Regulatory Reform Message to the Congress on a Program of Legislative and Executive Actions.

To the Congress of the United States:

I am today announcing a program of major reforms in the regulatory process, including both legislative and executive action. This program will make new regulations more efficient and effective; ensure reviews of existing regulatory laws and individual rules to eliminate or revise those that are outmoded; and reduce the burden of regulation and paperwork without jeopardizing our progress toward vital regulatory goals.

Since the first Federal regulatory agency was established nearly a century ago, regulatory programs have grown steadily in number, scope, and impact. During that time, however, little attention has been paid to the management of the regulatory process. There was little effort to reexamine rules which no longer served the public or to ensure that needed programs are run on a common sense basis, so that missions are accomplished with maximum results and minimum burdens.

The time has come to stop this neglect. Just as we have injected a new sense of discipline into the management of Federal budgetary and personnel resources, we must reform the government's regulation of others' resources.

Much of Federal regulation is vitally important to modern society. Goals such as equal opportunity, a healthy environment, a safe workplace, and a competitive and truthful marketplace cannot be achieved through market forces alone. In the last decade, the regulatory programs created to achieve these goals have produced a wide range of benefits, such as:

• Workplace health standards have been established which are protecting more than two and one-half million workers exposed to cancer causing substances, such as asbestos, arsenic, and vinyl chloride.

• Automobile safety devices such as seat belts, collapsible steering wheels, interior padding, and side door strength are saving an estimated 9,000 lives per year.

• Fuel economy standards are reducing automobile gasoline consumption by about 1.5 billion gallons this year.

• Populated areas have more protection against fires, explosion and the spilling of hazardous materials transported by rail because of new rules on tank cars.

• We are making real progress on water pollution. Salmon are swimming in the Connecticut River for the first time in almost two centuries.

• Regulations requiring child-proof containers for such products as household cleaners and drugs have prevented as many as 200,000 accidental poisonings of young children.

• Emission controls for automobiles helped reduce carbon monoxide air pollution by 20% between 1972 and 1977.

The regulatory programs that produced these benefits are essential to the Nation's well-being. I am committed to continuing this progress.

The overall regulatory system, however, has become burdensome and unwieldy. We now have 90 regulatory agencies issuing some 7,000 rules each year. When Congress established these programs, it usually focused on isolated objectives. There was little effort to coordinate overlapping agency mandates or to assess cumulative impact. Little attention was given to analyzing the benefits and costs of proposed rules or to using regulatory approaches which could reduce the cost of achieving the goals. Many regulatory programs were allowed to continue unreviewed for decades, in spite of changing conditions. Some rules, such as certain rules affecting transportation rates and routes, came to do more harm than good by crippling competition. The last comprehensive legislation to improve regulatory procedures was passed more than 30 years ago.

We can no longer afford this neglect. Regulation has a large and increasing impact on the economy. Uncertainty about upcoming rules can reduce investment and productivity. Compliance with regulations absorbs large amounts of the capital investments of some industries, further restricting productivity. Inflexible rules and massive paperwork generate extra costs that are especially burdensome for small businesses, state and local governments, and non-profit groups. Regulations that impose needless costs add to inflation.

Our society's resources are vast, but they are not infinite. Americans are willing to spend a fair share of those resources to achieve social goals through regulation. Their support falls away, however, when they see needless rules, excessive costs, and duplicative paperwork. If we are to continue our progress, we must ensure that regulation gives Americans their money's worth.

During the past two years, I have used my authority as President to improve regulatory management.

• After extensive public comment, I is. sued Executive Order 12044, establishing far-reaching new procedures for development of regulations by Executive agencies. Under that Order, agencies are now analyzing the costs of all major new regulations to seek out the most cost-effective approach; they are expanding opportunities for public participation; and they are starting to identify and eliminate out. dated rules.

