From now on, agencies will be asked to test complex or lengthy forms in advance, by seeing if people can actually understand them. Advance testing can take many forms. Agencies might use focus groups. They might use web-based experiments. They might try in-person observations of how users understand the forms.  From those tests, agencies will be better able to identify the likely burdens on members of the public and to find ways to increase simplification and ease of comprehension.

Here’s an example from a closely related area: labeling. In 2011, the Environmental Protection Agency and the Department of Transportation unveiled new and improved fuel economy labels. The new labels promote informed choices by telling consumers, clearly and simply, about annual fuel costs and about the likely five-year savings or costs of particular cars (compared to the average vehicle). The new labels followed an extensive process of testing, to see what really would be most useful for consumers. In the future, we will be engaging in similar testing for forms, increasing simplicity, reducing confusion, and saving time.

In recent years, we have made a lot of progress in reducing red tape, increasing plain language, and eliminating complexity. Today’s action is a significant further step in this direction.

Watch the White House white board here.

Since taking office, President Obama has been committed to eliminating red tape and ensuring that when rules are issued to protect safety and health, they are sensitive to the economic situation and attuned to the importance of job creation and economic growth. 

As this White House White Board shows, the net benefits, or the benefits minus the costs, of regulations issued through the third fiscal year of the Obama Administration have exceeded $91 billion. This amount, including not only monetary savings but also thousands of lives saved and tens of thousands of illnesses and injuries prevented,is over 25 times the net benefits through the third fiscal year of the previous Administration.  What are the ingredients of these benefits?

Part of the answer lies in the reduction of regulatory costs. President Obama has created an unprecedented government-wide regulatory “lookback,” designed to revisit rules on the books to see if they really make sense. Government agencies have identified over 580 reform proposals and already acted on over 100 of them. Just a very small fraction of those reforms, already finalized or proposed to the public, will save over $10 billion over the next five years and eliminate tens of millions of hours of paperwork requirements. This is just a beginning. As the reforms continue, we expect to be able to produce far greater savings.

The success of small businesses is exceedingly important to our economic recovery, and agencies have been working to reduce burdens that hinder job creation and economic expansion. For example, truck drivers, and small businesses that employ them, are sometimes required to fill out forms that may be unnecessary and unduly burdensome. The Department of Transportation took a hard look and recently eliminated over 32 million annual forms, thus saving tens of millions of dollars in costs annually while also eliminating 1.6 million hours that truck drivers spend on administrative work each year. 

As part of the regulatory lookback, we are also taking a look at regulations imposed on state and local governments. We have already eliminated a number of costly regulations, saving millions of dollar a year, so local officials can focus on their top priorities, such as education and police protection, during an economically difficult time.

In the area of safety and health, doctors and hospitals have been relieved of numerous burdensome requirements so they can provide patients with better care. The result of now-final reforms will be five-year savings of about $5 billion. Before long, we expect to add significantly to these savings, not least through the streamlining and eliminating of paperwork and reporting requirements.

Smart Rules

At the same time, the Administration has been issuing smart rules that promise to deliver big benefits for the American people in terms of health and safety. Lives are being saved and injuries and illnesses are being reduced. For example, one rule reduces the stopping distance for trucks by 30 percent, thus averting $170 million in annual property damage, and, most importantly, saving over 200 lives a year. We also took a step to reduce the risk of salmonella in shell eggs, saving dozens of lives a year and eliminating up to 79,000 illnesses annually.

New rules will significantly increase fuel economy in the United States for both cars and trucks. These rules will save consumers billions of dollars at the pump, reduce America’s dependency on foreign oil, and make our air cleaner, thus protecting public health. At the same time, smart disclosure policies are informing the choices of investors, workers, consumers, in areas including education, finance, nutrition, and safety.

These are just a few examples of rules that are producing large benefits – saving lives, reducing accidents and illnesses, and reducing unjustified burdens and red tape. Through a series of ambitious steps, we’ve created a 21st-century regulatory system that is cost-effective, flexible, evidence-based, and modern. The Administration’s regulatory review is already on track to remove billions of dollars of regulatory costs for small businesses and the economy, with far greater savings to come. 

Watch Cass Sunstein in Advise the Advisor here.

How can we continue to streamline, simplify, and improve rules and regulations? Which rules should be eliminated, streamlined, or made more effective? How can we reduce reporting and paperwork burdens? What are the best ways to cut regulatory costs? We’re looking for your ideas.

In January 2011, the President directed all executive agencies to undertake an unprecedented government-wide review of regulations on the books, in order to figure out what is working and what is not, and where appropriate, to streamline or eliminate ineffective, overly burdensome, and outdated rules. Over two dozen agencies responded with regulatory reform plans, listing more than 800 initiatives.

We are already seeing big results. Just a small fraction of those initiatives, already finalized or formally proposed to the public, will save more than $10 billion over the next five years. Far more savings are expected as the plans are implemented and improved.

This May, the President made regulatory reform a continuing responsibility of all executive agencies and departments. All agencies must engage with the public to obtain suggestions about which regulations should be reassessed, modified, improved, streamlined, or eliminated. All agencies must give priority to reforms that would produce significant quantifiable savings or big reductions in paperwork and reporting burdens. And all agencies must report regularly to the public on their progress.

