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Regulatory Reform Issue [1981] (1)
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ROUGH
DRAFT
File Rea Relief
Materials on President Reagan's
Program of Regulatory Relief
June 5, 1981
LUNEM
PRESS RELEASE
THE WHITE HOUSE
Office of the Press Secretary
FOR RELEASE: June 5, 1981
STATEMENT BY THE PRESIDENT ON REGULATORY RELIEF
Excessive and inefficient Federal regulations place an
undue burden on our society. They limit job opportunties,
raise prices, and reduce the incomes of all Americans. During
the Presidential campaign, I promised quick and decisive action.
Since taking office, I have made regulatory relief a top
priority. It is one of the cornerstones of my economic recovery
program.
Thanks to the constructive work of my Task Force on Regula-
tory Relief, chaired by Vice President Bush, many needless and
unproductive regulations have been eliminated. Others in my
Administration are moving forward with equal vigor, and are
producing tangible results.
The materials in this volume document some of our progress.
But more needs to be done, and will be done. I am confident
that the legitimate purposes of regulation can be met at
considerably lower costs. We shall not rest until that goal
is achieved.
Ronald Reagan
INTRODUCTION
The materials in this information packet summarize the Reagan
Administration's early progress in reducing the burden of
excessive and inefficient Federal regulation on the American
public.
This continuing effort is under the overall direction of a
cabinet-level Presidential Task Force on Regulatory Relief,
chaired by Vice President George Bush. Other members of the
Task Force are: Treasury Secretary Regan, Attorney General
Smith, Commerce Secretary Baldridge, Labor Secretary Donovan,
Office of Management Budget Director Stockman, Assistant to the
President for Policy Development Anderson, and Council on Economic
Advisers Chairman Weidenbaum.
The first item in this packet is a fact sheet summarizing the
President's program:
1.
The President's economic recovery program and his
program of regulatory relief, (pp. ).
Second, the packet contains information on several announcements
made by the Vice President on June 5. Included are:
2.
Statement by the Vice President on regulatory
relief progress to date. This includes reference
to items # 2 through #6 below, as well as mention
of the Task Force's plan to review Presidential
Executive Orders (pp. ).
3.
Summary of regulatory relief initiatives,
January 20 - April 24. Included is a table
showing that the initiatives announced to
date could save the American public between
$15.5 billion and $18.6 billion, or between
$5.5 billion and $6.0 billion annually (pp. ).
4.
Experience under the first 100 days of Executive
Order 12291, "Federal Regulation." This report
shows how the Office of Management and Budget
has developed procedures for reviewing new and
existing regulations, and the types of regula-
tions reviewed thus far (pp. ).
5.
Effects of the 60-day postponement of new
regulations (pp. ).
6.
Guidelines for preparation of Regulatory Impact
Analyses. This outlines in more detail the
Executive Order's requirement for agency
analyses to accompany proposed regulations or
regulatory changes (pp.
).
- 2 -
Finally, this packet contains key documents which describe in
chronological order the Administration's regulatory policies
and their implementation. These include:
7.
Press release on President's announcement of
the Task Force, January 22, 1981. With the
Vice President in attendance, the President
announced his intention to establish a task
force to be "more than just another presidential
task force that files a report" (pp.
).
8.
President's memorandum of January 29, 1981
asking executive agencies to postpone the
effective dates of new regulations for 60 days.
President Reagan's January 29 memorandum
instituted a moratorium on new Federal regula-
tions to allow for review of the so-called
"midnight regulations" issued in the last days
of the previous Administration (pp. ).
9. Vice President's statement on Task Force member-
ship and charter dated January 30, 1981. In this
statement the Vice President details the role
of the Task Force and its organization (pp. ).
10.
President Reagan's Executive Order 12291, "Federal
Regulation," and accompanying fact sheet, both dated
February 17, 1981. The Executive Order states the
President's regulatory principles, creates a mechanism
for reviewing all new and many existing regulations
by the Office of Management and Budget, and establishes
the pre-eminence of the Task Force in overseeing
the President's regulatory relief program (pp. ).
11.
Excerpts on regulatory relief from "America's
New Beginning: A Program for Economic Recovery,"
and the fact sheet on the President's initiatives
to reduce regulatory burdens, both dated
February 18, 1981. As part of the President's
announcement of his Program for Economic Recovery,
these documents describe the Administration's
initial regulatory relief actions, including
abolishing the Council on Wage and Price Stability's
wage/price monitoring program (pp.
).
12. Press release by Vice President Bush on Environmental
Protection Agency change in national air pollution
rules, dated March 7, 1981. This rule change allows
- 3 -
firms to offset pollution caused by plant expansion
by reducing pollution from other sources in the plant
(pp. ).
13.
Press statement of Vice President Bush dated March 25,
1981 and accompanying materials on 36 new (proposed)
rules to be postponed and 27 existing agency rules
to be reviewed under the Executive Order, EPA's
"bubble" initiative, and certain correspondence
(pp. ).
14.
Fact sheet dated April 6, 1981 summarizing
President's program of regulatory relief for
the U.S. automobile industry (pp. ).
THE WHITE HOUSE
Office of the Press Secretary
FOR RELEASE: June 5, 1981
SUMMARY FACT SHEET
The President's Economic Recovery Program
and Regulatory Relief
BACKGROUND
The President has proposed a national program for economic recovery
designed to revitalize economic growth, increase productivity,
reduce inflation and unemployment, and rekindle the Nation's
entrepreneurial creativity.
The program is designed to restore forward momentum to the economy
in order to achieve a full and vigorous recovery. The Administra-
tion's economic recovery program has four key components:
*
A stringent budget policy designed to reduce the
rate of growth in Federal spending.
*
An incentive tax policy designed to increase after-
tax returns for savings, work and investment.
*
A regulatory relief program designed to eliminate
unnecessary and costly regulations and bring
efficiency to the overall regulatory process.
*
A stable monetary policy, designed to reduce
uncertainty and bring inflation under control.
These components are mutually reinforcing. Taken together, they
constitute a positive program for the achievement of economic
prosperity.
The remainder of this summary fact sheet focuses on the President's
efforts to reduce the Federal government's regulatory burden on
all Americans.
EXECESSIVE FEDERAL REGULATIONS
As President Reagan said in his February 18 economic address to
Congress, American society experienced a virtual explosion in
Government regulation during the past decade. Between 1970
and 1979, expenditures for the major regulatory agencies
quadrupled. The number of pages published annually in the
Federal Register nearly tripled, and the number of pages in the
Code of Federal Regulations increased by nearly two-thirds.
- more -
- 2 -
The budgetary costs of these excessive regulations were passed
onto individuals in the form of higher taxes, while regulatory
compliance costs by businesses added billion of dollars per
year to the price of goods and services Americans bought.
REGULATORY RELIEF INITIATIVES
Faced with a regulatory machine run amuck, the President
commenced a number of swift, effective actions to eliminate
unproductive and unnecessary regulations, better coordinate
and improve the management of the entire regulatory process,
and reduce Federal intervention in the lives of all Americans.
These actions include:
*
Establishment of the Task Force on Regulatory Relief
On January 22, the President created a cabinet-
level Task Force on Regulatory Relief, chaired by
Vice President George Bush. Among its ongoing
responsibilities, the Task Force will review pending
regulations, study existing regulations with an eye
toward revising them, and coordinate proposals for
legislative change.
* Postponement of Pending Regulations
On January 29, the President requested the heads of
12 Federal departments and agencies, to the extent
permitted by law, to postpone the effective dates
of regulations scheduled to become effective before
March 29 and refrain from issuing any new final
regulations during the same 60-day period. This
action was taken to allow review of regulations
issued during the previous administration, allow
time for Reagan Administration appointees to
familiarize themselves with the details of these
regulations and programs, and allow the Presidential
Task Force on Regulatory Relief to develop procedures
to improve management and oversight of the regula-
tory process.
*
Signing of Executive Order 12291
On February 17, the President signed a new
Executive Order designed to produce better
- more -
- 3 -
quality regulations. The Executive Order directs
agencies to determine the most cost-effective
approach for meeting any regulatory objective;
requires that agencies prepare Regulatory Impact
Analyses, and evaluate the potential benefits and
costs of their major regulatory proposals; and
emphasizes that regulatory actions should not be
undertaken unless the potential benefits to society
outweigh the potential costs.
*
Announcement of Changes in National Air Pollution
Rules
On March 7, the Vice President, in his capacity as
Chairman of the Presidential Task Force on Regulatory
Relief, announced that the Environmental Protection
Agency would propose an important change in its
national air pollution regulations. The change,
dealing with EPA's treatment of new sources of air
pollution, sharply reduces Federal restrictions
on new industrial development while continuing to
protect the public against air pollution.
*
Further Postponement and Review of Federal Regulations
Building on the actions announced by the President
on January 29 and February 17 for more cost-effective
regulations, the Vice President on March 25 announced
that 63 regulations which had been in effect or awaiting
adoption by a number of government agencies would be
candidates for modification or elimination.
The Vice President also announced that: (a) he had
solicited views on regulation and priorities from
business, labor, consumer, academic, and other groups,
(b) the Environmental Protection Agency had approved
New Jersey's rule to permit more flexible emission
standards, known as "bubble" rules, and (c) the
Calendar of Federal Regulations would continue to
be published, with input gathered from executive
and independent agencies.
*
Initiatives Affecting the Auto Industry
On April 6, the Auto Industry Task Force and the
Presidential Task Force on Regulatory Relief
announced changes in regulation designed to save
- more -
- 4 -
the U.S. auto industry $1.4 billion in capital
costs, hold down consumer prices by some $9.3
billion over the next five years, and return
200, 000 idle auto workers to their jobs by the
end of 1982.
*
Regulatory Relief Actions At the Agencies
Many cabinet departments and agencies, in coordina-
tion with the Presidential Task Force on Regulatory
Relief, have taken significant regulatory actions
of their own. These include:
O On February 2, the Secretary of Education
withdrew the proposed bilingual education
rules. These rules would have required
all school systems to offer bilingual
instruction to each child whose primary
language is other than English. The
Department estimated that the proposed
rule could have cost up to $1 billion
over the first 5 years of the program and
an annual maintenance cost of between $72
million and $157 million thereafter.
On February 17, the Secretary of Energy:
-- Announced that national energy efficiency
standards for major household appliances
will not be issued until a thorough re-
view is completed. The 1980 proposal
would require producers to redesign, by
1986, virtually all existing models
of these appliances and to retool their
production lines. As a result, many
small firms would probably be forced
out of business and consumers would face
sharply higher costs -- about $500 million
annually. Low-income families could be
especially hard-hit, since the standards
would prevent continued production of the
kinds of lower-cost appliances they can
afford.
-- Withdrew proposed standby energy conserva-
tion measures involving a compressed work
week, vehicle use stickers, and the part
- more -
- 5 -
of the employer-based commuter and travel
measures concerning working hours and
transit subsidies. In addition, the
Secretary proposed to withdraw several
interim final measures, including odd-even
day motor fuel purchases, additional
employer-based commuter and travel measures,
increased enforcement and/or reduction of
the 55 m.p.h. speed limit and mandatory
temperature restrictions. This action
rescinded measures which, if implemented,
would have interfered excessively in all
our daily lives.
On February 17, the Director of OMB revoked
the Department of Energy's clearance under the
Federal Reports Act for the collection of
industrial energy consumption data. A number
of respondents had provided data which
demonstrated that the information requested
is needlessly detailed and unduly burdensome.
This action terminated the collection of
industrial energy data for sites not subject
to Federal regulation and precluded the Federal
Government from expanding its regulatory pro-
grams.
On February 17, President Reagan revoked
Executive Order 12265, which established a
cumbersome, duplicative and burdensome
regulatory policy regarding the export of
some hazardous substances. The rescinded
Executive Order would have threatened American
workers' jobs and could have disrupted produc-
tion abroad where affected U.S. exports serve
as vital material inputs. Procedures already
exist which inform foreign governments of
hazards associated with exported American
products. Thus, each foreign government can
decide for itself whether to import the pro-
ducts and what precautions to take.
EARLY SUCCESSES
The President's program of regulatory relief has already attained
tangible results. For instance:
- more -
- 6 -
*
Approximately 181 regulatory relief actions
(regulations withdrawn, modified or under review)
have been taken by 13 Federal regulatory agencies
since January 20.
*
These relief actions affect regulations with an
estimated annual cost of $5.5 to $6 billion, and
an estimated one time cost of $15.5 to $18.6
billion.
*
Relief initiatives taken by two agencies alone --
EPA and DOT -- affect regulations with an
estimated annual cost of over $3 billion and an
estimated one time cost of $14 billion.
*
By the end of March, reflecting the President's 60-
day postponement, the volume of Federal rules pro-
posed or made final was nearly cut in half while
the number of pages printed daily in the Federal
Register was down a third.
Much more will be accomplished in the coming months. We have just
begun. Regulatory relief, as a major component of the President's
economic recovery program, will continue to be a high priority for
this Administration.
# # #
PRESS RELEASE
THE VICE PRESIDENT
OFFICE OF THE PRESS SECRETARY
FOR RELEASE: June 5, 1981
CONTACT:
Peter Teeley
Shirley Green
(202) 456-6772
STATEMENT BY THE VICE PRESIDENT
REGARDING PROGRESS MADE IN ACHIEVING
THE PRESIDENT'S GOALS OF REGULATORY RELIEF
I have a number of announcements today which report on our
progress in achieving President Reagan's goals of regulatory
relief. Before getting into the specifics, however, I want to
emphasis that this Administration's regulatory relief initiatives,
which the President has asked me to lead, are an essential,
component part of the President's program of economy recovery.
The whole idea is to get this economy moving again -- to create
jobs, to reduce inflation, and to increase the incomes of all
Americans.
As you know, with the help of Congress we are achieving
real success with the President's budgetary proposals. We need
the tax program as well -- to provide incentives for consumers
to save and for businesses to invest. We need regulatory relief,
and we are all working toward that end. And finally, we need a
sound, stable monetary policy, one that will reduce uncertainty
and restore credibility to our monetary system.
Now, let me turn to a report we are releasing today entitled
"Summary of The Reagan Administration's Regulatory Relief Actions,"
prepared for the Presidential Task Force On Regulatory Relief by
the staff of the Office of Management and Budget. This report
concludes that the regulatory relief initiatives announced thus
far by the Administration will generate significant savings for
the American people. Although these figures are fairly rough
estimates, they show one-time savings in the neighborhood of $15
to $18 billion, with annual savings approaching $6 billion. I
should emphasize, however, that this is only the beginning. Our
purpose in putting this together is as much for our own use as
for yours. One thing we want to make sure of is that we are
making progress and will continue in the future.
Second, there are two other analyses -- one on the President's
sixty-day regulatory postponement, and another of the first one
hundred days of Executive Order 12291. Partly as a result of
- 2 -
the postponement, there has been a notable reduction in the size
of the Federal Register during recent months. The average size
of the Register is down one-third, and the number of proposed rules
has been cut roughly in half. Agencies are responding well to the
Executive Order, and I believe that we now have in place a reason-
ably well-functioning process for the review of new and existing
regulations.
Third, we are releasing a set of guidelines to agencies
concerning the Regulatory Impact Analyses which they are required
to prepare for major rules and regulations. This is an effort
to flesh out the requirements listed in the Executive Order.
You should note, however, that these are interim guidelines and
may be amended depending on further experience under the Executive
Order and suggestions coming from the agencies and others who
make use of the system.
Finally we have compiled a set of information entitled,
"Materials on President Reagan's Program of Regulatory Relief."
This is a collection we put together for purposes of better
explaining the President's program and for providing relevant
materials to those in the press. We plan to mail this volume to
some 3,000 reporters, editors, and others in the media, and shall
make it available to others who show an interest.
I have one other announcement. The President has asked the
Task Force to review his own regulations -- that is, the hundreds
of Executive Orders that are currently in effect. We have
discovered that many of these are no longer relevant, some have
been ignored for years, and others are downright counterproductive
to the kind of regulatory relief we are trying to achieve. We
have begun a process of winnowing these down and expect to complete
the process over the next few months.
Let me convey my sincere appreciation to those in the private
sector and those in government who have contributed so much to
getting this regulatory relief program off to such a good start.
We have received hundreds of substantial responses to my letter
of March 25. Moreover, agencies have been enthusiastic about
this program, and all have indicated timetables for completion
of the analyses of existing rules that I announced on March 25.
With this degree of cooperation, I am sure we will fulfill the
President's pledge to achieve significant regulatory relief.
# # #
Excerpts from: Summary of Reagan Administration's
Regulatory Relief Actions: A Report by the Presidential
Task Force on Regulatory Relief and the
Office of Management and Budget
Introduction
The attached tables reflect a preliminary effort to quantify the
regulatory relief initiatives taken between January 20 and
April 24. A brief description of the contents of these tables
and some useful commentary on their usefulness follow:
1. The tables contain: (a) the items on the Task
Force list of rules designated for postpone-
ment; (b) the items on the Task Force list of
existing regulations to be reviewed; (c) the
list of actions to help the auto industry; and
(d) other major actions initiated by the
agencies themselves. 1/ The list does not in-
clude regulations allowed to go into effect
during, or at the end of the 60-day postpone-
ment, or subsequent actions that are not
perceived as being in the nature of granting
regulatory relief. The list includes a wide
variety of actions, some arguably trivial and
some very important. Some of the items involve
a withdrawal or change of a rule, while others
involve only an intention to review.
2. Some type of cost estimate is provided for 55
of the 181 items in the tables. Almost all
of the cost estimates are from the agencies,
and almost all represent non-budgetary costs.
Because of the variety of sources for the
estimates, we cannot be sure that they have
been derived in a consistent manner. For
example, in some cases there is double counting
because annual costs include a share of
investment costs in the form of depreciation.
3. The totals -- $15.5 to $18.6 billion in one-
time costs and $5.5 to $6.0 billion in re-
curring costs -- are large. However, it
1/ Vice President Bush, Chairman of the Presidential Task
Force on Regulatory Relief, announced items (a) and (b)
on March 25 and item (c) on April 6.
- 2 -
should be stressed that they are not precise.
On the one hand, since there are no estimates
for 70 percent of the items, we might assume
that the total is low, even allowing for the
fact that many of the items for which no
estimates are available are trivial. On the
other hand, except for the auto package items,
the cost estimates generally represent potential
savings if the regulation is entirely elimi-
nated; since, in many cases, the regulation
may go forward in modified form, the actual
savings could be lower.
4. The largest potential savings estimates are for
the Department of Transportation and the
Environmental Protection Agency. Somewhat
surprisingly, the majority of the savings are
for items not included in the auto package:
EPA items not in the auto package account for
$3.4 billion in one-time costs and $1.3 billion
in recurring costs; DOT items not in the auto
package account for $8.7 to $9.7 billion in
one-time costs and about $400 million in
recurring costs.
