Regulatory Reform Act Becomes Law

Published January 1, 2001

Without adequate fanfare, The Truth in Regulating Act of 2000 became law on October 17, 2000. This important regulatory improvement bill was steered through the rocks and shoals of the legislative process by Representative Dan Burton (R-Indiana), chairman of the House Government Reform and Oversight Committee, and Senator Fred Thompson (R-Tennessee), chairman of the Senate Government Affairs Committee.

The act’s provisions

The new act creates a three-year pilot project within the General Accounting Office (GAO) to provide independent evaluation of the regulatory analysis used by federal regulatory agencies to justify new rules. At the request of the chairman or ranking member of a congressional committee, GAO would consider undertaking an independent evaluation of a proposed or final major rule. The Act directs the GAO to promulgate guidelines on how it will choose and prioritize assignments, and the Comptroller General of the GAO would have the authority to reject any assignment.

After the GAO accepts an assignment, it has 180 days to submit its report. With respect to the content of the GAO investigation, Paul Ryan, vice chairman of the House subcommittee through which the Truth in Regulating Act 4744 passed, noted

under H.R. 4744, GAO would be required to consult the public’s data in the course of evaluating agency rules. Although S. 1198 [the Senate version of the Act] does not require GAO to review public data, neither does it forbid or preclude GAO from doing so. I bring this up, because some hope that S. 1198 implicitly contains a gag order, forbidding GAO to consult any analyses or data except those supplied by the agency to be reviewed. This reading of S. 1198 would defeat a key purpose of the bill, which is to enable Congress to comment knowledgeably about agency rules from the standpoint of a truly independent evaluation of those rules.

Explained House committee chairman Burton, “this act is designed to improve the work of our regulatory agencies, and we expect GAO to give Congress an independent, accurate assessment of the quality of work these agencies perform before major rules are completed. We in Congress have to do a better job of policing these agencies, which are supposed to be following the intent of Congress.

“Experts estimate that federal regulations cost the economy up to $700 billion a year,” the Indiana Republican added. “GAO should give Congress and the public a greater assurance that these agencies are doing their best and remain accountable to the people.”

Benefits predicted

“Regulation, when properly implemented, can provide important protections for all of us at reasonable costs,” Burton said.

Thompson, a prime mover of the bill in the Senate, agreed. “The foundation of the Truth in Regulating Act is the right of Congress and the people we serve to know about important regulatory decisions.” The Senator said he hopes the new law “will encourage federal agencies to make better use of modern decision-making tools, such as cost-benefit analysis and risk assessment. Currently, these important tools often are viewed simply as options—options that aren’t used as much or as well as they should be. Over the years, the Governmental Affairs Committee has reviewed and developed a voluminous record showing that our regulatory process is not working as well as intended, and is missing important opportunities to achieve more cost-effective regulation.”

“The members of our Council are deeply gratified that Chairmen Burton and Thompson were able to navigate this bill through tricky legislative waters,” declared Wayne Valis, chairman of the Regulatory Improvement Council. “If GAO picks a top-flight economist with the intestinal fortitude and brains of a Jim Miller or Wendy Gramm to lead this group, we have every expectation that it will be able to help regulatory agencies make better use of the modern tools of economic analysis and provide greater benefits at lower costs.

“All of us deserve better than what the regulatory agencies have been serving up in recent years,” Valis stressed. “Conscientious application of the cost-benefit and risk assessment principles advocated by our Council and numerous experts in the field would produce better results for the public and less confusion and waste for the producers of goods and services.”

Bipartisan support

In addition to Thompson, Valis praised Senate Majority Leader Trent Lott (R-Mississippi), Senator Richard Shelby (R-Alabama), an original sponsor of the bill, and Senators Kit Bond (R-Missouri), George Voinovich (R-Ohio), Blanche Lincoln (D-Arkansas), John Breaux (D-Louisiana), Ted Stevens (R-Alaska), Mary Landrieu (D-Louisiana), James Inhofe (R-Oklahoma), Robert Bennett (R-Utah), William Roth (R-Delaware), Charles Robb (D-Virginia), and Chuck Hagel (R-Nebraska).

In addition to Burton, Valis said the stalwarts on the House side were Rep. Sue Kelly (R-New York), the original sponsor and creator of the bill and a tireless worker for it, Majority Leader Dick Armey (R-Texas), Majority Whip Tom DeLay (R-Texas), and Representatives Paul Ryan (R-Wisconsin), Jim Turner (D-Texas), Gary Condit (D-California), James Barcia (D-Michigan), and David McIntosh (R-Indiana).

Said Valis, “I was thrilled to see moderate Democrats like Jim Barcia, who really pitched in, and leading liberal Democrats [Henry] Waxman [California] and [Dennis] Kucinich [Ohio], support this bill.

“Liberals worried about overburdening GAO and the regulatory agencies and thus lobbied for limiting GAO’s role in evaluating agency analysis,” Valis continued. “We hope in the future to convince our friends on the left that careful use of the modern tools of economic analysis can maximize net benefits for all of us and minimize the burdens on business and consumers as compared to the command-and-control, bureaucracy-building regulatory state.

“We hope to persuade them to become advocates for cost-benefit analysis because it will be a great benefit to their constituents.”