within the time requested by the agency head and, if approved, shall assign the information collection request a control number. Any collection of information conducted pursuant to this subsection may be conducted without compliance with the provisions of this chapter for a maximum of ninety days after the date on which the Director received the request to authorize such collection.
§ 3508. Determination of necessity for information; hearing
Before approving a proposed information collection request, the Director shall determine whether the collection of information by an agency is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility. Before making a determination the Director may give the agency and other interested persons an opportunity to be heard or to submit statements in writing. To the extent, if any, that the Director determines that the collection of information by an agency is unnecessary, for any reason, the agency may not engage in the collection of the information.
§ 3509. Designation of central collection agency
The Director may designate a central collection agency to obtain information for two or more agencies if the [Page 826]Director determines that the needs of such agencies for information will be adequately served by a single collection agency, and such sharing of data is not inconsistent with any applicable law. In such cases the Director shall prescribe (with reference to the collection of information) the duties and functions of the collection agency so designated and of the agencies for which it is to act as agent (including reimbursement for costs). While the designation is in effect, an agency covered by it may not obtain for itself information which it is the duty of the collection agency to obtain. The Director may modify the designation from time to time as circumstances require. The authority herein is subject to the provisions of section 3507(c) of this chapter.
§ 3510. Cooperation of agencies in making information available
- (a) The Director may direct an agency to make available to another agency, or an agency may make available to another agency, information obtained pursuant to an information collection request if the disclosure is not inconsistent with any applicable law.
- (b) If information obtained by an agency is released by that agency to another agency, all the provisions of law (including penalties which relate to the unlawful disclosure of information) apply to the officers and employees of the agency to which information is released to the same extent and in the same manner as the provisions apply to the officers and employees of the agency which originally obtained the information. The officers and employees of the agency to which the information is released, in addition, shall be subject to the same provisions of law, including penalties, relating to the unlawful disclosure of information as if the information had been collected directly by that agency.
§ 3511. Establishment and operation of Federal Information Locator System
- (a) There is established in the Office of Information and Regulatory Affairs a Federal Information Locator System (hereafter in this section referred to as the System) which shall be composed of a directory of information resources, a data element dictionary, and an information referral service. The System shall serve as the authoritative register of all information collection requests.
- (b) In designing and operating the System, the Director shall—
§ 3512. Public protection
Notwithstanding any other provision of law, no person shall be subject to any penalty for failing to maintain or provide information to any agency if the information collection request involved was made after December 31, 1981, and does not display a current control number assigned by the Director, or fails to state that such request is not subject to this chapter.
§ 3513. Director review of agency activities; reporting; agency response
- (a) The Director shall, with the advice and assistance of the Administrator of General Services, selectively review, at least once every three years, the information management activities of each agency to ascertain their adequacy and efficiency. In evaluating the adequacy and efficiency of such activities, the Director shall pay particular attention to whether the agency has complied with section 3506.
- (b) The Director shall report the results of the reviews to the appropriate agency head, the House Committee on Government Operations, the Senate Committee on Governmental Affairs, the House and Senate Committees on Appropriations, and the committees of the Congress having jurisdiction over legislation relating to the operations of the agency involved.
- (c) Each agency which receives a report pursuant to subsection (b) shall, within sixty days after receipt of such report, prepare and transmit to the Director, the House Committee on Government Operations, the Senate Committee on Governmental Affairs, the House and Senate Committees on Appropriations, and the committees of the Congress having jurisdiction over legislation relating to the operations of the agency, a written statement responding to the Director's report, including a description of any measures taken to alleviate or remove any problems or deficiencies identified in such report.
§ 3514. Responsiveness to Congress
- (a) The Director shall keep the Congress and its committees fully and currently informed of the major activities under this chapter, and shall submit a report thereon to the President of the Senate and the Speaker of the House of Representatives annually and at such other times as the Director determines necessary. The Director shall include in any such report—
- (b) The preparation of any report required by this section shall not increase the collection of information burden on persons outside the Federal Government.
§ 3515. Administrative powers
Upon the request of the Director, each agency (other than an independent regulatory agency) shall, to the extent practicable, make its services, personnel, and facilities available to the Director for the performance of functions under this chapter.
§ 3516. Rules and regulations
The Director shall promulgate rules, regulations, or procedures necessary to exercise the authority provided by this chapter.
§ 3517. Consultation with other agencies and the public
In development of information policies, plans, rules, regulations, procedures, and guidelines and in reviewing information collection requests, the Director shall provide interested agencies and persons early and meaningful opportunity to comment.
§ 3518. Effect on existing laws and regulations
- (a) Except as otherwise provided in this chapter, the authority of an agency under any other law to prescribe policies, rules, regulations, and procedures for Federal information activities is subject to the authority conferred on the Director by this chapter.
- (b) Nothing in this chapter shall be deemed to affect or reduce the authority of the Secretary of Commerce or the Director of the Office of Management and Budget pursuant to Reorganization Plan No. 1 of 1977 (as amended) and Executive order, relating to telecommunications and information policy, procurement and management of telecommunications and information systems, spectrum use, and related matters.
- (c)(1) Except as provided in paragraph (2), this chapter does not apply to the collection of information—
- (A) during the conduct of a Federal criminal investigation or prosecution, or during the disposition of a particular criminal matter;
- (B) during the conduct of (i) a civil action to which the United States or any official or agency thereof is a party or (ii) an administrative action or investigation involving an agency against specific individuals or entities;
- (C) by compulsory process pursuant to the Antitrust Civil Process Act and section 13 of the Federal Trade Commission Improvements Act of 1980; or
- (D) during the conduct of intelligence activities as defined in section 4–206 of Executive Order 12036, issued January 24, 1978, or successor orders, or during the conduct of cryptologic activities that are communications security activities.
- (2) This chapter applies to the collection of information during the conduct of general investigations (other than information collected in an antitrust investigation to the extent provided in subparagraph (C) of paragraph (1)) undertaken with reference to a category of individuals or entities such as a class of licensees or an entire industry.
- (d) Nothing in this chapter shall be interpreted as increasing or decreasing the authority conferred by Public Law 89–306 on the Administrator of the General Services Administration, the Secretary of Commerce, or the Director of the Office of Management and Budget.
- (e) Nothing in this chapter shall be interpreted as increasing or decreasing the authority of the President, the Office of Management and Budget or the Director thereof, under the laws of the United States, with respect to the substantive policies and programs of departments, agencies and offices, including the substantive authority of any Federal agency to enforce the civil rights laws.
§ 3519. Access to information
Under the conditions and procedures prescribed in section 313 of the Budget and Accounting Act of 1921, as amended, the Director and personnel in the Office of Information and Regulatory Affairs shall furnish such information as the Comptroller General may require for the discharge of his responsibilities. For this purpose, the Comptroller General or representatives thereof shall have access to all books, documents, papers and records of the Office.
§ 3520. Authorization of appropriations
There are hereby authorized to be appropriated to carry out the provisions of this chapter, and for no other purpose, sums—
- (b) The item relating to chapter 35 in the table of chapters for such title is amended to read as follows: “35. Coordination of Federal Information Policy.”
- (c)(1) Section 2904(10) of such title is amended to read as follows:
- (2) Section 2905 of such title is amended by redesignating the text thereof as subsection (a) and by adding at the end of such section the following new subsection: “(b) The Administrator of General Services shall assist the Administrator for the Office of Information and Regulatory Affairs in conducting studies and developing standards relating to record retention requirements imposed on the public and on State and local governments by Federal agencies.”
- SEC. 3. (a) The President and the Director of the Office of Management and Budget shall delegate to the Administrator for the Office of Information and Regulatory Affairs all functions, authority, and responsibility under section 103 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 18b).
- (b) The Director of the Office of Management and Budget shall delegate to the Administrator for the Office of Information and Regulatory Affairs all functions, authority, and responsibility of the Director under section 552a of title 5, United States Code, under Executive Order 12046 and Reorganization Plan No. 1 for telecommunications, and under section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759).
- SEC. 4. (a) Section 400A of the General Education Provisions Act is amended by (1) striking out “and” after “institutions” in subsection (a)(1)(A) and inserting in lieu thereof “or,” and (2) by amending subsection (a)(3)(B) to read as follows:
- (b) Section 201(e) of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1211) is repealed.
- (c) Section 708(f) of the Public Health Service Act (42 U.S.C. 292h(f)) is repealed.
- (d) Section 5315 of title 5, United States Code, is amended by adding at the end thereof the following:
“Administrator, Office of Information and Regulatory
Affairs, Office of Management and Budget.”
SEC. 5. This Act shall take effect on April 1, 1981.
Approved December 11, 1980.
While the Freedom of Information Act was designed to provide the public access to agency documents and proceedings, the 1974 Privacy Act (88 Stat. 1896, 5 U.S.C. 552a note) was designed to give individuals an opportunity to find out what files the government has about them and to challenge, correct, or amend the material. In addition, provisions of the act were designed to protect individual privacy by preventing a person from looking at records involving another individual. The Privacy Act only protects U.S. citizens and permanent residents.
The Privacy Act authorizes the director of the Office of Management and Budget to develop and, after notice and opportunity for public comment, prescribe guidelines and regulations for the use of agencies in implementing the provisions of this section. All executive branch agencies have developed their own regulations and procedures for handling the act (consult the Code of Federal Regulations under “Privacy Act”), and each agency publishes its procedures for appeal following the denial of a request.
Major provisions of the Privacy Act:
- Permitted an individual access to personal information contained in federal agency files and to correct or amend the information.
- Prevented an agency maintaining a file on an individual from using it or making it available to another agency for a second purpose without the individual's consent.
- Required agencies to maintain records that were necessary and lawful as well as current and accurate and to disclose the existence of all data banks and files they maintain containing information on individuals.
- Prohibited agencies from keeping records that described an individual's exercise of First Amendment rights unless the records were authorized by statute or approved by the individual or were within the scope of an official law enforcement activity.
- Permitted an individual to seek injunctive relief to correct or amend a record maintained by an agency and permitted the individual to recover actual damages when an agency acted in a negligent manner that was “willful or intentional.”
- Provided that an officer or employee of an agency who willfully violated provisions of the act should be subject to a fine of not more than $5,000.
- Exempted from disclosure provisions: records maintained by the Central Intelligence Agency; records maintained by law enforcement agencies; Secret Service records; statistical information; names of persons providing material used for determining the qualification of an individual for federal government service; federal testing material; and National Archives historical records.
- Prohibited an agency from selling or renting an individual's name or address for mailing list use.
- Required agencies to submit to Congress and to the Office of Management and Budget any plan to establish or alter any system of records.