• To assist individual agencies in meeting the goals of Executive Order 12044, I established the Regulatory Analysis Review Group, which prepares reports on particularly important proposed rules.

• Until this year, there was no way to get a picture of upcoming regulations. Now, each agency is publishing agendas of the rules it is developing. To provide a government-wide picture of major rules, I have established a Regulatory Calendar to be published twice a year. The first Calendar, issued last month, listed 109 rules being developed this year.

• I created the Regulatory Council to prepare the Calendar and use it to identify and deal with areas of overlapping and conflicting regulations. The Council is composed of Executive regulatory agencies plus those independent commissions that agreed to join.

The men and women I appointed to head the regulatory agencies are working to implement these steps and improve regulatory management. They are achieving results. HEW has eliminated 300 pages of rules. OSHA voided nearly 1,000 nitpicking rules, and the Federal Trade Commission cancelled 145 more. The FCC rewrote its rules on citizens band broadcasting into plain English. The FAA reduced the hours small airlines have to spend filling out their forms by more than two-thirds. EPA designed creative procedures that allow companies flexibility in meeting pollution standards, leading to potential savings of millions of dollars without sacrificing clean air goals. We reorganized regulation of pension programs to eliminate duplication and reduce paperwork.

These efforts will continue in 1979. We have important non-legislative initiatives underway, including: a wide-ranging review of rules affecting technological innovation; revisions of all OSHA safety standards to make them simpler and more flexible; overhauls of the regulations imposing costs on hospitals; streamlining EPA permit procedures; review of restrictions on banking; development of a coordinated policy on identification and regulation of cancer-causing substances; and increased research to improve the factual basis for regulatory decisions on toxic chemicals, air pollutants and radiation. We will continue to scrutinize major new rules to ensure that they accomplish their statutory mandates without imposing needless burdens.

These steps are having an impact. Regulatory programs were created by legislation, however, and we need legislation to achieve comprehensive reform. Last year we and Congress made an important beginning. The Airline Deregulation Act substantially deregulated a major industry and enabled more people to fly while saving passengers $2.5 billion in air fares.

My regulatory reform program has two elements:

• We must work together to review the laws that established the regulatory programs. Those that needlessly restrict competition, impose rigidity, or are otherwise out of date must be revised or eliminated.

• For the programs that are needed, we must assure that the statutory mandates are executed sensibly. We must identify alternative means of achieving goals, choose efficient and effective approaches, and improve planning and coordination. We must make it easier for the public and those affected by regulations to anticipate them, participate in developing them, comply with them, and benefit from them. We must provide common sense management for the regulatory process.

This year I am proposing that Congress act in three areas:

I. REGULATION REFORM ACT OF 1979

Once a statute creating a regulatory program is passed, the quality of the program depends mainly on the men and women who are running it. We have a competent and dedicated group of regulators in government now, and they are producing real advances in regulatory reform.

We need legislation to set uniform standards for the work they do and give them the tools to continue their progress. I am submitting, with this Message, a bill to revamp regulatory procedures. This bill strengthens the reforms introduced by E.O. 12044, makes them permanent, and applies them to the independent regulatory commissions. It also overhauls key parts of the Administrative Procedure Act, for the first time since 1946. It sets vital new rules for the regulators:

• Cost-Effectiveness: The bill requires that when an agency develops a major rule, it lists the alternative means of accomplishing the objective and the costs and benefits of each alternative. The public will be asked to comment on that analysis and to suggest any additional options that should be considered. The agency must select the least costly way to achieve the rule's objective, or if another is needed—explain the reasons.

• Review of Old Rules: Each agency will establish a schedule to review its major rules and smaller rules which may be outmoded or ineffective. The reviews, to be conducted over a 10-year period, will be used to ensure that rules are kept up-to-date or eliminated.

• Planning and Management: The bill requires agencies to publish semiannual agendas of upcoming rules; ensures that senior officials are fully involved in developing rules; and strengthens selection and oversight for the Administrative Law Judges who make many key regulatory decisions.