The next reports are due fairly soon – this fall. To improve our review, and to make it as ambitious as possible, we are announcing, today, an opportunity for members of the public to offer their ideas. Which rules are outdated? Which ones are imposing unjustified costs? Which ones can be improved or made more effective? Submit your ideas at WhiteHouse.gov/Advise. They will be given careful consideration.

Cass Sunstein is Administrator of the Office of Information and Regulatory Affairs. 

President Obama is committed to a regulatory approach that protects public safety and welfare while also promoting economic growth and job creation. In January 2011, the President issued a historic Executive Order, setting forth new cost-saving, burden-reducing requirements for federal regulations, and requiring an ambitious government-wide “lookback” at existing regulations. In response to that requirement, over two dozen agencies identified more than 500 reforms. Agencies have already proposed or finalized more than 100 of them.

On May 10, we announced a series of final rules that will save nearly $6 billion over the next five years. Other rules, now proposed or finalized, will produce billions of dollars in additional savings, producing total savings in excess of $10 billion from just a small fraction of the reform initiatives.

Also on May10, the President institutionalized his regulatory lookback with an historic Executive Order requiring federal agencies to continue to scrutinize rules on the books to see if they really make sense. That Executive Order takes three new steps. To promote priority-setting, the Order requires agencies to identify reforms that will produce significant quantifiable savings, especially (but not only) for small business. To promote accountability, the Order requires agencies to report to the public regularly on their past efforts and their future plans -- with details and deadlines. To promote public participation, the Order directs agencies to obtain public comments to see which rules should be simplified, improved or repealed.

There is a lot more to come, but today, numerous agencies are releasing progress reports, including both recent achievements and new initiatives, large and small. To offer just a few examples:

• On May 21, the Department of Agriculture streamlined its meat and poultry labeling approval process, creating a new, web-based electronic alternative to paper applications, making the process faster, cheaper, and more accurate.
• The Federal Railroad Administration plans to eliminate unjustified regulations imposed on the railroad industry, streamlining and simplifying existing requirements and saving hundreds of millions of dollars in the coming years.
• The Federal Motor Carrier Safety Administration is finalizing today a rule eliminating a reporting requirement imposed on truck drivers, doing away with roughly thirty-eight million reports annually – an amount that represents over $50 million in annual paperwork savings.
• The Department of Housing and Urban Development plans to eliminate burdensome and unnecessary requirements for mortgage insurance, thus enhancing consumer choice, reducing administrative and paperwork burdens on HUD and the borrowers, and producing savings for prospective borrowers.

With the President’s recent Executive Order, agencies will be engaging directly with the public for ideas about streamlining, improving, or eliminating existing rules. As that Executive Order states, “members of the public, including those directly and indirectly affected by regulations, as well as State, local, and tribal governments, have important information about the actual effects of existing  regulations,” and agencies must invite public suggestions “about regulations in need of retrospective review and about appropriate modifications to such regulations.” We eagerly look forward to those suggestions.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs.   

Under the President’s direction, we have finalized rules, in our first three years, with more than $91 billion in net benefits – over 25 times the corresponding figure in the first three years of the Bush Administration, and over 6 times the corresponding figure in the first three years of the Clinton Administration.

But we don’t need all of the regulations that are on the books. By streamlining some and eliminating others, we can save billions of dollars in unnecessary costs. As President Obama has emphasized, it is possible, even indispensable, both to issue sensible, protective regulations and to eliminate rules that are no longer justified.  Today, we are taking three important steps in that direction.

First, the President has signed a new Executive Order, making it a continuing obligation of our government to scrutinize rules on the books to see if they really make sense. The Order directs agencies to seek public comments on rules in need of review. To promote priority-setting, the Order directs agencies to emphasize reforms that produce significant quantifiable savings. To promote accountability, the Order requires agencies to provide the public with regular reports on their past efforts and their future plans -- with details and deadlines. These historic steps build on, and institutionalize, the President’s Executive Order of January 18, 2011,  which first called for retrospective review of rules on the books (the regulatory “lookback”). 

Second, the Council of Economic Advisers is issuing a report on the “lookback.” The report outlines the progress made to date. It notes that agencies have identified over 500 reforms and that a small fraction of them, already finalized or formally proposed to the public, will be saving more than $10 billion over the next five years. The report emphasizes that we need continued analysis and public participation to identify rules that should be streamlined, improved, or eliminated.

Third, we are announcing five final rules that will save nearly $6 billion as a result of the President’s directive that agencies review old rules:

• The Department of Health and Human Services is finalizing two rules to remove unnecessary regulatory and reporting requirements now imposed on hospitals and other healthcare providers, saving more than $5 billion over the next five years.
• The Department of Transportation is finalizing a rule to eliminate unnecessary regulation of the railroad industry, saving up to $335 million in the near future while continuing to maintain public safety.
• The Department of Transportation is finalizing a rule to extend compliance dates on traffic control requirements (which would, among other things, require states and localities to change street signs), saving millions of dollars in the process.
• The Environmental Protection Agency is eliminating the obligation for some states to require air pollution vapor recovery systems at local gas stations. This obligation was imposed before new vehicles were required to have increasingly ubiquitous built-in air pollution control technologies.  The anticipated five-year savings are over $300 million. 

With today’s announcements, the regulatory “lookback” is becoming a standardized feature of American government. In an economically difficult time, it promises to increase the benefits and to decrease the costs of Federal regulation.