Table 1:
SUMMARY OF REGULATORY RELIEF INITIATIVES
JANUARY 20 TO APRIL 24
Annual
Investment
Number of
Number of Regulations
(Recurring)
(One-Time)
Agency
Regulations
With a Cost Estimate
Cost (millions)
Cost (millions)
USDA
5
3
$ 602-610
$
NA
Commerce
10
3
20
3
Energy
6
1
500
NA
Education
5
1
72-157
900-2,950
EPA
27
19
2,118
4,327
HHS
4
0
NA
NA
HUD
31
0
NA
NA
DOI
12
1
0
NA
Justice
3
0
NA
NA
Labor
18
10
913-1,298
1,087
OMB
3
0
NA
NA
DOT
55
19
1,289
9,204-10,204
Treasury
2
0
NA
NA
181
55
$ 5,514
$ 15,521
to
to
$ 5,992
$ 18,571
This estimate does not include the $1 billion to $2 billion savings which
could result from EPA's review of the Hazardous Waste Disposal regulations.
b Same as in above footnote, except that this estimate includes a $1.5 billion
savings which would occur if EPA substantially modified its BCT effluent
guidelines.
Excerpts from: The First 100 days of E.O. 12291,
"Federal Regulation": A Report by the Staff of the
Presidential Task Force on Regulatory Relief
and the Office of Management and Budget
BACKGROUND
In pursuit of a myriad of desirable goals, the Federal government's
direct regulatory intervention has increased dramatically in re-
cent years. For example, since 1965 laws have been enacted to
require that automobiles be safe, non-polluting, and efficient;
the environment be cleaned up and protected; consumer products
be made safe; and that workers be protected from accidents and
exposure to health hazards. All too often, these goals have
been pursued without due regard to resource limitations. The
increasing prevalence of serious debate over the question of
whether, in the aggregate, the benefits of regulation outweigh
the costs in itself reveals that something is very wrong with
our nation's regulatory program.
Many regulations suffer from two related weaknesses. First,
their objectives often could be achieved at lower cost, i.e.,
they are not cost-effective. Second, the costs imposed by
individual regulations are often greater than the benefits they
generate. As a result of not critically examining alternatives
and not weighing costs against benefits, Federal regulators
have unnecessarily increased inflation, decreased productivity,
limited employment opportunities, and restrained growth in real
incomes.
One reason why Federal agencies tend to over-regulate is that
they have not been held accountable for the costs they impose
on the economy. While spending programs are regularly scrutinized
by the Office of Management and Budget and by the Congress, regula-
tory costs have tended to escape close review. Executive Order
12291, signed by President Reagan on February 17, 1981 responds to
the need for centralized review to ensure that regulations are
cost-effective and that their benefits outweigh their costs.
MAJOR REQUIREMENTS OF E.O. 12291
Executive Order 12291 both sets forth objectives and prescribes
means by which these objectives can be achieved. First, the
Order outlines basic principles that executive agencies are
to use in developing regulatory proposals and evaluating
existing rules. Second, it establishes a formal review
mechanism for all regulatory actions to ensure that these
actions are consistent with the principles articulated in the
Order.
- 2 -
The regulatory action shall be based on
adequate information concerning the need for
and consequences of the proposed action;
The potential benefits to society of imple-
mented regulatory actions must outweigh the
potential costs; and
Of all alternative approaches to a given
objective, the proposed action must maximize
net benefits to society.
All agencies must adhere to these requirements to the extent
permitted by law.
For each "major" rulemaking, agencies are required to prepare a
Regulatory Impact Analysis (RIA); this information requirement
facilitates making an informed judgment as to whether a proposed
rule fulfills the objectives of E.O. 12291.
The principal responsibility for reviewing regulatory proposals
under the Executive Order falls on OMB, subject to the overall
direction of the Presidential Task Force on Regulatory Relief.
Executive-branch agencies are required to submit all proposed
and final rules to OMB prior to publication in the Federal
Register.
STEPS TAKEN BY OMB TO IMPLEMENT E.O. 12291
The Office of Management and Budget has taken a series of steps
to ensure prompt and effective implementation of E.O. 12291.
These include integration and coordination of the Executive
Order's authority with related requirements of law, changes in
OMB's own organization, internal tracking processes to support
timely and orderly action by OMB and guidance to agencies on
implementation. Each step has been taken with an awareness of
the need to minimize the administrative burden placed on agencies
and to avoid delay in the regulatory process.
PRELIMINARY RESULTS
Major accomplishments during the first 100 days following issuance
of the Executive Order included: prompt review by the Office of
Management and Budget of more than 700 regulations; designation
by the Vice President of twenty-seven major regulatory activities
- 3 -
as initial candidates for special review by the Task Force;
and actions by agencies to meet the goals and requirements
of the Executive Order.
Regulations Reviewed by the Office of Management and Budget
under E.O. 12291: Under the terms of the Executive Order, OMB
has limited time to review regulations (10, 30, or 60 days
depending upon their classification). A regulatory tracking
system, mentioned earlier, was designed to ensure rapid pro-
cessing. During the first 100 days, the average regulation
was reviewed in eight calendar days, well within the Executive
Order time limits. As of May 27, 1981, 847 regulations had
been received for E.O. 12291 review. Of these, reviews have
been completed for 725. This is an average of over 50 reviews
per week. (See Table 1.)
Slightly less than nine percent of the rules reviewed by OMB
(63) have been found to be inconsistent with the principles in
the Executive Order and have been returned to the submitting
agency for further development.
Existing Regulations Chosen for Review Under Section 3(i) of
E.O. 12291: On March 25, 1981, the Vice President, as Chairman
of the Presidential Task Force on Regulatory Relief, announced
à list of 27 existing regulations to be reassesed and possibly
modified in accordance with the Executive Order. Table 2 shows
the tentative schedule established by the agencies and OMB for
these reviews.
The potential savings from these actions are significant. Table 3
provides preliminary estimates, where available, of the costs of
these regulations. The regulations for which estimates are
available involve annual costs of $1.8 to $2.1 billion and
investment (one-time) costs of $6.0 billion. Estimates are
not available for the great majority of regulations on the list
and, indeed, this is one of the reasons they have been targeted
for review.
Executive Agency Actions: The first 100 days of the Executive
Order have been a period for agencies to install internal manage-
ment mechanisms, modify existing internal guidelines for analysis
and establish a solid working relationship with the Presidential
Task Force on Regulatory Relief and its staff in the Office of
Management and Budget. In addition to procedural accomplishments,
many agencies have already made substantial progress in having
their regulatory actions comport with the new Executive Order.
- 4 -
In many agencies major regulatory relief programs are underway.
For example, the Department of Transportation is reviewing 46
existing regulations; in the Department of Health and Human
Services, the Food and Drug Administration (FDA) and the Health
Care Financing Administration (HCFA) have dramatically curtailed
the number of regulations issued (HCFA has issued no regulations
since the Executive Order was released); the Department of the
Interior has initiated a review of 10 major regulations and 12
major regulatory programs, including surface mining, the Federal
Coal Management Program, and the outer continental shelf;
finally, the Department of Energy's Task Force on Regulations
has identified approximately 200 existing regulations for possible
changes.
The Department of Labor has moved quickly to withdraw or defer
a number of rules and proposed rules. These actions included
withdrawing an unnecessarily burdensome proposed rule that
required labeling of hazardous chemicals in the workplace
regardless of the extent of the hazard and the possibility that
in complying with the proposal some companies would be forced
to give away trade secrets. The Department has also proposed
withdrawing a 40 year-old rule that restricted individuals
from doing certain kinds of work at home. This action was
the result of a number of complaints from workers and employers
stating that the Department's rule was unreasonable and no
longer served the original purpose. In addition, Labor is
reconsidering a number of OSHA regulations -- including the
hearing conservation amendments to the noise standard, the
lead and the cotton dust standards -- to determine whether the
regulatory approaches achieve the regulatory needs in the least
costly, most beneficial way.
Independent Agency Actions: On March 25 Vice President Bush
sent a letter to the so-called "independent" regulatory agencies
asking them to comply voluntarily with Sections 2 and 3 of the
Executive Order and to comply with its overall spirit "to
demonstrate to the American people the willingness of all
components of the Federal Government to respond to their con-
cerns about the unnecessary intrusion of government into their
daily lives." Seven agencies have responded to the Vice
President's request so far (Civil Aeronautics Board, Federal
Emergency Management Agency, Federal Energy Regulatory Commission,
Federal Home Loan Bank Board, Federal Mine Safety and Health
Review Commission, Interstate Commerce Commission, and the
Securities and Exchange Commission). All of these agencies
indicated their willingness to abide by the spirit and principles
of the Executive Order.
- 5 -
CONCLUSION
Implementation of the President's program for regulatory relief
is off to a good start. The Executive Order lays the foundation
for a sound, continuing process to establish reasonable regula-
tions, and to eliminate those that are unnecessarily burdensome.
Relationships between agencies and OMB have been established
to ensure close communications in meeting the Executive Order
goals. Procedures for implementing the Order have been put in
place in the agencies and at OMB. These procedures will provide
prompt review of regulatory actions, and serve as check points
for compliance with the Order.
Although it is too early for a definitive judgement of the success
of the Executive Order in providing regulatory relief, there are
already clear signs of progress. Perhaps most vivid is the
reduction in the size of the Federal Register: the Register
was 40 percent shorter in April 1981 than in April 1980; and the
number of proposed regulations published in April 1981 was 44
percent less than in April 1980. In addition, much of the
recent regulatory activity has been deregulatory in nature.
Progress is being made. With the structure of the Executive
Order in place, and the early results showing initial success,
there is every reason to be confident that this program will
be able to meet its goals.
TABLE 1: REGULATIONS RECEIVED BY OMB FOR REVIEW UNDER E.O. 12291
February 17, 1981 - May 27, 1981
All Regulations
Final Regulations
Proposed Regulations
Non-
Non-
Non-
Total
Major
Major
Total
Major
Major
Total
Major
Major
Total
847
*
*
*
*
*
*
*
*
Reviews completed
by OMB
725
4
721
455
2
453
270
2
268
-Regulations
found
consistent
with
E.O. 12291
623
3
620
396
1
395
213
2
211
- -Emergency
regulations
or those with
statutory
deadlines 1/
33
-
33
31
-
31
2
I
2
-
-Regulations
for which
OMB extended
review
period
13
-
13
8
-
8
5
-
5
-Regulations
returned to
agencies for
reconsidera-
tion
56
1
55
6
1
5
50
50
*
Classification of regulation is unkown pending completion of reviews
1/ These regulations are submitted to, but not reviewed by OMB under the terms
of E.O. 12291.
TABLE 2: SCHEDULE FOR REVIEW OF 27 EXISTING REGULATIONS
Agency
Regulation
Date
Department of Agriculture
- Mechanically Processed (Species)
June 15, 1981
Product
- Marketing Orders for Fruits and
September 10, 1981
Vegetables
- National Forest Service Planning
July 15, 1981
Regulations
Department of Commerce
- Regulations Implementing Various
July 31, 1981
Fishery Management Plans
Department of Education
- Education of Handicapped Children
July 15, 1981
Department of Energy
- Coal Conversion Program
- Residential Conservation Service
Environmental Protection
Agency
- BCT Effluent Guidelines
"next four months"
- Hazardous Waste Disposal
1) Analysis of Cost/Risk/Feasibility
mid 1982
2) Paperwork
late 1981
3) Storage facilities
September 1981
4) Phase I economic analysis
December 1981
5) Phase II economic analysis
January 1982
- Electroplating Pretreatment and
October 1981
General Pretreatment Standards
Department of Health and
- New Drug Application Requirements
October 1981
Human Services
- Medicaid Regulations Affecting
in process
States
- Health Care Institution
in process
Certification and Surveys
Department of Housing and
- Minimum Property Standards for
June 15, 1981
Urban Development
One- and Two-Family Dwellings
- Minimum Property Standards for
December 1, 1981
Multi-Family Dwellings
Agency
Regulation
Date
Department of the Interior
- Surface Mining Rules
- Federal Coal Management Program
Department of Justice
- Leadership and Coordination of
ongoing
Nondiscrimination Laws
Department of Labor
- Occupational Noise
in process
- Office of Federal Contract
May 1981
Compliance Policy
- Prevailing Wage
May 1981
- Personal Protective Devices
April 1982
- OSHA Carcinogen Policy
December 1981
Office of Management and
- Urban/Community Impact Analyses
June 1981
Budget
- University Research
June 1981
- Cost Sharing in University Research
June 1981
Department of Transportation
- Access to Handicapped
in process
Department of Treasury
- Use of Published Indices to
Public hearing
Determine Inventory
scheduled June 30,
1981
TABLE 3: TASK FORCE LIST OF 27 EXISTING REGULATIONS TO BE REVIEWED
Number of
List of Regulations
Investment
Annual
Regulations
with a Cost Estimate
Cost
Cost
(Millions of dollars)
Agriculture
3
1
NA
100
Commerce
1
0
NA
NA
Education
1
0
NA
NA
Energy
2
0
NA
NA
Environmental
Protection
Agency
3
3
3,400 (2)
1,090 (1)
Health and
Human Services
3
0
NA
NA
Housing and
Urban
Development
1
0
NA
NA
Interior
2
0
NA
NA
Justice
1
0
NA
NA
Labor
5
2
0
478-763
Office of
Management and
Budget
3
0
NA
NA
Transportation
1
1
2,600
139
Treasury
1
0
NA
NA
27
7
6,000
1,807 -
2,092
(1) This estimate does not include the one to two billion dollar savings which
could result from EPA's review of the Hazardous Waste Disposal regulations.
(2) Same as above. This estimate includes a 1.5 billion dollar savings which will
occur if we assume that EPA will substantially modify its BCT effluent guidelines.
NA - Not available.
Excerpts from: The Report on the President's
60-Day Regulatory Postponement prepared by the Staff of
the Presidential Task Force on Regulatory Relief and
the Office of Management and Budget
June 5, 1981
BACKGROUND
During 1980, the cabinet departments and EPA issued more than
5,000 new regulations. These regulations and related notices
were printed in the Federal Register. In 1970, the Federal
Register contained a total of 20,000 pages. Last year, the
Federal Register contained more than 87,000 pages. That number
has been increasing by about 10,000 pages each year for the-
past four years.
In the last few years of the Carter Administration, Federal
agencies put the finishing touches on a number of regulations
that had been under development over the preceding four years.
In the last two days of that Administration, each issue of the
Federal Register topped 1,000 pages -- roughly three times its
normal average length for 1980. The sheer volume of these
last-minute (or "midnight") regulations threatened to overwhelm
efforts by the new Administration to evaluate the substance of
new regulations and provide the regulatory relief that it had
promised.
PRESIDENTIAL ACTION
Faced with this situation, President Reagan took two major steps:
o First, he moved to delay the implementation of
the so-called midnight regulations. On January
29, he sent a memorandum to the heads of his
eleven cabinet departments and the Environmental
Protection Agency, directing them to delay for
60 days -- until March 30 -- the effective dates
of all final regulations not yet effective. He
also directed agencies to refrain from issuing
any additional final regulations during the
postponement period unless they were mandated
by Court order or legislative mandate, were of
an emergency nature, or were essential for
economic activity to go forward.
O Second, he moved to develop improved procedures
for overseeing the regulatory process. On
January 21, he announced central regulatory
oversight at the highest level by establishing
a cabinet-level Task Force on Regulatory Relief
chaired by Vice President George Bush. To
articulate his regulatory principles, the
President issued Executive Order 12291 on
- 2 -
February 17 to provide for a regulatory review
and coordination mechanism and to formalize
the role of the Task Force in this process.
In it, he directed agencies to maximize the
net benefits to society of their regulatory
programs, and directed the Office of Manage-
ment and Budget, under the direction of the
Task Force, to play a major role in this pro-
cess.
Of course, a key to the Administration's early efforts to achieve
regulatory relief was the memorandum directing a 60-day regulatory
postponement. The postponement served three distinct purposes.
First, it offered the new Administration a chance to review the
last-minute regulations of the past Administration, to ensure
that they comported with the President's regulatory principles.
Second, it allowed time for the new Administration's appointees
to establish priorities and assess their regulatory agendas.
Third, it enabled the new Administration, through the Presidential
Task Force on Regulatory Relief, to develop improved procedures
for reviewing the necessity and economic consequences of new and
existing regulations.
AGENCY RESPONSES
Agencies implemented this postponement in a constructive way.
Shortly after January 29, each of the 12 agencies published
notices in the Federal Register, postponing the effective
dates of their final regulations issued by their agencies that
were scheduled to take effect between January 29. and March 30.
In all, the effective dates of 172 final regulations were post-
poned. At the same time, the agencies postponed issuing a
number of final regulations they had contemplated during this
60-day period.
Some final regulations, however, did go forward. As contemplated
in the President's memorandum, OMB established a process of
consultation with the agencies in order to ensure that urgent
regulations, regulations under judicial or statutory deadlines,
and regulations that lessened regulatory burdens or were
necessary for economic activities went forward expeditiously.
After consulting with OMB, the affected agencies allowed a
total of 96 final regulations to take effect during the
postponement period. Forty-four of these were emergency
regulations that responded to urgent needs or were
required to meet judicial or statutory deadlines. Of the
remaining 52 regulations, approximately two-thirds were final
regulations, already issued but not yet effective, and one-
- 3 -
third were rules that the agencies had not yet issued in
final when the 60 day postponement was announced.
At the end of the postponement, agencies made effective 100 of
the 172 regulations they had postponed. However, 72 final
regulations were withdrawn or further postponed. Thirty-five
regulations were withdrawn: the Department of Housing and Urban
Development withdrew 11 previously published final regulations
and 23 final regulations that were ready to be published in the
Federal Register; and the Department of Energy withdrew one
postponed regulation as part of the overall oil price and
allocation decontrol. Thirty-seven regulations were postponed
further at the end of the 60-day period. *
Tables 1 and 2 contain a summary of the regulations affected by
the postponement. As a caution, however, it is important to
note that these actions do not constitute all actions taken by
the agencies to provide regulatory relief. The tables describe
only those actions taken in direct response to the President's
memorandum.
CONSEQUENCES
The most immediate consequence of the 60 day regulatory postpone-
ment was a dramatic decrease in the rate of issuance of proposed
and final regulations. During the month of January, 1981,
the daily average length of the Federal Register had swelled
to 461 pages -- 35 percent more than the daily average for
1980. That rate slowed substantially after the postponement
memorandum was issued, as is illustrated in Table 3.
By the end of March, all three measures of the volume of rule-
making had declined by at least 45 percent. The length of the
Federal Register, had declined 33 percent below the 1980
average. The volume of proposed rulemakings declined by almost
than 50 percent, even though the postponement order did not
preclude their issuance.
*
Thirty-six of these were identified by Vice President Bush
on March 25. The Department of Justice later decided to
postpone an additional regulation dealing with certification
of prison inmate grevience procedures.
TABLE 1: Decreased Regulatory Activity In Response to the President's Memorandum
Final Regulations Final Regulations Final Regulations
Agency
Postponed
Reconsidered
I
Made Effective
I
1. Agriculture
8
1
7
2.