- Established a privacy protection study commission composed of seven members to provide Congress and the president information about problems related to privacy in the public and private sectors. The commission issued a report in 1977, Personal Privacy in an Information Society.
- Made it illegal for any federal, state, or local agency to deny an individual any benefit provided by law because he refused to disclose his Social Security account number to the agency. (The provision did not apply to disclosure required by federal statute or to government agencies requiring disclosure of the number before Jan. 1, 1975.)
The Computer Matching and Privacy Protection Act of 1988 amended the Privacy Act by adding new provisions regulating the use of computer matching of records maintained by the government. Computer matching is the computerized comparison of databases to determine the status, rights, or benefits of the individuals within those systems of records. Computer matching allows federal, state, and local government agencies to compare computerized information about individuals for the purpose of determining eligibility for federal benefit programs. Every agency that uses a matching program must have a Data Integrity Board. The Data Integrity Board reviews and approves the data matching agreements to [Page 830]ensure that the agency is in compliance with laws, guidelines, and regulations.
Following the 2001 terrorist attacks, Congress enacted two laws that affected privacy issues: the Homeland Security Act of 2002 and the USA Patriot Act.
The USA Patriot Act amended the federal criminal code to authorize the interception of wire, oral, and electronic communications for the production of evidence of specified chemical weapons or terrorism offenses and computer fraud and abuse. The act also amended the Foreign Intelligence Surveillance Act of 1978 (FISA) to require an application for an electronic surveillance order or search warrant to certify that a significant purpose (formerly, the sole or main purpose) of the surveillance was to obtain foreign intelligence information.
Some provisions of the USA Patriot Act were set to expire at the end of 2005. After a lengthy battle Congress voted to reauthorize the Patriot Act with some of the more controversial provisions intact, including the FISA amendments and the electronic wiretap provisions. Civil libertarians were concerned over four provisions: sections 206 (roving wiretaps), 213 (delayed notice warrants), 215 (business records), and 505 (national security letters). The Senate addressed some of these concerns in a separate bill, USA Patriot Act Additional Reauthorizing Amendments Act of 2006. On March 9, 2006, President George W. Bush signed into law the USA Patriot Improvement and Reauthorization Act of 2005 as well as the USA Patriot Act Additional Reauthorizing Amendments Act of 2006.
The reauthorized Patriot Act allows for greater congressional oversight and judicial review of section 215 orders, section 206 roving wiretaps, and national security letters. In addition, the act includes requirements for high-level approval for section 215 FISA orders for library, bookstore, firearm sale, medical, tax return, and educational records. The act also provides for greater judicial review for delayed notice (“sneak and peak”) search warrants. Fourteen of sixteen Patriot Act provisions were made permanent, with a sunset date of Dec. 31, 2009, for sections 206 and 215.
On May 26, 2011, President Barack Obama signed PATRIOT Sunsets Extension Act of 2011. This extended provisions concerning roving electronic surveillance orders and requests for the production of business records and other tangible items, as well as a provision revising the definition of an “agent of a foreign power” to include any non-U.S. person who engages in international terrorism or preparatory activities (“lone wolf” provision). These extensions expire June 1, 2015.
Consistent with the authority granted to U.S. Customs and Border Protection (CBP) under the Aviation and Transportation Security Act of 2001 and its interim implementing regulations, each air carrier operating passenger flights in foreign air transportation to or from the United States must provide CBP with electronic access to passenger name record (PNR) data to the extent it is collected and contained in the air carrier's automated reservation and departure control systems for each person traveling to and from the United States.
After working through privacy concerns, President George W. Bush signed agreements in May 2004 with the European Union (EU) to exchange PNR data collected by airlines. The agreement took into account the privacy laws of both the United States and the EU. However, the European Court of Justice struck down the agreement in 2006 based on technical issues not pertaining to privacy.
In 2007 the Bush administration negotiated another agreement that collected less data on individuals. After the agreement was signed, the Department of Homeland Security (DHS) published Privacy Act system of records notice (SORN) for the Arrival and Departure Information System (ADIS), claiming exemption from certain requirements of the Privacy Act for ADIS. DHS stated these exemptions were needed to protect information relating to DHS investigatory and enforcement activities from disclosure to subjects or others related to these activities. In December 2008 the DHS published an additional SORN for legacy records for the Immigration and Customs Enforcement (ICE) Search, Arrest, and Seizure Records system of records. Although these DHS SORN national security and law enforcement exemptions are routine and covered under the Privacy Act, civil libertarians in the United States and abroad expressed concern over the amount of information being collected, the length the information was being held, and the inability of individuals to access information about themselves.
The following is the text of the Privacy Act, as amended, as it appears in the U.S. Code, Title 5, Chapter 5, Subchapter II, section 552a.
§ 552a. Records maintained on individuals
For purposes of this section—
- (1) the term “agency” means agency as defined in section 552(e) of this title;
- (2) the term “individual” means a citizen of the United States or an alien lawfully admitted for permanent residence;
- (3) the term “maintain” includes maintain, collect, use, or disseminate;
- (4) the term “record” means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or photograph;
- (5) the term “system of records” means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual;
- (6) the term “statistical record” means a record in a system of records maintained for statistical research or reporting purposes only and not used in whole or in part in making any determination about an identifiable individual, except as provided by section 8 of title 13;
- (7) the term “routine use” means, with respect to the disclosure of a record, the use of such record for a purpose which is compatible with the purpose for which it was collected.
- (8) the term “matching program”—
- (9) the term “recipient agency” means any agency, or contractor thereof, receiving records contained in a system of records from a source agency for use in a matching program;
- (10) the term “non-Federal agency” means any State or local government, or agency thereof, which receives records contained in a system of records from a source agency for use in a matching program;
- (11) the term “source agency” means any agency which discloses records contained in a system of records to be used in a matching program, or any State or local government, or agency thereof, which discloses records to be used in a matching program;
- (12) the term “Federal benefit program” means any program administered or funded by the Federal Government, or by any agent or State on behalf of the Federal Government, providing cash or in-kind assistance in the form of payments, grants, loans, or loan guarantees to individuals; and
- (13) the term “Federal personnel” means officers and employees of the Government of the United States, members of the uniformed services (including members of the Reserve Components), individuals entitled to receive immediate or deferred retirement benefits under any retirement program of the Government of the United States (including survivor benefits).
(b) Conditions of disclosure
No agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains, unless disclosure of the record would be—
- (1) to those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties;
- (2) required under section 552 of this title;
- (3) for a routine use as defined in subsection (a)(7) of this section and described under subsection (e)(4)(D) of this section;
- (4) to the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13;
- (5) to a recipient who has provided the agency with advance adequate written assurance that the record will be used solely as a statistical research or reporting record, and the record is to be transferred in a form that is not individually identifiable;
- (6) to the National Archives and Records Administration as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Archivist of the United States or the designee of the Archivist to determine whether the record has such value;
- (7) to another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which maintains the record specifying the particular portion desired and the law enforcement activity for which the record is sought;
- (8) to a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if upon such disclosure notification is transmitted to the last known address of such individual;
- (9) to either House of Congress, or, to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee;
- (10) to the Comptroller General, or any of his authorized representatives, in the course of the performance of the duties of the Government Accounting Office;
- (11) pursuant to the order of a court of competent jurisdiction; or
- (12) to a consumer reporting agency in accordance with section 3711(e) of Title 31.
- (c) Accounting of certain disclosures
- Each agency, with respect to each system of records under its control, shall—
- (1) except for disclosures made under subsections (b)(1) or (b)(2) of this section, keep an accurate accounting of—
- (2) retain the accounting made under paragraph (1) of this subsection for at least five years or the life of the record, whichever is longer, after the disclosure for which the accounting is made;
- (3) except for disclosures made under subsection (b)(7) of this section, make the accounting made under paragraph (1) of this subsection available to the individual named in the record at his request; and
- (4) inform any person or other agency about any correction or notation of dispute made by the agency in accordance with subsection (d) of this section of any record that has been disclosed to the person or agency if an accounting of the disclosure was made.
(d) Access to records
Each agency that maintains a system of records shall—
- (1) upon request by any individual to gain access to his record or to any information pertaining to him which is contained in the system, permit him and upon his request, a person of his own choosing to accompany him, to review the record and have a copy made of all or any portion thereof in a form comprehensible to him, except that the agency may require the individual to furnish a written statement authorizing discussion of that individual's record in the accompanying person's presence;
- (2) permit the individual to request amendment of a record pertaining to him and—
- (3) permit the individual who disagrees with the refusal of the agency to amend his record to request a review of such refusal, and not later than thirty days (excluding Saturdays, Sundays, and legal public holidays) from the date on which the individual requests such review, complete such review and make a final determination unless, for good cause shown, the head of the agency extends such thirty-day period; and if, after his review, the reviewing official also refuses to amend the record in accordance with the request, permit the individual to file with the agency a concise statement setting forth the reasons for his disagreement with the refusal of the agency, and notify the individual of the provisions for judicial review of the reviewing official's determination under subsection (g)(1)(A) of this section;
- (4) in any disclosure, containing information about which the individual has filed a statement of disagreement, occurring after the filing of the statement under paragraph (3) of this subsection, clearly note any portion of the record which is disputed and provide copies of the statement and, if the agency deems it appropriate, copies of a concise statement of the reasons of the agency for not making the amendments requested, to persons or other agencies to whom the disputed record has been disclosed; and
- (5) nothing in this section shall allow an individual access to any information compiled in reasonable anticipation of a civil action or proceeding.
(e) Agency requirements
Each agency that maintains a system of records shall—
- (1) maintain in its records only such information about an individual as is relevant and necessary to accomplish a purpose of the agency required to be accomplished by statute or by executive order of the President;
- (2) collect information to the greatest extent practicable directly from the subject individual when the information may result in adverse determinations about an individual's rights, benefits, and privileges under Federal programs;
- (3) inform each individual whom it asks to supply information, on the form which it uses to collect the information or on a separate form that can be retained by the individual—
- (4) subject to the provisions of paragraph (11) of this subsection, publish in the Federal Register upon establishment or revision a notice of the existence and character of the system of records, which notice shall include—
- (p) Verification and Opportunity to Contest Findings
- (3) Notwithstanding paragraph (1), an agency may take any appropriate action otherwise prohibited by such paragraph if the agency determines that the public health or public safety may be adversely affected or significantly threatened during any notice period required by such paragraph.
- (1) Notwithstanding any other provision of law, no source agency may disclose any record which is contained in a system of records to a recipient agency or non-Federal agency for a matching program if such source agency has reason to believe that the requirements of subsection (p), or any matching agreement entered into pursuant to subsection (o), or both, are not being met by such recipient agency.
