THE WHITE HOUSE

Office of the Press Secretary

                    The National Performance Review
         Creating a Government that Works Better and Costs Less
                          Regulatory Reform
                                     
                  A Fair, Open, Streamlined Process
 
      Reforming our regulatory process is critical to creating a 

government that works better and costs less. Improving budget, personnel, and procurement systems will strip away a lot of red tape. But thousands of outdated, overlapping regulations will still remain in other areas -- inside and outside the government -- unless we act aggressively to reform the regulatory system. That system now is cumbersome and fails to ensure that rules issued are necessary and effective. What's needed, and what we propose, are sensible planning and a thorough, focused review of regulations to end the proliferation of unnecessary and unproductive rules.

This reform has already begun. President Clinton directed agencies to eliminate 50 percent of all internal regulations when he signed an executive order September 11 that was recommended by the National Performance Review. The next step is reforming the regulatory review process and eliminating outdated, obsolete, and duplicative regulations that affect people outside of government. The executive order the President signs September 30, will do just that and create a regulatory review process that works better while still providing needed health, safety, and environmental safeguards. The President also will direct each agency to review its internal procedures for developing and issuing regulations.

President Clinton is offering real reform. He shut down the Competitiveness Council during his first days in office, closing the back door special interests used to get out from under regulations they didn't like. In its place, President Clinton offers a regulatory review process that is dramatically different: open to the public, streamlined, responsive, coordinated, straightforward, and fair.

Putting People First

The President's plan provides a regulatory process that works for the American people, improving health, safety and well-being while encouraging economic growth, competitiveness, and job creation. It is aimed at producing regulations that are cost-effective, consistent, and understandable. And, it takes away the unfair advantage special interests enjoyed in the past thanks to the Competitiveness Council.

Consider just a few examples of the Competitiveness Council's work: meeting secretly with builders to undermine implementation of the fair housing accessibility law that prohibits discriminatory housing practices; blocking a rule banning the burning of lead acid car batteries (the single largest source of lead emissions), an action later overturned by a federal court; and allowing a major pharmaceutical company to review a proposed drug-approval policy before it was made public.

Under this new Executive Order, there will be no special access for special interests. The review process will exist only to resolve intergovernmental disputes, not to provide an avenue for special interest appeals of regulatory decisions. Decisions on rules will be based on the public record, not on political paybacks. During the review process, outside contacts will be on the record and the status of regulations will be public knowledge. Rules will be reviewed at the Vice Presidential level only at the request of an agency head or the Office of Management and Budget.

Eliminating Regulatory Overkill

President Clinton's regulatory review reforms reflect his commitment to ensuring that executive branch agencies produce effective and sensible regulations, relieving businesses of unnecessary regulatory burdens and ending special access for special interests. The process created by the executive order will ensure that agencies regulate only when necessary and makes clear that alternatives, such as market incentives, are preferable to command-and-control regulations. A regulatory working group of representatives from agencies with major domestic regulatory responsibility will meet regularly to consider new, creative, and more effective alternatives and approaches to regulating. And , when regulations are needed, the order will ensure that they are designed and implemented in the most cost-effective manner, so as to maximize benefits to society and to place the smallest necessary burden on those being regulated. The President's plan uses a sensible, balanced definition of costs and benefits to ensure a realistic assessment of impacts on the economy, the environment, and public health and safety.

Sensible Planning

President Clinton's plan will streamline the regulatory review process, open it up to the public, improve planning and coordination, ensure more agency and public involvement at the beginning of the process (instead of simply at the end), and provide for the review of duplicative or outdated regulations.

A new planning process that starts at the beginning of rule making will improve inter-agency coordination and help ensure a clear and common understanding of innovative and effective regulatory approaches across the government. This process provides early guidance about administration priorities, minimizing conflicts and inconsistent regulatory activities among agencies. Agencies will set priorities and assemble annual regulatory plans, improving their own planing and ensuring that other agencies and the public are informed of their activities. And, the new process will help agencies craft alternatives to command-and-control regulations. In many cases, such advance planning can remove the need for federal mandates.