Commerce
7
3
4
3. Education
31
1
30
4. Energy
4
1*
3
5. Health and Human Services
1
-
1
6. Housing and Urban Development
39
34**
5
7. Interior
14
10***
4
8. Justice
5
2****
3****
9. Labor
29
9
20
10. Transportation
18
7
11
11. Treasury
4
1
3
12. Environmental Protection Agency
12
3
9
TOTAL
172
72
I
100
5
*
Regulation withdrawn.
**
All 34 regulations withdrawn.
*** Seven of: 10 regulations postponed until determination of effects completed.
****
Only portions of regulations affected.
TABLE 2: Regulatory Activity Occuring During the 60 Day Regulatory Postponement
Additional
Emergency
Total Final
Final Regulations
Regulations
Regulations
Regulations Issue
Agency
Made Effective
Issued in
Issued in
and Made Effectiv
Final Form
Final Form
1. Agriculture
7
6
8
21
2.
Commerce
4
3
I
7
3.
Education
30
4
-
I
34
4. Energy
3
3
I
6
5. Health and Human Services
1
3
27
I
31
6. Housing and Urban Development
5
0
-
5
7. Interior
4
2
I
6
8. Justice
3
1
-
4
9. Labor
20
-
I
20
10. Transportation
11
2
I
3
I
16
11. Treasury
3
-
-
3
12. Environmental Protection Agency
9
28
6
43
TOTAL
100
52
I
44
I
196
9
TABLE 3: Daily Average Number of Regulations Issued and Printed, 1981
Jan. 2-
I
Jan. 29-
I
Percent Change
I
Mar. 1-
I
Percent Change
Jan. 29
I
Feb. 28
I
Feb. VS. Jan.
I
Mar. 31
I
Mar. VS. Jan.
Final Rules Issued
38
21
-45
21
-45
Proposed Rules Issued
25
14
-44
I
11
-56
F.R. Pages Printed
461
I
230
I
-50
I
231
-50
L
SPECIMEN
Dear
:
As you know, the Executive Order on Federal Regulation (E.O.
12291) requires that agencies prepare Regulatory Impact
Analyses (RIAs) of major regulations. Several agencies have
asked the Office of Management and Budget, which is required
to oversee compliance with the Executive Order, for guidance
about how to satisfy the RIA requirement. The attached docu-
ment is intended to assist agencies in understanding the
objectives of the Order. It does not add any new burdens
beyond those specified in the Order. At least on an interim
basis it will form the basis for OMB's review of RIAs and
for its consultations with agencies concerning proposed regula-
tory actions. Individual agencies may find it desirable to
propose supplements to this document containing more detailed
guidance tailored to their own particular needs, taking into
account circumstances in which some variation from the
established norm may make sense. In addition, agencies are
invited to comment on this document and suggest improvements,
including ways to incorporated requirements mandated by the
Regulatory Flexibility Act.
The purpose of RIAs is to ensure well-reasoned regulations that
are based on a full consideration of the need for the regula-
tion itself, its economic impact, and the availability of other,
less burdensome alternatives. To this end, RIAs must be pre-
pared for all "major rules," as described in the Executive
Order. The definition of a "major rule" is broad, and OMB
retains the authority to designate any rule or set of rules
as "major." This term encompasses regulations that are promul-
gated through notice-and-comment rulemaking as well as agency
actions of general applicability and future effect, including
policy statements, guidelines, and manuals. In addition,
agencies should identify related rules that should be considered
together as a major rule and actions taken at a local level
that will have a major application on a national basis. Of
- 2 -
course, even if a regulation does not fall within the definition
of a major rule, it is still subject to the general principles
and review procedures set forth in the Executive Order.
I believe that you and other policy-making officials at your
agency will find Regulatory Impact Analyses extremely valuable
bases upon which to make regulatory decisions and carry out the
President's program for regulatory relief. If I or my staff
can be of assistance to you or your staff, please do not
hesitate to call upon us.
Sincerely yours,
James C. Miller III
EXECUTIVE OFFICE OF THE PRESIDENT
STATE VICTIME CENTER OFFICE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
INTERIM REGULATORY IMPACT ANALYSIS GUIDANCE
A Regulatory Impact Analysis (RIA) should demonstrate that a
proposed regulatory action satisfies the requirements of Section
2 of Executive Order 12291. To do so, it should show that:
o
There is adequate information concerning the need
for and consequences of the proposed action;
o
The potential benefits to society outweigh the
potential costs; and
o
Of all the alternative approaches to the given
regulatory objective, the proposed action will
maximize net benefits to society.
The fundamental test of a satisfactory RIA is whether it
enables independent reviewers to make an informed judgment that
the objectives of E.O. 12291 are satisfied. An RIA that includes
all the elements described below is likely to fulfill this
requirement. Although variations consistent with the spirit and
intent of the Executive Order may be warranted for some proposed
or existing rules, most RIAs are expected to include these
elements.
This document is written primarily in terms of proposed
regulatory changes. However, it is equally applicable to the
review of existing regulations. In the latter case, the impact
of the regulation under review should be compared to a baseline
case of no regulation and to reasonable alternatives.
-2-
Elements of a Regulatory Impact Analysis
Preliminary and final Regulatory Impact Analyses of major rules
should contain five elements.
(1). Statement of need for and consequences of the proposal.
The statement of the need for and consequences of the
proposed regulatory change should address the following
questions:
(a) What precisely is the problem that needs to be
corrected? (That is, what market imperfection(s
give (s) rise to the regulatory proposal? Causes, not
just symptoms, should be identified.)
(b) How would the regulatory proposal, if promulgated,
improve the functioning of the market, or otherwise
meet the regulatory objective(s) Since regulatory
failure may be a real possibility, is it clear that the
proposed regulation would produce better results than
no regulatory change? (Imperfectly functioning markets
should not be compared with idealized, perfectly
functioning regulatory programs.)
(2) An examination of alternative approaches.
The RIA should show that the agency has considered the most
important alternative approaches to the problem and must provide
the agency's reasoning for selecting the proposed regulatory
change over such alternatives. Although only the most promising
alternatives need be evaluated at length, the agency should
consider:
(a) The consequences of having no regulation. (Are there
existing or potential market, or judicial, or state or
local regulatory, mechanisms that could resolve the
problem? For example, RIAs for health and safety
regulations should consider the adequacy of tort law or
state programs such as workmen's compensation.)
(b) The major alternatives (if any) that might lie beyond
the scope of the specific legislative provision under
which the proposed regulation is being promulgated.
(This may require a broad comparison across programs,
including those both within and outside the
jurisdiction of the issuing agency.)
(c) Alternatives within the scope of the specific
legislative provision. These include:
(i) Alternative stringency levels;
(ii) Alternative effective dates; and
-3-
(iii) Alternative methods of ensuring compliance.
(d) Alternative, market-oriented ways of regulating
(whether or not they are explicitly authorized in the
agency's legislative mandate), including:
(i) Information or labeling (to enable consumers or
workers to evaluate hazards themselves);
ii) Performance rather than design standards; and
(iii) Economic incentives, such as fees or charges,
marketable permits or offsets, changes in
insurance provisions, or changes in property
rights.
(3) Analysis of benefits and costs.
(a) Benefit estimates:
The RIA should state the beneficial effects of the
proposed regulatory change and its principal
alternatives. It should include estimates of the
present value of all potential real incremental
benefits to society. Benefits that can be estimated in
monetary terms should be expressed in constant
dollars. Other favorable effects should be described
in detail and quantified where possible. An annual
discount rate of 10 percent should be used; however,
where it appears desirable, other discount rates also
may be used to test the sensitivity of the results.
Assumptions should be stated, and the RIA should
identify the data or studies on which the analysis is
based.
There should be an explanation of the mechanism by
which the proposed action is expected to yield the
anticipated benefits.
A schedule of benefits should be included that would
show the type of benefit, to whom it would accrue, and
when it would accrue. The numbers in this table should
be expressed in constant dollar terms.
(b) Cost estimates:
The analysis should include estimates of the present
value of all the real incremental costs of the proposed
regulatory change and its principal alternatives (i.e.,
the costs that would be incurred by society as a result
of taking the proposed action or an alternative). All
costs that can be estimated in monetary terms should be
expressed in constant dollars. Other costs should be
-4-
described completely and quantified where possible. An
annual discount rate of 10 percent should be used;
however, where it appears desirable, other discount
rates also may be used to test the sensitivity of the
results.
To support the present value estimates, a schedule of
costs should be included that would identify the type
of cost (capital, recurring, etc.), who would bear that
cost, and when that cost would be incurred. The
numbers in this table should be expressed in constant
dollar terms. Assumptions should be stated, and the
RIA should identify the data or studies on which the
analysis is based.
Where possible, various adverse effects of the
regulation -- such as those from reductions in
competition, innovative activity, or productivity
growth -- should also be identified.
Transfer payments from one group to another, such as
taxes and insurance premiums, should not be included in
the calculation of real resource costs, but they
nevertheless should be identified. Any major increase
in costs or prices for consumers, individual
industries, Federal, State, or local government
agencies, or geographic regions also should be
identified.
(c) Net benefit estimates:
The monetary social cost should be subtracted from the
monetary social benefit to obtain the monetary net
benefit estimate (which could be negative). Any
remaining nonmonetary but quantifiable benefit and cost
information also should be presented.
Then,
nonquantifiable benefits and costs should be listed, in
a way that facilitates making an informed final
decision. Where many benefits are not easily
quantified, the results should show the cost-
effectiveness of the several alternatives. When there
are major uncertainties affecting the assumptions or
the methodology, the most likely or best estimates
should be used, but reasonable alternative assumptions
also should be examined to test the sensitivity of the
results to changes in assumptions. The results snould
be arrayed so that the policymaker can easily see the
effects of the different assumptions.
-5-
(4) Rationale for choosing the proposed regulatory action.
The RIA should include an explanation of the reasons for
choosing the selected regulation. Ordinarily the regulatory
alternative selected should be the one that achieves the
greatest net benefits. If legal constraints prevent this
choice, they should be identified and explained, and their
net cost should be estimated.
(5) Statutory Authority
The RIA should include a statement of determination and
explanation that the proposed regulatory action is within
the agency's statutory authority.
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
JANUARY 22, 1981
REMARKS BY THE PRESIDENT
Press Briefing Room
(1:01 P.M. EST)
THE PRESIDENT: Well, ladies and gentlemen, I have
a statement here that I want to make. The regulatory reform as
you know we've been talking about for a long time as one of the
keystones in our program to return the nation to prosperity and
to set loose again the ingenuity and energy of the American people.
Government regulations impose an enormous burden on
large and small businesses, discourage productivity and contribute
substantially to our current economic woes. To cut away the
thicket of irrational and senseless regulations requires careful
study, close coordination between the agencies and bureaus in the
federal structure.
Therefore, I announcing today my intention to
establish a presidential task force on regulatory relief, a task
force that will review pending regulations, study past regulations
with an eye towards revising them and recommend appropriate
legislative remedies.
I intend that this be more than just another
presidential task force that files a report and is soon forgotten.
We're seeking real reform and tangible results. And accomplishing
this will take a vigorous leader, talented administrator and an
absolutely, no doubt, a superb diplomat. And that person is
Vice President George Bush who's agreed to serve as chairman
of this task force and to coordinate an inter-agency effort to
end excessive regulation.
I've asked them to get back to me promptly with
recommended members of the task force and a detailed plan for
its operation. And our goal is going to be to see if we can not
reverse the trend of recent years and see at the end of the year
a reduction in the number of pages in the Federal Register instead
of an increase.
And now I'm not taking any questions and I'm going
to leave and George will take you questions here. George
END
(1:03 P.M. EST)
THE WHITE HOUSE
January 29, 1981
MEMORANDUM FOR:
THE SECRETARY OF THE TREASURY
THE ATTORNEY GENERAL
THE SECRETARY OF THE INTERIOR
THE SECRETARY OF AGRICULTURE
THE SECRETARY OF COMMERCE
THE SECRETARY OF LABOR
THE SECRETARY OF HEALTH AND
HUMAN SERVICES
THE SECRETARY OF HOUS ING AND
URBAN DEVELOPMENT
THE SECRETARY OF TRANSPORTATION
THE SECRETARY OF ENERGY
THE SECRETARY OF EDUCATION
THE ADMINISTRATOR OF THE
ENVIRONMENTAL PROTECTION AGENCY
SUBJECT:
Postponement of Pending Regulations
Among my priorities as President is the establishment of a new
regulatory oversight process that will lead to less burdensome
and more rational federal regulation. I am now directing
certain measures that will give this Administration, through
the Task Force on Regulatory Relief, sufficient time to imple-
ment that process, and to subject to full and appropriate
review many of the prior Administration's last-minute decisions
that would increase rather than relieve the current burden of
restrictive regulation. This review is especially necessary
in the economic climate we have inherited.
1.
Postponement of Pending Final Regulations. To the extent
permitted by law, your agency shall, by notice in the Federal
Register, postpone for 60 days from the date of this memorandum
the effective date of all regulations that your agency has
promulgated in final form and that are scheduled to become
effective during such 60-day period.
2.
Postponement of Proposed Regulations. To the extent per-
mitted by law, your agency shall refrain, for 60 days following
the date of this memorandum, from promulgating any final rule.
- more -
- 2 -
3.
Emergency Regulations and Regulations Subject to Short-
Term Deadlines. Your agency shall not postpone regulations
that respond to emergency situations or for which a postpone-
ment pursuant to this memorandum would conflict with a
statutory or judicial deadline.
4.
Consultation with the Office of Management and Budget.
(a) Your agency shall report to the Director of the
Office of Management and Budget all regulations that cannot
legally be postponed under paragraphs 1 and 2 of this
memorandum and all regulations that will not be postponed
under paragraph 3 of this memorandum, including a brief
explanation of the legal or other reasons why the effective
date of any such regulation will not be be postponed.
(b) After consultation with the Director, or the
Director's designee, your agency may decide to postpone the
effective date or promulgation of a regulation for fewer than
60 days from the date of this memorandum, if circumstances
warrant a shorter period of postponement.
5.
Exemptions. This memorandum shall not apply to:
(a) regulations issued in accordance with the formal
rulemaking provisions of the Administrative Procedure Act,
5 U.S.C. 556, 557;
(b) regulations issued with respect to a military or
foreign affairs function of the United States;
(c) regulations related to Federal government procure-
ment;
(d) matters related to agency organization, management,
or personnel; or
(e) regulations issued by the Internal Revenue Service.
6.
Definition. For purposes of this memorandum, "regulation"
or "rule" shall mean an agency statement of general applicability
and future effect designed to implement, interpret, or prescribe
law or policy or describing the procedure or practice require-
ments of an agency.
RONALD REAGAN
#####
January 30, 1981
FOR IMMEDIATE RELEASE
CONTACT:
Peter Teeloy
Shirley Green
202/456-6772
FROM THE OFFICE OF THE PRESS SECRETARY
TO VICE PRESIDENT GEORGE BUSH
STATEMENT BY VICE PRESIDENT GEORGE BUSH
REGARDING THE MEMBERSHIP AND
THE CHARTER OF THE
PRESIDENTIAL TASK FORCE ON REGULATORY RELIEF
President Reagan has made regulatory relief one of the
top priorities of his economic policy. He has asked me, as
Chairman of the Presidential Task Force on Regulatory Relief,
to take clear, constructive and decisive action and to
recommend to him a number of individuals who should serve on
the Task Force.
The President has appointed the following officials:
*
Donald Regan, Secretary of the Treasury
*
William French Smith, Attorney General
*
Malcolm Baldridge, Secretary of Commerce
*
Raymond Donovan, Secretary of Labor-designate
*
David Stockman, Director, Office of Management
and Budget
*
Martin Anderson, Assistant to the President
for Policy Planning
*
Murry Weidenbaum, Chairman, Council of Economic
Advisors
Serving as Executive Director of the Task Force will be
James C. Miller, III, Administrator for Information and Regulatory
Affairs, Office of Management and Budget. Special Assistant to
- MORE -
-2-
the President, Rich Williamson will serve as Associate Director,
and G. Boyden Gray, Counsel to the Vice President, will serve
as Counsel to the Task Force. Finally, the Task Force will
utilize staff support from the Office of Management and Budget
to identify the major regulatory actions that fit the charter and
to provide needed analytical support. (Initial assessment of
regulations will, of course, be the responsibility of the agencies
themselves in the first instances, with backup support and review
by the Task Force.)
The basic charter of the Task Force is to:
*
Review major proposals by executive branch regulatory
agencies, especially those proposals that would appear to have
a major policy significance or where there is overlapping juris-
diction among agencies.
*
Assess executive branch regulations already on the
books, especially those that are particularly burdensome to the
national economy or to key industrial sectors.
*
Oversee the development of legislative proposals in
response to Congressional timetables (e.g., The Clean Air Act
amendments expire this year), and, more importantly, to codify
the President's views on the appropriate role and objectives of
regulatory agencies.
The Task Force, consistent with the President's regulatory
beliefs, will be guided by the following general principles:
*
Federal regulations should be initiated only when
there is a compelling need.
- MORE -
-3-
*
Alternative regulatory approaches (including no
regulation) should be considered and the approach selected that
imposes the least possible burden on society consistent with
achieving the overall statutory and policy objectives.
*
Regulatory priorities should be governed by an
assessment of the benefits and costs of the proposed regulations.
As the President has said, government regulations are
imposing an enormous economic burden on our national economy
and our people.
Government regulation has not only been a serious impediment
to capital formation, increased productivity, and expanding our
trade abroad, but also in our ability to compete at home with
foreign companies.
Excessive regulations is a serious factor in the continued
high rate of inflation and unemployment.
Our intent is not to damage the environment, make the
work place unsafe, or reduce the quality of life for our citizens.
We are striving to find the balance a balance that has not been
reached in recent years. We must never forget that the nation's
economy must continue to grow and that new jobs must be created
for an expanding work force.
I fully recognize the thousands and thousands of pages
of information and regulations that must be reviewed. We will
begin shortly to establish liaison with the Congress and non-govern-
mental groups to gain the benefit of their views and expertise.
- MORE -
- -4- -
We fully intend to produce results and recommendations
that will, as President Reagan has stated, help "return the nation
to prosperity and set loose again the ingenuity and energy of
the American people."
13193
Federal Register
Presidential Documents
Vol. 46, No. 33
Thursday. February 19, 1981
Title 3-
Executive Order 12291 of February 17, 1981
The President
Federal Regulation
By the authority vested in me as President by the Constitution and laws of the
United States of America, and in order to reduce the burdens of existing and
future regulations, increase agency accountability for regulatory actions, pro-
vide for presidential oversight of the regulatory process, minimize duplication
and conflict of regulations, and insure well-reasoned regulations, it is hereby
ordered as follows:
Section 1. Definitions. For the purposes of this Order:
(a) "Regulation" or "rule" means an agency statement of general applicability
and future effect designed to implement, interpret, or prescribe law or policy
or describing the procedure or practice requirements of an agency, but does
not include:
(1) Administrative actions governed by the provisions of Sections 556 and 557
of Title 5 of the United States Code;
(2) Regulations issued with respect to a military or foreign affairs function of
the United States; or
(3) Regulations related to agency organization, management, or personnel.
