Improved Quality, Adequate Resources, and Consistent Oversight Needed if Regulatory Analysis Is To Help Control Costs of Regulations

In response to a congressional request, GAO examined the role and performance of regulatory analysis in controlling the costs of federal regulation and the fundamental outstanding issues confronting Congress in determining whether and how to legislate a regulatory analysis requirement. Specifically, GAO was asked to analyze the effects of regulatory oversight by the Office of Management and Budget (OMB) under Executive Order 12291 and the potential effects of proposed Senate Bill S. 1080.

Executive Order 12291 currently requires that major regulations be analyzed to assess their costs and benefits. This requirement may be augmented by proposed regulatory reform legislation, S. 1080, which would require a description and comparison of the costs and benefits of all major proposed and existing regulations and reasonable alternatives to them. GAO found that many regulatory analyses do not provide adequate support for their conclusions. The costs of regulatory analysis under Executive Order 12291 are high, and S. 1080 can be expected to increase them. The regulatory impact analysis requirement of Executive Order 12291 has not significantly slowed deregulation. S. 1080 would require more analysis of deregulatory initiatives and provides no discretionary authority to waive the regulatory analysis requirement for the initiatives or to provide selective relief not supported by analysis. S. 1080 incorporates some provisions that would provide the public with more information on the role of OMB and would also increase the potential for displacing agency rulemaking discretion by formally authorizing presidential oversight. GAO believes that ambiguity in existing legislation about the applicability of cost-benefit standards may conflict with congressional intent and that the oversight provided for in S. 1080 is likely to reduce the independence of regulatory agencies.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Craig A. Simmons Team: General Accounting Office: Program Analysis Division Phone: (202) 512-8678