Reviewing New Regulations

The executive order recognizes the primacy of agencies in the regulatory review process. It also makes clear that the Office of Information and Regulatory Affairs (OIRA) will be the central, day-today entity in the process of reviewing, not writing, federal regulations. And that process will be conducted in the open. There will be public disclosure of OIRA's meetings with people outside the Executive Branch and the status of regulations, including whether there is Presidential or Vice Presidential review. OIRA and the agencies will prepare and make public written explanations of any differences between their views on particular regulations. And, any changes made to regulations during the OIRA review process will be made public.

The OIRA review process will be more focused and streamlined because OIRA will be authorized to review only the most significant regulations, not every regulation, as the current system allows. This will ensure that OIRA reviews fewer regulations. Its review will be more credible because it will consider a broad definition of costs and benefits to include a realistic assessment of impacts on the economy, the environment, and public health and safety. And, its review will be timely, driven by clear and appropriate time limits on review that will prevent delay from effectively killing important protections or creating uncertainty that disrupts business planning cycles.

Reviewing Existing Regulations

Too often, cumulative and unnecessary regulations hamper economic growth and job creation. We will begin an ongoing review of existing regulations so that those that are cumulative, obsolete, duplicative, or inconsistent will be identified for reconsideration and, where appropriate, revision or elimination. This process is carefully structured to ensure that it is meaningful and that it produces results. The agencies will be asked to prepare a specific program for ongoing review of existing regulations and laws mandating such regulations, and to receive comments from the public about regulations to be reviewed. In addition, the Vice President, in consultation with the White House policy advisors, will conduct reviews of existing regulations with a cross-agency perspective, and may identify regulations to the agency for appropriate review.

Resolving Disputes

A clear and open process for resolving the rare regulatory disputes that develop between agencies or OMB and an agency will replace the inconsistent and closed-door process of the past. Such disputes will be reviewed by the President or the Vice President only at the request of an agency head or the Office of Management and Budget. The President and Vice President will not intervene at the request of private parties, be they from business or from public interest communities. The Vice President, aided by the White House policy advisors, will advise the President in resolving these disputes.

Enhanced Accountability

Openness is the best way to restore credibility to the regulatory review process. The new process encourages more public participation in the development and promulgation of regulations. It encourages agencies to consult with the public before taking any regulatory actions. The process also encourages the development of regulations through the use of negotiated rulemaking, a consensual mechanism for developing new regulations. The President will direct each agency to identify, within 90 days, at least one rulemaking which the agency will, within the upcoming year, develop through the use of negotiated rulemaking or explain why this process will not be feasible. The new executive order also makes clear that the public should be afforded a meaningful opportunity to comment on proposed regulations.

The OIRA review process will be open and timely. And, the order makes clear that it is OIRA that is responsible for the review of individual regulations and that review must occur within tight time limits. To ensure that the process is more selective and streamlined, OIRA will be directed to report to the Vice President and President its review activities during the first six months under these new procedures. This report will include a list of the regulatory actions reviewed by OIRA; whether OIRA selected the action for review; and the time dedicated to review.

The new process also ensures that the White House no longer serves as a conduit for special interests. The back-room, closed-door operations of the Competitiveness Council have left a legacy of mistrust that can only be erased by an open, fair, and balanced process. The President's plan provides a clear statement describing the review process and comprehensive disclosure provisions for greater public accountability. The concerns and interests of outside parties must be on the record, in writing, to be considered by White House staff in the rulemaking or review process.

The new executive order revokes existing orders on regulatory review. In addition, the Administration will undertake a thorough review of the related orders, for example, on takings, federalism, and civil justice reform to determine what action, if any, should be taken with respect to those orders.

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