(b) "Major rule" means any regulation that is likely to result in:
(1) An annual effect on the economy of $100 million or more;
(2) A major increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies, or geographic regions; or
(3) Significant adverse effects on competition, employment, investment, pro-
ductivity, innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic or export markets.
(c) "Director" means the Director of the Office of Management and Budget.
(d) "Agency" means any authority of the United States that is an "agency"
under 44 U.S.C. 3502(1), excluding those agencies specified in 44 U.S.C.
3502(10).
(e) "Task Force" means the Presidential Task Force on Regulatory Relief.
Sec. 2. General Requirements. In promulgating new regulations, reviewing
existing regulations, and developing legislative proposals concerning regula-
tion, all agencies, to the extent permitted by law, shall adhere to the following
requirements:
(a) Administrative decisions shall be based on adequate information concern-
ing the need for and consequences of proposed government action;
(b) Regulatory action shall not be undertaken unless the potential benefits to
society for the regulation outweigh the potential costs to society;
(c) Regulatory objectives shall be chosen to maximize the net benefits to
society;
(d) Among alternative approaches to any given regulatory objective, the
alternative involving the least net cost to society shall be chosen; and
(e) Agencies shall set regulatory priorities with the aim of maximizing the
aggregate net benefits to society, taking into account the condition of the
13194 Federal Register / Vol. 46, No. 33 / Thursday, February 19, 1981 / Presidential Documents
particular industries affected by regulations, the condition of the national
economy, and other regulatory actions contemplated for the future.
Sec. 3. Regulatory Impact Analysis and Review.
(a) In order to implement Section 2 of this Order, each agency shall, in
connection with every major rule, prepare, and to the extent permitted by law
consider, a Regulatory Impact Analysis. Such Analyses may be combined with
any Regulatory Flexibility Analyses performed under 5 U.S.C. 603 and 604.
(b) Each agency shall initially determine whether a rule it intends to propose
or to issue is a major rule, provided that, the Director, subject to the direction
of the Task Force, shall have authority, in accordance with Sections 1(b) and 2
of this Order, to prescribe criteria for making such determinations, to order a
rule to be treated as a major rule, and to require any set of related rules to be
considered together as a major rule.
(c) Except as provided in Section 8 of this Order, agencies shall prepare
Regulatory Impact Analyses of major rules and transmit them, along with all
notices of proposed rulemaking and all final rules, to the Director as follows:
(1) If no notice of proposed rulemaking is to be published for a proposed major
rule that is not an emergency rule, the agency shall prepare only a final
Regulatory Impact Analysis, which shall be transmitted, along with the pro-
posed rule, to the Director at least 60 days prior to the publication of the major
rule as a final rule;
(2) With respect to all other major rules, the agency shall prepare a prelimi-
nary Regulatory Impact Analysis, which shall be transmitted, along with a
notice of proposed rulemaking, to the Director at least 60 days prior to the
publication of a notice of proposed rulemaking, and a final Regulatory Impact
Analysis, which shall be transmitted along with the final rule at least 30 days
prior to the publication of the major rule as a final rule;
(3) For all rules other than major rules, agencies shall submit to the Director, at
least 10 days prior to publication, every notice of proposed rulemaking and
final rule.
(d) To permit each proposed major rule to be analyzed in light of the
requirements stated in Section 2 of this Order, each preliminary and final
Regulatory Impact Analysis shall contain the following information:
(1) A description of the potential benefits of the rule, including any beneficial
effects that cannot be quantified in monetary terms, and the identification of
those likely to receive the benefits;
(2) A description of the potential costs of the rule, including any adverse
effects that cannot be quantified in monetary terms, and the identification of
those likely to bear the costs;
(3) A determination of the potential net benefits of the rule, including an
evaluation of effects that cannot be quantified in monetary terms;
(4) A description of alternative approaches that could substantially achieve
the same regulatory goal at lower cost, together with an analysis of this
potential benefit and costs and a brief explanation of the legal reasons why
such alternatives, if proposed, could not be adopted; and
(5) Unless covered by the description required under paragraph (4) of this
subsection, an explanation of any legal reasons why the rule cannot be based
on the requirements set forth in Section 2 of this Order.
(e) (1) The Director, subject to the direction of the Task Force, which shall
resolve any issues raised under this Order or ensure that they are presented to
the President, is authorized to review any preliminary or final Regulatory
Impact Analysis, notice of proposed rulemaking, or final rule based on the
requirements of this Order.
(2) The Director shall be deemed to have concluded review unless the Director
advises an agency to the contrary under subsection (f) of this Section:
Federal Register / Vol. 46, No. 33 / Thursday, February 19, 1981 / Presidential Documents 13195
(A) Within 60 days of a submission under subsection (c)(1) or a submission of
a preliminary Regulatory Impact Analysis or nôtice of proposed rulemaking
under subsection (c)(2);
(B) Within 30 days of the submission of a final Regulatory Impact Analysis
and a final rule under subsection (c)(2); and
(C) Within 10 days of the submission of a notice of proposed rulemaking or
final rule under subsection (c)(3).
(f) (1) Upon the request of the Director, an agency shall consult with the
Director concerning the review of a preliminary Regulatory Impact Analysis
or notice of proposed rulemaking under this Order, and shall, subject to
Section 8(a)(2) of this Order, refrain from publishing its preliminary Regulatory
Impact Analysis or notice of proposed rulemaking until such review is con-
cluded.
(2) Upon receiving notice that the Director intends to submit views with
respect to any final Regulatory Impact Analysis or final rule, the agency shall.
subject to Section 8(a)(2) of this Order, refrain from publishing its final
Regulatory Impact Analysis or final rule until the agency has responded to the
Director's views, and incorporated those views and the agency's response in
the rulemaking file.
(3) Nothing in this subsection shall be construed as displacing the agencies'
responsibilities delegated by law.
(g) For every rule for which an agency publishes a notice of proposed
rulemaking, the agency shall include in its notice:
(1) A brief statement setting forth the agency's initial determination whether
the proposed rule is a major rule, together with the reasons underlying that
determination; and
(2) For each proposed major rule, a brief summary of the agency's preliminary
Regulatory Impact Analysis.
(h) Agencies shall make their preliminary and final Regulatory Impact Analy-
ses available to the public.
(i) Agencies shall initiate reviews of currently effective rules in accordance
with the purposes of this Order, and perform Regulatory Impact Analyses of
currently effective major rules. The Director, subject to the direction of the
Task Force, may designate currently effective rules for review in accordance
with this Order, and establish schedules for reviews and Analyses under this
Order.
Sec. 4. Regulatory Review. Before approving any final major rule, each agency
shall:
(a) Make a determination that the regulation is clearly within the authority
delegated by law and consistent with congressional intent, and include in the
Federal Register at the time of promulgation a memorandum of law supporting
that determination.
(b) Make a determination that the factual conclusions upon which the rule is
based have substantial support in the agency record, viewed as a whole, with
full attention to public comments in general and the comments of persons
directly affected by the rule in particular.
Sec. 5. Regulatory Agendas.
(a) Each agency shall publish, in October and April of each year, an agenda of
proposed regulations that the agency has issued or expects to issue, and
currently effective rules that are under agency review pursuant to this Order.
These agendas may be incorporated with the agendas published under 5
U.S.C. 602, and must contain at the minimum:
(1) A summary of the nature of each major rule being considered, the
objectives and legal basis for the issuance of the rule, and an approximate
13196
Federal Register / Vol. 46, No. 33 / Thursday, February 19, 1981 / Presidential Documents
schedule for completing action on any major rule for which the agency has
issued a notice of proposed rulemaking;
(2) The name and telephone number of a knowledgeable agency official for
each item on the agenda; and
(3) A list of existing regulations to be reviewed under the terms of this Order,
and a brief discussion of each such regulation.
(b) The Director, subject to the direction of the Task Force, may, to the extent
permitted by law:
(1) Require agencies to provide additional information in an agenda; and
(2) Require publication of the agenda in any form.
Sec. 6. The Task Force and Office of Management and Budget.
(a) To the extent permitted by law, the Director shall have authority, subject
to the direction of the Task Force, to:
(1) Designate any proposed or existing rule as a major rule in accordance with
Section 1(b) of this Order;
(2) Prepare and promulgate uniform standards for the identification of major
rules and the development of Regulatory Impact Analyses;
(3) Require an agency to obtain and evaluate, in connection with a regulation,
any additional relevant data from any appropriate source;
(4) Waive the requirements of Sections 3, 4, or 7 of this Order with respect to
any proposed or existing major rule;.
(5) Identify duplicative, overlapping and conflicting rules, existing or pro-
posed, and existing or proposed rules that are inconsistent with the policies
underlying statutes governing agencies other than the issuing agency or with
the purposes of this Order, and, in each such case, require appropriate
interagency consultation to minimize or eliminate such duplication, overlap, or
conflict;
(6) Develop procedures for estimating the annual benefits and costs of agency
regulations, on both an aggregate and economic or industrial sector basis, for
purposes of compiling a regulatory budget;
(7) In consultation with interested agencies, prepare for consideration by the
President recommendations for changes in the agencies' statutes; and
(8) Monitor agency compliance with the requirements of this Order and advise
the President with respect to such compliance.
(b) The Director, subject to the direction of the Task Force, is authorized to
establish procedures for the performance of all functions vested in the Direc-
tor by this Order. The Director shall take appropriate steps to coordinate the
implementation of the analysis, transmittal, review, and clearance provisions
of this Order with the authorities and requirements provided for or imposed
upon the Director and agencies under the Regulatory Flexibility Act, 5 U.S.C.
601 et seq., and the Paperwork Reduction Plan Act of 1980, 44 U.S.C. 3501 et
seq.
Sec. 7. Pending Regulations.
(a) To the extent necessary to permit reconsideration in accordance with this
Order, agencies shall, except as provided in Section 8 of this Order, suspend
or postpone the effective dates of all major rules that they have promulgated
in final form as of the date of this Order, but that have not yet become
effective, excluding:
(1) Major rules that cannot legally be postponed or suspended;
(2) Major rules that, for good cause, ought to become effective as final rules
without reconsideration. Agencies shall prepare, in accordance with Section 3
of this Order, a final Regulatory Impact Analysis for each major rule that they
suspend or postpone.
Federal Register / Vol. 46, No. 33 / Thursday, February 19, 1981 / Presidential Documents 13197
(b) Agencies shall report to the Director no later than 15 days prior to the
effective date of any rule that the agency has promulgated in final form as of
the date of this Order, and that has not yet become effective, and that will not
be reconsidered under subsection (a) of this Section:
(1) That the rule is excepted from reconsideration under subsection (a),
including a brief statement of the legal or other reasons for that determination;
or
(2) That the rule is not a major rule.
(c) The Director, subject to the direction of the Task Force, is authorized, to
the extent permitted by law, to:
(1) Require reconsideration, in accordance with this Order, of any major rule
that an agency has issued in final form as of the date of this Order and that
has not become effective; and
(2) Designate a rule that an agency has issued in final form as of the date of
this Order and that has not yet become effective as a major rule in accordance
with Section 1(b) of this Order.
(d) Agencies may, in accordance with the Administrative Procedure Act and
other applicable statutes, permit major rules that they have issued in final
form as of the date of this Order, and that have not yet become effective, to
take effect as interim rules while they are being reconsidered in accordance
with this Order, provided that, agencies shall report to the Director, no later
than 15 days before any such rule is proposed to take effect as an interim rule,
that the rule should appropriately take effect as an interim rule while the rule
is under reconsideration.
(e) Except as provided in Section 8 of this Order, agencies shall, to the extent
permitted by law, refrain from promulgating as a final rule any proposed
major rule that has been published or issued as of the date of this Order until
a final Regulatory Impact Analysis, in accordance with Section 3 of this Order,
has been prepared for the proposed major rule.
(f) Agencies shall report to the Director, no later than 30 days prior to
promulgating as a final rule any proposed rule that the agency has published
or issued as of the date of this Order and that has not been considered under
the terms of this Order:
(1) That the rule cannot legally be considered in accordance with this Order,
together with a brief explanation of the legal reasons barring such considera-
tion; or
(2) That the rule is not a major rule, in which case the agency shall submit to
the Director a copy of the proposed rule.
(g) The Director, subject to the direction of the Task Force, is authorized, to
the extent permitted by law, to:
(1) Require consideration, in accordance with this Order, of any proposed
major rule that the agency has published or issued as of the date of this Order;
and
(2) Designate a proposed rule that an agency has published or issued as of the
date of this Order, as a major rule in accordance with Section 1(b) of this
Order.
(h) The Director shall be deemed to have determined that an agency's report
to the Director under subsections (b), (d), or (f) of this Section is consistent
with the purposes of this Order, unless the Director advises the agency to the
contrary:
(1) Within 15 days of its report, in the case of any report under subsections (b)
or (d); or
(2) Within 30 days of its report, in the case of any report under subsection (f).
13108
Federal Register / Vol. 46, No. 33 / Thursday, February 19, 1981 / Presidential Documents
(i) This Section does not supersede the President's Memorandum of January
29, 1981, entitled "Postponement of Pending Regulations", which shall remain
in effect until March 30, 1981.
(j) In complying with this Section, agencies shall comply with all applicable
provisions of the Administrative Procedure Act, and with any other proce-
dural requirements made applicable to the agencies by other statutes.
Sec. 8. Exemptions.
(a) The procedures prescribed by this Order shall not apply to:
(1) Any regulation that responds to an emergency situation, provided that, any
such regulation shall be reported to the Director as soon as is practicable, the
agency shall publish in the Federal Register a statement of the reasons why it
is impracticable for the agency to follow the procedures of this Order with
respect to such a rule, and the agency shall prepare and transmit as soon as is
practicable a Regulatory Impact Analysis of any such major rule; and
(2) Any regulation for which consideration or reconsideration under the terms
of this Order would conflict with deadlines imposed by statute or by judicial
order, provided that, any such regulation shall be reported to the Director
together with a brief explanation of the conflict, the agency shall publish in
the Federal Register a statement of the reasons why it is impracticable for the
agency to follow the procedures of this Order with respect to such a rule, and
the agency, in consultation with the Director, shall adhere to the requirements
of this Order to the extent permitted by statutory or judicial deadlines.
(b) The Director, subject to the direction of the Task Force, may, in accordance
with the purposes of this Order, exempt any class or category of regulations
from any or all requirements of this Order.
Sec. 9. Judicial Review. This Order is intended only to improve the internal
management of the Federal government, and is not intended to create any
right or benefit, substantive or procedural, enforceable at law by a party
against the United States, its agencies, its officers or any person. The determi-
nations made by agencies under Section 4 of this Order, and any Regulatory
Impact Analyses for any rule, shall be made part of the whole record of
agency action in connection with the rule.
Sec. 10. Revocations. Executive Orders No. 12044, as amended, and No. 12174
are revoked.
Ronald Reagan
THE WHITE HOUSE,
February 17, 1981.
[FR Doc. 81-5790
Filed 2-17-81: 3:19 pm]
Billing code 3195-01-M
THE OFFICE OF THE VICE PRESIDENT
EMBARGOED FOR RELEASE UNTIL 3:00 p.m.
February 17, 1981
FACT SHEET
Executive Order on Regulatory Management
Summary: Vice President Bush today announced details of a
new Executive Order replacing current Executive Order 12044
to a) set forth an express Presidential policy on regulation
and to provide a structured system to enable agencies to
implement that policy effectively pursuant to the overall
direction of the Task Force on Regulatory Relief, b) provide
for centralized review, in order that the most sensitive
questions of regulatory policy will be brought in timely
fashion to the Presidential Task Force (and, if necessary,
to the President himself), and c) to afford the Task Force
and the Director, of OMB sufficient flexibility to minimize
paperwork and unnecessary regulatory delay.
BACKGROUND:
A comprehensive program of regulatory management is needed
to replace the "freeze" on new and "midnight" regulations
being implemented by the Cabinet (and EPA) pursuant to the
President's memorandum signed on January 29. Such a
program is also essential to the President's goal of
reducing the excess burden of regulation.
On January 22, the President announced that the Vice
President had agreed to chair a Task Force on Regulatory
Relief, consisting of: Vice President Bush (Chairman),
Treasury Secretary Regan, Attorney General Smith, Commerce
Secretary Baldridge, Labor Secretary Donovan, OMB Director
Stockman, CEA Chairman Weidenbaum, and Assistant to the
President Anderson. The Vice President also announced
that Jim Miller, OMB Administrator of Information and
Regulatory Affairs, will serve as the Task Force's
Executive Director; that Rich Williamson, Special
Assistant to the President for Intergovernmental Rela-
tions, will serve as Associate Director; and that
C. Boyden Gray, Counsel to the Vice President, will
serve as Counsel to the Task Force.
In order for the Task Force to carry out its work, it must
establish procedures for careful review of new and existing
regulations to assure their compliance with the President's
- 2 -
goal of reducing regulatory burdens. To this end, the staff
of the Task Force, OMB and the Justice Department developed
an Executive Order that would replace Executive Order 12044,
which has proven ineffective. The new Order would build upon
the management responsibilities and expertise of OMB and OMB's
other responsibilities for regulatory oversight (e.g., under
the Paperwork Reduction Act of 1980), and would place the
Presidential Task Force in charge of the President's overall
regulatory reform program.
THE EXECUTIVE ORDER:
The Executive Order, which does not cover independent agencies
and applies primarily to the 150 major annual executive agency
rules:
1. Imposes, to the extent permitted by law, a requirement
that agencies choose regulatory goals and set priorities to
maximize benefits to society, and choose the most cost-
efficient means among legally available options for securing
these regulatory goals;
2. Requires all agencies to prepare, for each major rule, a
Regulatory Impact Analysis that will be designed to permit an
accurate assessment of the potential costs and benefits of
each major regulatory proposal, including alternatives;
3. Authorizes the Director of the Office of Management and
Budget, subject to the direction of the Presidential Task
Force, to oversee the implementation of the Order and to
take a variety of steps to achieve its purposes, including
the review of proposed and final agency regulations and
Regulatory Impact Analyses for consistency with the Order;
4. Requires agencies to determine that proposed final regu-
lations are within authority vested by law, and are supported
by the agency record in each case; and
5. Requires agencies to publish semiannual agendas that will
keep the public abreast of pending and expected regulatory
actions that could have a major impact on the economy.
Under this new program, the agencies would be the first line
of offense to reduce the regulatory burden and the first line
of defense to assure that regulations not comporting with the
President's policies did not slip through. The management
program will assure that: (a) deregulatory initiatives (and
unimportant regulations) are approved quickly; (b) major
new regulations are scrutinized carefully; and (c) regula-
tions of truly major consequence are brought before the
Presidential Task Force (and the President, if necessary)
for final review. The Task Force will also convene working
groups representing key agencies to develop appropriate
- 3 -
legislative proposals and responses where existing statutory
constraints, identified more clearly by the review process
described above, preclude effective regulatory decisions
(the Clean Air Act Amendments, for example, are up for
renewal this year). .
