THE WHITE HOUSE

Office of the Press Secretary

                             PRESS BRIEFING
                                   BY
               SALLY KATZEN, ADMINISTRATOR FOR OFFICE OF
                 INFORMATION AND REGULATORY AFFAIRS IN 
                  OFFICE OF MANAGEMENT AND BUDGET, AND
       ELAINE KAMARCK, SENIOR POLICY ADVISOR TO THE VICE PRESIDENT

The Briefing Room

1:40 P.M. EST

MR. MCCURRY: Good afternoon, ladies and gentlemen. Before I start my daily briefing here at the White House, I wanted to make two people available to do some follow-up questions on the event that the President and the Vice President just held on reinventing regulation.

I think most of you know Elaine Kamarck, who is the Senior Advisor to the Vice President; and Sally Katzen, the Administrator in the Office of Information and Regulatory Affairs at OMB. They're both here; they don't have opening statements because they just thought they'd take any follow-up questions you might have based on the event.

So I'll turn it over to Sally and Elaine.

Q Will the President veto legislation that would put a freeze on all regulations?

MS. KATZEN: I think he said quite clearly this morning that the current form is unacceptable.

Q Does that mean he's going to veto?

MS. KATZEN: It's a little early in the legislative process. We've just had it marked up by committee and it's coming to the House floor. But in its current form it's not acceptable.

Q The President said that the Vice President was doing a serious review of environmental and worker safety rules, particularly OSHA and EPA. What does that mean?

MS. KAMARCK: It means that we are going through a process that involves staff from Sally Katzen's office -- it involves extensive consultations with people in the agencies. We are bringing them into the White House to develop reform packages for each of these big areas of regulatory reform. And the goal of those reform packages is very similar to the goal of the overall National Performance Review, which is to streamline regulations, create a government that works better and costs less.

Q Does that mean legislation?

MS. KAMARCK: Some of it will be legislation. Again, it depends on what is needed to do the job. Some of it will be legislative packages; other things we'll be able to do through our own powers, through administrative powers. And one of the things you will note, the President directed the regulatory agencies today to, in fact, change the way they do enforcement. And this is something

that has been in a couple places. We know that they can do this. This is within their own power to make these kinds of culture changes within the agencies.

Q How would they do that? I mean, how do you change enforcement?

MS. KAMARCK: Well, one of the things that Lynn Gordon did in Miami was begin to bring in the business community -- that it was affected by her regulatory activities in the Miami Port -- talk to them about how to better enforce the law, how to catch more drugs coming in, which they are doing, and how to streamline the process using new technology, and basically developing a dialogue between the people who are doing the regulating and the people who -- the customers, the businessmen out there who have to interact with the regulatory system.

Q Elaine, could you refresh my memory -- which regulatory agencies has the President eliminated since taking office?

MS. KAMARCK: None. I don't think -- he didn't say that he has eliminated any.

Q He said when he was governor he used to eliminate one every year; nobody noticed.

MS. KAMARCK: Right, he said that about when he was governor. He did not say that about when he was President.

Q Are there any regulatory agencies that should be eliminated, or are all of them doing worthwhile things?

MS. KAMARCK: This budget calls for the elimination of the Interstate Commerce Commission, the ICC.

Q Is that your only one?

MS. KAMARCK: That's the one in this budget. I don't know if there's any other ones. Can you think of any at OMB?

MS. KATZEN: There aren't any eliminations. There's a lot of streamlining and some consolidations, which were fully briefed during the budget season. And part of the process of the review is to see on a sector by sector basis rather than an agency by agency basis, to see whether further consolidation streamlining is appropriate.

Q Sally, back in September of '93 when the President issued his regulatory order, it also included a directive about negotiated rulemaking. How is what the President talked about here today and the instructions he gave different in your mind than what he did in September?

MS. KATZEN: They build on what was happening then. When they gave some of the examples today, what Gene Ludwig has done at the OCC, what the Department of Commerce has done in rewriting export regulations -- those were all undertaken pursuant to the original executive order. And at the end of the first year we thought that we would do it -- we did an analysis to determine how we were faring and thought we had achieved a lot of progress, but we wanted to up the ante; we wanted to take a dramatic step forward. And that was the Vice President's effort with the review of sector by sector basis, and the President here giving a firm deadline and underscoring the significance of this so that all agencies will be able to focus in this way.

Q So it's basically the same thrust, but there's now a deadline?

MS. KAMARCK: There's now a firm deadline and it is combined with a White House-led, sector-by-sector review, which will result in big reform efforts in each of these areas.