- (2) No source agency may renew a matching agreement unless—
(r) Report on new systems and matching programs
Each agency that proposes to establish or make a significant change in a system of records or a matching program shall provide adequate advance notice of any such proposal (in duplicate) to the Committee on Government Operations of the House of Representatives, the Committee on Governmental Affairs of the Senate, and the Office of Management and Budget in order to permit an evaluation of the probable or potential effect of such proposal on the privacy or other rights of individuals.
(s) Biennial report
The President shall biennially submit to the Speaker of the House of Representatives and the President pro tempore of the Senate a report
- (1) describing the actions of the Director of the Office of Management and Budget pursuant to section 6 of the Privacy Act of 1974 during the preceding two years;
- (2) describing the exercise of individual rights of access and amendment under this section during such years;
- (3) identifying changes in or additions to systems of records;
- (4) containing such other information concerning administration of this section as may be necessary or useful to the Congress in reviewing the effectiveness of this section in carrying out the purposes of the Privacy Act of 1974.
(t) Effect of Other Laws
- (1) No agency shall rely on any exemption contained in section 552 of this title to withhold from an individual any record which is otherwise accessible to such individual under the provisions of this section.
- (2) No agency shall rely on any exemption in this section to withhold from an individual any record which is otherwise accessible to such individual under the provisions of section 552 of this title.
(u) Data Integrity Boards
- (1) Every agency conducting or participating in a matching program shall establish a Data Integrity Board to oversee and coordinate among the various components of such agency the agency's implementation of this section.
- (2) Each Data Integrity Board shall consist of senior officials designated by the head of the agency, and shall include any senior official designated by the head of the agency as responsible for implementation of this section, and the inspector general of the agency, if any. The inspector general shall not serve as chairman of the Data Integrity Board.
- (3) Each Data Integrity Board—
- (4)(A) Except as provided in subparagraphs (B) and (C), a Data Integrity Board shall not approve any written agreement for a matching program unless the agency has completed and submitted to such Board a cost-benefit analysis of the proposed program and such analysis demonstrates that the program is likely to be cost effective.
- (5)(A) If a matching agreement is disapproved by a Data Integrity Board, any party to such agreement may appeal the disapproval to the Director of the Office of Management and Budget. Timely notice of the filing of such an appeal shall be provided by the Director of the Office of Management and Budget to the Committee on Governmental Affairs of the Senate and the Committee on Government Operations of the House of Representatives.
- (6) In the reports required by paragraph (3)(D), agency matching activities that are not matching programs may be reported on an aggregate basis, if and to the extent necessary to protect ongoing law enforcement or counterintelligence investigations.
(v) Office of Management and Budget Responsibilities
The Director of the Office of Management and Budget shall—
- (1) develop and, after notice and opportunity for public comment, prescribe guidelines and regulations for the use of agencies in implementing the provisions of this section; and
- (2) provide continuing assistance to and oversight of the implementation of this section by agencies.
AppendixExecutive OrdersExecutive Order 12044
(Revoked Feb. 17, 1981)Improving Government Regulations
As President of the United States of America, I direct each Executive Agency to adopt procedures to improve existing and future regulations.
Section 1. Policy. Regulations shall be as simple and clear as possible. They shall achieve legislative goals effectively and efficiently. They shall not impose unnecessary burdens on the economy, on individuals, on public or private organizations, or on State and local governments.
To achieve these objectives, regulations shall be developed through a process which ensures that:
- (a) the need for and purposes of the regulation are clearly established;
- (b) heads of agencies and policy officials exercise effective oversight;
- (c) opportunity exists for early participation and comment by other Federal agencies, State and local governments, businesses, organizations and individual members of the public;
- (d) meaningful alternatives are considered and analyzed before the regulation is issued; and
- (e) compliance costs, paperwork and other burdens on the public are minimized.
Sec. 2. Reform of the Process for Developing Significant Regulations. Agencies shall review and revise their procedures for developing regulations to be consistent with the policies of this Order and in a manner that minimizes paperwork.
Agencies’ procedures should fit their own needs but, at a minimum, these procedures shall include the following:
- (a) Semiannual Agenda of Regulations. To give the public adequate notice, agencies shall publish at least semiannually an agenda of significant regulations under development or review. On the first Monday in October, each agency shall publish in the Federal Register a schedule showing the times during the coming fiscal year when the agency's semiannual agenda will be published. Supplements to the agenda may be published at other times during the year if necessary, but the semiannual agendas shall be as complete as possible. The head of each agency shall approve the agenda before it is published.
- At a minimum, each published agenda shall describe the regulations being considered by the agency, the need for and the legal basis for the action being taken, and the status of regulations previously listed on the agenda.
- Each item on the agenda shall also include the name and telephone number of a knowledgeable agency official and, if possible, state whether or not a regulatory analysis will be required. The agenda shall also include existing regulations scheduled to be reviewed in accordance with Section 4 of this Order.
- (b) Agency Head Oversight. Before an agency proceeds to develop significant new regulations, the agency head shall have reviewed the issues to be considered, the alternative approaches to be explored, a tentative plan for obtaining public comment, and target dates for completion of steps in the development of the regulation.
- (c) Opportunity for Public Participation. Agencies shall give the public an early and meaningful opportunity to participate in the development of agency regulations. They shall consider a variety of ways to provide this opportunity, including (1) publishing an advance notice of proposed rulemaking; (2) holding open conferences or public hearings; (3) sending notices of proposed regulations to publications likely to be read by those affected; and (4) notifying interested parties directly.
- Agencies shall give the public at least 60 days to comment on proposed significant regulations. In the few instances where agencies determine this is not possible, the regulation shall be accompanied by a brief statement of the reasons for a shorter time period.
- (d) Approval of Significant Regulations. The head of each agency, or the designated official with statutory responsibility, shall approve significant regulations before they are published for public comment in the Federal Register. At a minimum, this official should determine that:
- (e) Criteria for Determining Significant Regulations. Agencies shall establish criteria for identifying which regulations are significant. Agencies shall consider among other things: (1) the type and number of individuals, businesses, organizations, State and local governments affected; (2) the compliance and reporting requirements likely to be involved; (3) direct and indirect effects of the regulation including the effect on competition; and (4) the relationship of the regulations to those of other programs and agencies. Regulations that do not meet an agency's criteria for determining significance shall be accompanied by a statement to that effect at the time the regulation is proposed.
Sec. 3. Regulatory Analysis. Some of the regulations identified as significant may have major economic consequences for the general economy, or for individual industries, geographical regions or levels of government. For these regulations, agencies shall prepare a regulatory analysis. Such an analysis shall involve a careful examination of alternative approaches early in the decision-making process.
The following requirements shall govern the preparation of regulatory analyses:
- (a) Criteria. Agency heads shall establish criteria for determining which regulations require regulatory analyses. The criteria established shall:
- (b) Procedures. Agency heads shall establish procedures for developing the regulatory analysis and obtaining public comment.
Regulatory analyses shall not be required in rulemaking proceedings pending at the time this Order is issued if an Economic Impact Statement has already been prepared in accordance with Executive Orders 11821 and 11949.
Sec. 4. Review of Existing Regulations. Agencies shall periodically review their existing regulations to determine whether they are achieving the policy goals of this Order. This review will follow the same procedural steps outlined for the development of new regulations.
In selecting regulations to be reviewed, agencies shall consider such criteria as:
- (a) the continued need for the regulation;
- (b) the type and number of complaints or suggestions received;
- (c) the burdens imposed on those directly or indirectly affected by the regulations;
- (d) the need to simplify or clarify language;
- (e) the need to eliminate overlapping and duplicative regulations; and
- (f) the length of time since the regulation has been evaluated or the degree to which technology, economic conditions or other factors have changed in the area affected by the regulation.
Agencies shall develop their selection criteria and a listing of possible regulations for initial review. The criteria and listing shall be published for comment as required in Section 5. Subsequently, regulations selected for review shall be included in the semiannual agency agendas.
Sec. 5. Implementation.
- (a) Each agency shall review its existing process for developing regulations and revise it as needed to comply with this Order. Within 60 days after the issuance of the Order, each agency shall prepare a draft report outlining (1) a brief description of its process for developing regulations and the changes that have been made to comply with this Order; (2) its proposed criteria for defining significant agency regulations; (3) its proposed criteria for identifying which regulations require regulatory analysis; and (4) its proposed criteria for selecting existing regulations to be reviewed and a list of regulations that the agency will consider for its initial review. This report shall be published in the Federal Register for public comment. A copy of this report shall be sent to the Office of Management and Budget.
- (b) After receiving public comment, agencies shall submit their revised report to the Office of Management and Budget for approval before final publication in the Federal Register.
- (c) The Office of Management and Budget shall assure the effective implementation of this Order. OMB shall report at least semiannually to the President on the effectiveness of the Order and agency compliance with its provisions. By May 1, 1980, OMB shall recommend to the President whether or not there is a continued need for the Order and any further steps or actions necessary to achieve its purpose.
Sec. 6. Coverage.
- (a) As used in this Order, the term regulation means both rules and regulations issued by agencies including those which establish conditions for financial assistance. Closely related sets of regulations shall be considered together.
- (b) This Order does not apply to:
Sec. 7. This Order is intended to improve the quality of Executive Agency regulatory practices. It is not intended to create delay in the process or provide new grounds for judicial review. Nothing in this order shall be considered to supersede existing statutory obligations governing rulemaking.
Sec. 8. Unless extended, this Executive Order expires on June 30, 1980.
The White House, March 23, 1978.Executive Order 12291
(Revoked Sept. 30, 1993)Federal Regulation
By the authority vested in me as President by the Constitution and laws of the United States of America, and in order to reduce the burdens of existing and future regulations, increase agency accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and insure well-reasoned regulations, it is hereby ordered as follows:
Section 1. Definitions. For the purposes of this Order:
- (a) “Regulation” or “rule” means an agency statement of general applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the procedure or practice requirements of an agency, but does not include:
- (b) “Major rule” means any regulation that is likely to result in:
- (c) “Director” means the Director of the Office of Management and Budget.
- (d) “Agency” means any authority of the United States that is an “agency” under 44 U.S.C. 3502(1), excluding those agencies specified in 44 U.S.C. 3502(10).
- (e) “Task Force” means the Presidential Task Force on Regulatory Relief.