Experience under the Executive Order may suggest the need
for technical modifications. Accordingly, the Task Force
welcomes comments from the public as the Order is implemented.
##
Excerpts from: America's New Beginning:
A Program for Economic Recovery, submitted to
Congress by President Reagan on February 18, 1981
The rapid growth in Federal regulation has retarded economic
growth and contributed to inflationary pressures. While there
is widespread agreement on the legitimate role of government in
protecting the environment, promoting health and safety, safe-
guarding workers and consumers, and guaranteeing equal opportunity,
there is also growing realization that excessive regulation is a
very significant factor in our current economic difficulties.
The costs of regulation arise in several ways. First, there
are the outlays for the Federal bureaucracy which administers
and enforces the regulations. Second, there are the costs to
business, nonprofit institutions, and State and local governments
of complying with regulations. Finally, there are the longer
run and indirect effects of regulation on economic growth and
productivity.
The most readily identifiable of the costs are the administra-
tive outlays of the regulatory agencies, since they appear in the
Federal budget. These costs are passed on to individuals and
businesses directly in the form of higher Federal taxes. Much
larger than the administrative expenses are the costs of compliance,
which add $100 billion per year to the costs of the goods and
services we buy. The most important effects of regulation, however,
are the adverse impacts on economic growth. These arise because
regulations may discourage innovative research and development,
reduce investment in new plant and equipment, raise unemployment
by increasing labor costs, and reduce competition. Taken together,
these longer run effects contribute significantly to our current
economic dilemma of high unemployment and inflation.
In many cases the costs of regulation can be substantially
reduced without significantly affecting worthwhile regulatory
goals. Unnecessarily stringent rules, intrusive means of
enforcement, extensive reporting and recordkeeping requirements,
and other regulatory excesses are all too common.
During this Administration's first month in office, five major
steps have been taken to address the problem of excessive and
inefficient regulation. Specifically, we have:
Established a Task Force on Regulatory Relief
chaired by Vice President George Bush;
Abolished the Council on Wage and Price Stability's
ineffective program to control wage and price
increases;
- 2 -
Postponed the effective dates of pending regulations
until the end of March;
Issued an Executive order to strengthen Presidential
oversight of the regulatory process; and
Accelerated the decontrol of domestic oil.
Presidential Task Force on Regulatory Relief
Previous efforts to manage the proliferation of Federal
regulation failed to establish central regulatory oversight at
the highest level. On January 22, the President announced the
creation of a Task Force on Regulatory Relief to be chaired
by the Vice President. The membership is to include the
Secretary of the Treasury, the Attorney General, the Secretary
of Commerce, the Secretary of Labor, the Director of the Office
of Management and Budget, the Assistant to the President for
Policy Development and the Chairman of the Council of Economic
Advisers.
The Task Force's charter is to:
O Review major regulatory proposals by executive
branch agencies, especially those that appear
to have major policy significance or involve
overlapping jurisdiction among agencies.
Assess executive branch regulations already on
the books, concentrating on those that are
particularly burdensome to the national economy
or to key industrial sectors.
O Oversee the development of legislative proposals
designed to balance and coordinate the roles and
objectives of regulatory agencies.
Termination of CWPS's Wage-Price Standards Program
The Council on Wage and Price Stability (CWPS) was created
in 1974, and like many government agencies, rapidly grew in size
and scope. But the CWPS program of wage-price standards proved
to be totally ineffective in halting the rising rate of inflation.
On January 29, the President rescinded the CWPS's wage-
price standards program. As a result, taxpayers will save about
$1.5 billion, employment in the Executive Office of the President
will decline by about 135 people, and Federal requirements that
businesses submit voluminous reports will end.
- 3 -
Postponing Pending Regulations
On January 29, the President also sent a memorandum to
cabinet officers and the head of the Environmental Protection
Agency (EPA), requesting that, to the extent permitted by law,
they postpone the effective dates of those regulations that
would have become effective before March 29 and that they
refrain from issuing any new final regulations during this
60-day period.
This suspension of new regulations has three purposes:
First, it allows the new Administration to review the "midnight"
regulations issued during the last days of the previous
Administration to assure that they are cost-effective. Second,
the Administration's appointees now can become familiar with
the details of the various programs for which they are responsible
before the regulations become final. Lastly, the suspension
allows time for the Administration, through the Presidential
Task Force, to develop improved procedures for management and
oversight of the regulatory process.
The Executive Order on Federal Regulation
The President has signed a new Executive order designed to
improve management of the Federal regulatory process. It provides
reassurance to the American people of the government's ability
to control its regulatory activities. The Office of Management
and Budget is charged with administering the new order, subject
to the overall direction of the Presidential Task Force on
Regulatory Relief.
The order emphasizes that regulatory decisions should be
based on adequate information. Actions should not be undertaken
unless the potential benefits to society outweigh the potential
costs, and regulatory priorities should be set on the basis of
net benefits to society. The order requires agencies to
determine the most cost-effective approach for meeting any given
regulatory objective, taking into account such factors as the
economic condition of industry, the national economy, and other
prospective regulations.
As part of the development of any important regulation, the
order also requires that each agency prepare a Regulatory Impact
Analysis to evaluate potential benefits and costs. The Task
Force will oversee this process; OMB will make comments on
regulatory analyses, help determine which new and existing
regulations should be reviewed, and direct the publication of
semiannual agendas of the regulations that agencies plan to issue
or review.
- 4 -
Decontrolling Domestic Oil Prices
The President has also ordered the immediate decontrol of
domestic oil prices, instead of waiting until October as originally
scheduled. This has eliminated a large Federal bureaucracy which
administered a cumbersome and inefficient system of regulations
that served to stifle domestic oil production, increase our
dependence on foreign oil, and discourage conservation.
Integrating the Goals of Regulatory Relief with Paperwork Reduction
Our program to reduce regulatory burdens will dovetail with
the efforts under the Paperwork Reduction Act of 1980. Lamentably,
present regulations will require Americans. to spend over 1.2
billion hours filling out government forms during 1981. This is
equivalent to the annual labor input for the entire steel
industry.
The Congress responded to the need for consistent management
of Federal paperwork and regulatory issues by passing the Paper-
work Reduction Act of 1980. The act creates an Office of
Information and Regulatory Affairs within OMB with the power to
review Federal regulations that contain a recordkeeping or
reporting requirement and directs this agency to reduce the
paperwork burden by 15 percent.
Future Targets for Regulatory Review
The program of regulatory relief is just getting under way.
Future regulatory reform efforts will be directed not only at
proposed regulations, but also at existing regulations and
regulatory statutes that are particularly burdensome. This
process has already begun: in the first month of the Administra-
tion several cabinet departments and agencies --- on their own
initiative and in coordination with the Task Force -- have taken
action on particularly controversial rules. For example, rules
mandating extensive bilingual education programs, passive
restraints in large cars, the labeling of chemicals in the work-
place, controls on garbage truck noise, and increased overtime
payments for executives have been withdrawn or postponed. The
actions taken already are expected to save the American public
and industry almost $1 billion annually. The Administration will
be reviewing a host of other regulations in the near future.
Legislative Changes
Not all of our regulatory problems can be resolved satis-
factorily through more effective regulatory management and
decisionmaking. Existing regulatory statutes too often preclude
- 5 -
effective regulatory decisions. Many of the statutes are con-
flicting, overlapping, or inconsistent. Some force agencies to
promulgate regulations while giving them little discretion to
take into account changing conditions or new information. Other
statutes give agencies extremely broad discretion, which they
have sometimes exercised unwisely.
The Administration will examine all legislation that serves
as the foundation for major regulatory programs. This omnibus
review, spearheaded by the Presidential Task Force on Regulatory
Relief, will result in recommendations to reform these statutes.
The Task Force will initially concentrate its efforts on those
laws scheduled for Congressional oversight or reauthorization,
such as the Clean Air Act.
THE WHITE HOUSE
Office of the Press Secretary
EMBARGOED FOR WIRE TRANSMISSION
February 18, 1981
UNTIL 4:00 P.M. (E.S.T.) AND
EMBARGOED FOR RELEASE UNTIL
9 P.M. (E.S.T.), Wednesday, February 18, 1981
FACT SHEET
President Reagan's Initiatives to Reduce Regulatory Burdens
Summary: President Reagan today announced the details of a far-reaching program to reduce
the burden of Federal regulations and paperwork, and to reduce the intrusion of the Federal
Government into our daily lives.
BACKGROUND
During the campaign, President Reagan promised swift action to ease the economic
burden of government regulation.
Previous administrations have instituted programs to manage the regulatory process. But,
despite these measures, regulations have continued to proliferate, often based on
inadequate analysis of the costs and benefits that would result.
During the last month of the Carter Administration, regulatory agencies in the Executive
Branch issued more than 150 final regulations. Of these so-called "Midnight Regulations,"
over 100 were scheduled to become effective within the next 60 days. Many of these new
regulations impose substantial new burdens on the economy.
Often, the high cost of regulatory compliance is due to the cumulative effect on an
industry of many agencies' rules, rather than to a single major rule. For example, at least
five Federal agencies directly regulate the auto industry, and these five agencies are now
considering more than 50 significant new auto rules.
This year, the Federal government is forcing Americans to spend over a billion hours
providing information to the government.
ACTIONS TAKEN SINCE JANUARY 20
Since taking office on January 20th, the President has taken a number of actions as a part of
a broad effort to free the economy, wherever feasible, of the hidden tax of complying with
Federal rules and paperwork requirements which do not contribute to the public welfare. This
effort will also seek to assure that regulations essential to the goal of protecting the public
health and safety achieve their goal in the most efficient manner.
1. Task Force on Regulatory Relief
President Reagan announced the creation of a Presidential Task Force on Regulatory
Relief on January 22, 1981. It is chaired by the Vice President. The other members are
the Secretary of the Treasury, the Attorney General, the Secretary of Commerce, the
Secretary of Labor, the Director of the Office of Management and Budget, the Assistant
to the President for Policy Development, and the Chairman of the Council of Economic
Advisers.
This Task Force has ongoing responsibilities which will be reinforced by the President's
Executive Order on Federal Regulation. The Task Force will:
Review major regulatory proposals by executive branch agencies, especially those
proposals that would appear to have major policy significance or where there is
overlapping jurisdiction among agencies.
Assess executive branch regulations already on the books, especially those that are
burdensome to the national economy or to key industrial sectors.
Oversee the development of legislative proposals in response to Congressional
timetables (e.g., the Clean Air Act must be reauthorized this year), and codify the
President's views on the appropriate role and objectives of regulatory agencies.
Seek to increase public awareness of regulations and their impact, including
regulatory expenditures that do not show up in the Federal budget.
Make recommendations to the President on regulatory personnel and how to reform
regulation through Executive Orders, agency actions, and legislative changes.
2. Termination of CWPS's Wage-Price Program
On January 29, President Reagan issued Executive Order 12288 terminating the Council
on Wage and Price Stability's wage-price standards program.
The Council on Wage and Price Stability (CWPS) was created in 1974 to study and
encourage wage and price restraint, monitor inflation in the economy, encourage
productivity, and review the inflationary impact of government programs and regulations.
In 1978, President Carter directed CWPS to establish a program of "voluntary" wage and
price standards. The Office of Federal Procurement Policy was ordered to issue
regulations denying Federal contracts to violators of these standards. The CWPS staff
grew from approximately 50 to 238 in 1979. As of January 20, 1981, employment was
170.
The CWPS program of wage-price standards proved ineffective in halting the rising rate
of inflation. It proved to be an unnecessary burden on labor and industry, and a waste of
taxpayers' money.
About $1.5 million will be saved in 1981 by this action, employment in the Executive
Office of the President will be reduced by about 135 people, and Federal requirements
that businesses submit voluminous reports will be ended. Companies spent some $300
million to comply with the reporting requirements alone of this program (more than 5,000
company reports were submitted to CWPS). CWPS's small regulatory staff will work
closely with OMB and the Presidential Task Force on Regulatory Relief to carry out the
program of regulatory relief.
3. Postponement of Pending Regulations
On January 29, President Reagan requested the heads of 12 departments and agencies,
to the extent permitted by law, to postpone the effective dates of regulations that
otherwise would have become effective before March 29 and refrain from issuing any
new final regulations during this same 60-day period. This suspension in the effective
date of new regulations was to:
Allow the new Administration time to review the "midnight" regulations issued during
the last days of the Carter Administration to assure that they are cost-effective and in
concert with this Administration's policies.
Allow time for this Administration's appointees to come abcard and to become familiar
with the details of the various programs for which they will be responsible.
2
Allow time for this Administration, through the Presidential Task Force, to develop
improved procedures for management and oversight of the regulatory process.
The request was sent to the heads of the Departments of Agriculture, Commerce,
Education, Energy, Health and Human Services, Housing and Urban Development,
Interior, Justice, Labor, Transportation and Treasury, and the Environmental Protection
Agency.
With certain exceptions, the effective dates of all rules that would have become legally
effective during the 60-day period have been extended. The Office of Management and
Budget has received and has granted several requests for waivers of this regulatory
suspension. Most such cases involve regulatory actions necessary for economic activity
to go forward.
4. Initial Regulatory Actions
The program of regulatory relief is underway. Several cabinet departments and agencies,
on their own initiative and in coordination with the President's Task Force, have taken
action on several significant issues:
On February 2, the Secretary of Education withdrew the proposed bilingual education
rules. These rules would have required all school systems to offer bilingual instruction
to each child whose primary language is other than English. The Department
estimated that the proposed rule could have cost up to $1 billion over the first 5 years
of the program and an annual maintenance cost of between $72 million and $157
million thereafter.
On February 9, the Secretary of Transportation proposed a one-year delay in a
regulation which would have mandated the installation of passive restraints, beginning
with large cars, in September 1981. The implementation of this regulation could have
resulted in consumers paying as much as $800 more per vehicle equipped with air
bags. Moreover, this requirement would have hit U.S. auto producers hardest. Before
the government imposes additional costs on the consumer and puts an additional
financial burden on an already troubled industry, it must be sure that such an action is
warranted. A one-year delay will provide the opportunity for such an evaluation.
On February 9, the EPA asked the D.C. Court of Appeals to remand to it a rule setting
noise emission standards for garbage trucks. This request set in motion a process in
which EPA will review regulatory alternatives suggested by the garbage truck industry.
During this review, EPA will not enforce any aspect of the rule. When the rule was
issued, EPA estimated that it would cost $25 million annually to comply with the rule,
most of which would be borne by municipalities.
On February 12, the Secretary of Labor announced action on three major rules.
- An OSHA rule requiring that chemicals in the workplace be labeled was withdrawn
for reconsideration. This rule, if issued in final form, would have cost between $643
million and $900 million initially, and between $338 million and $473 million annually
according to Labor Department figures. Lower-cost means of assuring worker
protection will be sought.
- New rules under the Fair Labor Standards Act were postponed indefinitely. These
would have raised the salary levels used as tests, in part, to determine whether
executives must be paid overtime. This would have cost employers over $50 million
annually, would have reduced employment opportunities, and would have raised
prices, especially in the fast foods industry.
- The implementation of new rules under the Service Contract Act was postponed.
These rules would have extended Davis-Bacon "prevailing wage" principles to
those timber sales, automatic data processing, and research and development firms
3
under contract with the Federal government. The Department estimated that these
rules would have cost at least $68 million annually.
On February 14, OMB withdrew the policy memorandum on Federal Support for
Hospital Construction issued by the previous Administration. This policy set out an
elaborate review process to prevent Federal support for unnecessary hospital
construction and renovation projects. In the Administration's judgment, the objectives
of the policy could be met more simply and effectively through other means.
On February 17, the President rescinded the mandatory Federal controls on building
temperatures which had been imposed by the previous Administration. This action
allows operators of non-residential buildings to choose the methods of conserving
energy that best suit their circumstances.
On February 17, the Secretary of Energy took several actions:
- Announced that national energy efficiency standards for major household
appliances will not be issued until a thorough review is completed. The 1980
proposal would require producers to redesign, by 1986, virtually all existing models
of these appliances and to retool their production lines. As a result, many small
firms would probably be forced out of business. Consumers would face sharply
higher purchase prices -about $500 million annually. Low-income families could
be especially hard-hit, since the standards would prohibit continued production of
the kinds of lower cost appliances they can afford.
- Withdrew proposed standby energy conservation measures involving a compressed
work week, vehicle use stickers, and the part of the employer-based commuter and
travel measures concerning working hours and transit subsidies. In addition, the
Secretary has proposed to withdraw several interim final measures, including
odd-even day motor fuel purchases, additional employer-based commuter and
travel measures, increased enforcement and/or reduction of the 55 m.p.h speed
limit and mandatory temperature restrictions. This action will remove measures
which, if implemented, would interfere excessively in the daily life and business of
Americans.
On February 17, the Director of OMB revoked the Department of Energy's clearance
under the Federal Reports Act for the collection of industrial energy consumption
data.. A number of respondents have provided data which demonstrated that the
information requested is needlessly detailed and unduly burdensome. This action will
terminate the collection of industrial energy data for sites not subject to Federal
regulation and preclude the Federal Government from expanding its regulatory
programs.
On February 17, President Reagan revoked Executive Order 12264, which established
a cumbersome, duplicative and burdensome regulatory policy regarding the export of
some hazardous substances. The rescinded Executive Order would have threatened
American workers' jobs and could have disrupted production abroad where affected
U.S. exports serve as vital material inputs. Procedures already exist which inform
foreign governments of hazards associated with exported American products. Thus,
each foreign government can decide for itself whether to import the products and
what precautions to take.
NEW ACTIONS ANNOUNCED BY THE PRESIDENT
Building on the steps taken since January 20th, today the President announced the following
additional actions taken by his Administration:
1. The Executive Order on Federal Regulation
4
Yesterday, the President signed a new Executive Order designed to improve coordination
and management of the Federal regulatory process. This Order will produce better
quality regulation and reduce the excess burden of regulation on the American people.
The Order:
Instructs the agencies on what is expected of them with respect to their regulatory
work and provides reassurance to the American people of the government's ability to
control its regulatory activities.
Charges the Office of Management and Budget with administering the new order,
subject to the overall direction of the Presidential Task Force on Regulatory Relief.
Emphasizes that: regulatory decisions should be based on adequate information;
actions should not be undertaken unless the potential benefits to society outweigh the
potential costs; and regulatory priorities should be set on the basis of net benefits to
society.
Directs agencies to determine the most cost-effective approach for meeting any given
regulatory objective, and requires that factors such as the economic condition of
industry, the national economy, and prospective regulations be taken into account.
Requires each agency to perform certain tasks as part of the development of an
important regulation. A Regulatory Impact Analysis is required to evaluate potential
benefits and costs in light of the regulatory objectives. A determination must be made
that any proposed rule is consistent with applicable legal authority and Presidential
policy and that it reflects careful evaluation of the comments of all persons affected by
or interested in the regulation. The Task Force is to oversee this process; the Office
of Management and Budget is to make substantive comments on regulatory analyses,
help determine which new and existing regulations should be so analyzed, and
oversee the publication of semiannual regulatory agendas.
