STATEMENT OF SEAN O'KEEFE
DEPUTY DIRECTOR
OFFICE OF MANAGEMENT AND BUDGET
BEFORE THE
SUBCOMMITTEES ON
ENERGY POLICY, NATURAL RESOURCES AND
COMMITTEE ON GOVERNMENT REFORM
U.S. HOUSE OF REPRESENTATIVES
April 24, 2001
(Note: Read by Austin Smyth, Executive Associate
Director)
Good morning, Mr. Chairmen and members of the Subcommittee. Thank
you for
your invitation to testify today. I am pleased to have the opportunity to
appear
and discuss with you the Executive Branch's efforts to reduce the paperwork
and regulatory burden on the American people. The record over the last
eight years
is mixed, and the Office of Management and Budget (OMB), led by the Office
of
Information and Regulatory Affairs (OIRA), is working diligently to assess
the situation and plan for the future.
However, as can be expected, this period of transition makes our job
all the
more difficult. Our focus, since January 20, has been the production of the
President's Budget, completed and transmitted to Congress on April 9, and
the
review of the so-called "Midnight Regulations," those regulatory actions
issued
in the last months of the previous Administration. In addition, OIRA's
Administrator-designate,
John Graham, has not yet been confirmed by the Senate, so OMB does not have
its primary policy official for the Paperwork Reduction Act (PRA) yet in
place. Once he is sworn in, he will begin a more thorough review of the
information collections imposed on the public and of opportunities for
improving their quality and reducing their burden.
Purposes of the Paperwork Reduction Act
This Administration takes very seriously the requirements of the
PRA.
The PRA provides an important framework for managing Federal information
resources,
including the information collected by or for the Federal government. The
PRA
includes as its purposes:
reducing information collection burdens imposed on the public;
increasing the productivity, efficiency, and effectiveness of Federal
programs; and
balancing the practical utility of information collections against the
burden they impose.
Under the PRA, the agencies and OMB have specific roles intended to
help
achieve these purposes of the Act.
Reducing Burden. The PRA requires the head of each agency, supported
by his or her Chief Information Officer (CIO), to be responsible for the
agency's
information collection activities, including the reduction of paperwork
burden on the public. Under the PRA, OIRA oversees
the CIO's management of each agency's collection of information. The PRA
also
requires OMB to set, in consultation with the agencies, annual agency goals
to
reduce burden on the public.
Improving Government Programs. OIRA also monitors CIO information
resource
management to assist agency efforts to increase the productivity,
efficiency,
and effectiveness of their programs. As part of this responsibility, OIRA
works
with the agencies to improve their management of information. For example,
OIRA
encourages data sharing among agencies when possible. OIRA also reviews
agency
information collection activities to ensure that they effectively serve
agency
needs and increase program efficiency.
Balance the Need for Information vs. Burden. OIRA oversees CIO
paperwork
management by reviewing Federal agencies' information collection activities
that are covered by the PRA, weighing the burdens
of each collection on the public against the practical utility it will have
for
agencies. Last fiscal year, for example, OIRA approved over 3,000 agency
requests
to collect information. This included roughly 2300 renewals of previous
approvals,
which the PRA requires every three years. Before approving each request,
OIRA
worked to ensure that any burden imposed was justified by the accuracy,
adequacy,
reliability, and timeliness of the information collected.
The Information Collection Budget
Each year, OIRA, working with 27 of the Executive Branch agencies,
develops
the Information Collection Budget (ICB). The ICB is a look back on
significant
changes in the information collection burden imposed on the public during
the
last fiscal year and a description of significant changes expected in the
current
fiscal year. Through the development of the annual Information Collection
Budget
(ICB), OIRA oversees CIO paperwork management -- including CIO initiatives
to
reduce paperwork burden, improve agency programs, and balance agencies'
need for information against paperwork burden.
The ICB is also the management oversight mechanism through which
agency CIOs
and OIRA establish agency paperwork burden targets for the coming year,
taking
into account agencies' anticipated program and statutory initiatives. Based
upon the prior year's
experience and the best estimates of "burden hours" imposed by each form,
survey, and other
information collection, each agency's CIO submits to OIRA a proposed
accounting
of total burden hours and burden costs for the new fiscal year, together
with
a description of the changes in existing information collections that are
necessary to meet its needs.