Today, President Obama has built on Executive Order 13563 by signing a historic Executive Order on Promoting International Regulatory Cooperation.  The new Executive Order will promote American exports, economic growth, and job creation by helping to eliminate unnecessary regulatory differences between the United States and other countries and by making sure that we do not create new ones.  

As I discuss in an op-ed in today’s Wall Street Journal, the order makes clear that in eliminating such differences, we will respect domestic law and will not compromise U.S. priorities and prerogatives. Even while insisting on those priorities and prerogatives, we can eliminate pointless red tape. Today’s global economy relies on supply chains that cross national borders (sometimes more than once), and different regulatory requirements in different countries can significantly increase costs for companies doing business abroad. As the President’s Jobs Council recently noted, international regulatory cooperation canreduce these costs and help American businesses access foreign markets.  Such cooperation can also help U.S. regulators more effectively protect the environment and the health and safety of the American people. 

Today’s Executive Order calls for, among other things, an interagency working group, chaired by OMB’s Office of Information and Regulatory Affairs, to provide a forum to foster greater cooperation and coordination of U.S. Government strategies, including those for promoting regulatory transparency, sound regulatory practices, and U.S. regulatory approaches abroad.  Today’s Order also requires Federal agencies, as part of the President’s retrospective review initiative under Executive Order 13563, to consider regulatory reforms that eliminate unnecessary differences between the United States and its major trading partners.

As we work with other governments to tackle unnecessary differences in regulation, we must continue to protect the environment and the health and safety of Americans. Today’s Executive Order emphasizes this point while reaffirming the primacy of domestic law and national prerogatives. 

The new Executive Order will build on work that is already underway. We have started close to home, with President Obama launching Regulatory Cooperation Councils with Prime Minister Harper of Canada and President Calderon of Mexico. The Councils are implementing work plans to eliminate or prevent the creation of unnecessary regulatory differences that adversely affect cross-border trade; to streamline regulatory requirements; and to promote greater certainty for the general public and businesses, particularly small- and medium-sized enterprises, in the regulation of food, pharmaceuticals, nanotechnology, and other areas. The United Statesand Canada released the United States-Canada Regulatory Cooperation Council (RCC) Joint Action Plan last December. In February, we announced the United States-Mexico High-Level Regulatory Cooperation Council (HLRCC) Work Plan. 

I invite you to review both plans and provide your thoughts and ideas on how we can reduce red tape and unjustified costs by increasing regulatory cooperation, in North America and beyond.  Just email us at international-oira@omb.eop.gov.  The ideas we have received from the public have helped shape our efforts to date, and continued public engagement will help ensure that we make meaningful progress in the years to come.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs.  

The Obama Administration has adopted a number of initiatives to promote smart, cost-justified regulation. On January 18, 2011, the President ordered an unprecedented government-review of existing rules. After a period of public comment, over two dozen agencies released ambitious reform plans, outlining hundreds of cost-saving reforms. A small fraction of those reforms, already finalized or formally proposed to the public, will save more than $10 billion over the next five years.

As the plans are implemented, far higher savings are anticipated. Just today, the Federal Register has on display a final rule from the Department of Labor that will bring our warning labels for hazardous chemicals in line with those of other nations. This rule will save employers a lot of money on training and updating of materials; improve safety and health protections for American workers; and reduce trade barriers for chemical manufacturers that sell their products abroad. The overall five-year savings will be in excess of $2.5 billion, most of it in the form of savings for employers. (Stay tuned; significant announcements from other agencies are expected in the near future.)

Today, we are taking another major step toward improving our regulatory system and eliminating unjustified costs. In some cases, the addition of new rules and requirements has unfortunate cumulative effects. Taken in isolation, a new rule may seem perfectly sensible, but it may overlap with existing requirements. The sheer accumulation of regulations can cause real harm, especially for small businesses and startups. As the President said last January, agencies must take into account “the costs of cumulative regulations.”

With our action today, we are directing agencies to take a number of significant steps to reduce such cumulative costs. These steps include:

• Early engagement with state, tribal, and local governments to identify opportunities for eliminating redundancy and reducing burdens on the public and private sectors;
• Early consultation with affected stakeholders to reduce cumulative burdens, well in advance of proposing new rules;
• Specific consideration of the cumulative effects of regulations on small businesses and start-ups;
• Careful consideration, in the analysis of costs and benefits, of the relationship between new regulations and those regulations that are already in effect;
• Identification of opportunities to harmonize the requirements of new and existing rules, so as to eliminate inconsistency, excessive cost, and redundancy.

It should be clear that a central goal of today’s effort is to promote early consultation, so that unnecessary rules and redundant requirements can be avoided. Agencies will be reaching out to the public to promote that goal.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs  

In response to the President’s direction, Regulations.gov has launched a major redesign, including innovative new search tools, social media connections, and better access to regulatory data.  The result is a significantly improved website that will help members of the public to engage with agencies and ultimately to improve the content of rules.

The redesign of Regulations.gov also fulfills the President’s commitment in The Open Government Partnership National Action Plan to “improve public services,” including to “expand public participation in the development of regulations.” This step is just one of many, consistent with the National Action Plan, designed to make our Federal Government more transparent, participatory, and collaborative.