Sec. 2. General Requirements. In promulgating new regulations, reviewing existing regulations, and developing legislative proposals concerning regulation, all agencies, to the extent permitted by law, shall adhere to the following requirements:
- (a) Administrative decisions shall be based on adequate information concerning the need for and consequences of proposed government action;
- (b) Regulatory action shall not be undertaken unless the potential benefits to society from the regulation outweigh the potential costs to society;
- (c) Regulatory objectives shall be chosen to maximize the net benefits to society;
- (d) Among alternative approaches to any given regulatory objective, the alternative involving the least net cost to society shall be chosen; and
- (e) Agencies shall set regulatory priorities with the aim of maximizing the aggregate net benefits to society, taking into account the condition of the particular industries affected by regulations, the condition of the national economy, and other regulatory actions contemplated for the future.
Sec. 3. Regulatory Impact Analysis and Review.
- (a) In order to implement Section 2 of this Order, each agency shall, in connection with every major rule, prepare, and to the extent permitted by law consider, a Regulatory Impact Analysis. Such Analyses may be combined with any Regulatory Flexibility Analyses performed under 5 U.S.C. 603 and 604.
- (b) Each agency shall initially determine whether a rule it intends to propose or to issue is a major rule, provided that, the Director, subject to the direction of the Task Force, shall have authority, in accordance with Sections 1(b) and 2 of this Order, to prescribe criteria for making such determinations, to order a rule to be treated as a major rule, and to require any set of related rules to be considered together as a major rule.
- (c) Except as provided in Section 8 of this Order, agencies shall prepare Regulatory Impact Analyses of major rules and transmit them, along with all notices of proposed rulemaking and all final rules, to the Director as follows:
- (d) To permit each proposed major rule to be analyzed in light of the requirements stated in Section 2 of this Order, each preliminary and final Regulatory Impact Analysis shall contain the following information:
- (e)(1) The Director, subject to the direction of the Task Force, which shall resolve any issues raised under this Order or ensure that they are presented to the President, is authorized to review any preliminary or final Regulatory Impact Analysis, notice of proposed rulemaking, or final rule based on the requirements of this Order.
- (f)(1) Upon the request of the Director, an agency shall consult with the Director concerning the review of a preliminary Regulatory Impact Analysis or notice of proposed rulemaking under this Order, and shall, subject to Section 8(a)(2) of this Order, refrain from publishing its preliminary Regulatory Impact Analysis or notice of proposed rulemaking until such review is concluded.
- (g) For every rule for which an agency publishes a notice of proposed rulemaking, the agency shall include in its notice:
- (h) Agencies shall make their preliminary and final Regulatory Impact Analyses available to the public.
- (i) Agencies shall initiate reviews of currently effective rules in accordance with the purposes of this Order, and perform Regulatory Impact Analyses of currently effective major rules. The Director, subject to the direction of the Task Force, may designate currently effective rules for review in accordance with this Order, and establish schedules for reviews and Analyses under this Order.
Sec. 4. Regulatory Review. Before approving any final major rule, each agency shall:
- (a) Make a determination that the regulation is clearly within the authority delegated by law and consistent with congressional intent, and include in the Federal Register at the time of promulgation a memorandum of law supporting that determination.
- (b) Make a determination that the factual conclusions upon which the rule is based have substantial support in the agency record, viewed as a whole, with full attention to public comments in general and the comments of persons directly affected by the rule in particular.
Sec. 5. Regulatory Agendas.
- (a) Each agency shall publish, in October and April of each year, an agenda of proposed regulations that the agency has issued or expects to issue, and currently effective rules that are under agency review pursuant to this Order. These agendas may be incorporated with the agendas published under 5 U.S.C. 602, and must contain at the minimum:
- (b) The Director, subject to the direction of the Task Force, may, to the extent permitted by law:
Sec. 6. The Task Force and Office of Management and Budget.
- (a) To the extent permitted by law, the Director shall have authority, subject to the direction of the Task Force, to:
- (b) The Director, subject to the direction of the Task Force, is authorized to establish procedures for the performance of all functions vested in the Director by this Order. The Director shall take appropriate steps to coordinate the implementation of the analysis, transmittal, review, and clearance provisions of this Order with the authorities and requirements provided for or imposed upon the Director and agencies under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., and the Paperwork Reduction Plan Act of 1980, 44 U.S.C. 3501 et seq.
Sec. 7. Pending Regulations.
- (a) To the extent necessary to permit reconsideration in accordance with this Order, agencies shall, except as provided in Section 8 of this Order, suspend or postpone the effective dates of all major rules that they have promulgated in final form as of the date of this Order, but that have not yet become effective, excluding:
- (b) Agencies shall report to the Director no later than 15 days prior to the effective date of any rule that the agency has promulgated in final form as of the date of this Order, and that has not yet become effective, and that will not be reconsidered under subsection (a) of this Section:
- (c) The Director, subject to the direction of the Task Force, is authorized, to the extent permitted by law, to:
- (d) Agencies may, in accordance with the Administrative Procedure Act and other applicable statutes, permit major rules that they have issued in final form as of the date of this Order, and that have not yet become effective, to take effect as interim rules while they are being reconsidered in accordance with this Order, provided that, agencies shall report to the Director, no later than 15 days before any such rule is proposed to take effect as an interim rule, that the rule should appropriately take effect as an interim rule while the rule is under reconsideration.
- (e) Except as provided in Section 8 of this Order, agencies shall, to the extent permitted by law, refrain from promulgating as a final rule any proposed major rule that has been published or issued as of the date of this Order until a final Regulatory Impact Analysis, in accordance with Section 3 of this Order, has been prepared for the proposed major rule.
- (f) Agencies shall report to the Director, no later than 30 days prior to promulgating as a final rule any proposed rule that the agency has published or issued as of the date of this Order and that has not been considered under the terms of this Order:
- (g) The Director, subject to the direction of the Task Force, is authorized, to the extent permitted by law, to:
- (h) The Director shall be deemed to have determined that an agency's report to the Director under subsections (b), (d), or (f) of this Section is consistent with the purposes of this Order, unless the Director advises the agency to the contrary:
- (i) This Section does not supersede the President's Memorandum of January 29, 1981, entitled “Postponement of Pending Regulations,” which shall remain in effect until March 30, 1981.
- (j) In complying with this Section, agencies shall comply with all applicable provisions of the Administrative Procedure Act, and with any other procedural requirements made applicable to the agencies by other statutes.
Sec. 8. Exemptions.
- (a) The procedures prescribed by this Order shall not apply to:
- (b) The Director, subject to the direction of the Task Force, may, in accordance with the purposes of this Order, exempt any class or category of regulations from any or all requirements of this Order.
Sec. 9. Judicial Review. This Order is intended only to improve the internal management of the Federal government, and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers or any person. The determinations made by agencies under Section 4 of this Order, and any Regulatory Impact Analyses for any rule, shall be made part of the whole record of agency action in connection with the rule.
Sec. 10. Revocations. Executive Orders No. 12044, as amended, and No. 12174 are revoked.
The White House,
February 17, 1981.Executive Order 12498
(Revoked Sept. 30, 1993)Regulatory Planning Process
By the authority vested in me as President by the Constitution and laws of the United States of America, and in order to create a coordinated process for developing on an annual basis the Administration's Regulatory Program, establish Administration regulatory priorities, increase the accountability of agency heads for the regulatory actions of their agencies, provide for Presidential oversight of the regulatory process, reduce the burdens of existing and future regulations, minimize duplication and conflict of regulations, and enhance public and Congressional understanding of the Administration's regulatory objectives, it is hereby ordered as follows:
Section 1. General Requirements.
- (a) There is hereby established a regulatory planning process by which the Administration will develop and publish a Regulatory Program for each year. To implement this process, each Executive agency subject to Executive Order No. 12291 shall submit to the Director of the Office of Management and Budget (OMB) each year, starting in 1985, a statement of its regulatory policies, goals, and objectives for the coming year and information concerning all significant regulatory actions underway or planned; however, the Director may exempt from this Order such agencies or activities as the Director may deem appropriate in order to achieve the effective implementation of this Order.
- (b) The head of each Executive agency subject to this Order shall ensure that all regulatory actions are consistent with the goals of the agency and of the Administration, and will be appropriately implemented.
- (c) This program is intended to complement the existing regulatory planning and review procedures of agencies and the Executive branch, including the procedures established by Executive Order No. 12291.
- (d) To assure consistency with the goals of the Administration, the head of each agency subject to this Order shall adhere to the regulatory principles stated in Section 2 of Executive Order No. 12291, including those elaborated by the regulatory policy guidelines set forth in the August 11, 1983, Report of the Presidential Task Force on Regulatory Relief, “Reagan Administration Regulatory Achievements.”
Sec. 2. Agency Submission of Draft Regulatory Program.
- (a) The head of each agency shall submit to the Director an overview of the agency's regulatory policies, goals, and objectives for the program year and such information concerning all significant regulatory actions of the agency, planned or underway, including actions taken to consider whether to initiate rulemaking; requests for public comment; and the development of documents that may influence, anticipate, or could lead to the commencement of rulemaking proceedings at a later date, as the Director deems necessary to develop the Administration's Regulatory Program. This submission shall constitute the agency's draft regulatory program. The draft regulatory program shall be submitted to the Director each year, on a date to be specified by the Director, and shall cover the period from April 1 through March 31 of the following year.
- (b) The overview portion of the agency's submission should discuss the agency's broad regulatory purposes, explain how they are consistent with the Administration's regulatory principles, and include a discussion of the significant regulatory actions, as defined by the Director, that it will take. The overview should specifically discuss the significant regulatory actions of the agency to revise or rescind existing rules.
- (c) Each agency head shall categorize and describe the regulatory actions described in subsection (a) in such format as the Director shall specify and provide such additional information as the Director may request; however, the Director shall, by Bulletin or Circular, exempt from the requirements of this Order any class or category of regulatory action that the Director determines is not necessary to review in order to achieve the effective implementation of the program.
Sec. 3. Review, Compilation, and Publication of the Administration's Regulatory Program.
- (a) In reviewing each agency's draft regulatory program, the Director shall (i) consider the consistency of the draft regulatory program with the Administration's policies and priorities and the draft regulatory programs submitted by other agencies; and (ii) identify such further regulatory or deregulatory actions as may, in his view, be necessary in order to achieve such consistency. In the event of disagreement over the content of the agency's draft regulatory program, the agency head or the Director may raise issues for further review by the President or by such appropriate Cabinet Council or other forum as the President may designate.
- (b) Following the conclusion of the review process established by subsection (a), each agency head shall submit to the Director, by a date to be specified by the Director, the agency's final regulatory plan for compilation and publication as the Administration's Regulatory Program for that year. The Director shall circulate a draft of the Administration's Regulatory Program for agency comment, review, and interagency consideration, if necessary, before publication.