In addition, agency CIOs report on paperwork management initiatives
designed to improve the
collection and use of information over time. OIRA reviews these reports and
consults with CIOs to
develop final information collection budget targets that minimize paperwork
burden, consistent with
the program needs and planned uses of the collected information.
With the transition and the absence of policy officials at the
agencies,
OIRA has not completed the ICB in time for this hearing. However, I am
pleased
to present some of our preliminary results.
In fiscal year 2000, the reported information collection burden
imposed by
Federal agencies on the public increased by 2.5 percent, from 7.2 billion
hours
to 7.4 billion hours. Of that increase, slightly less than half can be
attributed
to actions taken within an agency's discretion to implement or improve
existing programs, and
half can be are attributed to new burden imposed due to the implementation
of new statutes.
Agency Efforts to Reduce Paperwork Burden
This year's Information Collection Budget will mention a number of
agency paperwork accomplishments and improvements. The
ICB will detail these agency efforts agency-by-agency. I'd like to
summarize just a few below.
Agencies are reducing information collection burden by revising
existing
regulations to eliminate unnecessary requirements or by completely changing
the way they regulate.
Environmental Protection Agency (EPA) amended its rules
implementing the Resource Conservation and Recovery Act
(RCRA) to reduce the number of Boiler and Industrial Furnaces that need to
report and keep records, reducing burden on these facilities by over
130,000
hours.
The Federal Communications Commission (FCC) reduced burden on
local exchange carriers (LECs) by reducing the amount of information they
would need to provide in order to request a change in the access fees they
charge to other telecommunications companies. This change reduced burden on
this industry by over 1.7 million hours.
The Federal Trade Commission reduced burden on makers and sellers
of textiles by streamlining requirements to disclose content and country of
origin information to customers. This change reduced burden on this
industry by 6 million hours.
Agencies are reducing burden by making their forms simpler to read
and fill out and by making their programs easier to apply for.
The Department of Agriculture (USDA) has created a "low-doc" loan
application for their Farm Loan Program. This form, which can be used for
loans under $50,000 or for recurring operating loans, requires
significantly less time and information than the regular loan application,
reducing the burden on small farmers by over 16,000 hours.
The Department of Labor (DOL) estimates that it reduced burden on
the public by over 300,000 hours by streamlining and simplifying its Form
5500. This form is used by businesses to document their employee benefit
plans.
The Department of the Treasury's Internal Revenue Service reduced
the burden of the 1040 by over 13 million hours by increasing by 2 million
the number of taxpayers that could use the 1040A, a simplified version of
the1040.
Agencies are changing the way they do business, incorporating
information
technology into their own work and allowing the public to their existing IT
systems to communicate with the agencies'.
USDA created an automated version of the form it uses to
administer the Noninsured Crop Disaster Assistance Program, reducing the
amount of time it takes the public to apply by almost 850,000 hours.
DOL changed their rules to allow employers to distribute employee
benefit plan disclosures electronically, reducing burden by over 170,000
hours.
OMB Oversight of Agency Efforts to Reduce Paperwork Burden
Factors that Influence Paperwork Burden. Despite these fine
accomplishments,
the total burden for FY 2000 still went up. There are many factors that
contribute
to paperwork burdens going up, not down. New legislative initiatives and
amendments
to existing laws typically require more, not less, data collection. For
example,
in FY 2000, agencies attributed over 5.2 million hours of increased burden
to
their implementation of provisions of the Gramm-Leach-Bliley Act that, for
example,
require financial institutions to enable consumers to restrict disclosures
of
their nonpublic personal information and require public disclosure of
Community
Reinvestment Act agreements between banks and non-governmental parties. In
addition, even in the absence of legislative changes, the paperwork
associated
with agency statutory and program responsibilities can expand over time due
to
a number of factors beyond the agency's direct control, such as economic
growth
and demographic trends. For example, as the number of businesses grows, the
number
of applications to the Small Business Administration for loans increases,
the number
of respondents to Occupational Safety and Health Administration reporting
requirements
increases, and the number of reports to the IRS of payments made to
employees increases.