Application Programming Interfaces (APIs)
Application Programming Interfaces (APIs) are technical interfaces/tools that allow people to pull regulatory content from Regulations.gov. For most of us, the addition of “APIs” on Regulations.gov doesn’t mean much, but for web managers and experts in the applications community, providing APIs will fundamentally change the way people will be able to interact with public federal regulatory data and content. 

The initial APIs will enable developers to pull data out of Regulations.gov, and in future releases, the site will include APIs for receiving comment submissions from other sites. With the addition of APIs, other web sites - ranging from other Government sites to industry associations to public interest groups – will now be able to repurpose publicly-available regulatory information on Regulations.gov, and format this information in unique ways such as mobile apps, analytical tools, “widgets” and “mashups.” We don’t know exactly where this will lead us – technological advances are full of surprises – but we are likely to see major improvements in public understanding and participation in rulemaking.

Making Federal rulemaking content available for open exchange was a key goal set out by the President in Executive Order 13563, and we eagerly await the use of these new APIs to enhance and transform public participation in the regulatory process.

Categories
For the first time, users will now be able to browse by categories of regulations. This step moves us closer to meeting the recent Jobs Council recommendation to enable regulations to be searched by North American Industry Classification System (NAICS) codes, (NAICS is a standard used by Federal agencies in classifying industry).   The ten new categories include:

1. Aerospace and Transportation
2. Agriculture, Environment, and Public Lands
3. Banking and Financial
4. Commerce and International
5. Defense, Law Enforcement, and Security
6. Education, Labor, Presidential, and Government Services
7. Energy, Natural Resources, and Utilities
8. Food Safety, Health, and Pharmaceutical
9. Housing, Development, and Real Estate
10. Technology and Telecommunications
     

Search
As a result of changes in the search functionality and results page, Regulations.gov now includes more user-friendly sorting and filtering tools. Users can now sort by “Comment Due Date” and “newly posted regulations” and can filter by “Category.”

There is also a new feature called “Document Spotlight,” which allows users to hover their cursors over the documents listed in the search result page, and view additional information about a specific document without having to go first to the docket.  Information like the RIN, highlighted keyword search matches, and whether the comment period is open/closed can be viewed quickly and easily from the Search Results page.

Learn
The Federal regulatory process can be hard to understand, and a new “Learn” section offers an interactive explanation of the regulatory process.

I encourage all citizens and especially those with particular interest in regulation to explore the new site and offer feedback.  Comments are welcome; the Regulations.gov team and partner agencies have more improvements in the pipeline for 2012. 

Cass Sunstein Administrator of the Office of Information and Regulatory Affairs

And today, agency updates on regulatory reform progress can be found here.

As these updates show, a great deal has happened in a short time.  For example:

• HHS has finalized a rule that will facilitate and promote telemedicine, helping hospitals and patients in rural areas and saving around $65 million over the next five years.
   
• The Department of Transportation has proposed a rule to extend compliance dates on dozens on traffic control requirements imposed on states and local government, potentially saving millions of dollars in the process.
   
• The Department of Homeland Security has issued a new Global Entry rule that will allow many people to reduce their waiting time at airports.
   
• The Department of Labor will shortly finalize a rule to harmonize its hazards warning requirements with those of other nations, increasing safety and saving employers over $1.5 billion over the next five years.
   
• The Occupational Safety and Health Administration has announced a final rule that will remove over 1.9 million annual hours of redundant reporting burdens on employers and save more than $40 million in annual costs.
   
• To eliminate unjustified economic burdens on railroads, the Department of Transportation is reconsidering parts of a rule that requires railroads to install equipment on trains.  DOT has proposed to refine the requirements so that the equipment is installed only where it is really needed on grounds of safety. DOT expects initial savings of up to $325 million, with total 20-year savings of up to $755 million. 
   
• The Department of Agriculture has proposed a rule to modernize and streamline poultry inspections, saving the private sector over $1 billion over the next five years while increasing safety in the process.
   
• EPA has proposed to eliminate the obligation for many states to require air pollution vapor recovery systems at local gas stations, on the ground that modern vehicles already have effective air pollution control technologies.  The anticipated five-year savings are around $440 million.
   
• The Departments of Commerce and State are undertaking a series of steps to eliminate unnecessary barriers to exports, including duplicative and unnecessary regulatory requirements, thus reducing the cumulative burden and uncertainty faced by American companies and their trading partners. These steps will make it a lot easier for American companies to reach new markets, increasing our exports while creating jobs here at home.
   
• To promote flexibility, the Department of Health and Human Services has proposed new rules to reduce burdensome regulatory requirements now placed on hospitals and doctors. These reforms are expected to save more than $5 billion over the next five years.
   
• The Federal Communications Commission has already eliminated over 190 regulations.

These changes are already producing measurable savings for consumers and businesses. Over the next five years, more than $10 billion in savings are anticipated from just a small fraction of the hundreds of initiatives now underway.

The effort to look back at existing rules, and to streamline, fix, or eliminate those that aren’t working, is now becoming a regular part of agency practice. One of the most important features of the current process is the continuing request for public suggestions – for ideas about regulations that might be streamlined, improved, reformed, or eliminated. We are already eliminating billions of dollars in unjustified costs; as the plans are implemented, we expect to save a great deal more.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs   

For many decades, the framework for records management has been based on an approach developed in the middle of the twentieth century, involving paper and filing cabinets. Things are of course very different today. In the digital age, when many records are made and maintained in electronic form, we have extraordinary opportunities to improve records management. New steps can save money, improve efficiency, promote openness, and increase both accuracy and transparency. They can provide great benefits to posterity.

