The Federal Information Triangle
Date: September 18, 2001 -
By Jim Tozzi
The “Federal Information Triangle” consists of three key components. At its apex stands the Office of Information & Regulatory Affairs in the White House Office of Management and Budget (OMB). Its base is supported by the Paperwork Reduction Act on one end and the Data Quality Act on the other. Basically, the Paperwork Reduction Act controls the information that the government collects; the Data Quality Act controls the information that the government disseminates, and OMB administers these two statutes. Thus, the flow of scientific and technical information into agencies like EPA to support science policy efforts and the release of risk assessments will be impacted by these statutes and related guidance.
The purpose of this article is to describe the evolution and the mission of these three important elements of the Federal Informational Triangle.
* OMB's Office of Information and Regulatory Affairs (OIRA)
OMB's OIRA has overall responsibility for the review of federal regulations and the establishment of federal information policy. The office had its genesis in the Quality of Life Review, originated by the Nixon Administration.
The Quality of Life Review was established to analyze federal regulations in the environmental health and safety areas. Consequently, it focused on EPA, OSHA, NOAA, portions of the Department of Interior, and the Army Corps of Engineers. It was not mandated by an Executive Order, but simply by a memorandum to the heads of agencies from then head of OMB, George Shultz.
OMB's role in the Quality of Life Review differed in a major way from the process OMB currently used under its Executive Order for Regulatory Planning and Review (E.O. 12866). More specifically, OMB would send proposed regulations out to the affected agencies, receive their comments, and then develop an Administration position. The process used for the review of regulations paralleled that used for the formulation of an Administration position on legislation. Generally, there is not such an interagency review under the current OMB review process.
The process was heavily monitored by the press, but remarkably, as opposed to what has occurred in the last eight years, agency reversals in court were minimal by comparison. This ability of regulations to withstand judicial challenge was due in large part to the input each agency had in the totality of the federal regulatory process.
The Quality of Life Review continued through the Ford Administration. However, on the last day of the Ford Administration, a high-ranking EPA official, unilaterally canceled the agency's participation in the Quality of Life Review before he left office for the incoming Carter Administration.
The Carter Administration, although not commonly viewed as an agent of regulatory reform, was sympathetic to the need to improve the federal regulatory process. Although many people forget this fact, it was the Carter Administration that established the first OMB-wide office on regulatory review. It was called the Office of Regulatory and Information Policy. In the establishment of the office, although the Carter Administration did not require OMB review of regulations, it did enact Executive Order 12044, which for the first time set up principles for the development of federal regulations. In addition, the Administration set up a review process co-chaired by the Council of Economic Advisors and OMB for the most significant regulations. This group was called the Regulatory Analysis Review Group.
At the same time, OMB had been reviewing paperwork requirements under the old Federal Reports Act. This Act did not grant OMB overly significant review powers. Consequently, OMB initiated a legislative proposal to improve this system. In doing so, Administration officials had the foresight, some two decades ago, for the need to improve federal information policy. As a result of the diligence of the Carter Administration, the apex and foundation of future regulatory policy emanated from the passage of the Paperwork Reduction Act in 1980. President Carter signed this seminal measure on his last days in office, notwithstanding opposition from a majority of his Cabinet.
The Act gave unchallengeable authority to OMB to review paperwork burdens imposed by agencies. The Act also established by statute, the Office of Information and Regulatory Affairs in the White House Office of Management and Budget. The establishment of this office received the majority of the attention. However, a complete reading of the Act clearly demonstrated that the PRA itself was equally significant in establishing a framework for federal information policy.
With the advent of the Reagan Administration, whose leadership campaigned on a theme of reducing the burden that federal regulations impose on the public and private sectors, they issued the landmark Executive Order 12866, which required regulations of all Executive Branch agencies to go through OMB for analysis and comment. OMB would have not been able to discharge this responsibility, had it not had experience under the Quality of Life Review and under the then-operating Office of Regulatory and Information Policy established by President Carter. Had these mechanisms not been in place, it is uncertain whether OMB would have been up to the challenges imposed and the entire system could have faltered.
It should be noted that although the Reagan Executive Order applied only to Executive Branch agencies, the independent agencies agreed to comply with its principles on a voluntary basis, but not to submit their regulations to OMB. Although there was an exemption from OMB review of the activities of independent agencies in the Executive Order, there was no such exemption in the Paperwork Reduction Act.