- (c) After development of the Administration's Regulatory Program for the year, if the agency head proposes to take a regulatory action subject to the provisions of Section 2 and not previously submitted for review under this process, or if the agency head proposes to take a regulatory action that is materially different from the action described in the agency's final Regulatory Program, the agency head shall immediately advise the Director and submit the action to the Director for review in such format as the Director may specify. Except in the case of emergency situations, as defined by the Director, or statutory or judicial deadlines, the agency head shall refrain from taking the proposed regulatory action until the review of this submission by the Director is completed. As to those regulatory actions not also subject to Executive Order No. 12291, the Director shall be deemed to have concluded that the proposal is consistent with the purposes of this Order, unless he notifies the agency head to the contrary within 10 days of its submission. As to those regulatory actions subject to Executive Order No. 12291, the Director's review shall be governed by the provisions of Section 3(e) of that Order.
- (d) Absent unusual circumstances, such as new statutory or judicial requirements or unanticipated emergency situations, the Director may, to the extent permitted by law, return for reconsideration any rule submitted for review under Executive Order No. 12291 that would be subject to Section 2 but was not included in the agency's final Regulatory Program for that year; or any other significant regulatory action that is materially different from those described in the Administration's Regulatory Program for that year.
Sec. 4. Office of Management and Budget.
The Director of the Office of Management and Budget is authorized, to the extent permitted by law, to take such actions as may be necessary to carry out the provisions of this order.
Sec. 5. Judicial Review.
This Order is intended only to improve the internal management of the Federal government, and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers or any person.
The White House,
January 4, 1985.Executive Order 12866
(Amended Feb. 26, 2002, and Jan. 18, 2007)Regulatory Planning and Review
The American people deserve a regulatory system that works for them, not against them; a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society; regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect the role of State, local, and tribal governments; and regulations that are effective, consistent, sensible, and understandable. We do not have such a regulatory system today.
With this Executive order, the Federal Government begins a program to reform and make more efficient the regulatory process. The objectives of this Executive order are to enhance planning and coordination with respect to both new and existing regulations; to reaffirm the primacy of Federal agencies in the regulatory decision-making process; to restore the integrity and legitimacy of regulatory review and oversight; and to make the process more accessible and open to the public. In pursuing these objectives, the regulatory process shall be conducted so as to meet applicable statutory requirements and with due regard to the discretion that has been entrusted to the Federal agencies.
Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Statement of Regulatory Philosophy and Principles.
- (a) The Regulatory Philosophy. Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people. In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating. Costs and benefits shall be understood to include both quantifiable measures (to the fullest extent that these can be usefully estimated) and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider. Further, in choosing among alternative regulatory approaches, agencies should select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity), unless a statute requires another regulatory approach.
- (b) The Principles of Regulation. To ensure that the agencies’ regulatory programs are consistent with the philosophy set forth above, agencies should adhere to the following principles, to the extent permitted by law and where applicable:
Sec. 2. Organization. An efficient regulatory planning and review process is vital to ensure that the Federal Government's regulatory system best serves the American people.
- (a) The Agencies. Because Federal agencies are the repositories of significant substantive expertise and experience, they are responsible for developing regulations and assuring that the regulations are consistent with applicable law, the President's priorities, and the principles set forth in this Executive order.
- (b) The Office of Management and Budget. Coordinated review of agency rulemaking is necessary to ensure that regulations are consistent with applicable law, the President's priorities, and the principles set forth in this Executive order, and that decisions made by one agency do not conflict with the policies or actions taken or planned by another agency. The Office of Management and Budget (OMB) shall carry out that review function. Within OMB, the Office of Information and Regulatory Affairs (OIRA) is the repository of expertise concerning regulatory issues, including methodologies and procedures that affect more than one agency, this Executive order, and the President's regulatory policies. To the extent permitted by law, OMB shall provide guidance to agencies and assist the President, the Vice President, and other regulatory policy advisors to the President in regulatory planning and shall be the entity that reviews individual regulations, as provided by this Executive order.
- (c) The Vice President. The Vice President is the principal advisor to the President on, and shall coordinate the development and presentation of recommendations concerning, regulatory policy, planning, and review, as set forth in this Executive order. In fulfilling their responsibilities under this Executive order, the President and the Vice President shall be assisted by the regulatory policy advisors within the Executive Office of the President and by such agency officials and personnel as the President and the Vice President may, from time to time, consult.
Sec. 3. Definitions. For purposes of this Executive order:
- (a) “Advisors” refers to such regulatory policy advisors to the President as the President and Vice President may from time to time consult, including, among others: (1) the Director of OMB; (2) the Chair (or another member) of the Council of Economic Advisors; (3) the Assistant to the President for Economic Policy; (4) the Assistant to the President for Domestic Policy; (5) the Assistant to the President for National Security Affairs; (6) the Assistant to the President for Science and Technology; (7) the Assistant to the President for Intergovernmental Affairs; (8) the Assistant to the President and Staff Secretary; (9) the Assistant to the President and Chief of Staff to the Vice President; (10) the Assistant to the President and Counsel to the President; (11) the Deputy Assistant to the President and Director of the White House Office on Environmental Policy; and (12) the Administrator of OIRA, who also shall coordinate communications relating to this Executive order among the agencies, OMB, the other Advisors, and the Office of the Vice President.
- (b) “Agency,” unless otherwise indicated, means any authority of the United States that is an “agency” under 44 U.S.C. 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10).
- (c) “Director” means the Director of OMB.
- (d) “Regulation” or “rule” means an agency statement of general applicability and future effect, which the agency intends to have the force and effect of law, that is designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency. It does not, however, include:
- (e) “Regulatory action” means any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.
- (f) “Significant regulatory action” means any regulatory action that is likely to result in a rule that may:
Sec. 4. Planning Mechanism. In order to have an effective regulatory program, to provide for coordination of regulations, to maximize consultation and the resolution of potential conflicts at an early stage, to involve the public and its State, local, and tribal officials in regulatory planning, and to ensure that new or revised regulations promote the President's priorities and the principles set forth in this Executive order, these procedures shall be followed, to the extent permitted by law:
- (a) Agencies’ Policy Meeting. Early in each year's planning cycle, the Vice President shall convene a meeting of the Advisors and the heads of agencies to seek a common understanding of priorities and to coordinate regulatory efforts to be accomplished in the upcoming year.
- (b) Unified Regulatory Agenda. For purposes of this subsection, the term “agency” or “agencies” shall also include those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10). Each agency shall prepare an agenda of all regulations under development or review, at a time and in a manner specified by the Administrator of OIRA. The description of each regulatory action shall contain, at a minimum, a regulation identifier number, a brief summary of the action, the legal authority for the action, any legal deadline for the action, and the name and telephone number of a knowledgeable agency official. Agencies may incorporate the information required under 5 U.S.C. 602 and 41 U.S.C. 402 into these agendas.
- (c) The Regulatory Plan. For purposes of this subsection, the term “agency” or “agencies” shall also include those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10).
- (d) Regulatory Working Group. Within 30 days of the date of this Executive order, the Administrator of OIRA shall convene a Regulatory Working Group (“Working Group”), which shall consist of representatives of the heads of each agency that the Administrator determines to have significant domestic regulatory responsibility, the Advisors, and the Vice President. The Administrator of OIRA shall chair the Working Group and shall periodically advise the Vice President on the activities of the Working Group. The Working Group shall serve as a forum to assist agencies in identifying and analyzing important regulatory issues (including, among others (1) the development of innovative regulatory techniques, (2) the methods, efficacy, and utility of comparative risk assessment in regulatory decision-making, and (3) the development of short forms and other streamlined regulatory approaches for small businesses and other entities). The Working Group shall meet at least quarterly and may meet as a whole or in subgroups of agencies with an interest in particular issues or subject areas. To inform its discussions, the Working Group may commission analytical studies and reports by OIRA, the Administrative Conference of the United States, or any other agency.
- (e) Conferences. The Administrator of OIRA shall meet quarterly with representatives of State, local, and tribal governments to identify both existing and proposed regulations that may uniquely or significantly affect those governmental entities. The Administrator of OIRA shall also convene, from time to time, conferences with representatives of businesses, nongovernmental organizations, and the public to discuss regulatory issues of common concern.
Sec. 5. Existing Regulations. In order to reduce the regulatory burden on the American people, their families, their communities, their State, local, and tribal governments, and their industries; to determine whether regulations promulgated by the executive branch of the Federal Government have become unjustified or unnecessary as a result of changed circumstances; to confirm that regulations are both compatible with each other and not duplicative or inappropriately burdensome in the aggregate; to ensure that all regulations are consistent with the President's priorities and the principles set forth in this Executive order, within applicable law; and to otherwise improve the effectiveness of existing regulations:
- (a) Within 90 days of the date of this Executive order, each agency shall submit to OIRA a program, consistent with its resources and regulatory priorities, under which the agency will periodically review its existing significant regulations to determine whether any such regulations should be modified or eliminated so as to make the agency's regulatory program more effective in achieving the regulatory objectives, less burdensome, or in greater alignment with the President's priorities and the principles set forth in this Executive order. Any significant regulations selected for review shall be included in the agency's annual Plan. The agency shall also identify any legislative mandates that require the agency to promulgate or continue to impose regulations that the agency believes are unnecessary or outdated by reason of changed circumstances.
- (b) The Administrator of OIRA shall work with the Regulatory Working Group and other interested entities to pursue the objectives of this section. State, local, and tribal governments are specifically encouraged to assist in the identification of regulations that impose significant or unique burdens on those governmental entities and that appear to have outlived their justification or be otherwise inconsistent with the public interest.
- (c) The Vice President, in consultation with the Advisors, may identify for review by the appropriate agency or agencies other existing regulations of an agency or groups of regulations of more than one agency that affect a particular group, industry, or sector of the economy, or may identify legislative mandates that may be appropriate for reconsideration by the Congress.
Sec. 6. Centralized Review of Regulations. The guidelines set forth below shall apply to all regulatory actions, for both new and existing regulations, by agencies other than those agencies specifically exempted by the Administrator of OIRA:
- (a) Agency Responsibilities.
Sec. 7. Resolution of Conflicts. To the extent permitted by law, disagreements or conflicts between or among agency heads or between OMB and any agency that cannot be resolved by the Administrator of OIRA shall be resolved by the President, or by the Vice President acting at the request of the President, with the relevant agency head (and, as appropriate, other interested government officials). Vice Presidential and Presidential consideration of such disagreements may be initiated only by the Director, by the head of the issuing agency, or by the head of an agency that has a significant interest in the regulatory action at issue. Such review will not be undertaken at the request of other persons, entities, or their agents.
Resolution of such conflicts shall be informed by recommendations developed by the Vice President, after consultation with the Advisors (and other executive branch officials or personnel whose responsibilities to the President include the subject matter at issue). The development of these recommendations shall be concluded within 60 days after review has been requested.