Today President Obama is taking a historic step -- and the most important step in many decades -- to improve the management of federal records. Delivering on a commitment in the recent Open Government Partnership: National Action Plan for the United States, he is calling for a large-scale transformation in how agencies maintain their records. In the process, he is inaugurating a government-wide effort to reform records management policies and practices. 

Today’s Presidential Memorandum requires a number of concrete actions. The new effort calls for reports, by each agency head, describing their current plans for improving records management programs; outlining current obstacles to sound, cost-effective records management policies;and cataloging potential reforms and improvements. The agency reports will inform, and be followed, by a Records Management Directive, to be issued by the Director of OMB and the National Archivist. The Directive will focus on maintaining accountability to the American public through documenting agency actions; increasing efficiency (and thus reducing costs); and switching, where feasible, from paper-based records to electronic records. In addition, all statutes, regulations, and policies must be reviewed to improve government-wide practices in records management. In a key provision, the President has required the Director of OMB and the National Archivist to consult with those inside and outside the government – including public stakeholders interested in improving records management and open government. 

Today’s action begins a large-scale transformation in how we maintain the backbone of open government. It promises, at once, to save money, to increase accuracy, and to contribute knowledge and perspective to future generations.

A few months ago, and after consulting with the public, over two dozen departments and agencies released plans to remove what the President has called “absurd and unnecessary paperwork requirements that waste time and money.” And we’re continuing our work to identify and eliminate regulations that don’t make sense.

Just a small fraction of our burden-reducing reforms promise billions of dollars in savings over the next five years. And many of these changes overlap with the recent recommendations of the President’s Council on Jobs and Competitiveness.

Today, one part of this larger effort is moving forward. The Department of Health and Human Services is announcing three sets of important reforms that are expected to save more than $1 billion every year in health care overhead and paperwork costs. These reforms are aimedat reducing unnecessary, obsolete, or burdensome regulations on American hospitals and healthcare providers.  

While some of the reforms are a bit technical, they are going to save doctors, nurses, and patients a lot of time and money:

1. Streamlining Conditions of Participation. “Conditions of Participation” are federal health and safety requirements that hospitals must meet in order to participate in the Medicare and Medicaid programs.  CMS estimates that today’s burden-reducing initiative will produce $940 million in annual savings to hospitals by giving hospitals more flexibility in deciding how to best treat their patients. Without compromising safety, these new rules will increase the time and resources hospitals and providers can devote to patient care by eliminating outdated, bureaucratic, and unnecessary requirements.
2. Reducing burdens on end-stage renal disease facilities and ambulatory surgical centers. The proposed Medicare Regulatory Reform rule would identify and eliminate duplicative, overlapping, outdated, and conflicting regulatory requirements for healthcare providers and suppliers, including end-stage renal disease facilities and ambulatory surgical centers.  CMS estimates that first year savings will total $170 million and that another $37 million per year will be saved thereafter through the elimination of outdated standards and by ending requirements that these centers purchase and maintain unnecessary equipment.
3. Simplifying conditions for coverage for Ambulatory Surgical Centers. HHS is finalizing a rule to update the conditions for coverage regulations for Ambulatory Surgical Centers (ASCs). Specifically, the final rule eliminates a provision that required ASCs to notify patients, the patients’ representative, or the patients’ surrogate of their rights on a separate day from their procedure. Before today’s final rule, regulatory requirements led to significant problems and inconveniences for patients who needed ASC services on the same day that they received a physician referral. CMS estimates that the final rule will result in $50 million in annual savings for ASCs.

Today’s announcements are just one step in a continuing process of regulatory reform. In the recent past, other significant cost-saving initiatives have been announced by the Departments of Commerce, Health and Human Services, Homeland Security, Labor, State, and Transportation, as well as the Environmental Protection Agency. 

Our new initiatives, coming from more than two dozen agencies, are designed to change the regulatory culture of Washington by constantly exploring what is working and what isn’t. Agencies are continuing to review their rules – to make sure that the lookback is not just a one-time event. New ideas are welcome. We are reaching out to hospitals, nurses, physicians, consumers, and patients to hear their ideas about how we can make our health care system stronger and eliminate outdated and unnecessary regulations. You can click here for information on where to send us your thoughts and comments on today’s proposals.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs
 

President Obama believes that, as our economy recovers and we work to support job creation, it is important to minimize regulatory burdens and avoid unjustified regulatory costs. The President has taken ambitious and strong steps to promote this goal.

Executive Order 13563, issued early this year, calls on all agencies to conduct a thorough retrospective review of existing rules; it also imposes a series of new requirements designed to reduce regulatory burdens and costs. Just this month, twenty-six agencies released regulatory review plans, with over 500 reform initiatives. A mere fraction of the new initiatives will save more than $10 billion over the next five years; as progress continues, we expect to be able to deliver savings far in excess of that figure. Already, we’ve finalized or formally proposed reforms to save more than $4 billion of regulatory costs over that period.