• Delay: To eliminate needless legal formality and delay, the bill revamps the procedures for agency hearings. It also requires that agencies set deadlines on most proceedings.

• Public Participation: The bill helps those affected by regulation participate in the regulatory process, through more notice to the public, a longer comment period, and consultation with affected state and local governments. It also. authorizes limited funding for groups that would present important information and could not otherwise afford to participate.

The Office of Management and Budget will oversee the key management reforms. The Administrative Conference of the U.S. will oversee administrative law judges and use of the participation funds. I will soon submit a reorganization plan to enable the Conference to carry out these missions.

II. PAPERWORK REDUCTION

The Federal Government must collect information from the public to enforce the laws, analyze the economy and establish sound public policy. But too many paperwork requirements are duplicative, unnecessary, or place an unreasonable burden upon small organizations. Over the past two years, we have cut the time the public spends filling out Federal forms by about 15%. But we must do more.

The job of reviewing Federal paperwork requirements should be performed in one place—not divided as it is now, among OMB, GAO and other agencies. I shall submit legislation to the Congress to centralize this mission in the Office of Management and Budget.

In addition, I will soon issue an Executive Order to further reduce the paperwork burden. The Order will require agencies to consider the special problems that small businesses and organizations face in filling out Federal forms and will authorize simpler forms and requirements for such groups. It will establish a "paperwork budget" for Executive agencies and create an information locator system to help agencies determine whether the information they need is already available elsewhere. No report should be approved if the information can be obtained, within privacy and confidentiality protections, elsewhere in the government.

III REFORM OF INDIVIDUAL STATUTES

All regulatory programs were created by legislation and many of their problems can be solved only by amending individual statutes. Much of the trouble with regulation built up because laws have gone unchanged in spite of changing needs.

This problem applies to many Federal programs in addition to regulation. One answer is to pass a sunset bill. This legislation would set a schedule for Congressional review of each program, once every 10 years. The reviews would be timed so that related programs are considered simultaneously. To ensure that the reviews are serious, spending authority would terminate unless Congress acts to renew or revise the program.

Sunset will make a crucial contribution to the effort to cut the waste from government regulation and government spending. An excellent sunset bill passed the Senate last year. With the addition of sunset reviews for Federal tax expenditures, this legislation will make a great contribution to effective management. I urge Congress to put it into law.

In addition, my Administration will work with Congress this year to reform several individual regulatory statutes. We just submitted the first of our proposals to reduce economic regulation of surface transportation. We will submit legislation on drugs, nuclear plant siting, meat and poultry inspection and other areas. And we will work with Congress on bills already introduced to revamp regulation of communications.

To reform regulation, we and Congress must act in partnership, within our respective spheres of responsibility under the Constitution. The program I have stated follows that principle. From Congress, it asks reform of underlying statutes and modernization of the ground rules for administering them. From me, and from the agency heads I have appointed to help me execute the laws, it demands competent management and coordination.

I ask Congress to join me in this effort and to refrain from seeking authority to veto individual regulatory decisions and thereby to administer the laws itself. The legislative veto is an illusory solution to the problems of regulation. In some cases it would make rules weaker; in others it would make them stricter. But in all cases, it would increase delay, undermine fair procedures, and fragment responsibilities. It would disrupt our effort to manage the regulatory process, and it would distract Congress from the fundamental job of reforming underlying statutes. Any serious effort to administer the legislative veto would require a major increase in congressional staff and threaten the Constitutional division of power.

The program I am proposing will not solve all the problems overnight. But these steps will make regulation a more effective tool to improve our lives. They will help get needless rules and paperwork off our backs, and they will help marshal our resources to attack the real problems with maximum efficiency. By doing so, they will help us advance our national commitment to the regulatory goals we all believe in-a healthier, safer and fairer America.

JIMMY CARTER

The White House,

March 26, 1979.