|Office of Management and Budget||Print this document|
OF JOHN D. GRAHAM, PH.D.
OFFICE OF INFORMATION AND REGULATORY AFFAIRS
OFFICE OF MANAGEMENT AND BUDGET
EXECUTIVE OFFICE OF THE PRESIDENT OF THE UNITED STATES
SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES
AND REGULATORY AFFAIRS
COMMITTEE ON GOVERNMENT REFORM
UNITED STATES HOUSE OF REPRESENTATIVES
April 11, 2002
Good morning, Mr. Chairman, and Members of this Subcommittee. I am John D. Graham, Ph.D., Administrator, Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget. Thank you inviting me to testify about the Paperwork Reduction Act (PRA). I am pleased to have this opportunity to discuss how the Federal Government is improving the quality of the information it collects, uses, and disseminates, while also reducing the associated burdens that are imposed on the American public. The Bush Administration, while recognizing the public benefits of information collections, is committed to reducing needless paperwork burdens and agency violations of the PRA. I appreciate this Subcommittee's strong interest in information policy, and I look forward to working with you and other members of this Subcommittee on the challenges we face in advancing the objectives of the PRA.
In my testimony, I will provide an overview of the Federal Government's need for and use of information, briefly describe OMB's efforts to enhance the quality of information disseminated by agencies, and discuss the challenges of achieving and measuring burden reduction.
I would first, however, like to address a number of issues that you raised in your letter of invitation. Specifically, you asked that I discuss (1) OMB's disclosure of changes made during our review of agency information collection requests, (2) agency efforts to resolve violations of the PRA, (3) agency progress in reviewing 15 non-Internal Revenue Service (IRS) regulations with 10 million burden hours, and (4) specific reductions in reporting and recordkeeping requirements that agencies accomplished last year and expect to accomplish in 2002.
Disclosure Measures for OIRA's Role in Paperwork Reduction
I am pleased to report that OMB is beginning to collect information on whether an agency's information collection changed during PRA reviews. Specifically, OMB's computerized database will begin to indicate whether the collection is "approved without change" from what the agency originally submitted or "approved with change." The first public reports with this information will be available by the end of this month.
As you may know, OIRA is currently working with the Regulatory Information Services Center (RISC) at the General Services Agency (GSA) to create a new information system that will replace OIRA's current, somewhat antiquated, database. GSA has hired Booz-Allen Hamilton to develop this new system, which will expand on the existing system, the RISC/OIRA Consolidated Information System (ROCIS), that RISC uses to produce the Semi-Annual Unified Agenda of Federal Regulatory and Deregulatory Actions. Our goal is have the new, enhanced ROCIS fully operational by November 2003.
ROCIS will be an internet-based system that will accept paperwork and regulatory submissions from Federal agencies and provide materials to OIRA staff for their review. ROCIS will maintain a record of each OIRA review, including the information submitted by an agency and a record of OIRA's actions. Almost all the public records that are currently located in OIRA's Docket Library in paper form will be accessible to the public in electronic form. Search capabilities in the new system will make it easy for individuals to search these public files for information about paperwork and regulatory issues that might be of interest.
Resolving Agency Violations of the Paperwork Reduction Act
Over the past several years, the Subcommittee has expressed concerns about agency violations of the PRA. We appreciate your interest in this issue and acknowledge the leadership role you have played in addressing this problem. I would like to provide a brief summary of OMB's recent efforts on this front and update you on the progress we are making.
As you know, at last year's hearing on the Paperwork Reduction Act, the General Accounting Office testified that agencies were responsible for 487 PRA violations in FY 2000, which was down from the 710 violations committed in FY 1999 and the 872 violations committed in FY 1998. This represented a 44 percent reduction in violations during this time period.
Last October, to help us prepare the FY 2002 Information Collection Budget (ICB), we sent OMB Bulletin No. 02-02 to 15 agencies (the Cabinet agencies and the Environmental Protection Agency). (1) The OMB Bulletin reminded agencies that OMB is required to report to Congress violations of the PRA, and requested that they document their compliance with the information collection provisions of the PRA. Agencies were specifically asked to report the title of the information collection, the nature of the violation, and how the violation was discovered and remedied.
Subsequently, then-OMB General Counsel Jay Lefkowitz and I sent a memorandum to agency chief information officers and general counsels that further emphasized the importance of full agency compliance with the PRA. We requested more specific information from CIOs on the steps they were taking to resolve PRA violations that we reported in the FY 2001 ICB. We also asked that they describe the procedures that they have instituted to prevent future violations, including monthly reviews of OMB's computer-generated reports, CIO oversight, and direct CIO participation in their agencies' programmatic functions. Further, we asked that agency general counsels and solicitors assist CIOs whenever possible.