‪It is important to note that there has been no significant increase in rulemaking under this Administration. On the contrary, the number of significant rules reviewed by the White House Office of Information and Regulatory Affairs (OIRA) and issued in the first two years of the Obama administration is lower than the number issued in the last two years of the Bush administration.  Moreover, in its last two years, the administration of George W. Bush imposed far higher regulatory costs than did the Obama administration in its first two years.

Even more importantly, the net benefits of the final, economically significant regulations reviewed by OIRA in the first two years of the Obama Administration, including not only monetary savings but also lives saved and illnesses prevented, have been over ten times the net benefits during the first two years of the Bush Administration. Smart regulations produce significant benefits in the form of savings for businesses, clean air and water, workplace safety, safe food and consumer and investor protection.

It is important to clarify that the annual regulatory agenda, sometimes cited as evidence of an increase in regulatory burden, is simply a list of potential ideas that agencies may consider pursuing. Under both Republican and Democratic Administrations, the agenda is merely a list of rules that are under general contemplation, provided to the public in order to promote transparency. Before any such rule can be issued, it must be subject to a long series of internal and external constraints, including the rulemaking requirements of the Administrative Procedure Act and the new burden-reducing, cost-saving requirements of the President's January Executive Order on regulation. In any given year, many rules on the agenda do not become final.

The President has said that our regulatory system must "protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness and job creation.”  We look forward to working closely with the public to achieve that goal.

Today, we are announcing that agencies are releasing their final regulatory reform plans, including hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency.

As the plans demonstrate, a great deal has been achieved in a short time. Significant burden-reducing rules have been finalized or publicly proposed from the Department of Labor, the Environmental Protection Agency, and the Department of Transportation. These rules are expected to save more than $4 billion over the next five years.

The reforms announced today span a wide range. Consider just a few examples:

• The Department of Health and Human Services will soon propose to remove unnecessary regulatory and reporting requirements now imposed on hospitals and other healthcare providers, potentially saving an anticipated $4 billion over the next five years.
• The Department of Labor is finalizing a rule to simplify and to improve hazard warnings for workers, likely saving employers over $2.5 billion over the next five years without compromising safety.
• The Department of Transportation is proposing a rule, announced just today, that will eliminate unnecessary regulation of the railroad industry, saving up to $340 million in the near future, and avoiding the risk that regulatory costs will be passed onto consumers.
• By the end of this year, the Internal Revenue Service will eliminate 55 million hours in annual paperwork burdens by consolidating reporting requirements and streamlining various tax forms.

Many of the new reforms focus specifically on small business. For example, the Department of Defense recently issued a new rule to accelerate payments on contracts to as many as 60,000 small businesses, thus improving their cash flow in an economically difficult time.

Over the next five years, the monetized savings from just a fraction of the reforms announced today are likely to exceed $10 billion. Perhaps more important, today’s plans explicitly recognize that the regulatory lookback is not a one-time endeavor. Agencies will continue to revisit existing rules, asking whether they should be updated, streamlined, or repealed.  And they will do so in close consultation with the public. Ideas are welcome at any time.

Today’s cost-reducing reforms complement, and do not displace, our continuing efforts to safeguard public safety and our environment. As President Obama has said, “We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.” We will continue to eliminate unjustified regulatory costs, and thus strengthen our economy, while taking sensible, cost-effective, evidence-based steps to protect public health and welfare.

In a historic initiative, the President has requested the independent agencies to produce plans to reassess and to streamline their existing regulations, and to disclose those plans for public scrutiny. In addition, the President has asked the independent agencies to follow the cost-saving, burden-reducing principles in his January Executive Order on improving regulation.  

With today's action, the President has taken strong steps to improve and reduce rules on the books, and also to improve new rules going forward. With full respect for the independence of the independent agencies and for their impressive efforts in the recent past, the President has asked for their collaboration in the creation of a twenty-first century regulatory system, using state-of-the-art tools and smart approaches to protect public welfare while promoting economic growth and job creation. 

We’ve already begun to get some positive feedback from heads of the independent regulatory agencies, regulatory experts, and members of the President’s Council on Jobs and Competitiveness, which has been a major advocate for streamlining the regulatory system in order to stimulate job creation.  See below:

Jeffrey Immelt
Chairman, GE and Chair of the President’s Jobs Council, in a speech today to the Chamber of Commerce
“…we are pleased with the Executive Order the President issued this morning.  Since the Council was created, we’ve been urging the Administration to streamline the regulatory process for independent agencies.  And they listened.  The Council exists to make these kinds of recommendations and to be the catalyzing force to make them happen.”

Richard Parsons
Citigroup Chairman and Member of the President’s Jobs Council
"I applaud the President's call for independent regulatory agencies to review and streamline unnecessary and burdensome regulations. This effort, combined with the work of the Jobs Council, will be an important catalyst to creating jobs and fueling economic growth."

Lew Hay
Chairman and CEO, NextEra Energy and Member of the President’s Jobs Council
"We applaud the President for taking prompt action on an item flagged by his Council on Jobs and Competitiveness in the early course of our work. Improving the environment for job creation will require action on many fronts, and this is a productive step.  As leaders of American businesses, we experience the pressures of regulation every day. No one disputes the importance of sound regulation, but as a nation we need to get smarter and sharper in the way we apply regulations.  Greater focus on cost-benefit analysis, looking at alternative ways of meeting the aims of regulation, and deploying regulatory frameworks that encourage constructive compliance are all important.  We hope that every independent regulatory agency will adopt the principles of the Executive Order in the constructive spirit in which they are intended.”

