Statement of Administration Policy: H.R. 994 - Small Business Growth and Administrative Accountability Act of 1996

(House)
(The Clinger/Hyde Substitute)

The Administration supports judicial review of agencies' regulatory flexibility analyses. The Administration, however, has concerns about a one-year statute of limitations where a shorter period of review for the final agency action is provided by law. Moreover, the statute of limitations should begin after the publication date of the regulation, not the effective date.

The Administration also supports the concept of legislative branch accountability for regulations and, for that reason, has endorsed a limited period of review by the Congress of rules before they take effect. The Administration, however, opposes extending this review period from the 45 days provided in the Senate-passed bill (S. 219) to 60 days in this legislation, and objects to its retroactive application.

The Administration is committed to administrative review of existing regulations and to eliminating those that are outdated, ineffective, or unduly burdensome. The substitute amendment to H.R. 994, however, does not provide an effective or workable means of achieving this goal. The Administration strongly opposes the administrative review provisions in H.R. 994 because, among other things:

• The scope is overly broad. The bill's definition of "major rule" and "covered rule" encompasses virtually every rule in the existing Code of Federal Regulations, many of which are non-controversial, insignificant, or otherwise do not warrant review, as well as guidance and other policy documents.
• The review process is overly prescriptive and burdensome. Agencies will be tied in knots while trying, to comply with the bill's burdensome and elaborate review procedures. H.R. 994 prescribes detailed requirements for each step, .including initial designation of rules, review and analysis, solicitation and consideration of public comments, as well as full rulemaking proceedings. These procedures would have to be followed even when the agency's analysis indicates that the rule should be continued without change. There is, in addition, a petition process that would force agencies to devote resources to reviewing less significant rules before more significant rules.
• Excessive litigation would result. The' bill would create numerous new opportunities for judicial review, thus introducing additional delay, cost, and uncertainty.
• Agency resources would be drained. Administration experience with review of existing regulations has shown that such a review, when thoroughly done, is very time-consuming and expensive. Under this bill, these costs would be imposed on agencies for potentially every regulation in the Code of Federal Regulations, at a time when many agencies are experiencing large budget reductions.
• Important health and safety rules could be suspended. The bill would allow courts to suspend regulations if rulemakings are not completed by a set date. Given the tremendous number of rulemakings that agencies will have to conduct under this bill, important health and safety rules, as well as rules that provide important economic benefits, could be suspended.

On the basis of these objections, if the substitute amendment to H.R. 994 were presented to the President with the provisions regarding administrative review of existing regulations, the Director of the Office of Management and Budget and the Secretaries of Agriculture, Education, Energy, Health and Human Services, the Interior, Labor, Transportation, the Treasury, and Veterans Affairs, and the Administrator of the Environmental Protection Agency and would recommend that it be vetoed.