During the Vice Presidential and Presidential review period, communications with any person not employed by the Federal Government relating to the substance of the regulatory action under review and directed to the Advisors or their staffs or to the staff of the Vice President shall be in writing and shall be forwarded by the recipient to the affected agency(ies) for inclusion in the public docket(s). When the communication is not in writing, such Advisors or staff members shall inform the outside party that the matter is under review and that any comments should be submitted in writing.
At the end of this review process, the President, or the Vice President acting at the request of the President, shall notify the affected agency and the Administrator of OIRA of the President's decision with respect to the matter.
Sec. 8. Publication. Except to the extent required by law, an agency shall not publish in the Federal Register or otherwise issue to the public any regulatory action that is subject to review under section 6 of this Executive order until (1) the Administrator of OIRA notifies the agency that OIRA has waived its review of the action or has completed its review without any requests for further consideration, [Page 852]or (2) the applicable time period in section 6(b)(2) expires without OIRA having notified the agency that it is returning the regulatory action for further consideration under section 6(b)(3), whichever occurs first. If the terms of the preceding sentence have not been satisfied and an agency wants to publish or otherwise issue a regulatory action, the head of that agency may request Presidential consideration through the Vice President, as provided under section 7 of this order. Upon receipt of this request, the Vice President shall notify OIRA and the Advisors. The guidelines and time period set forth in section 7 shall apply to the publication of regulatory actions for which Presidential consideration has been sought.
Sec. 9. Agency Authority. Nothing in this order shall be construed as displacing the agencies’ authority or responsibilities, as authorized by law.
Sec. 10. Judicial Review. Nothing in this Executive order shall affect any otherwise available judicial review of agency action. This Executive order is intended only to improve the internal management of the Federal Government and does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.
Sec. 11. Revocations. Executive Orders Nos. 12291 and 12498; all amendments to those Executive orders; all guidelines issued under those orders; and any exemptions from those orders heretofore granted for any category of rule are revoked.
WILLIAM J. CLINTON
The White House,
September 30, 1993.Executive Order 13258
(Revoked Jan. 30, 2009)Amending Executive Order 12866 on Regulatory Planning and Review
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered that Executive Order 12866, of September 30, 1993, is amended as follows:
Section 1. Section (2)(b) is amended by striking “the Vice President, and other regulatory policy advisors” and inserting in lieu thereof “and regulatory policy advisors.”
Sec. 2. Section (2)(c) is amended by:
- (a) striking in the heading the words “The Vice President” and inserting in lieu thereof “Assistance”;
- (b) striking the sentence that begins “The Vice President is”;
- (c) striking “In fulfilling their responsibilities” and inserting in lieu thereof “In fulfilling his responsibilities”; and
- (d) striking “and the Vice President” both times it appears.
Sec. 3. Section 3(a) is amended by:
- (a) striking “and Vice President”;
- (b) striking “the Assistant to the President for Science and Technology” and inserting in lieu thereof “the Director of the Office of Science and Technology Policy”;
- (c) striking “the Assistant to the President for Intergovernmental Affairs” and inserting in lieu thereof “the Deputy Assistant to the President and Director for Intergovernmental Affairs”;
- (d) striking “the Deputy Assistant to the President and Director of the White House Office of Environmental Policy” and inserting in lieu thereof “the Chairman of the Council on Environmental Quality and Director of the Office of Environmental Quality”; and
- (e) striking “and (12)” and inserting in lieu thereof “(12) the Assistant to the President for Homeland Security; and (13).”
Sec. 4. Section 4(a) is amended by striking “the Vice President shall convene” and inserting in lieu thereof “the Director shall convene.”
Sec. 5. Section 4(c)(3) is amended by striking “the Advisors, and the Vice President” and inserting in lieu thereof “and the Advisors.”
Sec. 6. Section 4(c)(4) is amended by striking “the Advisors, and the Vice President” and inserting in lieu thereof “and the Advisors.”
Sec. 7. Section 4(c)(5) is amended by striking “the Advisors, and the Vice President” and inserting in lieu thereof “and the Advisors.”
Sec. 8. Section 4(c)(6) is amended by striking “Vice President, with the Advisors’ assistance,” and inserting in lieu thereof “Director.”
Sec. 9. Section 4(d) is amended by:
- (a) striking “the Advisors, and the Vice President” and inserting in lieu thereof “and the Advisors”; and
- (b) striking “periodically advise the Vice President” and inserting in lieu thereof “periodically advise the Director.”
Sec. 10. Section 5(c) is amended by striking “Vice President” and inserting in lieu thereof “Director.”
Sec. 11. Section 6(b)(4)(C)(i) is amended by striking “Vice Presidential and.”
Sec. 12. Section 7 is amended by:
- (a) striking “resolved by the President, or by the Vice President acting at the request of the President” and inserting in lieu thereof “resolved by the President, with the assistance of the Chief of Staff to the President (“Chief of Staff ”)”;
- (b) striking “Vice Presidential and Presidential consideration” and inserting in lieu thereof “Presidential consideration”;
- (c) striking “recommendations developed by the Vice President” and inserting in lieu thereof “recommendations developed by the Chief of Staff ”;
- (d) striking “Vice Presidential and Presidential review period” and inserting in lieu thereof “Presidential review period”;
- (e) striking “or to the staff of the Vice President” and inserting in lieu thereof “or to the staff of the Chief of Staff”;
- (f) striking “the President, or the Vice President acting at the request of the President, shall notify” and insert in lieu thereof “the President, or the Chief of Staff acting at the request of the President, shall notify.”
Sec. 13. Section 7 is also amended in the first paragraph by inserting the designation “(a)” after the words “Resolution of Conflicts,” and by designating the following three paragraphs as “(b),” “(c),” and “(d)” in order.
Sec. 14. Section 8 is amended by striking “Vice President” both times it appears and inserting in lieu thereof “Director.”
GEORGE W. BUSH
The White House, February 26, 2002.Executive Order 13392Improving Agency Disclosure of Information
By the authority vested in me as President by the Constitution and the laws of the United States of America, and to ensure appropriate agency disclosure of information, and consistent with the goals of section 552 of title 5, United States Code, it is hereby ordered as follows:
Section 1. Policy.
- (a) The effective functioning of our constitutional democracy depends upon the participation in public life of a citizenry that is well informed. For nearly four decades, the Freedom of Information Act (FOIA) has provided an important means through which the public can obtain information regarding the activities of Federal agencies. Under the FOIA, the public can obtain records from any Federal agency, subject to the exemptions enacted by the Congress to protect information that must be held in confidence for the Government to function effectively or for other purposes.
- (b) FOIA requesters are seeking a service from the Federal Government and should be treated as such. Accordingly, in responding to a FOIA request, agencies shall respond courteously and appropriately. Moreover, agencies shall provide FOIA requesters, and the public in general, with citizen centered ways to learn about the FOIA process, about agency records that are publicly available (e.g., on the agency's website), and about the status of a person's FOIA request and appropriate information about the agency's response.
- (c) Agency FOIA operations shall be both results-oriented and produce results. Accordingly, agencies shall process requests under the FOIA in an efficient and appropriate manner and achieve tangible, measurable improvements in FOIA processing. When an agency's FOIA program does not produce such results, it should be reformed, consistent with available resources appropriated by the Congress and applicable law, to increase efficiency and better reflect the policy goals and objectives of this order.
- (d) A citizen-centered and results-oriented approach will improve service and performance, thereby strengthening compliance with the FOIA, and will help avoid disputes and related litigation.
Sec. 2. Agency Chief FOIA Officers.
- (a) Designation. The head of each agency shall designate within 30 days of the date of this order a senior official of such agency (at the Assistant Secretary or equivalent level), to serve as the Chief FOIA Officer of that agency. The head of the agency shall promptly notify the Director of the Office of Management and Budget (OMB Director) and the Attorney General of such designation and of any changes thereafter in such designation.
- (b) General Duties. The Chief FOIA Officer of each agency shall, subject to the authority of the head of the agency:
- (c) FOIA Requester Service Center and FOIA Public Liaisons. In order to ensure appropriate communication with FOIA requesters:
Sec. 3. Review, Plan, and Report.
- (a) Review. Each agency's Chief FOIA Officer shall conduct a review of the agency's FOIA operations to determine whether agency practices are consistent with the policies set forth in section 1 of this order. In conducting this review, the Chief FOIA Officer shall:
- (b) Plan.
- (c) Agency Reports to the Attorney General and OMB Director.
Sec. 4. Attorney General.
- (a) Report. The Attorney General, using the reports submitted by the agencies under subsection 3(c)(i) of this order and the information submitted by agencies in their annual FOIA reports for fiscal year 2005, shall submit to the President, no later than 10 months from the date of this order, a report on agency FOIA implementation. The Attorney General shall consult the OMB Director in the preparation of the report and shall include in the report appropriate recommendations on administrative or other agency actions for continued agency dissemination and release of public information. The Attorney General shall thereafter submit two further annual reports, by June 1, 2007, and June 1, 2008, that provide the President with an update on the agencies’ implementation of the FOIA and of their plans under section 3(b) of this order.
- (b) Guidance. The Attorney General shall issue such instructions and guidance to the heads of departments and agencies as may be appropriate to implement sections 3(b) and 3(c) of this order.
Sec. 5. OMB Director. The OMB Director may issue such instructions to the heads of agencies as are necessary to implement this order, other than sections 3(b) and 3(c) of this order.
Sec. 6. Definitions. As used in this order:
- (a) the term “agency” has the same meaning as the term “agency” under section 552(f)(1) of title 5, United States Code; and
- (b) the term “record” has the same meaning as the term “record” under section 552(f)(2) of title 5, United States Code.
Sec. 7. General Provisions.
- (a) The agency reviews under section 3(a) of this order and agency plans under section 3(b) of this order shall be conducted and developed in accordance with applicable law and applicable guidance issued by the President, the Attorney General, and the OMB Director, including the laws and guidance regarding information technology and the dissemination of information.
- (b) This order:
GEORGE W. BUSH
The White House,
December 14, 2005.Executive Order 13422
(Revoked Jan. 30, 2009)Further Amendment to Executive Order 12866 on Regulatory Planning and Review
By the authority vested in me as President by the Constitution and laws of the United States of America, it is hereby ordered that Executive Order 12866 of September 30, 1993, as amended, is further amended as follows:
Section 1. Section 1 is amended as follows:
- (a) Section 1(b)(1) is amended to read as follows:
- (b) by inserting in section 1(b)(7) after “regulation” the words “or guidance document.”
- (c) by inserting in section 1(b)(10) in both places after “regulations” the words “and guidance documents.”