Julius Genachowski
Chairman, Federal Communications Commission
“I welcome the President’s Executive Order today.  Since my first day as Chairman, I have made regulatory reform a top priority, improving FCC processes and decisions to support innovation, economic growth, and America’s global competitiveness.  The results have been strong, with robust and growing private investment and innovation throughout the broadband economy.

Shortly after the President’s initial Executive Order, I directed FCC staff to follow the spirit of the Order. We had already conducted retrospective reviews, and incorporated cost-benefit analysis into our decision-making.  I am proud of the progress we have achieved over the past two years toward making the FCC a model of excellence in government.  We have repealed more than 50 outdated regulations and identified 25 sets of outdated data collections for elimination  We have also removed regulatory restrictions on spectrum use and we moved to bring market-based incentive auctions to reallocate inefficiently used spectrum. We have taken action to preserve free data flows and free markets on the Internet, increasing certainty and predictability, and spurring investment in both applications and infrastructure. And we are reforming universal service funding to remove waste and inefficiency and incorporate market-based funding mechanisms.

We’ll continue to work with all stakeholders on these important matters, consistent with our obligations as an independent agency.”

Jon Leibowitz
Chairman, Federal Trade Commission
“President Obama deserves enormous credit for ensuring regulatory review throughout the federal government, including at independent agencies. Although regulations are critically important for protecting consumers, they need to be reviewed on a regular basis to ensure that they are up-to-date, effective, and not overly burdensome. For all agencies – independent or not – periodic reviews of your rules is just good government. The announcement raises the profile of this issue, and I think that’s a constructive step.”

Inez Tenenbaum
Chairman, U.S. Consumer Product Safety Commission (CPSC)
“The U.S. Consumer Product Safety Commission (CPSC) has a 30 year history of undertaking various regulatory review efforts, in keeping with our role as an independent safety agency dedicated to protecting Americans from unsafe consumer products that can cause serious injury or death.  Earlier this year, I directed agency staff to reinvigorate CPSC’s voluntary review process, which is intended to look at ways to maximize openness and public participation, and effectively review substantive regulations that may require revision, repeal, or strengthening.

As CPSC moves toward completion of the remaining rulemakings mandated by the Consumer Product Safety Improvement Act, which Congress explicitly exempted from many of CPSC’s traditional rulemaking requirements, we have strengthened our nation’s product safety net and now, under my direction, we are aiming to revive our regulatory review program. 

I believe this approach is consistent with President Obama’s call for a sensible and streamlined regulatory system that is protective of public health and safety, and I look forward to working with the President and Congress, as appropriate, as our review process moves forward.”

Jon Wellinghoff
Chairman, Federal Energy Regulatory Commission (FERC)
“FERC welcomes the President’s new executive order for a more formal, public reassessment of our regulations and their effect on the economy.  The Commission complied with the spirit of the President’s January order when I directed staff to perform an internal assessment of the effectiveness of our regulations. And as part of our normal procedure, FERC’s regulatory process is open and public. The President’s new directive will be a useful addition to our continuing efforts to ensure FERC regulations are effective, timely and up to date.”

Sally Katzen
Visiting Professor, NYU Law School and former OIRA Administrator
“The executive order is a sound step in furthering the President's regulatory reform initiative.  Many of us have argued for some time that the independent regulatory commissions should be required to engage in cost benefit analysis and be held to the same standards for rigorous review of their rules that apply to the Executive Branch agencies.  This is a most welcome move in that direction.”

Institute for Policy Integrity
New York University School of Law
“President Obama's new Executive Order has the potential to trim unnecessary rules while boosting needed protections. Adequate protection for the environment, public health, and consumers is essential, but periodic review can help ensure they stay up to date.

Independent agencies are charged with regulating some of the most important issues facing the country like Internet policy and consumer safety. Today's move will help improve those regulatory programs by setting up a process of periodic review, while respecting the discretion of these agencies.

The retrospective review that began with the President's January Executive Order, which applies only to Executive agencies, was an important first step. But the plans submitted by agencies so far have focused almost exclusively on paperwork reduction and axing outdated rules.

Going forward, the Obama administration should focus on putting in place a durable system of review that gives equal attention to cutting bad rules and extending protections where needed.”

The good news is that relatively small efforts to communicate more clearly can minimize that burden. Take this example: the Federal Communications Commission used to receive so many questions from the public about its requirements for ham radio operations that five full-time employees were needed to provide answers. After the requirements were written in plain language, questions dropped off so dramatically that all five of those employees could be reassigned to more pressing activity at the Commission.

In short, writing in plain language can make a huge difference. That is why President Obama signed the Plain Writing Act of 2010 into law last October. By improving government communications, the Act will not only save money but also facilitate two-way communication between agencies and the public and make it is far easier for people to understand what they are being asked to do.

To promote the use of plain language in Federal documents, I issued final guidance (pdf) last Wednesday to help Federal agencies to comply with the Act.  Whenever officials provide information about Federal benefits and services, produce documents that are necessary for filing taxes, or offer notices or instructions to the public, they must now write clearly and concisely. In addition, agencies must train employees to use plain language, create a plain writing section of their websites, and designate a senior official to oversee the implementation of the Act.