2. Integrating the Goals of Regulatory Relief with Paperwork Reduction
The Administration's program to reduce regulatory burdens will be integrated with its
program to implement the Paperwork Reduction Act of 1980. During 1981, given present
requirements, Americans will spend over 1.2 billion hours filling out government forms.
This is equivalent to the annual labor input for the entire steel industry.
The costs of Federal paperwork and regulation discourage Americans from opening small
businesses, doctors from accepting Medicare patients, and State and local governments
from requesting needed Federal aid. The Office of Management and Budget has
exercised some control over the paperwork burdens of the cabinet departments since
1942. Last year, OMB supervised an effort which resulted in a reduction of almost 10
percent in the burden imposed by agencies subject to OMB Federal Reports Act
authority. However, agencies not subject to OMB information collection review increased
their paperwork load last year by more than 10 million hours.
The Paperwork Reduction Act of 1980 brings the independent regulatory agencies under
OMB authority, directs that the paperwork burden be reduced by 15 percent by October
1, 1982, and relates the effort to reduce paperwork burden to the need to minimize
regulatory burden.
This Act creates an Office of Information and Regulatory Affairs within OMB and directs
the agency to review Federal regulations that contain a recordkeeping or reporting
requirement under a variety of different procedures. It provides that no agency may
impose civil or criminal penalties on any person who fails to comply with a recordkeeping
or reporting requirement that has not received OMB approval.
3. Future Candidates for Regulatory Review
5
The Administration is completing a comprehensive initial review of the regulations of 14
key executive branch agencies: Departments of Treasury, Justice, Interior, Agriculture,
Commerce, Labor, Health and Human Services, Housing and Urban Development,
Transportation, Energy and Education, and the Environmental Protection Agency, the
Equal Employment Opportunity Commission and the Office of Management and Budget.
This review covers both rules under development as well as rules now in effect.
Regulations now under development can usually be withdrawn, modified, or cancelled by
the agency head at his or her direction. In the case of existing rules, the agency head
will have to issue a new notice of proposed rulemaking and follow usual procedures
before making substantive change. That is, revision or withdrawal of these existing rules
would require that the agency propose the revision or withdrawal and obtain public
comment before taking final action.
During the coming weeks and months, agencies will be conducting intensive reviews of
many existing and proposed regulations at their own initiative, and in response to
requests from the Task Force on Regulatory Relief.
4. Legislative Changes
The Administration will examine all legislation that serves as the foundation for major
regulatory programs. This review will be led by the Presidential Task Force on
Regulatory Relief and will result in recommendations to reform these statutes.
Not all of our regulatory problems can be solved satisfactorily through more effective
regulatory management and decision-making. Statutory constraints often preclude
effective regulatory decisions. Also, the Administration's efforts to better control the
regulatory process may, in some cases, require further Congressional action. For
example:
Many of the statutes are conflicting, overlapping, or inconsistent. Some force
agencies to promulgate regulations while giving them little discretion to take into
account changing conditions or new information. Other statutes give agencies
extremely broad discretion, which they may sometimes exercise unwisely. Statutes
should not force agencies to promulgate inefficient regulations: they should provide
agencies with requisite discretion and sufficient direction so that they act wisely.
Compliance deadlines are often established in various laws. In general, they are
imposed to ensure that agencies move forward expeditiously in implementing the law.
However, these deadlines are often impossible to meet, especially if the rules
developed are to be based on adequate information. Deadlines in statutes also
constrain agencies' ability to tailor rules to the economic conditions of the affected
parties. Where deadlines are unreasonable, changes will be sought.
Over the past few years numerous procedural reforms have been introduced in Congress
that would respond to increasingly burdensome and intrusive regulations being imposed
by the Federal Government. They have included requirements for regulatory analyses, an
across-the-board legislative veto, and broader judicial review of the substance of
regulations. While supportive of the goals of such proposals, the Administration is
concerned about legislation that may result in excessive layering of review or an undue
broadening of control responsibility. Legislative proposals should be developed in a
manner to ensure they do not make the process even more complex, increase the size of
the federal bureaucracy, make it more difficult to make needed changes in regulations,
create additional delay and uncertainty, or contribute to the waste that results from the
current adversarial nature of the rulemaking process.
6
THE VICE PRESIDENT
OFFICE OF THE PRESS SECRETARY
FOR IMMEDIATE RELEASE
CONTACT: Peter Teeley
March 7, 1981
(202) 456-6772
or
C. Boyden Gray, Esq.
(202) 456-7034
Vice President George Bush, Chairman of the President's
Task Force on Regulatory Relief, announced today that the Environmental
Protection Agency, on Monday, will propose an important change in its
national air pollution regulations that will ease a regulatory burden.
on industries.
The change which deals with how the EPA defines a pollution
source will sharply reduce red tape binding new industrial development
while continuing to protect public health against air pollution.
The regulatory change applies to all types of industries
nationwide, but one significant benefit can be seen in the State of
California.
In much of California, substantial modifications of petroleum
refinery facilities are prohibited under the current EPA rule defining
pollution sources--with serious consequences for the state and the
country. A study conducted last year by the Governor's office concluded
that California could probably achieve energy self-sufficiency in the
30's provided that over a billion dollars in modifications of California
refineries be made in the next few years.
These modifications will allow state refiners to process
more than a quarter million additional barrels a day of California oil
in place of imported oil now being refined. This could result, in this
one state's production alone, in a savings to the national economy of
several billion dollars a year. For the country it would mean a signifi-
cant reduction in our oil imports. The change EPA is proposing would
remove a Federal roadblock to these modifications without increasing air
pollution.
The change will also allow two General Motors assembly plants--
in Van Nuys and Southgate, California--to retool. That new retooling, in
turn, will allow these plants to build smaller cars.
The change concerns EPA's regulatory treatment of new sources
of air pollution in areas that do not meet Federal atmospheric air
quality standards.
The Clean Air Act forbids any new construction of a "major
source" in areas that do not have an EPA-approved plan needed to meet
Federal standards, and forbids any "modification of a major source that
would increase emissions 'significantly.
- more -
Vice President Bush
-2-
In areas that do have a plan to meet these standards, but have
not yet met them, construction or modification may proceed provided that
the involved source gets a construction permit and meets certain other
pollution control requirements.
The burdens imposed by these requirements depend largely on
what EPA defines a "source" to be. If the entire plant is taken as the
"source," its owners could increase pollution from one part of the plant,
as long as they decreased emissions in another part of the plant. Since
on balance pollution from the plant as a whole would not have increased
"significantly," there would have been no modification under the statute
and formal preconstruction review would not be required. However, if
EPA views each individual facility within that plant as a "source," then
the owners must meet the regulatory requirements for each facility when-
ever its emissions increase beyond a certain amount, even if total
plant-wide emissions do not increase as a whole.
At present, EPA applies the second definition in areas that are
not meeting air quality standards--that is, it defines each individual
facility as a separate pollution source. Monday's proposal will adopt the
first approach instead. Under it, only the plant as a whole is con-
sidered a "source." This is the approach that EPA currently applies in
areas that are meeting air quality standards.
In addition to this change, EPA will propose dropping its current
requirement that any existing plant that is substantially rebuilt in an
area that is not meeting air quality standards must get a permit and meet
the related requirements, even if its total pollution does not increase
significantly.
#####
THE VICE PRESIDENT
OFFICE OF THE PRESS SECRETARY
FOR RELEASE: 3:00 p.m.
CONTACT: Peter Teeley
March 25, 1981
Shirley Green
(202) 456-6772
Statement by the Vice President
Regarding Actions Taken
by the
President's Task Force on Regulatory Relief
Today I have several announcements concerning actions taken
by the President's Task Force on Regulatory Relief.
As you know, our mandate is to achieve the regulatory relief
our economy desperately needs -- to reduce costs, to reduce infla-
tion, to increase productivity, and to provide more jobs, while at
the same time maintaining due concern for the environment, and for
the health and safety of our citizens. The latest actions of the
Task Force further these goals.
First, we are releasing a list of regulatory rules that are
designated for postponement. These are "midnight" regulations
that were caught in the regulatory "freeze." They will not be made
final in their current form, but will be reviewed by the agencies.
Second, we are releasing a list of existing regulations that
various agencies will be reassessing and possibly modifying. The
regulations on both lists will undergo the review procedure out-
lined in the Executive Order signed by the President on February 17.
For most of these regulations, agencies will prepare Regulatory
Impact Analyses, and their decisions will be guided by the President's
regulatory principles as set forth in the Order.
Third, we are announcing EPA's approval of the first State
"bubble" rule that avoids the need for case-by-case EPA review.
Approval of this rule, submitted by New Jersey, will permit cheaper
and more flexible pollution control at the State level and will
result in greater pollution reductions at the same time.
These regulations do not include those rules that affect the
automobile industry. The automobile industry relief package now
under preparation has highest priority and will be announced separately
in the future.
- more -
Vice President Bush
-2-
I also want to announce that I am issuing correspondence to
various departments, agencies, business, labor and other private
sector groups.
*
First, I have sent a letter to the heads
of executive agencies informing them of
a decision of the President to abolish
the Regulatory Council. Some members of
the Council will continue working on the
useful Regulatory Calendar and other
projects.
*
There is another letter that I have sent
to the heads of independent agencies,
asking for their continued cooperation
in preparing the Regulatory Calendar,
but also -- and I think this is very
important -- asking them to cooperate
with the spirit of the requirements
of the Executive Order insofar as they
are able.
*
Finally, there are some 100 letters
that I have signed, a copy of which
you have there, formally requesting
input to us and the agencies from
the private sector. These letters are
going to labor organizations, businesses,
trade associations, State and local
governments, and academic groups.
Let me say finally that with regard to private sector inputs,
we seek and need help, not only in eliminating regulations from
which relief is warranted, but support for what we are doing. And
we are getting a lot of support. I want to read a letter received
two days ago written by a coal miner in West Virginia. He says
that, "due to the excessive pressure, unjust regulations, and civil
penalties that the federal government has imposed on the coal mining
industry, our future in maintaining a job in coal fields is in great
jeopardy
we feel that the Code of Federal Regulations is ham-
pering our production and making it impossible to compete with foreign
imports." His petition is signed by 65 fellow miners.
What the President is attempting to do in this area is find
a balance between safety in the work place and environmental pro-
tection, and, at the same time, èliminate from our economy unneeded
regulations SO that we can grow and increase our nation's productive
capacity.
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Vice President Bush
-3- -
There can be no hope for the jobless, the wage earner or
the retiree if inflation at double digit rates persists, if pro-
ductivity continues to fall, and if business and industry do not
have the capital to invest in job-producing enterprises.
Regulatory relief, as a major component of the President's
economic program, is essential if we are to accomplish the goals
which he has established. This Task Force was instructed by the
President to take action, not write reports. Actions have been
taken during the past few weeks that will bring some relief and
will help our economy grow. I am confident that the actions
announced today continues that movement in a positive direction.
# # # # #
March 25, 1981
RULES DESIGNATED FOR POSTPONEMENT
DEPARTMENT OF AGRICULTURE
1.
Revision and Redesignation of
This regulation relaxes eligibility
Section 502 Rural Housing Loan
requirements for low interest, subsidized
Policies, Procedures, and
loans to moderate-income families for buy-
Authorization (Farmers Home
ing homes. The Secretary has suspended
Administration, 46 FR 4681)
the effective date to facilitate further
analysis. Also, the regulation has major
budgetary implications.
DEPARTMENT OF COMMERCE
2.
Federal Interaction with
Prescribes procedures for (1) the listing
Voluntary Standards Bodies;
and delisting of organizations setting
Procedures (46 FR 1574)
voluntary standards eligible for Federal
agency support and participation and (2) a
DOC sponsored dispute resolution service for
procedural complaints against listed
voluntary standard bodies. Comments were
received before and during the freeze which
need to be analyzed.
3.
The Channel Islands National
Establishes limitations and prohibitions
Marine Sanctuary (45 FR 65198)
on the activities regulated within the
Sanctuary, the procedures by which persons
may obtain permits for prohibited activities
and the penalties for committing prohibited
activities. A major issue requiring review
is the impact of the rule on the development
of hydrocarbon energy sources. Only the
portion of the rule dealing with this issue
will remain frozen until the Department takes
further action.
4.
The Point Reyes-Farallon
Establishes limitations and prohibitions
Islands National Marine
on the activities regulated within the
Sanctuary (46 FR 7936)
Sanctuary, the procedures by which persons
may obtain permits for prohibited activities,
and the penalties for committing prohibited
activities. A major issue requiring review
is the impact of the rule on the development
of hydrocarbon energy sources. Only the
portion of the rule dealing with this issue
will remain frozen until the Department takes
further action.
-2-
DEPARTMENT OF EDUCATION
5. Assistance to States for
This is an interpretation of the Education
Education of Handicapped
of the Handicapped Act and Section 504 of
Children (46 FR 4912)
the Rehabilitation Act of 1973. This inter-
pretation specifies that schools should
provide catheterization service during the
school day. This requirement needs to be
reexamined.
DEPARTMENT OF INTERIOR
6.
Prime Farmlands
This rule implements the Surface Mining
(46 FR 7208)
Act, and replaces rules invalidated
by the Courts in 1978 concerning the standard
defining whether mined areas should be
returned to prime farmland and the
"grandfather" rule concerning land being
mined before passage of the Act. This rule
will be reexamined.
7. Prime Farmlands
This amendment also implements the Surface
(46 FR 7894)
Mining Act, dealing only with the grandfather
clause and also implementing the Court's
ruling. This rule will be reexamined.
8. Extraction of Coal, Two
These rules tighten the two acre exemption
Acres or Less (46 FR 7902)
included in the Surface Mining Act. The
Department has decided to reconsider it.
9. Tribal Government Elections
The rule extends to tribes in Oklahoma and
(46 FR 1668, 1674)
Alaska existing rules governing tribal
elections in other states. Also, rules
governing process for petitioning for an
election are rewritten. The rule will remain
frozen until the Department decides whether
to reconsider it.
10. FLPMA Exchange Authority
This rule deals with procedures governing
for Public Land (46 FR 1634)
the Department's authority to exchange public
lands for private lands. The rule will
remain frozen until the Department decides
whether to reconsider it.
-3-
DEPARTMENT OF INTERIOR (Continued)
11. Land Withdrawal Procedures
The rule sets out, for the first time, a
Amendments (46 FR 5794)
consistent management process for handling
withdrawal applications. The rule will
remain frozen until the Department decides
whether to reconsider it.
12. Leases, Permits, Easements
This rule sets out revised rules for
Through Public Lands
leases, permits and easements of public
(46 FR 5773)
lands. The rule will remain frozen
until the Department decides whether to
reconsider it.
13. Hawaiian Tree Snail
This rule extends endangered species
(46 FR 3178)
protection to the Hawaiian tree snail.
The rule will remain frozen until the
Department decides whether to reconsider it.
14. Gypsum Wild Buckwheat
These rules extend endangered species
and Todsens Pennyroyal
protection to the Pennyroyal plant
(46 FR 5730)
and to the wild Buckwheat plant.
These rules will remain frozen until the
Department decides whether to reconsider
them.
15. Glacier Bay National Monument;
This rule establishes limits on small vessels
Protection of Humpback Whale
within Glacier Bay and prohibits commercial
(45 FR 85741)
harvesting of the organisms upon which the
humpback whale feeds. The rule will remain
frozen until the Department decides whether
to reconsider it.
DEPARTMENT OF JUSTICE
16. The Effect of a Strike on the
Clarifies under which conditions temporary
Admission and Continued
alien workers cannot be used as strike-
Employment of Certain
breakers. INS will delay that part of the
Nonimmigrants (46 FR 4856)
rule which deals with the role of manager/
supervisor alien workers as strikebreakers
until additional analysis is completed.
DEPARTMENT OF LABOR
17. Walkaround Compensation
The rule would have required employers to
(46 FR 3582)
pay their employees for time spent
accompanying OSHA compliance officers in
their inspection of the work place. The
Department has submitted a Federal Register
notice to withdraw this rule as it appears to
be unnecessary.
-4-
DEPARTMENT OF LABOR (Continued)
18. Occupational Exposure to Lead
The rule specifies the amount of lead that
(46 FR 6134)
can be in the ambient air before engineering
controls must be introduced. The rule also
contains monitoring requirements. The lead
standard is under review. The Department is
postponing the standard for 30 more days to
permit additional fact finding as a basis for
a policy decision.
19. Procedures for Pre-deter-
This rule modified the 30% modal rate defin-
mination of Wage Rate under
ing the "prevailing wage". In the absence of
Davis-Bacon (46 FR 4306)
such a rate, the mean rate is established
as the prevailing rate. The Department is
planning thoroughly reexamining the Davis-
Bacon regulation.
20. Payment of Membership Fees
The rule would have prohibited employers
(46 FR 3892)
from paying membership fees for their
employees to private clubs unless it was
clear that the club did not discriminate by
race, sex, national origin or creed. The
Department has submitted a Federal Register
notice withdrawing this rule.
21. Service Contract Act
The Department is reexamining the SCA
(46 FR 4398)
regulations which require the payment of
"prevailing wages" to service employees
working for firms that have contracts with
the Federal Government. The Department is
reexamining these regulations.
22. Salary Test Levels to
The regulation would have raised the salary
Determine Eligibility for
test levels so that fewer workers would have
Exemption from Overtime
been exempted from the overtime requirements
Provisions (46 FR 3010)
of the FLSA. The Department is extending
the effective date to permit reexamination.
23. Government Contractors:
These specify what actions and reporting
Affirmative Action
and recordkeeping requirements government
Requirements (46 FR 9084)
contractors must comply with in order to do
business with the Federal Government. The
Department is working on a major
reexamination of the OFCCP affirmative action
requirements.
24. Labor Standards Provisions:
This regulation is related to the Davis-
Construction Contracts
Bacon regulations but is issued under the
(46 FR 4380)
Contract Work Hours and Safety Standards
Act.
This Davis-Bacon and related
regulations are being thoroughly reviewed.
-5-
DEPARTMENT OF LABOR (Continued)
25. Certification Process and
The rule would have changed the method of
Adverse Effect Wage Rate
determining the adverse effect wage rate
(46 FR 4568)
from a regional to national level method
and rate. The Department has submitted a
Federal Register notice withdrawing this
rule.
DEPARTMENT OF TRANSPORTATION
26. Urban Transportation Planning
This rule implements the urban transportation
(46 FR 5702)
planning process mandated by the Federal-Aid
Highway Act and the Urban Mass Transportation
Act of 1964. DOT is postponing this rule so
that FHWA and UMTA can determine what
portions will be made effective and what
portions will be withdrawn.
27. Addition of Water to Pipelines
Establishes a water standard for pipelines
Transporting Anhydrous Ammonia
transporting anyhdrous ammonia. DOT is post-
(46 FR 39)
poning the effective date to permit
additional analysis of potential costs and
benefits.
28. Traffic Control Devices
Reduces and consolidates existing regulations
(46 FR 2038)
that prescribe procedures for States to
develop uniform traffic control devices. DOT
is withdrawing this rule to allow a thorough
reevaluation of FHWA's traffic control
program.