In response to OMB's requests for information on PRA compliance, agencies contributing to this year's ICB reported 406 violations of the Paperwork Reduction Act in FY 2001, only 109 of which remain unresolved as of March 12, 2002 (which was the cut-off date for preparing the lists of violations that appear in the FY 2002 ICB). In the FY 2001 ICB, these agencies reported 161 unresolved violations. Although we are reporting fewer unresolved PRA violations than we did last year, there are still too many, and we are committed to reducing them further in the future.
Agency Progress in Reviewing 15 Non-IRS Rules with 10 Million Burden Hours
Mr. Chairman, your letter of invitation raised an issue relating to OMB's report to Congress on regulations that impose paperwork burdens of more than 10 million hours. In this report - which was required by Section 518 of the FY 2001 Consolidated Appropriations Act and was issued as part of the FY 2001 ICB - OMB limited its evaluation to only two Department of Labor (DOL) major rules. Subcommittee staff subsequently identified 15 non-IRS major rules imposing more than 10 million burden hours that you believe OMB should have addressed in its report. As we have discussed in previous correspondence with the Subcommittee, the disagreement over the scope of OMB's report is based on OMB's interpretation of the statutory language in Section 518, specifically the time frame that it covered.
I would like to provide some background on how OMB developed the report, and then suggest how we may move beyond this issue and work cooperatively to identify and address paperwork burdens that are unnecessary. Section 518 required OMB to prepare a report that
(2) includes a determination, based on such evaluation, of the need for additional procedures to ensure achievement of the purposes of that chapter, as set forth in section 3501 of title , United States Code, and evaluates the burden imposed by each major rule that imposes more than 10,000,000 hours of burden, and identifies specific reductions expected to be achieved in each of fiscal years 2001 and 2002 in the burden imposed by all rules issued by each agency that issued such a major rule.
In implementing Section 518, OMB understood it as directing OMB to prepare a report that assessed the impact that the 1995 PRA amendments have had on the paperwork burdens that agencies impose on the public through rules, and in particular through their "major rules." OMB's report therefore discussed how agency implementation of the PRA has reduced burden imposed by regulations, including major rules, as defined by the Congressional Review Act. It also evaluated the burden imposed by major rules that impose more than 10 million hours of burden. OMB found that DOL was the only agency that had issued a major rule that imposes more than 10 million hours of burden. Section 518 further required that, for agencies that issued such a rule, OMB identify the expected reductions in FY 2001 and in FY 2002 in the burden imposed by all of their rules. Accordingly, OMB's report identified DOL's expected reductions in FY 2002 in the burden imposed by all DOL rules. Expected reductions in FY 2001 in the burden imposed by all rules issued by DOL were addressed elsewhere in the FY 2001 ICB.
In interpreting Section 518, OMB found it understandable that Congress would direct OMB to prepare an oversight report on the 1995 PRA amendments, because those amendments had been in effect for five years, which was an appropriate time frame within which to evaluate their impact on agencies' paperwork activities. In this regard, the direction in Section 518 that OMB focus on the paperwork burdens imposed by "major rules" was also understandable, because the time period during which the 1995 PRA amendments have been in effect (i.e., since the fall of 1995) overlaps almost entirely with the period during which the agencies have been issuing "major rules" under the Congressional Review Act, which was enacted and went into effect in the spring of 1996.
Because OMB's report did not address the 15 non-IRS rules you referred to in your letter of invitation, I do not have information on agency progress in reviewing them. I would, however, be willing to explore burden reduction opportunities with respect to these regulations to extent that there is an analytical basis for doing so. In this regard, I would need some clarification about the 15 rules you have in mind. In your letter to OMB Director Mitch Daniels, dated September 6, 2001, you stated that
[U]sing OMB's August 30, 2001 data on information collections with a primary purpose of "regulatory or compliance," there appear to be at least the following seven additional covered agencies: the Departments of Education, Health and Human Services (HHS), Transportation, and Treasury, and the Environmental Protection Agency (EPA), Federal Trade Commission (FTC), and Securities and Exchange Commission (SEC). The 15 additional non-IRS "regulatory or compliance" information collections issued by these agencies and DOL include: one Education; HHS's "Investigational New Drug (IND) Regulations" (17 million hours), "Clinical Laboratory Improvement Amendments (CLIA)" (10 million hours), "Bloodborne Pathogens Standard" (13 million hours), and "Process Safety Management of Highly Hazardous Chemicals (PSM)" (79 million hours); Transportation's "Hours of Service of Drivers Regulations" (42 million hours) and "Inspection, Repair, and Maintenance" (35 million hours); one Treasury; EPA's "Standards for the Use or Disposal of Sewage Sludge" (13 million hours); and two information collections each from the FTC and the SEC.