- (d) by inserting in section 1(b)(11) after “its regulations” the words “and guidance documents.”
- (e) by inserting in section 1(b)(12) after “regulations” the words “and guidance documents.”
Sec. 2. Section 2 is amended as follows:
- (a) by inserting in section 2(a) in both places after “regulations” the words “and guidance documents.”
- (b) by inserting in section 2(b) in both places after “regulations” the words “and guidance documents.”
Sec. 3. Section 3 is amended as follows:
- (a) by striking in section 3(d) “rule” after “Regulation”;
- (b) by striking in section 3(d)(1) “or rules” after “Regulations”;
- (c) by striking in section 3(d)(2) “or rules” after “Regulations”;
- (d) by striking in section 3(d)(3) “or rules” after “Regulations”;
- (e) by striking in section 3(e) “rule or” from “final rule or regulation”;
- (f) by striking in section 3(f) “rule or” from “rule or regulation”;
- (g) by inserting after section 3(f) the following:
- “(g) “Guidance document” means an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.”
- (h) “Significant guidance document”—
Sec. 4. Section 4 is amended as follows:
- (a) Section 4(a) is amended to read as follows: “The Director may convene a meeting of agency heads and other government personnel as appropriate to seek a common understanding of priorities and to coordinate regulatory efforts to be accomplished in the upcoming year.”
- (b) The last sentence of section 4(c)(1) is amended to read as follows: “Unless specifically authorized by the head of the agency, no rulemaking shall commence nor be included on the Plan without the approval of the agency's Regulatory Policy Office, and the Plan shall contain at a minimum:”.
- (c) Section 4(c)(1)(B) is amended by inserting “of each rule as well as the agency's best estimate of the combined aggregate costs and benefits of all its regulations planned for that calendar year to assist with the identification of priorities” after “of the anticipated costs and benefits.”
- (d) Section 4(c)(1)(C) is amended by inserting “and specific citation to such statute, order, or other legal authority” after “court order.”
Sec. 5. Section 6 is amended as follows:
- (a) by inserting in section 6(a)(1) “In consultation with OIRA, each agency may also consider whether to utilize formal rulemaking procedures under 5 U.S.C. 556 and 557 for the resolution of complex determinations” after “comment period of not less than 60 days.”
- (b) by amending the first sentence of section 6(a)(2) to read as follows: “Within 60 days of the date of this Executive order, each agency head shall designate one of the agency's Presidential Appointees to be its Regulatory Policy Officer, advise OMB of such designation, and annually update OMB on the status of this designation.”
Sec. 6. Sections 9–11 are redesignated respectively as sections 10–12.
Sec. 7. After section 8, a new section 9 is inserted as follows:
“Sec. 9. Significant Guidance Documents. Each agency shall provide OIRA, at such times and in the manner specified by the Administrator of OIRA, with advance notification of any significant guidance documents. Each agency shall take such steps as are necessary for its Regulatory Policy Officer to ensure the agency's compliance with the requirements of this section. Upon the request of the Administrator, for each matter identified as, or determined by the Administrator to be, a significant guidance document, the issuing agency shall provide to OIRA the content of the draft guidance document, together with a brief explanation of the need for the guidance document and how it will meet that need. The OIRA Administrator shall notify the agency when additional consultation will be required before the issuance of the significant guidance document.”[Page 857]
Sec. 8. Newly designated section 10 is amended to read as follows:
“Sec. 10. Preservation of Agency Authority. Nothing in this order shall be construed to impair or otherwise affect the authority vested by law in an agency or the head thereof, including the authority of the Attorney General relating to litigation.”
GEORGE W. BUSH
The White House, January 18, 2007.Executive Order 13497Revocation of Certain Executive Orders Concerning Regulatory Planning and Review
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered that:
Section 1. Executive Order 13258 of February 26, 2002, and Executive Order 13422 of January 18, 2007, concerning regulatory planning and review, which amended Executive Order 12866 of September 30, 1993, are revoked.
Sec. 2. The Director of the Office of Management and Budget and the heads of executive departments and agencies shall promptly rescind any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 13258 or Executive Order 13422, to the extent consistent with law.
Sec. 3. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
The White House,
January 30, 2009.Executive Order 13563Improving Regulations and Regulatory Review
By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to improve regulation and regulatory review, it is hereby ordered as follows:
Section 1. General Principles of Regulation.
(a) Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation. It must be based on the best available science. It must allow for public participation and an open exchange of ideas. It must promote predictability and reduce uncertainty. It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends. It must take into account benefits and costs, both quantitative and qualitative. It must ensure that regulations are accessible, consistent, written in plain language, and easy to understand. It must measure, and seek to improve, the actual results of regulatory requirements.
- (b) This order is supplemental to and reaffirms the principles, structures, and definitions governing contemporary regulatory review that were established in Executive Order 12866 of September 30, 1993. As stated in that Executive Order and to the extent permitted by law, each agency must, among other things: (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.
- (c) In applying these principles, each agency is directed to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. Where appropriate and permitted by law, each agency may consider (and discuss qualitatively) values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.
Sec. 2. Public Participation.
(a) Regulations shall be adopted through a process that involves public participation. To that end, regulations shall be based, to the extent feasible and consistent with law, on the open exchange of information and perspectives among State, local, and tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole.
- (b) To promote that open exchange, each agency, consistent with Executive Order 12866 and other applicable legal requirements, shall endeavor to provide the public with an opportunity to participate in the regulatory process. To the extent feasible and permitted by law, each agency shall afford the public a meaningful opportunity to comment through the Internet on any proposed regulation, with a comment period that should generally be at least 60 days. To the extent feasible and permitted by law, each agency shall also provide, for both proposed and final rules, timely online access to the rulemaking docket on Regulations.gov, including relevant scientific and technical findings, in an open format that can be easily searched and downloaded. For proposed rules, such access shall include, to the extent feasible and permitted by law, an opportunity for public comment on all pertinent parts of the rulemaking docket, including relevant scientific and technical findings.
- (c) Before issuing a notice of proposed rulemaking, each agency, where feasible and appropriate, shall seek the views of those who are likely to be affected, including those who are likely to benefit from and those who are potentially subject to such rulemaking.
Sec. 3. Integration and Innovation. Some sectors and industries face a significant number of regulatory requirements, some of which may be redundant, inconsistent, or overlapping. Greater coordination across agencies could reduce these requirements, thus reducing costs and simplifying and harmonizing rules. In developing regulatory actions and identifying appropriate approaches, each agency shall attempt to promote such coordination, simplification, and harmonization. Each agency shall also seek to identify, as appropriate, means to achieve regulatory goals that are designed to promote innovation.
Sec. 4. Flexible Approaches. Where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, each agency shall identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. These approaches include warnings, appropriate default rules, and disclosure requirements as well as provision of information to the public in a form that is clear and intelligible.
Sec. 5. Science. Consistent with the President's Memorandum for the Heads of Executive Departments and Agencies, “Scientific Integrity” (March 9, 2009), and its implementing guidance, each agency shall ensure the objectivity of any scientific and technological information and processes used to support the agency's regulatory actions.
Sec. 6. Retrospective Analyses of Existing Rules.
- (a) To facilitate the periodic review of existing significant regulations, agencies shall consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Such retrospective analyses, including supporting data, should be released online whenever possible.
- (b) Within 120 days of the date of this order, each agency shall develop and submit to the Office of Information and Regulatory Affairs a preliminary plan, consistent with law and its resources and regulatory priorities, under which the agency will periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.
Sec. 7. General Provisions.
(a) For purposes of this order, “agency” shall have the meaning set forth in section 3(b) of Executive Order 12866.
- (b) Nothing in this order shall be construed to impair or otherwise affect:
- (c) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
- (d) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
January 18, 2011.Executive Order 13579Regulation and Independent Regulatory Agencies
By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to improve regulation and regulatory review, it is hereby ordered as follows:
Section 1. Policy. (a) Wise regulatory decisions depend on public participation and on careful analysis of the likely consequences of regulation. Such decisions are informed and improved by allowing interested members of the public to have a meaningful opportunity to participate in rulemaking. To the extent permitted by law, such decisions should be made only after consideration of their costs and benefits (both quantitative and qualitative).
- (b) Executive Order 13563 of January 18, 2011, “Improving Regulation and Regulatory Review,” directed to executive agencies, was meant to produce a regulatory system that protects “public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.” Independent regulatory agencies, no less than executive agencies, should promote that goal.
- (c) Executive Order 13563 set out general requirements directed to executive agencies concerning public participation, integration and innovation, flexible approaches, and science. To the extent permitted by law, independent regulatory agencies should comply with these provisions as well.
Sec. 2. Retrospective Analyses of Existing Rules. (a) To facilitate the periodic review of existing significant regulations, independent regulatory agencies should consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Such retrospective analyses, including supporting data and evaluations, should be released online whenever possible.
- (b) Within 120 days of the date of this order, each independent regulatory agency should develop and release to the public a plan, consistent with law and reflecting its resources and regulatory priorities and processes, under which the agency will periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.
Sec. 3. General Provisions. (a) For purposes of this order, “executive agency” shall have the meaning set forth for the term “agency” in section 3(b) of Executive Order 12866 of September 30, 1993, and “independent regulatory agency” shall have the meaning set forth in 44 U.S.C. 3502(5).
- (b) Nothing in this order shall be construed to impair or otherwise affect:
- (c) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
- (d) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
July 11, 2011.
AppendixFederal Regulatory Directory Combined Glossary
706 agencies—State and local agencies described in section 706(c) of Title VII of the Civil Rights Act. They are FEP agencies that meet certain criteria. The 706 agencies enforce state and local laws prohibiting job discrimination as well as Title VII on a contract basis with the EEOC.
Abandonment—The cessation of service certificated under the Natural Gas Act from a gas well or facilities dedicated to the interstate market.
Adulterated—Products or materials that are defective and unsafe because they are contaminated or were produced under unsanitary conditions.
Advisory opinion—Advice given by the commission in response to a request from an individual or company as to the legality of a specific course of action.
Alternative dispute resolution (ADR)—A less formal and less adversarial method of resolving employment practice disputes, such as mediation.
ANDA (abbreviated new drug application)—An application that must be filed and approved before a manufacturer can market a copy of an already approved drug. ANDAs require information showing that the copy is bioequivalent to the original product but do not require original test results proving safety and efficacy.
Bank holding company (BHC)—A company that owns or controls one or more banks. The Fed regulates and supervises BHCs, approves bank mergers and acquisitions, and maintains authority over a BHC even if the banks it owns are under the supervision of the FDIC or OCC.