29. Carpool and Vanpool Projects
Revises eligibility criteria for federal
(46 FR 2298)
funding of carpool and vanpool projects in
accordance with the Surface Transportation
Assistance Act of 1978. DOT is withdrawing
this regulation for FHWA to review the
overall program.
30. Bus Rehabilitation Program
Establishes policy and eligibility criteria
Policy and Procedures
for grants to aid in bus rehabilitation pro-
(46 FR 9862)
jects. DOT is withdrawing this regulation.
A more flexible policy statement is being
considered in its place.
31. Emergency Stockpiling of
Allows grantees to stockpile buses for future
Buses (46 FR 5480)
emergency use. DOT is withdrawing this rule.
A more flexible policy statement is being
considered in its place.
-6-
DEPARTMENT OF TRANSPORTATION (Continued)
32. Urban Initiatives Program
This regulation concerns funding for mass
(46 FR 5820)
transportation projects to enhance urban
development. DOT is withdrawing this
regulation. Funding for this program is
scheduled to end.
DEPARTMENT OF TREASURY
33. Revenue Sharing Handicapped
The rule imposes extensive new obligations
Discrimination Regulations
on local governments that are recipients of
(46 FR 1120)
revenue sharing funds to prevent discri-
mination against the handicapped in services,
employment and access to facilities, as
provided in Section 504 of the Rehabilitation
Act of 1973, as amended. These regulations
should be postponed pending further analysis
of the potential impacts.
ENVIRONMENTAL PROTECTION AGENCY
34. Timber Products Effluent
On January 26, EPA promulgated best conven-
Guidelines: BPT and BCT
tional pollutant control technology (BCT)
(46 FR 8260)
effluent limitation for categories of the
timber industry. Pending EPA's current
review of the economic methodology for
determining the reasonableness of BCT
standards, it is appropriate to postpone the
final BCT regulations. The BPT regulations
will go into effect.
35. Amendments to General
These amendments modify an earlier program
Pretreatment Standards
for controlling industrial discharges into
(46 FR 9404)
municipal sewage systems. These regulations
will be postponed pending further
examination.
36. Pesticides: Classification
EPA issued two regulations classifying uses
of Uses of Active Ingredients
of active ingredients for restricted use and
and State Registration of
specifying provisions for State registration
Pesticide to Meet Local Needs
of pesticides to meet local needs. At EPA's
(46 FR 2008 and 5696)
initiative, these regulations are being
postponed due to special Congressional review
provisions under FIFRA.
March 25, 1981
EXISTING REGULATIONS TO BE REVIEWED
DEPARTMENT OF AGRICULTURE
1. Mechanically processed
The Department of Agriculture has
(species) product
established, by regulation, requirements for
the production, use and labeling of
mechanically processed (species) product (a
meat food product resulting from the
mechanical separation of bone and skeletal
muscle), and the labeling and preparation of
products in which it is used as an ingre-
dient. The regulations' primary impacts are
on processors of the product and processors
and consumers of products in which it is
used. A review of the regulations will
determine whether modifications would result
in higher net benefits to processors and
consumers.
2. Marketing orders for fruits
Regulations issued to implement fruit and
and vegetables
vegetable marketing orders have a direct
impact on both producers and first handlers
by specifying the quality of the regulated
commodities to be marketed, the quantities to
be marketed on a scheduled basis within a
season, or the outlets into which a seasonal
crop may be marketed. Orders also may
provide for establishment of a reserve pool
whereby supplies in excess of marketing
requirements must be set aside for later
sale. In addition to meeting the marketing
regulations, handlers also must finance the
local administration and any research or
promotional activities under the programs. A
review of fruit and vegetable marketing
orders will focus on the programs' effects on
economic efficiency, costs and productivity.
-2-
3. National Forest Service
The National Forest Management Act (NFMA),
planning regulations
enacted in 1976, required the development of
regulations establishing standards and
guidelines for land and resource management
planning on 191 million acres of National
Forest System lands. The Act requires these
plans to be developed by September 30,
1985. For the past 1 1/2 years the Forest
Service has been implementing the regulation
developed in 1979 pursuant to NFMA. During
this period, it has become apparent that
certain revisions are needed to clarify
direction to planners in order to streamline
and speed up the process. The purpose of the
review is to simplify the procedures, improve
efficiency in planning, and encourage prompt
land use decisions that will meet public
needs.
DEPARTMENT OF COMMERCE
4. Regulations implementing various The National Marine Fisheries Service issues
fishery management plans
rules for the management of fisheries off the
U.S. Coast, primarily to prevent "over-
fishing." While these rules have been
successful in sustaining the fisheries, in
many cases they may require inefficient and
wasteful fishery methods.
DEPARTMENT OF EDUCATION
5. Education of handicapped
The regulations to implement the Education of
children
Handicapped Children Act of 1975 (P.L. 94-
142) define a special education program for
handicapped children, involving an individual
education plan for each handicapped student
and the concept of "mainstreaming." While
the Department does not have an estimate of
the cost of complying, school districts are
concerned that Federal funds for this program
are inadequate.
DEPARTMENT OF ENERGY
6. Coal Conversion Program
A complex set of rules implementing a statute
which directs electric utilities and large
industrial fuel users to switch from oil and
gas to coal or some alternative fuel. The
statute includes a prohibition of natural gas
for baseload power generation after 1990.
-3-
These requirements may be unnecessary with
decontrol and counterproductive given in-
creased availability of natural gas since the
Fuel Use Act was passed.
7. Residential Conservation
These regulations implement a statute which
Service
requires the States to have utilities provide
to residential customers, for a nominal fee,
a complete "energy audit" of their home or
apartment pointing out ways to conserve
energy. The requirements for these
inspections are complex and expensive. The
cost of inspection, beyond the nominal fee,
would likely show up in customers' utility
bills.
ENVIRONMENTAL PROTECTION AGENCY
8. BCT Effluent Guidelines
Under the 1977 Amendments to the Clean Water
Act, EPA is required to consider the
reasonableness of costs in establishing more
stringent effluent limits for industrial
dischargers of conventional (non-toxic)
pollutants in relation to comparable
municipal costs. Under these requirements,
EPA established the incremental cost of
achieving a more stringent treatment of
municipal wastewater as a benchmark for
determining the "reasonableness" of more
stringent controls for industrial dis-
chargers. EPA determined a benchmark cost of
$1.15 per pound for municipal treatment.
However, recent analysis indicates that EPA's
methodology may be incorrect. EPA is re-
studying the BCT benchmark cost to ascertain
whether a lower cost figure would meet the
requirements of the law. Adoption of a lower
benchmark cost figure could result in
substantial savings.
9. Hazardous Waste Disposal
These rules establish a comprehensive,
"cradle-to-grave" program governing the
generation, handling, and disposal of
hazardous wastes. Estimates of the costs of
this program range from one to two billion
dollars per year; however, EPA has never
completed a thorough regulatory/economic
-4-
analysis of the program and any cost figure
is somewhat speculative. Several major
issues deserve review, including the com-
prehensive definition of hazardous waste
under the rules and the limited extent to
which EPA has been able to vary program
requirements based on the degree of hazard of
the waste. This program will impose a
substantial additional burden in terms of the
time, effort, and financial resources
required of the private sector in meeting the
information requirements imposed by the
program.
10. Electroplating Pretreatment
Electroplating pretreatment rules establish
and General Pretreatment
national, technology-based standards requir-
Standards
ing roughly 90 percent removal of the toxic
pollutants (heavy metals and cyanide) dis-
charged by the electroplating industry into
municipal sewage treatment systems. EPA
estimated that in order to meet these pre-
treatment standards the electroplating
industry would incur capital costs of $1.3
billion and annual costs of $490 million (in
1976 dollars). Electroplaters have been
shown to be a major source of toxic water
pollution. In addition to the categorical
electroplating pretreatment standards, EPA
also promulgated general pretreatment
regulations requiring municipal sewage
treatment systems to establish pretreatment
programs. These regulations establish a
national program for controlling industrial
discharges into municipal sewage systems.
EPA will review its pretreatment program to
evaluate whether it appropriately balances
environmental protection, economic impacts,
and flexibility for states and localities.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
11. New Drug Application Require-
This set of regulations (21 CFR 314) governs
ments
the submission and review of new drug
applications. It involves requirements for
testing and marketing of all drugs to be used
by consumers in the United States. Concern
from the public, Congress and the drug
industry about delays in the existing process
and its cost justifies a thorough review.
-5-
12. Medicaid Regulations Affecting
At present a variety of regulations impose
States
significant administrative requirements on
States. States contend that these
regulations hamper their ability to provide
services to needy people at reasonable
funding levels. In addition, the President
has promised States that regulatory relief
will accompany his proposal to limit Federal
Medicaid expenditures. For these reasons, a
thorough review is warranted.
13. Health Care Institution
Hospitals, nursing homes, and other
Certifications and Surveys
institutional health care providers are
subject to myriad, frequent and duplicative
surveys and reviews. Many of these reviews
are a result of the Federal government's role
in insuring the health and safety of
patients. Given an expanding role and
improved performance by State and local
governments and voluntary organizations in
this area, a reassessment of the appropriate
Federal role is warranted.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
14. Minimum Property Standards for
The Minimum Property Standards (MPS) are
one- and two-family dwellings
composed of numerous design, construction,
and multi-family dwellings
and amenities criteria used as requirements
for new residential construction under HUD
mortgage insurance, public housing, and rent
subsidy programs. In September 1980 HUD
proposed to delete "livability and market-
ability" standards from the One- and Two-
Family MPS. An expanded review would examine
whether much more extensive deletions may be
in order. For numerous objectives of the
MPS, alternative government programs and
private market forces (e.g., local building
codes, homebuilders' warranties) may achieve
the same purposes. No improvements in the
MPS for Multi-Family Dwellings have been
proposed to date, but there appear to be
equally strong grounds for a comprehensive
review of them as well.
DEPARTMENT OF THE INTERIOR
15. Surface Mining Rules
These regulations implement the Surface
Mining Act, which sets forth techniques that
must be used for surface mining, particularly
recontouring and reclaiming the land
-6-
afterwards. The requirements for original
contour and vegetation may preclude more
useful or aesthetic treatment. These rules
not only raise the cost of surface mining,
but could render some areas uneconomical to
mine at all.
16. Federal Coal Management
These regulations govern competitive lease
Program
sales for coal on federal lands. They
determine the rate at which coal will be made
available (target-setting procedures), and
withdraw some areas entirely from coal mining
("unsuitability" criteria). In the West,
where Federal lands contain the major share
of total coal reserves, excessively
restrictive management can cause shortages,
lessen competition, and raise coal prices.
DEPARTMENT OF JUSTICE
17. Leadership and Coordination of
Rules implementing Executive Order 12250 to
Nondiscrimination Laws
coordinate the implementation of Federal laws
that prohibit discrimination on the basis of
race, color, national origin, religion, sex
or handicap in programs receiving Federal
financial assistance warrant review. Under
this Executive Order, DOJ has a leadership
and coordination role which includes issuing
regulations affecting non-discrimination
programs in other Federal agencies.
DEPARTMENT OF LABOR
18. Occupational Noise
On January 16, 1981, the Occupational Safety
and Health Administration published
regulations effective April 15, 1981 that
require employers to institute hearing
conservation measures for all workers in
general industry (except agriculture and
construction) exposed to noise levels equal
to or exceeding an eight-hour time weighted
average of 85 decibels. This rule is an
outgrowth of the occupational noise standard
revision which was first proposed in 1974.
The issues of the permissible exposure level
and the appropriate methods of compliance
with that level should be reviewed. In any
case, the hearing conservation measures,
-7-
themselves, are expensive (over $250 million
annual costs), controversial (petitions
challenging the rules have been filed in
three Courts of Appeals) and possibly not
cost-effective (the standards are alleged to
be too design-specific and not performance-
oriented enough).
19. Office of Federal Contract
The Federal Contract Compliance programs are
Compliance Policy
administered under the authority of a 1965
Executive Order (11246) and subsequent
legislation. These regulations need to be
examined to determine if they exceed legal
requirements. To a large extent these
regulations impose specification standards on
government contractors. These should be
reviewed to see if broad performance stan-
dards could replace the tight specifica-
tions. There is an overlap between EEOC's
statutory authority and the Department's
Executive Order 11246 authority. The
Department's regulations place more stringent
requirements on firms that do business with
the government than the Civil Rights Act of
1964 requires of other businesses. The
appropriateness of such dual tiering should
be examined.
20. Prevailing Wage
Under the Davis-Bacon and Service Contract
Acts, the Department of Labor establishes
minimum rates, based on a prevailing wage
concept, for wages and benefits paid to
workers by Government construction and
service contractors. The original intent of
these laws was to prevent competitive Govern-
ment procurement from depressing wages below
minimum rates prevailing in localities where
Federal contracts are being implemented.
Their effect over time (since 1931 for the
Davis-Bacon Act and since 1965 for the
Service Contract Act) has been to escalate
wages above rates prevailing in the private
sector. This happens because contractors can
pass through wage costs without having to
worry about competition. Service contract
costs are determined largely by wage and
benefit levels (about 75 percent of contract
costs) and construction costs are about 25
percent labor related. The Davis-Bacon Act
covers at least $30-35 billion per year of
construction contracts. The Service Contract
Act covers an additional estimated $5-10
billion per year of Federal contracts for
services.
-8-
21. Personal Protective Devices
Although OSHA does not have a published
comprehensive policy on personal protective
devices apart from its individual rulemakings
on specific occupational hazards, OSHA has
consistently adopted a policy of requiring
engineering controls first and personal
protective devices only when engineering
controls are not feasible or as supplements
to engineering controls. This policy has
been implemented regardless of the degree of
risk of the hazard (carcinogens were treated
the same as cotton dust or noise) and
regardless of the costs. A policy that
simply set performance standards, allowing
employers the option of using personal
protective devices where they are as
effective as engineering controls, might be
more cost-effective and ultimately more
beneficial to workers and society.
22. OSHA Carcinogen Policy
The Cancer Policy does not regulate specific
chemicals nor require their regulation.
Instead, it explains how OSHA will regulate
carcinogens in the future. It is intended to
streamline the regulatory process, thereby
conserving the resources of both the Agency
and affected industries, as well as providing
greater protection to employees. It is also
designed to assist industries' long-term
planning by giving them notice of how regu-
lation would proceed. The policy achieves
these goals by establishing (1) the evi-
dentiary criteria by which OSHA will conclude
that a substance causes cancer; (2) a system
for establishing priorities; (3) rulemaking
procedures, including limitations on the
issues which can be raised; and (4) certain
substantive requirements which must be
incorporated into future regulations of
Category I carcinogens, most notably that
employee exposure must automatically be
reduced to the lowest feasible level (i.e.,
through engineering and work practice
controls). The policy specifically rejects
the use of cost-benefit analysis in setting
exposure levels.
OFFICE OF MANAGEMENT AND BUDGET
23. Urban/Community Impact Analyses This OMB Circular (A-116) requires agencies
to conduct analyses to identify the likely
effects of proposed major programs and policy
initiatives on cities, counties and other
-9-
communities. The intent of these analyses is
to inform decisionmakers of agency actions
which may run counter to the President's
urban policy. The Circular provides guidance
on the conduct and format of such analyses.
24. University Research
Circular 73-7 establishes certain require-
ments for administration of college and
university research programs. These include
restrictions on how research projects are
managed, and limitations on certain kinds of
costs. They also call for numerous approvals
by the Federal Government. Many Federal
agencies have continuing relationships with
educational institutions via grants or other
agreements for research, training and similar
services. The OMB policies have a direct
impact on both the nature and level of this
relationship.
25. Cost Sharing on University
Circular 73-3 provides guidelines to Federal
Research
agencies requiring universities to share in
the cost of research projects, whether or not
cost sharing is required by law. Many
Federal agencies have continuing relation-
ships with educational institutions via
grants or other agreements for research,
training and similar services. The OMB
policies have a direct impact on both the
nature and level of this relationship.
DEPARTMENT OF TRANSPORTATION
26. Access to Handicapped
These rules require local governmental
entitities receiving Federal financial
assistance for mass transit purposes to
assume extensive handicap accessibility
obligations. Each mode of transportation in
an urban mass transit system must be made
accessible to the handicapped. Renovation of
"key" subway stations is required; if other
stations are not accessible, alternative
modes of transportation must be available to
serve the handicapped. New buses must have
ramps or lifts to accommodate wheelchairs.
New York City alone estimates the capital
costs (principally for purchasing lift-
equipped buses and retrofitting subway
stations) at between $1.1 billion and $1.6
billion, annual operating costs at between
$68 million and $140 million, and total cost
over 50 years between $2.6 billion and $6.1
billion.
-10-
DEPARTMENT OF TREASURY
27. Use of Published Indices to
Many taxpayers, especially small businesses,
Determine Inventory
do not currently use the dollar value LIFO
method of accounting for inventory because
existing rules relating to the computation of
inventory price indexes used in connection
with the dollar-value LIFO method of
inventory valuation are perceived as being
too complex and burdensome. IRS proposed on
January 16, 1981 amendments to the LIFO
regulations that would permit taxpayers to
use price indexes prepared by the United
States Bureau of Labor Statistics in lieu of
computing an inventory price index based on
their own inflation experience.
The
objective of the amendments is to provide
taxpayers with an alternative, simplified,
method of computing an inventory price index
that will make the use of the dollar-value
LIFO method easier to understand and use.
However, unresolved technical issues that
were not addressed in the proposed
rulemaking, such as the application of the 80
percent limitation to the inflation rate for
a period of more than one taxable year, need
to be addressed.
EPA Rule Changes
The Environmental Protection Agency today announced final
action to remove several procedural restrictions from EPA's
"bubble" policy. At the same time, the Agency approved a New
Jersey state rule that reflects the new approach. These
changes, which affect hydrocarbons, will significantly
expand the number of sources that can use a "bubble" approach
to controlling pollution. They will also reduce the degree
of Federal involvement in state decisions involving "bubbles"
to the minimum necessary to carry out the Clean Air Act.
Together, these two changes should result in cheaper pollu-
tion control and greater pollution reductions at the same
time.
The bubble policy involves treating the various
stacks of a factory as though they were one emission point
under a large dome or bubble, rather than as separate entities
to be rigidly regulated individually. Thus, in contrast to
the traditional approach where government officials set
specific emission standards at each pollution source
within a factory, the bubble permits plant managers to
propose their own emission standards -- tightening them
in places where it is least costly, and relaxing or even
eliminating them where pollution control costs are high.
The bubble is a voluntary program.
2
The changes announced today make the following two major
changes in EPA's "bubble" policy.
1. The Clean Air Act generally requires EPA to review, and
affirmatively approve, all elements of a "state implementation
plan" to meet air quality standards. The requirement of
affirmative approval was designed to allow EPA to make sure that
the particular control approach the state has chosen will in
fact meet the air quality standards on schedule.
