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Report Highlights Negative Effects of Regulations on Regulatory Agencies

Posted 27 June 2012 | By Alexander Gaffney, RAC 

Legislation and executive actions taken in recent years are increasingly looking to regulatory policy as a mechanism for promoting efficiency within the federal bureaucracy and competitiveness in the economy. The thinking is often based on the assumption that if regulatory agencies better understood the impact of the regulations being promulgated, they could better tailor them so as not to overly burden the industries they regulate.

A new report by the public advocacy organization Public Citizen claims the government's own efforts to regulate its regulators is having a negative effect on the speed at which regulators can respond to the public's needs, leading to unnecessary delays in the issuance of safety regulations.

Public Citizen identified four aspects of the regulatory review period it claims are-or could soon be-slowing down the regulatory process-sometimes by years at a time. The first is the Regulatory Freeze Act-a pending piece of legislation requiring agencies to analyze the impact of a regulation on small entities, including the costs of compliance and the number of companies affected. The costs of analysis in both time and resources is high, writes the group, and the delayed regulations could have negative effects on public health.

A second barrier identified by Public Citizen is Executive Order (EO) 12866, which requires additional analyses to be conducted on regulations that would have a significant impact on the economy. The EO, signed in 1993 by President Bill Clinton, also requires the Office of Information and Regulatory Affairs (OIRA) to review and approve all pending regulations. This represents the third barrier identified by Public Citizen. Under federal law, OIRA has 90 days to conduct its analysis of a regulation, with the option for an additional 30 days if warranted.

The Impact of OIRA

In practice, OIRA does not always adhere to statutory deadlines for analysis. The US Food and Drug Administration's (FDA) Unique Device Identification (UDI) rule has been under review by the office since July 2011, while a rule regulating laser products has been under review since May 2011. "In total, 51% of the rules submitted to OIRA exceeded 120 days of review," explained Public Citizen.

In total, FDA has seen just two of its eight significant regulations passed in the expected amount of time. OIRA did not review six, or 75%, of the rules published by FDA in 2011 in the allotted amount of time according to Public Citizen's analysis.

The group also highlighted what it sees as "politically motivated delays" as a source of delays in regulatory decision-making. Industries can-and often do-lobby for legislation and regulations favorable to their own interests. This can have a pernicious effect on the ability of regulatory agencies to protect the public, explained Public Citizen. These efforts are often used to delay regulations, lobby for new regulations, or seek more favorable treatment.

"The administration's failure to issue vital rules on time leaves the public at risk," said Public Citizen President Robert Weissman. "The culprits are many ... But none of this is an excuse for agencies failing to carry out the law."

"Look-back" Provisions

Another public advocacy group, The Center for Progressive Reform (CPR), has previously highlighted similar provisions in its own analyses of the regulatory system. In particular, the group has highlighted regulatory "look-back" provisions as being a drain on resources-something also highlighted by Public Citizen in its analysis.

So-called "look-back" provisions mandate agencies to analyze their regulations to find obsolete, overly-complicated or unnecessary regulations. In May 2012, US President Barack Obama called on agencies to exercise their "look-back" abilities in an Executive Order entitled "Identifying and Reducing Regulatory Burdens."

"[Agencies] have developed and made available for public comment retrospective review plans that identify over five hundred initiatives," wrote Obama in the Executive Order. The refined regulations are expects to save "billions of dollars in regulatory costs and tens of millions of hours in annual paperwork burdens."

Under the order, regulatory agencies would continue to be expected to involve members of the public and regulatory experts in their reviews of regulations and regulatory report to the Office of Information and Regulatory Affairs (OIRA) on their review process each year. OIRA has called on federal agencies to also assess the "cumulative effects" of an agency's regulations, writing in a March 2012 statement that agencies should "reduce redundant, overlapping and inconsistent requirements."

The US Food and Drug Administration (FDA) seems to be in the process of complying with those directives. Twice in June the agency has announced the immediate withdrawal of a regulation and a guidance documents, respectively referred to by the agency as obsolete and outdated.

Too Few Resources

The problem, wrote Rena Steinzor, President of CPR and a Professor of Law and the University of Maryland, is that agencies have been given additional duties to analyze their own regulations without being given a corresponding increase in funding.

"This is nonsense," explained Steinzor. "A check of the latest regulatory agendas shows agencies are behind on countless important rules to protect the public's health and safety." Agencies should instead be focused on developing regulations to confront the newest and more pressing threats to consumer safety instead of spending previous resources on reviewing existing regulations, she continued.

Public Citizen would seem to agree.

"The rulemaking process is already bottled up due to requirements that agencies conduct dense analyses and reviews," it explained. "Even when Congress sets a deadline to prioritize a rulemaking, agencies are missing nearly four-fifths of those deadlines. Congress should be looking for ways to make the rulemaking process more efficient, not proposing hurdles to slow it down."

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