Your letter identified only seven regulations by name, so I am not clear what the other eight regulations are. If, however, you could provide me with a list that identifies all 15 regulations that you would like agencies to review, I would certainly be willing to evaluate those 15 and, where appropriate, follow up with agencies to determine if reductions can be achieved without compromising regulatory benefits. Alternatively, an outside group with analytical expertise, such as the National Academy of Public Administration or the National Academy of Sciences, could be charged with reviewing these rules and making recommendations to improve them. If you would like to discuss such an initiative, I would of course be happy to do so. I know that you are aware of how labor-intensive such reviews can be.
Specific Burden Reductions
As we describe in the FY 2002 ICB, agencies have and are undertaking serious efforts to improve the quality of Federal information collection and to reduce burden when it is possible and makes sense to do so. Below are a number of specific burden reductions that I offer for illustrative purposes. A complete listing of significant burden changes is provided in the FY 2002 ICB.
FY 2001 Reductions
FY 2002 Reductions
OMB Initiative to Improve Agency Performance and Reduce Burden.
The significant burden reductions that agencies reported in the FY 2002 ICB, some of which I just mentioned, reflect the ongoing efforts by the Government to alleviate paperwork whenever possible. To build on these efforts and make burden reduction an even higher priority, OMB asked agencies to identify at least two initiatives that:
improve program performance by enhancing the efficiency of information collections;
significantly reduce the burden per response on the public; or
lead to a comprehensive review of an entire program, including regulations and procedures.
In response to this directive, agencies have reported a variety of burden reduction initiatives that have the potential to make meaningful improvements for the public. While these initiatives generally fall into two broad categories, incorporating information technology and simplifying information collection activities, the majority involve the use of some type of information technology. This is not unexpected given the evolving nature of information technology capabilities and potential to improve the vast amount of information collection activities by the federal government through harnessing these capabilities.
OMB has listed the agency initiatives in this year's ICB. I would like to mention just a few of them now.
We have asked agencies to provide OMB with regular status reports on all of their initiatives so that we can monitor their progress and help ensure they achieve meaningful outcomes.
Why the Government Needs Information
As a general matter, the Federal Government must have information to serve the American people. Agencies can only deliver services to individuals if they have information about whether programs are needed, the extent and nature of those needs, and how these needs are changing over time. Without information to support planning, management, and enforcement activities, Government programs may be poorly designed to address public needs or may fail to adapt to the changing needs of the American population. If agencies do not have access to accurate and complete information, they are less likely to understand the needs and challenges that their programs seek to address. The extraordinary scope and complexity of Government programs requires agencies to obtain a broad range of information on program performance, statistical information, information provided by applicants for Federal benefits, information demonstrating compliance with regulatory requirements, and - with April 15th around the corner - taxpayer information.
To see how collecting critical information from the public advances our understanding of the problems faced by our citizens, consider the various ways in which empirical research on societal and human behavior has contributed to policy and practice in areas ranging from drug abuse to education, health, retirement, and welfare. Similarly, supplementing clinical and biomedical research with empirical investigations of cancer patterns and associated risk behaviors in the population can stimulate prevention and education programs as well as increase our basic knowledge of the causes and effects of this disease. And, while recognizing the paperwork burden that forms and surveys may impose, the collection of agricultural production and marketing data from farmers is key to understanding and addressing issues in the agricultural economy such as genetic engineering and the changing structure of agriculture.
Agency Dissemination of Information
Government also uses information by providing it to citizens as a public service. In the Information Age, the public needs timely, accurate information. Investors need to access public filings from the Securities and Exchange Commission quickly and easily. Residents want to know if they are at risk from exposure to pollutants in their communities. Taxpayers expect quick responses from the IRS and fast refunds.