Q That review has basically the same time frame?

MS. KAMARCK: Basically, the same time frame; some of it may actually be earlier than June 1st.

Q If there were no moratorium being called for on the Hill right now, would you be up here today making these announcements?

MS. KATZEN: Yes. At the end of the first year, September 30, 1994, we did an evaluation of the first year's efforts and concluded that there were some additional things we wanted to do, as the President said quite clearly. We have made progress; there's a lot more that we need to do. And we set these in motion well before the election.

Q The timing is purely coincidental that the initiatives are being announced the week that the House --

MS. KATZEN: The reinventing government portion -- and I should let Elaine speak to this -- has had sort of a second phase, and the regulatory piece of it was placed in there because we thought it would be most efficient and most effective to bring our offices together, our work together to achieve what we have been striving to achieve.

MS. KAMARCK: I believe that the President announced the regulatory reform as a piece of the second phase of reinventing government in December when he announced the second phase of reinventing government. It did not get a lot of publicity because at that point we were dealing with the first five agencies. But we -- I think it was announced then, and we have actually conducting the review for several months now.

Q Could you walk through the sectors that the Vice President and you are analyzing, give us a list of the industries?

MS. KAMARCK: We have already had an extensive review on some of the things you heard today, which is the actual enforcement of regulations and what happens on the ground and what happens in these agencies. That was, in fact, our first meeting. We have reviewed with the Vice President and are preparing paper on a set of changes to the environmental protection sector. This afternoon we will have a meeting dealing with Food and Drug Administration and hear for the first time some reform proposals dealing with the FDA.

Last week, I think it was, Sally, we dealt with financial institutions. We heard several proposals brought forward by an interagency team consisting of Treasury, CEA, OCC, and others dealing with reform at financial institutions. That package is going forward.

Am I missing any?

MS. KATZEN: Well, next week will be food safety is what we're scheduled to begin discussing. We're also looking at Labor, safety in the workplace.

MS. KAMARCK: OSHA kinds of issues. So these are scheduled in a process that involves large interagency teams. They report to the Vice President. He makes a series of kind of decisions based on options presented to him. We go back, refine those more, and we'll start bringing them to the President shortly.

Q What were those two dangerous industries in Maine that OSHA is now working with?

MS. KAMARCK: Actually, I don't know. That's a good question. I don't know offhand. If you want to call Joe Deere over at OSHA, he will know, because this has been one of their reform efforts.

Q Is cost benefit one of the markers today, as it is with Republicans, or is it mainly red tape and tightening up?

MS. KATZEN: Cost benefit and risk analysis is part of the original executive order. It's something that we do every single day. And I think what the President was saying is, while he believes that agencies should use good data, good analysis and think about the consequences of their action, it's appropriate to consider when you do it. It isn't appropriate in every single, solitary instance. And what the Republicans have done with the bills that have been reported out so far is to have very, very broad; very, very prescriptive. And so it's in that sense that the current versions are not appropriate to the occasion. But we stand by our commitment to regulate sensibly, to regulate with consideration of cost and benefits. We don't differ on the underlying philosophy.

Q Can you really regulate cost benefit against humanity, against safety and health?

MS. KATZEN: One of the concerns has always been that the costs are more easily quantified than the benefits because how do you put a dollar value on life. The way we have been working it is in terms of quantitative and qualitative factors, and you can consider how they would be framed one against the other. That is one of the problems that has been raised about the Contract With America in that it seeks to make it very precise, very quantified and lead to distortions in the process.

Q Can I ask a related question to that? Is it your reading of the Contract that it would, in terms of risks and cost benefit, supercede any existing requirement or existing law?

MS. KATZEN: Yes. If you look at the bills that were reported out by Commerce and by Science and are coming to the floor next week, marking up Title 3 of H.R. 9, which is one of their highlights, it says in 13 lines of text that if there's anything in here that disagrees with any existing law, this takes precedence; this supercedes existing law. And what the "this" is, is pure cost benefit analysis, so that where the courts have said you cannot consider costs, those are gone; where the Congress, itself, has said technology-based, those would be superceded. And one of the problems that we have is, we don't know what the effect will be. All we know is that anything that's inconsistent with this would be superceded, and that seems a little bit odd way of governing.

Q Have the budgets for federal regulations since Clinton took office gone up or gone down, and the number of personnel involved in federal regulations been increased or decreased over the past two years?

MS. KAMARCK: See, because the regulatory agencies are usually within Cabinet agencies, and so we have to go actually look at the -- I mean, we have it in the broad brush.