Frankly, it is not surprising that the information collection
requirements of
the Federal government continue to grow. In this Information Age, the
Federal
government has come to rely more and more on information to perform its
most
basic functions. Information is the key to an effective government that
provides
its citizens with necessary services -- national security; a sound
financial
system; health, safety and environmental protections -- in the least
intrusive and most efficient manner possible. With a population that
is geographically dispersed, highly mobile, and diverse; with an economy
that
is robust, innovative, and operating on a global scale; and with a society
that
is living through the development of the computer as a primary personal and
commercial
tool -- one of the American government's primary functions is that of an
information collecting and management enterprise. Although the Federal
government has always depended on accurate and timely information, in
today=s complex, rapid-pace,
globalized world, the ability of the government to collect and use
information is more critical than ever before.
For example, it is well known that the Federal Government
collections information
to verify compliance with Government requirements. People are most
familiar, particularly
at this time of year, with some version of the IRS Form 1040, used to
calculate and declare
personal income tax. From the point of view of a taxpayer, the annual
preparation
of a tax return is an annual paperwork burden. In total, the Treasury
Department
(specifically the Internal Revenue Service (IRS), Customs Service, and the
Bureau of Alcohol, Tobacco, and Firearms (ATF)) collects over $2.0 trillion
in individual and business income taxes, tariff duties, user fees, excise
taxes, registration
fees, license fees, and other assessments that fund the Federal programs
that protect
and support Americans. These agencies, particularly IRS, collect and have
the public
maintain information to determine if the correct amount of taxes, fees, and
other
revenue has been paid and to correct errors that have been identified. The
Treasury
Department is responsible for roughly 80% of all information collection and
recordkeeping
conducted by the Federal Government.
Agency Compliance. While the PRA acknowledges Federal agencies'
legitimate
need for information to perform their missions, it also requires agencies
to obtain OMB approval of those information
collection activities that are covered by the PRA. It is very important
that
these information collections have OMB approval because it is the process
by
which agencies request and receive OMB approval that requires agencies and
OMB
to assess, among other things, the trade-off between the practical utility
of information
collections and the burden they impose on the public.
Since the FY 1998 ICBs, we have listed agency violations of the PRA.
These
occur primarily when agencies continue to use collections for which OMB
approval
has expired. These lists have been much too long and indicate a substantial
problem
that we will work to resolve. We take agency violations of the PRA very
seriously,
and will be working with the agencies to improve their compliance with the
Act.
OMB's Continuing Role. In light of the government's need for
information
to best serve the public, it is more critical than ever that we do more to
lead
a governmentwide effort to reduce paperwork burden on the public. OMB looks
forward
to the confirmation of John Graham as the Administrator of OIRA so that we
can
move forward in this direction. Of course, OMB welcomes any suggestions you
may
have on how we can achieve more burden reduction, and looks forward to
working
with you toward that end.
Midnight Regulations
I would like to take this opportunity to also discuss one of the
other significant issues on which OIRA has been working since January 20.
Over
the last months of the Clinton Administration, the Executive Branch issued
a large
number of significant rules. Some were rushed through the normal process so
quickly
as to raise real concerns about the policies they implemented and doubts
about
the procedures by which they were issued. For example, the National Park
Service's
final rule to phase out snowmobile use in Yellowstone National Park was
sent to the Federal Register only hours after the comment period on the
proposal
ended, during which the agency received over 5,000 comments.
This Administration took action on these "midnight regulations"
immediately. On January 20,
the Chief of Staff, Andrew H. Card, Jr., issued a memorandum entitled,
"Regulatory
Review Plan," establishing procedures to ensure that -- during the
transition period -- appointees
of President Bush reviewed and approved agency rulemakings that would be
issued under the new
Administration. To expedite needed rulemakings, OMB was to permit agencies
to
publish rules related to "emergency or other urgent situations relating to
health
and safety." Agencies were to withdraw rules from the Federal
Register that had not
been published. Agencies were to postpone by 60 days the effective date of
final
rules that had not yet taken effect. OMB was to exclude from these
requirements
those rules relating to "emergency or other urgent situations relating to
health and safety."