Bioequivalent—A drug product is considered a bioequivalent if it demonstrates the same therapeutic effect as the drug it copies.
Biologics—Medical products, such as vaccines and serums, derived from living organisms.
Blanket certificate—Allows pipelines to conduct certain transactions and services on a self-implementing basis.
Broadcasting—The multidirectional transmission of sound, images, data, or other electronically encoded information over the air by means of electromagnetic radiation in the radio spectrum, such as in radio or television.
Broker—A person who acts as an agent for customers in selling or buying securities for their accounts.
Cable—Transmission of sound, images, data, and other electronically encoded information by means of wires, usually a combination of fiber-optic and coaxial cables capable of carrying hundreds of video channels simultaneously.
Carcinogen—A substance that is shown to cause cancer.
Cellular telephone—Transmission of telephone calls via radio to mobile receivers. Metropolitan areas are divided into “cells,” each with an antenna to relay signals to and from the mobile phones. The call is handed off from one cell to the next as the receiving phone moves, allowing the first cell to use the same frequency for a new call.
Charge—Form used for filing an allegation of unfair labor practices.
Charging party—A person or group making a charge of employment discrimination.
Chlorofluorocarbons (CFCs)—Chemical compounds, such as refrigerants, suspected of causing the depletion of the ozone layer in the atmosphere.
Closed shop—An establishment in which the employer by agreement hires only union members in good standing.
Common carrier—A regulatory category that includes any company offering telecommunications services to the general public, such as telephone and telegraph companies. Common carriers must offer their transmission services at nondiscriminatory rates to any interested customer, and for regulatory purposes are treated much like electric or gas utilities.
Complaint—Formal allegation issued by an NLRB regional office after investigation indicates merit to a charge.
Consent orders—Orders issued by the commission in which a company, neither admitting nor denying it violated the law, agrees to discontinue certain practices.
Curtailment—A cutback in acceptance of delivery by pipelines from gas producers during periods of oversupply; a cutback in the availability of “interruptible” transportation service during periods of high demand.
Dealer—A person who acts as a principal rather than as an agent in buying or selling securities. Typically, dealers buy for their accounts and sell to a customer from their inventories.
Deferral—The process whereby the EEOC turns over a discrimination charge it has received to a state or local fair employment practices agency (706 agency) for action.
Delaney Amendment—A 1958 amendment to the Federal Food, Drug and Cosmetic Act that requires the FDA to ban any food or color additive that has been shown to cause cancer in laboratory test animals. Named after the chief sponsor, Rep. James J. Delaney (D-NY).
Direct broadcast satellite (DBS)—The transmission of video images and sound directly from a programming source to viewers' homes via satellite. The service typically is offered via subscriptions, such as cable, and the satellite dishes are roughly eighteen inches in diameter.
Discount rate—The interest rate district Federal Reserve banks charge on loans to depository institutions (banks, savings banks, thrifts, and credit unions).
Discount window—An expression used to describe the mechanism by which the Fed makes loans to depository institutions.
Electronic bulletin board—The use of computerized information systems to exchange information about pipeline capacity, rates, and deliveries. FERC, in Order 889, required electric utilities to obtain information about their transmission using the Open Access Same-time Information System (OASIS), sharing information about available transmission capacity with competitors.
Fed—A widely used nickname for the Federal Reserve System.
Federal funds rate—The rate commercial banks pay to borrow money from each other on a short-term basis, generally overnight, and typically to meet reserve requirements.
FEP agencies—State and local government agencies, known as FEPAs, that enforce fair employment practice (FEP) laws.
Generic drug—A copy of an already approved drug product whose patent protection has expired. To gain approval of a generic drug product, the manufacturer must submit an ANDA including laboratory tests demonstrating that the copy is bioequivalent to the original product.
Greenhouse effect—The trapping of carbon dioxide and other gases within the atmosphere, leading to climate change and health hazards.
Holding company—A corporation organized to hold the stock of other corporations; usually a holding company owns or controls a dominant interest in one or more other corporations and is able to influence or dictate the management policies of the other corporations.
Insider trading—Violation of the antifraud provisions of federal securities laws; occurs when an individual profits in the stock market on the basis of confidential corporate secrets. For example, an insider could profit from knowledge of an impending corporate takeover, which would drive up the takeover target's stock price, or of a soon-to-be released disappointing earnings report, which typically would drive a stock price down.
Institutional investor—Commonly used phrase for bank mutual funds, insurance companies, pension funds, and large corporate investment accounts that, because of the size and frequency of their transactions, are eligible for preferential commissions and other services from broker-dealers.
Interconnection—A joining of the transmission networks of two or more electric utilities. Interconnection allows utilities to share facilities and power reserves and provides service to larger areas.
Interlocking directorates—Boards of directors having some members in common, so that the corporations concerned are to some extent under the same control.
ISO—Independent system operator.
Junk bonds—Colloquial expression for high-yield, high-risk bonds. Because they have received a low, or speculative, rating from the companies that rate bonds, these bonds pay a higher interest rate to attract buyers.
Jurisdictional standards—NLRB's criteria for acting on a case, based on an enterprise's annual amount of business or annual sales or purchases.
LDC—Local distribution company.
Listed drug—A product with an approved NDA.
Low power television—Television stations with ranges of only a few miles. The FCC licenses low-power stations to increase the number of channels serving a community without electronically interfering with transmissions in nearby communities.
Margin trading—Purchasing securities that are paid for in part with a loan taken out using the same securities as collateral, in the hope that the price of the securities will increase, allowing the purchaser to pay off the loan and make a profit. Also called “buying on margin.”
Misbranded—Products or materials with labels that mislead or lack necessary information.
Multipoint microwave distribution services (MMDS), or wireless cable—Television broadcasting systems that transmit over the microwave portion of the radio spectrum. Microwave broadcasts can carry multiple channels but have a limited range because their signals do not pass through objects.
Mutual fund—An investment organization that issues stock to raise capital, which it then invests in other securities to generate funds for its operating costs and profits for its investors.
National bank—A bank that is chartered and regulated by the comptroller of the currency. National banks are required to have FDIC insurance.
National bank—Bank that is chartered and regulated by the OCC. National banks are required to be members of the Federal Reserve System.
NCE (new chemical entity)—A new chemical that has not been adequately characterized in the literature with regard to its physical and chemical properties.
NDA (new drug application)—An application that a pharmaceutical company must submit before the FDA will allow it to market a new drug. NDAs require supporting evidence that the new drug is both safe and effective.
No cause—A finding by the commission that a charge of discrimination does not have merit under the law.
NOPR—Notice of proposed rulemaking.
NOW accounts (negotiable-order-of-withdrawal accounts)—These are interest-bearing accounts on which checks may be drawn.
Open-access transportation program—A program that allows pipelines to apply for “blanket” transportation certificates that require transportation to be carried out on a nondiscriminatory basis. Transportation requests are fulfilled on a first-come, first-served basis.
OTC (over-the-counter)—A drug product that can be sold directly to the consumer without a doctor's prescription
Personal communications service (PCS)—A digital version of cellular telephone service that the FCC started licensing in 1994. Typically, PCS phones are capable of more functions than other mobile units. For example, they can simultaneously act as phones, pagers, and answering machines.
Petition—Form used to request a representation election.
Pooling—The voluntary agreement among utilities to sell power to each another. Pooling offers a sales outlet for power produced in excess of immediate system requirements, and a supply source when demand exceeds immediate system generating capacity. Pools may or may not be operated by independent system operators.
Program trading—Defined by the New York Stock Exchange as buy or sell orders for a group of fifteen or more stocks. Program trading usually employs computers to determine the optimum time for such trades and to execute them. Strategies include index arbitrage, the simultaneous trading of Big Board stocks and stock-index futures contracts to profit from brief price disparities, and tactical asset allocation, which uses futures contracts to shift money among equities, bonds, and other types of investments.
Radio spectrum—The range of radiation frequencies available for use by the broadcasting and mobile communications services. These frequencies are divided into discrete channels and allocated to the various users by the FCC.
Radon—An odorless and colorless gas produced from the decay of radium 226 in soil and rocks. High levels of radon trapped indoors can pose health hazards.
Reserves—Money that financial institutions must keep as cash in their vaults.
Respondent—The firm, union, employment agency, or individual against whom a charge of employment discrimination is filed.
Right-to-work laws—State laws that prohibit labor-management agreements requiring union membership to obtain or keep a job.
Selling short—Borrowing securities and selling them in anticipation of a market decline; if the market goes down, the securities may be bought back at a lower price and returned to the party from which they were borrowed, with the short seller keeping the profit.
State implementation plans (SIPs)—Plans created by the states in place of national EPA directives. The EPA oversees the development of such plans, which must be at least as stringent as EPA plans.
State member bank—A bank that is chartered by a state and is a member of the Federal Reserve System. State member banks are required to have FDIC insurance.
State member bank—A bank that is chartered by a state and is a member of the Federal Reserve System, which supervises these banks.
State nonmember bank—A bank that is chartered by a state but is not a member of the Federal Reserve System. These banks are supervised by the FDIC.
State nonmember bank—A bank that is chartered by a state, has FDIC insurance, but is not a member of the Federal Reserve System. The FDIC monitors the performance of all banks it insures, but it is the principal federal regulator of state nonmember banks and mutual savings banks (which are a form of a thrift owned and operated by its depositors).
Stranded costs—Costs that a utility has incurred to serve wholesale requirements or retail franchise customers that are stranded when a customer stops buying power from the utility and simply pays for transmission services to reach a different supplier.
Superfund—A multibillion-dollar fund set up in 1980 to provide for emergency cleanup of hazardous sites when no responsible party can be found.
Systemic discrimination—Employment “systems” that show a pattern or practice of employment discrimination throughout an industry or large company, as opposed to individual acts of discrimination.
Take-or-pay—Requires pipelines either to buy and take the agreed-on volumes from the producer or to pay a fee to the producer if it fails to take the gas.
Telecommunications—Transmission of information chosen by a customer to points selected by the customer, without changing the form or content of the information.
Tender offer—A public offer to purchase stock (usually the controlling interest) in a corporation within a specified time period and at a stipulated price, usually above the market price.
Trade regulation rules (TRRs)—Rules that set standards and define which industry practices the commission holds to be unfair and deceptive. TRRs have the force of law.
Unbundling—The separation of services into discrete components with separate charges for each service.
Union shop—An agreement that requires an employee to join a union to obtain or keep a job.
Wetlands—Marshes, swamps, or bogs that, according to environmentalists, provide wildlife habitat and other valuable ecological functions.
Wheeling—An arrangement in which one electric company allows another company to use its lines to transmit power to customers in its service area. Retail wheeling allows any customer to buy from any supplier.