Q The question, though, is, has government red tape increased because -- based on budget and personnel, or decreased?

MS. KATZEN: I'm not sure that there is a direct tie between government red tape and dollars spent for the agencies. The

Department of Commerce is spending dollars to reduce red tape. It does not come cost-free to deregulate. It does not come cost-free to streamline. It takes the same effort of a notice of proposed rulemaking and get the comments, and review the comments and then strip those regs from the CFR, from the Code of Federal Regulations. And so to measure it in terms of dollars spent by the regulatory agencies without knowing the product would not be productive.

Q Is there any way the moratorium could be modified to make it acceptable to the administration?

MS. KAMARCK: Sally, you had better take -- any way the moratorium can be modified to make it acceptable.

MS. KATZEN: I testified about a number of problems that we had with the moratorium legislation, and that was before the markup. And very few, if any of those, were paid attention to during the markup, and I know the Democratic congressmen raised a series of problems that they had, and those were not responded to. And I think that would give you a good menu of what our problems are.

Q Would any kind of timeout in going forward with regulations, not stuff that's already been proposed, be useful to the administration?

MS. KATZEN: What's useful is the actual attempt by every regulatory agency, which was ordered today by the President to actually go through and streamline their regulations. Everything else is a gimmick of one sort or another, okay? A timeout, a moratorium, those are gimmicks. We're proposing actual change in the regulatory agencies and culture of the government. And so everything else is kind of gimmickry as far as we're concerned.

Q I just wanted to ask -- the timing of this notwithstanding, and your determination to -- matter what happens, you're presumably not disappointed to be up here today contrasting your approach to this with what's going on up there, right? That's part of the point of this exercise and why you do it today as opposed to any other day.

MS. KAMARCK: Well, it's like -- the answer to that is the same answer I would give to the broader effort to reinvent government. They talk a lot about it. We deliver. They talked about reducing the federal work force. They've talked about making the agencies smaller. We did it. They talked about changing the way the government relates to people so that they treat people like customers. We have done it. And we believe that we can do it in the reinventing regulation area, and that, in fact, our approach is going to be better and more real than a gimmick like moratorium or any of the other things they've been talking about.

Q What's the chances of that legislation passing this week?

MS. KATZEN: This legislation or the moratorium?

Q The moratorium.

MS. KATZEN: It's supposed to come to the House floor, and I think if you count -- if the Republicans hold ranks as they have been, they will have enough votes to pass it from the House, and then we will look at the Senate, see what happens there.

Q If Tom DeLay or McIntosh, or Nickles were here, they would say that some of the examples that you're using for the moratorium would, in fact, be exempted under the way that the bill is structured, both in the House and the Senate. Are you complaining about what it would do to safety and health, or about the onerous

layer of rigmarole that you would have to go through to exempt this stuff? Because, in fact, trade or safety and health stuff would be exempted.

MS. KATZEN: Now, if you look at the language, what they say is not covered, does not square with the language as written, and we have raised a number of issues on the trade issue. It says, "implement" of trade agreement, dissensions against the Chinese -- this is all in your press packet here -- the sanctions against the Chinese are not implementing a trade agreement, and trade is separate from foreign affairs. They said that the duck hunting season isn't covered, because it's a license. Licenses are individual applications, not a kind of a blanket proposal. They say, well it's eliminating some restrictions, but there are bad limits. They have written this very, very carefully, and I'm sort of responding in some sense as a lawyer, but when I see a statute that Congress has passed when we have said there are problems with the language and they stick with the language, then I have to question whether or not their intentions are as they state them.

Q So you're saying that you would not be able to use the exemptions effectively to cover the examples you've used.

MS. KATZEN: I think there are serious questions along the way. It requires an agency determination, it requires concurrence from someone outside the agency, and judicial review is available. So whatever it is that I say -- and I'm not worried by the extra paperwork that I have to go through -- whatever I say will be litigated in the federal district courts, and we will have bigger government, more government, more bureaucracy rather than less. It's counterproductive. As Elaine said, we should be looking at the underlying problems, resolve what's wrong with the system as it exists, and get to that rather than be faced with a digression and detour.

Q On the duck hunting issue, which is close to the President's heart, why not let states regulate duck hunting? What role does the federal government have in duck hunting?

MS. KATZEN: In part, the federal government has a role through statute in duck hunting in which you don't want to have states competing, and this is congressional determinations that govern. In many of these areas -- in all of these areas across the board, there may be legitimate questions of what the federal government is doing in this area and is it doing it right. Those are the questions we are asking in the reinvention phase. We are not taking as a given. We have to be there, and we have to do it this way.