Because of the characteristics of hydrocarbon emissions,
however, EPA concluded that review of each separate state
"bubble" transaction was not needed to meet this basic statutory
purpose if a state approved such "bubbles" through tightly-drawn
rules like New Jersey's. Hydrocarbons are controlled because
they react in the atmosphere to form photochemical oxidants or
"smog". Smog is a broad, area-wide problem, and EPA believes
that all hydrocarbon emissions within a broad geographic area
contribute equally to it. Accordingly, if total emissions of
hydrocarbons in an area will not increase, EPA believes that
the state may allow sources to rearrange their emissions under
rules like New Jersey's within that total without case-by-case
EPA approval.
The impact on air quality of certain other pollutants -- such
as sulfur oxides and particulates -- appears much more dependent
on the exact location of an individual source. EPA is now studying
the extent to which the present requirement of affirmative Federal
approval could be relaxed for these sources.
3
2. Previously, EPA did not allow "bubble" transactions
to involve sources for which EPA had not issued recommended
control standards. The purpose was to make sure that emissions
increased under a "bubble" would not be balanced by reductions
that would have been legally required in any event. To allow
that would in effect allow bubbles to lead to emission increases
rather than to achieving a given emission reduction at a
decreased cost.
EPA today is loosening its application of this basic policy,
but not abandoning it. Sources can now participate in a "bubble"
whether or not EPA has issued recommended standards regarding
them as long as the state has defined and requires an acceptable
minimum level of control.
The New Jersey rule approved today also contains a number
of safeguards to help assure that it will work properly.
Public notice of all "bubbles" will be given, and public
comment will be invited by the state on the more important
ones. Also EPA will be informed of any adjustments of emission
limitations under a "bubble" so that it will know what control
requirements are legally binding and enforteable.
OFFICE OF THE VICE PRESIDENT
WASHINGTON
March 25, 1981
MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS
AND AGENCIES
SUBJECT: Consolidation of Regulatory Oversight
President Reagan has made regulatory relief one of the top
priorities of his economic policy. He has asked me, as
Chairman of the Presidential Task Force on Regulatory Relief,
to take clear, constructive, and decisive action to restrain
Federal regulation and to improve the regulatory process.
Through Executive Order 12291, issued February 17, 1981,
President Reagan has directed the Director of the Office of
Management and Budget, subject to the direction of the Task
Force, to coordinate Executive branch regulatory policies.
This approach renders unnecessary the Regulatory Council,
established by President Carter in 1978 as part of his
efforts to gain control over the regulatory agencies. To
avoid duplication of Task Force efforts and to ensure
consistent direction to the agencies, the President has
directed me to disband the Council effective immediately.
One major activity of the Council has been to publish, at
least every six months, a unified "Regulatory Calendar"
describing the goals and anticipated effects of major regulations
under development. This is a useful effort which will be
continued under the auspices of the Office of Management and
Budget. I request that you continue to participate in this
project and to provide the information which will be requested.
George Bush
OFFICE OF THE VICE PRESIDENT
WASHINGTON
March 25, 1981
SPECIMEN OF LETTER SENT TO INDEPENDENT AGENCIES
Dear
President Reagan is deeply concerned about the burden of
Federal regulations and paperwork, and strongly believes we
need to reduce the intrusion of the Federal government into
our daily lives. He has established a Task Force on Regulatory
Relief, which I chair, and he has issued Executive Order
12291 to establish procedures for careful review of new and
existing regulations to assure their compliance with his
goals of reducing regulatory burdens.
In this Executive Order, President Reagan ordered cabinet
departments and agencies to choose, among feasible alternative
approaches to any given regulatory objective, the alternative
involving the least net cost to society. To help focus
these efforts, he ordered that these agencies prepare a
regulatory impact analysis of major regulatory actions.
We appreciate that your organization's internal procedures
may make it difficult for you to comply with every provision
of Executive Order 12291. For upcoming major regulations,
however, I am requesting that you voluntarily adhere to
Sections 2 and 3 of the Order. To the extent you can
comply with the spirit of the Order, this will help demon-
strate to the American people the willingness of all components
of the Federal government to respond to their concerns about
unnecessary intrusion of government into their daily lives.
2
By the enclosed communication, I have today carried out the
President's wish to disband the U.S. Regulatory Council.
You should note, however, that the staff will continue to
prepare for publication the extraordinarily useful Regulatory
Calendar. We solicit and urge your continued, and valued,
participation in the Regulatory Calendar project.
President Reagan joins me in asking for your cooperation.
Working together, we will be able to coordinate and reduce
the cumulative burden of needless and overly rigid government
regulation.
Sincerely,
George Bush
Enclosure
THE VICE PRESIDENT
WASHINGTON
March 25, 1981
SPECIMEN OF LETTER SENT TO SMALL BUSINESS GROUPS
Dear
As you may know, President Reagan has asked me to chair
his Cabinet-level Task Force on Regulatory Relief. Unlike
many efforts in the past, the Task Force's job is not to
study regulation, but to reform regulation.
We need your participation in this effort. Secretary of
Commerce Malcolm Baldrige is a member of our Task Force
and will serve as the Task Force's principal contact with
the small business community. I hope you will work with
Mr. Baldrige to provide us with much-needed information.
Your organization is comprised of many people who have
direct experience with the effects of government regula-
tion. Therefore, would you please send us documentation
of instances in which specific regulations could be
changed in order to increase benefits or decrease costs,
thereby generating greater net benefits overall.
We would like to have your first ten priority issues listed
first. In the interest of time, it would be especially
useful to us if you would be specific in the ways you wish
these changed -- whether legislation would be required;
whether agencies could make the change on their own
initiative and how; and any other staff work that would
speed up the process, such as proposed language. It is
also important that you include with this report a one-page
summary of each regulation issue in the format indicated
on the enclosed sheet. (We know that some groups have
already submitted similar reports to the Task Force and the
agencies. For such reports, it would be sufficient simply
to prepare the one-page summaries, including reference to
the recipient of the underlying material so that we can
ensure coordination.)
2
We'd like your input by May 1, 1981. You should send this
summary, together with supporting documentation, to the
agency head responsible for enforcement of the regulation.
To help us coordinate, we'd like you to send a copy of the
one-page summaries to Mr. Baldrige, to the Executive
Director of the Task Force and to my office.
I appreciate your consideration on this matter. Together
we can provide the regulatory relief our economy desperately
needs.
Sincerely,
George Bush
Enclosure
Suggested Format of One-Page Summary of Review Requests
Source of Rule:
(Agency enforcing the
regulation
Citation:
(Precise legal reference)
Description of
Problems:
(Adverse impact)
Estimated Cost:
(Defensible estimate)
Estimated Benefit:
(Defensible estimate)
Other Impact:
(Nonquantifiable impacts)
Originator:
(Name, title, address and
telephone number of the
person to contact with
questions)
Routing:
Original, with supporting documentation, to the Secretary
or head of the enforcing agency.
A copy of the summary page to each of the following:
The Honorable Malcolm Baldrige
Secretary of Commerce
Washington, D.C. 20230
Attn: Regulatory Relief
Dr. James C. Miller III
Executive Director, Presidential Task Force
on Regulatory Relief
Old Executive Office Building
Washington, D.C. 20503
Attn: Regulatory Relief
C. Boyden Gray, Esquire
Office of the Vice President
Washington, D.C. 20501
Attn: Regulatory Relief
NOTES ON REGULATION AND REGULATORY RELIEF
I. General Statistics
90 Federal agencies have some regulatory responsibilities.
The eleven cabinet agencies and EPA issued more than 5,000
new regulations in 1980.
The Federal Register filled more than 87,000 pages in 1980,
up from 20,000 in 1970, and increasing at the rate of
10,000 pages per year.
Budget expenditures on regulatory programs at the principal
regulatory agencies amounted to at least $ 4 billion in
FY 1980. The total cost of regulation may exceed $100
billion annually. Environmental regulation, according to
CEQ, will cost more than $500 billion over the next 10
years.
II. Regulatory "Freeze"
The postponement in effective dates of final regulations
affected 12 agencies:
USDA
Interior
Commerce
Justice
Education
Labor
Energy
Transportation
HHS
Treasury
HUD
EPA
A. 172 regulations that had already been issued in final
form but which had not yet taken effect were initially
postponed.
- 41 were released during the 60-day period.
- About 100 more will be released on March 30, when
the postponement ends.
- The remaining 30 or so will be further postponed
and reconsidered.
B. An indefinite number of regulations that were about to
be issued in final form--a hundred or more--were held
up. Twenty-one of these regulations were released
during the 60-day period.
C. 44 final regulations were issued on an emergency basis,
without going through the postponement process.
III. Executive Order
223 submissions had been received under the Executive Order
by close of business, March 23. New submissions are
arriving at a rate of 30 per day, which would translate to
7,500 annually. (Each rule will be reviewed twice, first as
a proposal and later as a final rule.)
IV. Initial Impact of "Freeze" and Executive Order
During the month of January 1981, the average daily length
of the Federal Register increased by 50 percent over the
average for the previous year. By the end of February,
after the postponement and freeze, the Federal Register was
25 percent shorter than the average for the previous year.
The average daily number of proposed and final rules each
declined by at least 50 percent after the postponement and
Executive Order were announced, compared to the average for
the month of January.
Average Number Per Day
Final
Proposed
Federal Register
Rules
Rules
Pages
Jan 2 - Jan 29
38
24
525
Jan 30 - Feb 17
22
17
244
Feb 18 - Feb 27
19
11
254
Note: the postponement was issued on January 29; the
Executive Order was signed on February 17.
Among the regulations withdrawn or deferred since the
announcement of the Task Force and the regulation postponement
are:
Capital
Annual
Cost
Cost
Agency
Regulation
(in millions of dollars)
Education
Bilingual Education
--
180-590
Transportation
Passive Restraints
100
50
OSHA
Chemical Labelling
650-900
340-470
EPA
Garbage Truck Noise
--
30
V.
Paperwork Burden
OMB's inventory of reporting requirements contains 3,829
active reports, accounting for a total of 195 million burden
hours. (That understates the annual burden, since additional
reports will be added during the course of the year.) OMB
processes 3,000 transactions annually, covering 50 agencies.
The two largest reports are:
Medicare Forms
30 million hours
Food Stamps
18 million hours
IRS tax forms are not covered. When they and other agencies
are brought into the system, annual burden hours will increase
to 1.25 billion hours, annual transactions to 10,000.
THE WHITE HOUSE
Office of the Press Secretary
April 6, 1981
FACT SHEET
President Reagan's Program for the U.S. Automobile Industry
Promptly after taking office, President Reagan appointed a
Cabinet-level Task Force to examine the problems of the U.S. auto
industry. Based on the advice of the Task Force and other
Presidential advisers, he has adopted a positive program to
address directly the immediate problems of depressed sales,
record losses, and severe unemployment. The program also
addresses the industry's critical longer term needs to offer new
competitive models and to reduce unit costs.
BACKGROUND ON THE AUTO INDUSTRY
The Situation is Serious
o In 1980 a stagnant and inflationary economy reduced
sales of U.S.-made cars to the lowest point in 19
years. Compared with only three years earlier, total
auto sales (domestic and imported) were down 20 percent,
and sales of light trucks and vans were down 35 percent.
o
The domestic companies incurred unprecedented losses of
$4.3 billion in 1980.
o
The downturn in auto sales has exacted a severe human
toll. Over 180,000 auto workers are on indefinite
layoff, 300,000 more are estimated to be unemployed in
supplier industries, and another 100,000 are out of work
in the dealer network.
The Problems are Longer Term as well as Cyclical
o
Not only are sales depressed because of the stagnant
economy, but the U.S. auto industry has experienced a
dramatic change in its markets, induced by escalating
energy prices. As gasoline increased from 70€ per
gallon in January 1979 to $1.35 per gallon in February
1981, consumer demand shifted dramatically to small
cars. Partly as a result, imports increased from 18
percent to 28 percent of all auto sales during that same
period.
-2-
o The auto industry is also burdened with stringent
regulatory requirements which add hundreds of dollars to
the cost of each vehicle and billions to the industry's
capital requirements. Regulation also diverts
engineering and managerial talent from the industry's
adjustment problems.
The Industry Retains Tremendous Strengths
o Despite its unprecedented problems, the U.S. auto
industry has tremendous economic and competitive
strengths. It is now engaged in a $70-$80 billion
program of new investment to modernize its plants and
make its products more competitive. This program has
already resulted in lower production costs and the
introduction of technologically advanced, fuel-
efficient, front-wheel drive models.
To address the problems and exploit the strengths of this
important sector of our economy, the President has adopted a
program of economic recovery, regulatory relief, and other
important measures.
THE ECONOMIC RECOVERY PROGRAM
The cornerstone of the President's initiative for the auto
industry is his Economic Recovery Program, including spending
cuts, tax reforms, and general regulatory relief. There is
simply no doubt that revitalization of the economy is the single
most important remedy for the auto industry's problems.
Stimulating Sales, Profits, and Jobs
The Economic Recovery Program will provide immediate relief
to the industry by stimulating the sales of new cars and trucks:
o
Renewed growth in real incomes and higher employment
will give consumers added income to buy new cars.
Reduced interest rates will lower the costs of
automobile financing, further encouraging new car sales.
The investment tax credit provided under the Accelerated
Cost Recovery System will increase commercial and fleet
purchases of new cars and trucks.
A stable economic environment will renew consumer
confidence and encourage individuals who have deferred
purchases in recent years to buy new cars and trucks.
-3-
The sales recovery induced by the President's program will
improve the industry's financial condition and restore job
opportunities:
Sales of new cars (foreign and domestic) should rise
from approximately 9 million units in 1980 to 11 million
units by 1982 and 12 million by 1983; truck sales should
show similar growth.
o
Since every 500,000 units of additional car or truck
sales generate nearly $1 billion in additional net
operating income, by 1983 this should amount to an
additional $6 billion per year (before taxes) for U.S.
auto makers.
o
Increased production should permit the rehiring of most
unemployed auto workers by the end of 1982.
Improving Productivity and Lowering Unit Costs
Over the longer term, the most important effect of the
Economic Recovery Program will be to reduce production costs,
thereby improving the industry's international competitive
position:
o
Higher production volumes will mean lower unit costs due
to economies of scale.
Lower inflation rates and reduced federal borrowing will
lower the cost to the industry of capital necessary for
plant modernization.
Tax reductions for individual taxpayers and lower rates
of inflation should also moderate pressures for costly
wage settlements and contribute to a more stable
environment for collective bargaining and labor
relations.
REGULATORY RELIEF
President Reagan is committed to reducing the excessive
burdens of regulation throughout the economy and has established
a Task Force on Regulatory Relief, chaired by the Vice President,
to oversee that process. The Presidential Task Force and the
Executive branch regulatory agencies will give high priority to
relief for the auto industry. These measures will result in
considerable savings in capital costs to the industry and even
greater savings to consumers.
-4-
The President recognizes the importance of protecting
health, safety, and the environment. Nevertheless, some of the
regulations governing the auto industry's plants and products are
unnecessarily stringent, and can be relaxed or rescinded with
little or no cost to worthwhile regulatory goals. Other
regulations now pending may be needed over the long run, but can
be safely postponed until the industry has completed its
structural adaptation.
Regulatory relief will benefit the auto industry and its
customers by:
o Reducing substantially the cost of producing and
operating a new car or truck. This will not only
benefit consumers but further stimulate sales.
o Freeing capital needed for essential investments in new
plant and equipment.
o Improving U.S. manufacturers' international competitive
position.
Working together, the Auto Industry Task Force, the
Presidential Task Force on Regulatory Relief, and the major
regulatory agencies have developed a four-part program:
(1) 34 Specific Regulatory Actions
The Acting Administrators of the Environmental Protection
Agency (EPA) and the National Highway Traffic Safety
Administration (NHTSA) have today submitted to the Federal
Register notices of intent to rescind, revise, or repropose a
total of 34 specific regulations. EPA and NHTSA estimate that
over the next five years these actions would save the auto
industry more than $1.3 billion in capital that can be used
instead for needed plant modernization. In addition, these
actions will save consumers more than $8.0 billion over the next
five years. The actions are described in considerable detail in
the attachment.
(2) Statutory Requirements for High Altitude Emissions
As part of the proposed amendments to the Clean Air Act, EPA
will ask Congress to eliminate the requirement that all passenger
cars meet 1984 emissions standards at high altitudes. This
action alone would save $38 million in capital costs and $1.3
billion in consumer costs over five years.
As shown in the table below, the combined savings generated
by this legislative change and by the 34 specific regulatory
actions just described amount to $1.4 billion in capital costs
and $9.3 billion in consumer costs, or about $150 per car or
truck.
-5-
Savings from Actions to be Taken by EPA and NHTSA
($ billions over 5 years)
Agency
Capital
Consumer
EPA
$0.8
$4.3
NHTSA
0.6
5.0
Total
$1.4
$9.3
(Estimates include savings for high altitude requirements
and for 27 of 34 regulatory actions; estimated savings on
remaining 7 actions are not available. Source of estimates: EPA
and NHTSA (industry estimates typically run much higher) .)
(3) Regulations Earmarked for More Intensive Review
EPA and NHTSA have identified additional regulations on
which immediate action is not possible, but which are important
candidates for regulatory relief. These regulations, also listed
in the attachment, will be reviewed to see whether they should be
revised or rescinded.
(4) Longer Range Reforms
The President's program to reduce the regulatory burden on
the auto industry will be expanded to include:
o
Regulations administered by executive agencies other
than EPA and NHTSA.
o
Regulations where potential cost savings are not as
immediate as the other announced actions.
o
Additional changes in the Clean Air Act and other basic
regulatory statutes.
OTHER POLICY INITIATIVES
The President's program of economic recovery and regulatory
relief will materially improve the condition of the U.S. auto
.
industry, but more can--and will--be done to reinvigorate this
industry:
-6-
Antitrust
o
The President has asked the Attorney General to expedite
consideration of the industry's request to vacate the
1969 "smog decree" as soon as a pending appeal has been
concluded. The decree prohibits certain joint
statements by the industry to governmental agencies
concerned with auto emission and safety standards and
exchanges of certain technical information on emission
control devices.
The Department of Transportation (NHTSA) will waive the
prohibition on joint submissions on all of its future
regulatory initiatives.
EPA will adopt a liberal waiver policy and consider
requests to make joint statements on a case-by-case
basis.
The Federal Trade Commission has on its own initiative
withdrawn subpoenas for records in its long-standing
investigation of the auto industry. The FTC has
concluded that substantial changes in the industry have
occurred since the investigation began in 1976.
Labor
o
The Department of Labor is proposing to provide
increased assistance to displaced auto workers by
restructuring Federal programs for retraining and
relocation through the existing employment and training
delivery system.
Accelerated Federal Procurements
o
The Administration is proposing to accelerate the
Federal procurement of motor vehicles by $100 million in
the current fiscal year, an action which would also
reduce operating costs of the federal automobile fleet.
In summary, the President's program addresses those
fundamental problems of the industry fostered by the Government
itself, thereby restoring needed sales, jobs, and profitability
in the short term, while also encouraging the retooling,
productivity improvements, and cost reductions that are critical
for the industry over the longer term.