With the arrival of the Clinton Administration, they too issued an Executive Order and were instrumental in improving the Paperwork Reduction Act by passing amendments to the Act in 1995. Consequently, one can readily conclude that the role of OMB in information policy has been supported on a bipartisan basis for nearly two decades.
* Paperwork Reduction Act (PRA)
The Paperwork Reduction Act is well established, and there is reasonably good compliance with the Act, although one can find a number of violations at any given time. Basically, the PRA controls all information coming into the government. It is important to note that it not only controls information submitted to the government (i.e., reporting requirements), but it also controls information that the federal government requires outside parties to maintain (i.e., record keeping requirements). It even applies to the labeling that federal agencies mandate on products.
Since so many regulations include recordkeeping or reporting requirements, virtually all regulations have to go to OMB under the Paperwork Reduction Act for review, even in the absence of an Executive Order. However, in the absence of an Executive Order, OMB's range of review might be constrained. The Paperwork Reduction Act, coupled with OMB's oversight and implementation of the Act worked well for a number of years.
However, as will be explained in the next section, as a result of legislative passage of statutes designed to “regulate the regulators” -- Good Government statutes -- coupled with technological advances such as the Internet, the Paperwork Reduction Act itself needed reinforcement, notwithstanding the presence of OMB as the overseer of the federal regulatory process.
* Data Quality Act
As a result of the passage of the Good Government Statutes, including the Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and the Congressional Review Act, agencies began to look at ways to bypass the system. They found the superhighway of all bypasses in the Internet. More specifically, by placing a study, a risk assessment, or a statement about a product or production process on the Internet, agencies had immediate impact throughout the world on the thinking of federal agencies, state and local governments, and potential litigants. In essence, the agencies began to use the dissemination of information through the Internet as a “backdoor Federal Register.” In this way, agencies were able to achieve their regulatory ends, notwithstanding the establishment of Office of Information and Regulatory Affairs and the passage of the Paperwork Reduction Act. These two oversight mechanisms in and of themselves would not address the use of the Internet as a backdoor Federal Register or the related phenomenon of Regulation by Information.
The Center for Regulatory Effectiveness (CRE) was founded in 1996 at the request of House and Senate leadership to aid them in the implementation of the Congressional Review Act. The Center soon expanded its mission to include the development of mechanisms to improve the federal regulatory process. CRE does not, and will not, advocate a prepublication clearance mechanism for information going on the Internet, through press releases or other means of dissemination.
CRE concluded that what was needed were “standards of care” which governed the release of information by federal agencies. More specifically, CRE concluded that there was a need for: (1) OMB issuance of guidance setting minimum standards for data to meet before it is disseminated by the federal government; (2) a mechanism that would afford the public and the regulatory agencies an opportunity to correct data which do not meet OMB's standards; and (3) agency issuance guidance that not only conforms to OMB's guidance, but tailors such guidance, including the corrective mechanism, to the unique circumstances and programs of the particular agency or components there of.
CRE presented its proposals to the general public, to the regulated industry and to interest groups through its website. After considerable discussion, it refined its proposal and disseminated findings and conclusions to the Congress.
Congress then enacted legislation covering Data Quality in the FY 2001 Consolidated Appropriations Act (P.L. 106-554). That legislation incorporated many of the suggestions proposed by CRE. Having issued and sought comments on its proposed guidelines for Data Quality in late June of this year, OMB is on target to meet its statutory deadline to promulgate final guidelines by September 30, 2001. CRE's comments on this draft guidance, in addition to information on the Quality of Life Review process and Regulation by Information, can be obtained by visiting www.TheCRE.com on the Internet.
In total then, over a period of nearly three decades, the Federal Information Triangle is in place, and, in my opinion, will lead to the promulgation of efficient regulation of the market.
About the Author:
Jim Tozzi was the first deputy director of the Office of Information and Regulatory Affairs at the Office of Management and Budget from 1981-1983, and is currently a member of the board of advisors to the Center for Regulatory Effectiveness.
Source: Risk Policy Report via InsideEPA.com
Date: September 18, 2001
Issue: Vol. 8, No. 9
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