These requirements may not sound like giant steps, but they can yield big improvements in efficiency. A study in Business Horizons, the journal of Indiana University’s Kelley School of Business, found that when a US Navy memorandum was rewritten into plain language, it took 17-23 percent less time to read. The authors concluded that, the Navy “could save annually anywhere between $27 and $73 million [in 1991 dollars] worth of wasted reading and rereading time if its officers alone used the plain style.”

As our economic recovery continues, strong implementation of the Plain Writing Act is vital to ensuring that we are minimizing burdens on American business and the public as a whole.   

Cass Sunstein is Administrator of the Office of Information and Regulatory Affairs

In the short period since it was signed, agencies across the federal government have taken fresh steps to improve regulations, reducing costs, incorporating input from stakeholders and the public, and updating rules that impose unintended or excessive burdens on the American people.

Today, the Environmental Protection Agency (EPA) took the most recent of these smart steps toward eliminating unnecessary costs on the American public and American businesses. In direct response to feedback from stakeholders in the agriculture community, EPA concluded that an unintended result of the current Oil Spill Prevention, Control, and Countermeasure (SPCC) program – which is designed to prevent oil spill damage to inland waters and shorelines – has been to place unjustifiable burdens on dairy farmers and producers. As a result, today EPA announced that it has updated this important rule to exempt milk and milk product containers. This sensible decision will save the milk and dairy industries as much as $140 million per year.

To ensure that this rule didn’t harm the agriculture community while the mandatory regulatory process proceeded, EPA had previously delayed SPCC compliance requirements for milk and milk product containers.

Today’s rule reflects the Administration’s commitment to streamlining unjustified regulations and to common-sense, responsive, cost-sensitive, and transparent rulemaking.

This is just one step among many. In the recent past, other agencies – including the Department of Transportation, the Department of Energy, the Department of Labor, and the Department of Health and Human Services – have also taken major steps to reconsider, streamline, or eliminate proposed or final rules and requirements that seem unduly burdensome or that deserve fresh thinking. And on May 18, agencies will be submitting preliminary plans, reflecting their efforts to revise, simplify, or repeal their existing rules.

Stay tuned. Much more is on the way.

The Executive Order emphasizes the need for predictability and for certainty -- and for achieving regulatory goals with the smartest and least costly tools. It directs agencies to seek public comments on rules, to minimize burdens on the private sector, to simplify and harmonize their regulations, to promote flexibility and freedom of choice, and to make sure that the benefits justify the costs. It also directs agencies, within 120 days, to produce plans for a government-wide review of existing regulations to determine whether they should be modified, streamlined, expanded, or repealed.

Also on January 18, the President signed a memorandum requiring agencies to take new steps to reduce regulatory burdens on small business. As the President wrote in the Wall Street Journal, “Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.”

In the recent past, a great deal has happened to promote the President’s goals. Consider just a few examples:

• The Department of Energy, the Social Security Administration, and the Department of Commerce have asked the public for ideas about which regulations to streamline or repeal. Others will be following in the near future.
• The FDA has announced twenty-five significant reforms to its process for reviewing new medical devices, creating a smarter program that will promote innovation, keep jobs here at home, and bring safe, effective, and important technologies to patients more quickly.
• Responding to public comments, the Department of Labor has withdrawn its proposal to change workplace noise standards, emphasizing that “addressing this problem requires much more public outreach and many more resources than we had originally anticipated.”
• Listening to the concerns of many stakeholders, the Environmental Protection Agency has announced a three-year exemption of biomass from its greenhouse gas permitting rule.
• The Department of Labor has withdrawn its rule requiring reporting of musculoskeletal disorders, stating that it wants “greater input from small businesses on the impact of the proposal.”

Responding to employer concerns, the Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service have amended the "grandfathering rule," which permits group health plans existing as of March 23, 2010 not to be subject to certain provisions of the Affordable Care Act. Under the amendment, employers with fully insured plans can now change carriers without losing their grandfathered status.

These recent steps follow others. In November 2010, the Office of Management and Budget announced no fewer than 72 burden reduction initiatives, designed to eliminate paperwork and reporting burdens on the American public. Many of these initiatives are well underway. They include simplification of the Free Application for Federal Student Aid form by the Department of Education; reduced burdens on air travelers and carriers from the Department of Homeland Security; greater use of electronic communication by the Environmental Protection Agency; reduced reporting requirements on employers from the Department of Labor; and reduced filing burdens from the Internal Revenue Service. All in all, these initiatives are expected to reduce reporting burdens on the American people by more than 60 million hours – each year.

At the same time that we are eliminating excessive requirements and burdens, we have a responsibility to protect the health and safety of the American people by proceeding with what the President calls “common sense rules of the road.” Just last week, the Environmental Protection Agency announced that it would develop a science-based standard to protect infants and young children by limiting the amount of perchlorate – an ingredient in rocket fuel – that can be allowed in tap water. Also last week, the Department of Labor proposed a rule to protect workers from mine operators who repeatedly violate health and safety requirements.

As recent developments have shown, we can advance plans to out innovate, out-educate and out build the world by eliminating unjustified regulatory burdens, even as we insist on common sense safeguards. But much more work needs to be done, and we’ll need your ideas and your help.

Cass Sunstein is Administrator of the Office of Information and Regulatory Affairs