To ensure that the public can rely on the information provided by Government, Congress directed OMB in December 2000 to issue Governmentwide guidelines designed to maximize the quality of information disseminated by Federal agencies. Specifically, Congress directed OMB to issue, by September 30, 2001, Governmentwide guidelines that "provide policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated by Federal agencies." (2)
OMB's information quality guidelines apply to Federal agencies subject to the Paperwork Reduction Act. Agencies are directed to develop information resources management procedures for reviewing and substantiating (by documentation or other means) the quality (including the objectivity, utility, and integrity) of information before it is disseminated. In addition, agencies are to establish administrative mechanisms allowing affected persons to seek and obtain, where appropriate, correction of information disseminated by the agency that does not comply with the OMB or agency guidelines. Consistent with the underlying principles described above, these guidelines stress the importance of having agencies apply these standards and develop administrative mechanisms in a common-sense and workable manner. Moreover, agencies must apply these standards flexibly, and in a manner appropriate to the nature and timeliness of the information to be disseminated, and incorporate them into existing agency information resources management and administrative practices.
Achieving Burden Reduction
While information plays a critical role in good government, the collection of that information imposes a cost on the public. It takes time and (often) money to organize and provide information to the government. To minimize burden, agencies are expected to collect only the information necessary to perform their missions. They can do so by ensuring that they avoid collecting redundant or irrelevant information and by looking for simpler, easier, and faster ways for citizens to provide essential information.
An evaluation of agency efforts to reduce reporting burdens on the American public would be meaningless without information on reporting burdens and how they change over time. To address this need, the PRA requires Federal agencies to produce "a specific, objectively supported estimate of the burden" for each information collection that they propose to conduct. (3) Agency estimates of burden are also reported to OMB so that an agency-by-agency and Governmentwide accounting of burden can be presented in the annual Information Collection Budget (ICB). The ICB, which is included this year's report, thus helps identify each agency's and the Government's progress toward meeting the burden reduction goals of the PRA.I should note that President Bush is committed to improving the Government's performance, and he has launched an ambitious management agenda that requires careful evaluation of agency activities. The success of the President's management agenda will depend largely on the quality of the measures we use to evaluate the success and progress of agency programs. These measures must be consistently applied and accurately reflect performance and may entail additional paperwork burdens on the public.
As you know, throughout the history of the PRA, Congress has used Governmentwide paperwork burden reduction goals as a means to evaluate agency performance. In 1980, 1986, and 1995, Congress established annual 5 percent or 10 percent paperwork burden reduction goals, which together called for a burden reduction of 85 percent between 1981 and 2001. During this time period, OMB's inventory indicates - as a rough estimate - that the total annual burden of Federal information collections increased by over 50 percent. (4)
Although this record may be disappointing to some, I view it in a different light. Most importantly, I would point out that the decision to set targets at 5 and 10 percent was not based on an analysis of the amount of burden reduction that agencies could and should achieve. Rather, Congress set goals that agencies should aspire to meet while also performing their missions. Because the PRA calls on agencies and OMB to reduce reporting burdens only when information is unnecessary or not practically useful, burden reduction can be achieved only to the extent that it does not interfere with agencies' ability to meet their programmatic responsibilities. The aspirational nature of the PRA's burden reduction goals thus reflects the need for agencies to achieve a proper balance between reducing burden and performing their missions.
Moreover, in assessing the efforts by agencies to achieve burden reduction - while also ensuring that Government information is of high quality and useful to the public - we must remember that the demand for public services has increased over time. Since the PRA was first enacted in 1980, the size of the U.S. population has increased by over a quarter and U.S. gross domestic product has more than tripled.
In addition to the steady expansion of Government services over time, Federal agencies may also need to respond quickly to emerging challenges that require the public to provide information. For example, in FY 2001, the total paperwork burden imposed by the Department of Justice (DOJ) increased by 8.3 %, the largest increase reported in this year's ICB. This increase was due largely to the creation or modification of information collections by DOJ to implement the Legal Immigration Family Equity Act of 2000 (LIFE Act). Similarly, the IRS had to create two forms and revise 56 others in response to the Victims of Terrorism Tax Relief Act of 2001.
Mr. Chairman, in focusing on the upward trend in the level of Government paperwork, I would not want important PRA success stories to be overlooked. I would therefore like to provide a few examples illustrating how, during recent OIRA reviews of agency information collections requests, we were able to work with agencies to improve program performance.
Department of Education: School and Community Prevention Activities: A National Study of the Safe and Drug-Free Schools Program--Phase I. The Safe and Drug-Free Schools program is the largest and broadest school-based drug and violence prevention program nationally. When the Department of Education originally requested OMB approval last fall of a 5-year evaluation study, it focused almost exclusively on assessing program implementation and quality. This study consisted of national surveys and extensive longitudinal case studies. Yet, the availability of program outcomes was going to be assessed only in a feasibility study to be conducted in year 3. Additional design and investigation would then be required to examine the actual effects of the program on drug-use and school violence outcomes. OMB asked the Department to refocus the study to include program outcomes. Based on our feedback, Education redesigned this investigation study so that a thorough feasibility study would be conducted first. Based on the information from this study, the Department will then examine quality and outcomes in the next phase of the research, thereby providing more rigorous data much earlier and enhancing the practical utility of this information collection.