Q Okay. Can I follow up on that? You're asking the regulators themselves of the various agencies to go through and make their own recommendations. But can you honestly expect people to decide if they have no more jobs, that they have no more responsibilities? Why are you asking people who have a vested interest in this to make their own recommendations?

MS. KATZEN: Because we've seen it happen. I mean, people made the same comment when we asked the first five agencies to radically reinvent the way they do business, and can we really expect Cabinet secretaries to come up with plans that would cut 4,400 people out of their work force? Well, the answer to that is, yes; Henry Cisneros did it.

We have found all along the way that when you put an agency on the spot, you give a very clear presidential directive, and then we follow up with it vigorously from the White House, which is what the National Performance Review does, what happens is you do get the very best things coming out of the agency on the table.

Believe me, nobody is going to want to show up in the Oval Office on June 1 and say, sorry, Mr. President, we looked through everything we had and we couldn't find anything obsolete and we couldn't find anything that the states can do better. In fact, we know that the dynamic is quite different, that people will take a good, solid look at it.

MS. KAMARCK: Indeed, if I can add to that, the incentives are there for them to do precisely that because as the government is getting smaller, you have to use our resources wisely. And why enforce something that doesn't make sense? Why pursue regulations which, in your own heart of hearts, you know is not productive? And that's what we're seeing in all of our sessions where agencies are coming to the table, and the table is surrounded by other White House policy groups who are knowledgeable about the areas. And we have seen a very good discussion at these issues.

Q Can I follow up on that? Just as no Cabinet secretary recommended shutting down his or her department, you don't realistically expect any kind of a regulatory agency to recommend, shut me down?

MS. KAMARCK: You know, that is a policy question, okay. Because these regulatory agencies generally do things that have wide acceptance in the American public. They protect things that people care about. So I don't think that is nearly the issue. It's kind of a false issue when the issue is, in fact, how can we do the public purposes for which these were established in an efficient, streamlined and cost-effective way? I think that if people suddenly decide in America and they send a message loud and strong that they don't want their cars being safe, well, then maybe you can think about it. But they're not doing that, okay. They simply are not doing that and, therefore, I think that's kind of not really what's at issue here.

Q When this list of regulations that's identified as obsolete comes forward in June, what will be the process then? Will it be made subject to public review? Will there be a public comment period?

MS KAMARCK: Any regulation which is in the code of federal regulations has to be removed the same way it gets on the books. And that means a notice of proposed rulemaking comment and final action. And the courts have been quite clear that you have to go through every single, solitary step in deleting as you do and adding. We want to get that started sooner rather than later, like immediately.

Where they are predicated on statutes or where they're mandated by statutes, we're prepared to go to the Congress and say, help us fix this.

Q On this page-by-page review, haven't regulatory agencies been doing this anyway, and with this June 1 deadline, do you expect them to have to pull people off of more important things to go do this review, if they haven't been.

MS. KAMARCK: We don't think there is anything -- there are very few things that are as important for particularly the bureaucrats in Washington as opposed to the people out in the field who do the enforcement than actually conducting this review. If you want a good example of how one agency profited from this review, you ought to call Jean Ludwig at the Office of the Comptroller of the Currency. They actually did this review.

We did this review when we sunsetted the Federal Personnel Manual. It took two months. The MPR originally gave OPM a year to do it; they actually got it done in two months with the right committee and the right structure. So it can be done, we've seen it

done before. We're now going to insist that absolutely everyone go through this exercise.

Q So haven't, like, the Federal Communications or the SEC or groups like that done this kind of review all along the way?

MS. KAMARCK: Some have, some haven't.

Q Who has? Who has already done the review?

MS. KAMARCK: We mentioned today OCC and the Department of Commerce, the FAA, HHS -- parts of HHS have done this, and in different agencies, there are pockets where -- and very large pockets where they have been doing this. But, remember, not all regulation is bad, and it, in fact, is not inherently bad. Sometimes it's how it's written, sometimes it's how it's enforced that is the question. But you do -- you do end up with serving valuable functions in providing cleaner air and cleaner water and safer workplaces, and these are important values that we cannot lightly dismiss.

Q Whose idea was the health IV, reinventing government term? (Laughter.)

MS. KAMARCK: The National Performance Review has consistently worked very hard to make sure that the federal workers in the government get the message. That was distributed to the federal workers in the auditorium just to make sure that they can remember this every day of their working lives.

Q What agencies regulates ducks?

THE PRESS: Thank you.

END2:05 P.M. EST