STATEMENT OF JOHN GRAHAM

STATEMENT OF JOHN GRAHAM
ADMINISTRATOR
OFFICE OF INFORMATION AND REGULATORY AFFAIRS
BEFORE THE
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES

July 25, 2001

Good morning, Mr. Chairman, Ranking Member Velazquez, and members of the Small Business Committee. Thank you for your invitation to testify today. You invited me to testify about the Office of Management and Budget's (OMB) role in reviewing information collection requirements pursuant to the Paperwork Reduction Act (PRA), as well as our review of regulations governing the Medicare and Medicaid programs. I was confirmed by the Senate last Thursday in my new position as Administrator of the Office of Information and Regulatory Affairs (OIRA), and I am pleased that my first opportunity to testify as the OIRA Administrator is before this Committee. I look forward to working with this Committee to reduce the paperwork and regulatory burdens that the Federal Government imposes on this country's small businesses. I hope to leave this hearing today with a better understanding of your concerns and ideas for further action that may be taken by my Office in concert with Mr. Scully and the Centers for Medicare and Medicaid Services (CMS). I have appreciated the opportunity to read the testimony at the May 9th and July 11th hearings.

In your letter of invitation, you requested my views on the following issues: 1) administrative changes that OMB can make in ensuring that it properly understands the impact of reporting and recordkeeping requirements on small businesses; 2) the adequacy of OMB's review of reporting and recordkeeping requirements imposed by CMS contractors on small healthcare providers; 3) recommendations on necessary legislative changes in the Paperwork Reduction Act; and 4) our opinion on OMB's review of CMS regulations. These are important questions, and I look forward to working with the Committee and CMS to address the concerns that have been raised about the paperwork burdens that are placed on small healthcare providers. However, because I assumed the position of OIRA Administrator less than a week ago, I am not in a position at the present time to discuss what has happened in the past with respect to the relationship between CMS's contractors and small health care providers, nor can I offer at the present time any views or recommendations regarding what deficiencies may exist and how they can be remedied. However, I can assure you that one of my priorities as OIRA Administrator is to reinvigorate the Executive Branch's implementation of the Paperwork Reduction Act, and I am committed to working with OIRA staff and CMS to look into this matter in detail and to identify actions that should be taken to address any deficiencies that we identify.

I look forward to the challenge of administering the PRA in the Medicare and Medicaid programs. The PRA strikes a balance between the costs and benefits of government information. The PRA directs agencies to collect or create only information that is necessary for the proper performance of agency functions and that has practical utility. It seeks to maximize the usefulness of information collected, used and disseminated by the Federal government, while minimizing the Federal and private costs of providing and managing that information.

Our review of draft regulations under Executive Order 12866 must also complement our efforts under the PRA. Many information collections, recordkeeping requirements, and third-party disclosure requirements are contained in, or authorized by, regulations as monitoring or enforcement tools, while others appear in questionnaires and their accompanying instructions. When regulations operate by requiring the public to report, maintain, or disclose information, OIRA's information collection and regulatory reviews become closely intertwined.

There is no question that there are very substantial costs to the public of responding to the Federal Government's paperwork requirements. Americans spent some 7.4 billion hours complying with such requests in FY 2000.

I would like to briefly summarize the public and OIRA review that must occur before an agency can receive OIRA approval to collect information from the public. The 1995 PRA amendments mandate an extensive agency review process and provide significant opportunity for public participation in both the agency and OMB processes. In accordance with the goals of the PRA, the Act requires agencies to plan well in advance when they develop new collections of information and they consider extending ongoing collections of information. This advanced planning is necessary because agencies need to estimate potential burdens on respondents, prepare to disclose certain additional information to the public (e.g., time limits for recordkeeping requirements), and seek public comment in notices published in the Federal Register. Only after doing this, and considering changes based on any comments received, do agencies submit their paperwork clearance packages to OMB for review and approval. OIRA then reviews each agency information collection requirement before the agency can collect it, and reevaluates collections for their continued use at least once every three years. In cases where outstanding concerns remain, OIRA may call meetings with CMS staff, other affected Federal agencies, state groups, professional organizations, and other interested commenters. Our objectives are to (1) determine whether the agency's collection is necessary for the proper performance of the functions of the agency; (2) assure that the collection has practical utility and (3) assess whether these benefits justify the burden imposed on the public. If the agency cannot demonstrate to OIRA's satisfaction that the collection's need and practical utility justifies its paperwork burden, OIRA disapproves the collection and the agency may not go forward with the collection.

Through the PRA, OIRA must help agencies meet their obligation to the public by striking the proper balance. The PRA should not be used as grounds for denying the government the ability to collect from the public what is necessary to fulfill its statutory mission. On the other hand, collection of unnecessary or duplicative information imposes unjustified costs on the businesses or individuals that must respond, on the taxpayer, and on the economy as a whole.

OIRA is continuing to make serious efforts in this area, reviewing individual paperwork collection proposals and producing an annual Information Collection Budget that identifies, agency by agency, the agency initiatives under way to reduce paperwork burden and improve the quality of Federal data collection. I plan to place renewed emphasis on a coordinated effort to produce better results in this regard.

Thank you for this opportunity to testify and I look forward to working with you in the future.