Environmental Protection Agency: Printers' Simplified Total Environmental Partnership (PrintSTEP). EPA requested OMB approval of an information collection to evaluate an EPA pilot project designed to identify the impact PrintSTEP has on three stakeholders: printers, community residents, and the State agencies administering the program. EPA withdrew its request after OMB's initial review and resubmitted a revised request that incorporated OIRA-recommended design changes. The design changes that improved the practical utility of the data collected include: the use of a control group, inclusion of methodology for calculating quantitative values, and the addition of actions to improve response rates.
Department of Health and Human Services - The National Study on Child Protective Services Systems and Reform Efforts. This study was developed to examine State and local practices in Child Protective Services (CPS) to provide a comprehensive picture of the CPS system. Given the tremendous variation among State and local CPS service delivery systems, HHS hopes that this study will enable it to understand these variations between as well as within States. During the course of OIRA's review, we identified several weaknesses in the study's methodology that would limit the quality of the data obtained, and would impair the ability of the agency to answer their basic research questions. Key limitations included (1) the sample size was too small to produce nationally representative estimates or allow for comparisons between groups of counties; (2) several larger counties were hand-picked for participation, which introduced bias into the sample; and (3) local sites were not selected for visits in a systematic way, but were rather hand-picked, which implied that the agency was endorsing these approaches rather than objectively examining them. HHS agreed to double the sample size, so as to make their national estimates more precise and to facilitate meaningful comparisons between groups of counties. HHS also agreed to use a stratified random sampling methodology and decided not to hand-pick certain counties for survey participation. Due to these and other changes, HHS will be much better informed regarding the CPS system.
OMB is also seeking public input to identify opportunities to address paperwork burdens. In OMB's Draft Report to Congress on the Costs and Benefits of Federal Regulations, which we issued on March 18, 2002, we solicited public comment on a broad range of issues. In particular, we requested public nominations of "specific regulations, guidance documents, and paperwork requirements that impose especially large burdens on small businesses and other small entities without an adequate benefit justification."
Measuring Burden Reduction
Although burden hours alone do not provide a valid PRA performance measure, I do believe that - to the extent they are used in an analytically sound manner - they can provide useful information. First, burden estimation techniques should be applied consistently across the Government to ensure that, to the extent possible, a burden hour reported by one agency represents an amount of burden equal to that of a burden hour reported by any other agency. The methodologies used by agencies to estimate paperwork burden, however, vary significantly throughout the Government. One reason that methodologies differ is that the need for precise burden estimates increases with the size of information collections. Agencies would not be expected to utilize identical techniques to measure, for example, the burdens of a collection with several million respondents and of a collection with several dozen respondents.
Second, for burden measurement to be accurate, it should incorporate recent developments in estimation methodology and data collection, as well as reflect the changes that have occurred in the collection, storage, processing, preparation, and transmission of information. The manner in which taxpayers provide information to IRS, for example, has changed dramatically in recent years, particularly in the use of technology to computerize recordkeeping systems and electronically file tax returns.
Given the scale of its information collection activities, IRS confronts a particularly daunting challenge to measure burden in a meaningful way. I recently met with IRS and Treasury officials to learn about a major, multi-year effort by IRS to develop a quantitative model to more accurately estimate paperwork burden and forecast the burden-reduction consequences of alternative reforms of tax administration and tax policy. I believe that this important initiative will significantly improve the ability of IRS to measure taxpayer burden, and that what IRS learns will benefit other agencies.
That concludes my prepared testimony. I would be happy to answer any questions you may have.
The agencies that participated in the development of this year's ICB did not include 12 independent agencies that had contributed to previous ICBs. OMB decided to exclude the independent agencies for several reasons. First, OMB's authority over the independent agencies is limited, so our ability to influence their information collection policies through OMB oversight is constrained. Second, most of the independent agencies have total burden inventories of under 10 million hours. Finally, and perhaps most importantly, OMB recognizes that it too has limited resources, and it is our judgement that we can improve our PRA oversight by focusing on those agencies that impose the most paperwork burden and over which we have the most direct authority under the PRA to approve or disapprove information collections.
Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Public Law 106-554; H.R. 5658).
44 U.S.C. 3506(c)(1)(A)(iv).