A week later, the OMB Director issued a memorandum (M-01-09)
entitled,
"Effective Regulatory Review," emphasizing the importance for the new
Administration
to review planned agency rulemakings. Subject to the same exceptions in the
January 20th memorandum, agencies were to withdraw
rulemakings from OIRA
review that had been submitted prior to January 20th. After
the
Administration's appointees had reviewed and approved these withdrawn
rules, they were to be resubmitted for OIRA review under E.O. 12866.
We are very pleased with the results of our efforts in these first
weeks of
the Administration and with the work OIRA has done. OIRA has conducted
reviews
of numerous rules that had already been published but not yet effective. In
some
cases, the Administration affirmatively decided to let the rules to become
effective without further action. For example,
The Department of Health and Human Services (HHS) rule on egg labeling
will
take effect on June 4. This rule requires egg cartons that have not
been treated
for Salmonella carry a statement for consumers on how to handle them
safely.
The rule also sets a maximum temperature for storage and display of shell
eggs
that have not been treated to destroy Salmonella.
The Administration also allowed an HHS rule expanding Medicare coverage
for Outpatient Diabetes Self-Management Training and Diabetes Outcome
Measurements
to become final without delay.
The Administration reviewed and decided to move forward with EPA's
January 18 final rule to reduce pollution from
heavy-duty trucks and buses. Beginning in 2007, the rule will require
engine
manufacturers to reduce particulate matter (soot) by 90 percent and
smog-causing
nitrogen oxide emissions from new trucks and buses by 95 percent from
current
levels, guaranteeing cleaner air and improved public health for many
Americans.
The rule also requires refiners to reduce the sulfur in diesel fuel to
ultra-low
levels needed to allow advanced emission control technologies to operate
effectively.
EPA's Lead rule was also allowed to take effect without change. The
rule establishes uniform, national
standards for paint, dust and soil in pre-1978 housing and child-care
facilities.
The hazard standards established in the rule will serve as the focal point
of
several key components of the Federal lead program. In addition, these
hazard
standards will be incorporated in HUD rules requiring cleanup of housing
receiving
Federal assistance. They will also serve as the basis for the cleanup of
Federally
owned housing (e.g., DOD housing) and the cleanup of property (e.g.,
military
bases) transferred to State and local governments or sold to private
parties.
USDA moved forward with its proposed rule that would expand Listeria
control
program and establish Salmonella and E. Coli performance
standards
for ready-to-eat meat and poultry, requiring firms to either test plant
surfaces
for Listeria or to incorporate control programs for Listeria
in
their prevention plans.
However, some of the previous Administration's regulatory
actions do require significant additional scrutiny, so the agencies have
initiated
rulemakings to give this Administration that opportunity.
On March 23, 2001, the Department of the Interior proposed to rescind
the Bureau
of Land Management final rule that imposed new environmental performance
standards
on mining on public lands.
On April 3, 2001, the Federal Acquisition Regulation Council
indefinitely
stayed the "Contractor Responsibility" rule and proposed its
revocation.
Our review of these "midnight regulations" continues as we speak.
Many of these rules
are highly contentious and deserve a full airing, both within the Executive
Branch and in public. We will err on the side of delaying a rule to allow
further
consideration rather than allow the artificially-compressed timetables of
the previous
Administration limit our deliberations.
Conclusion
Overall, the Office of Information and Regulatory Affairs has a lot
of work ahead of it as this Administration evaluates its starting position
with
regards to regulations and information collection and develops concrete
plans
of action. There are significant opportunities to relieve the American
people
of unnecessary Federal burdens. We look forward to the confirmation of John
Graham
as Administrator and know that he will be ready, willing, and able to lead
OIRA's effort to streamline and reduce the regulatory
and information collection burden the Federal government imposes on the
public.
I personally look forward to working with him and with you, Mr. Chairman
and members
of the Subcommittee, to accomplish this important task. Thank you.
