Statement of Senator Fred Thompson

June 27, 1997

Regulatory Improvement and Government Accountability

Mr. Thompson. M _. President, I am pleased to be able to join with Senator Levin and several of our colleagues in introducing legislation to improve how the federal government regulates. This legislation is an effort by some of us to devise a common solution to the problems of our regulatory system. We have some real political differences among us, but we all share the same goals: clean air and water, injury free workplaces, safe transportation systems, to name a few of the good things that can come from regulation. We also all share the goal of avoiding regulation which unnecessarily interferes in people's lives and businesses, which costs more than it benefits, or which -- inadvertently -- causes actual harm.

I am pleased we are introducing this bill with Senators Glenn, Abraham, Robb, Roth, Rockefeller and Stevens. They have all toiled in the fields to improve regulation.

It was in this spirit that the legislation we are introducing today was drafted. The Regulatory Improvement Act will promote the public's right to know how and why agencies regulate, improve the quality of government decision making, and increase government accountability and responsiveness to the people it serves.

The problem is that agencies sometimes lose sight of common sense as they create regulations. Then even well-intentioned rules can produce disappointing results.

Consider the airbag issue that has been in the news lately. The National Highway Transportation Safety Administration required high-force air bags to maximize the odds of survival for adult males in highway crashes. But the deployment force from the these air bags can be so severe that they can injure children, women, and the elderly. Senator Kempthome has spoken about the tragic death of a young girl from Idaho who was decapitated when an air bag deployed during a low-impact collision. The agency is now considering the use of an air bag cut-off switch to avoid these tragedies. But M _. President, tragedies like this never should have occurred. We could have avoided needless deaths and injuries if the agency had carefully considered the risks that high-impact airbags pose to certain populations. I hope today's proposal will correct mistakes like this before they occur.

A second example is the removal of asbestos from our schools and other public buildings. Early in the 1980s, government scientists argued that asbestos exposure could cause thousands of deaths. Congress responded by passing a sweeping law that led cities and states to spend nearly $20 billion to remove asbestos from public buildings. After further research, EPA officials eventually concluded that ripping out the asbestos had been an expensive mistake. Ironically, removing the asbestos actually raised the risk to the public -- because asbestos fibers become airborne during removal. This mistake never would have occurred if these increased risks had been considered in the first place, I hope that would change under the Regulatory Improvement Act.

Finally, let me mention our Superfund requirements. Superfund was passed with the good intention of cleaning up America's toxic waste sites. Unfortunately, things are not working as well as intended. Superfund has become a legal and regulatory maze where a good 90% of insurers' costs and 20% of liable parties' costs are spent on lawyers and consultants -- not on cleaning up the environment. We also have to ask if we focusing on the most important priorities. For example, Superfund imposes extremely stringent standards for cleaning up lead in groundwater. Now, this is a good rule in many cases, because lead can be very toxic to children. The problem is that we may be overlooking more direct threats to children from lead. For example, lead paint in old houses can be a greater threat to children's health than lead that may be under some industrial site where there are no children. Last congress, our Committee heard testimony about how the Superfund law requires groundwater in a Newark rail-yard to be cleaner than drinking water -- at enormous cost. Now, if land is going to be used for industrial purposes, and no children will be there, does this make sense? The answer may be no -- those requirements may not improve the environment much, but they may drive businesses out of Newark. Nobody wants to open a business near a Superfund site and risk being sued. No wonder our inner cities are starved for jobs. In the end, we may be hurting the very people we should be concerned about -- the inner-city poor, those who already have to live with many risks in their daily lives, those who do not have clout here in Washington.

Virtually every serious student of the regulatory process agrees we can do better. One study by the Harvard Center for Risk Analysis found that if agencies simply set their priorities in a smarter way, we could save an additional 60,000 lives per year at no additional cost. M_. President, we don't have a moment to lose when we could save more lives. We can set aside partisan politics, and we all can agree this is the right thing to do.

Since I became Chairman of the Governmental Affairs Committee, I have been working closely with Senator Levin to forge bipartisan legislation with three major purposes:

First, to promote the public's right to know how and why agencies make regulatory decisions. This legislation helps the public to understand agency decisions by directing agencies to:

• Allow the public to comment and participate as rules are developed;
• Disclose the benefits and burdens of major rules;
• Disclose any environmental, health and safety risks a rule is designed to reduce, and make those risks understandable by comparing them with other risks familiar to the public; and
• Identify major assumptions and uncertainties considered in creating rules.

Second to improve the quality of government decision-making. Careful thought, grounded in science, will help us to target problems and to find better solutions. We must carefully craft new rules to be effective and efficient. Agencies will carefully consider the benefits and burdens of rules and use good scientific and technical information. Agencies will seek out smarter ways to regulate, including flexible approaches such as outcome-oriented performance standards and market mechanisms. We must modernize and improve rules already on the books. Independent committees will advise agencies how to revise rules to substantially increase the benefits to the public.

And finally, to increase government accountability to the people it serves. The Actwill require agencies to--

• Clearly present regulatory proposals so the public, the Congress and the President can understand the problem at hand and help find a solution;

• Explain any legal impediment or other factor hindering the agency from issuing cost-effective and sensible regulations, and describe any superior alternatives;

• Disclose realistic estimates of any risks addressed;

• Document changes made to proposed rules when the rules are reviewed by the Office of Management and Budget ("OMB");

• Disclose contacts from persons outside the Executive Branch with OMB when it is reviewing proposed rules, since such contacts may represent outside influence.

M _. President, while it is important to review what this legislation will accomplish, it also is important to note that this proposal avoids the contentious issues that thwarted agreement on legislation last Congress.

First, this legislation does not contain a "supermandate." That is, while we believe that cost-benefit analysis is an important tool to inform agency decision making, the results of the cost-benefit analysis do not trump existing law. The bill explicitly recognizes that sometimes an agency will issue a rule that would not pass a cost-benefit test. We only ask the agency to explain why it selected such a rule, including any legal impediment that hindered the agency from issuing a cost-justified rule.

Second, this bill does not contain a petition process that would allow outside parties to sue agencies in court to change particular rules that the litigant does not like. While we believe there are fruitful opportunities to update and improve old rules, we do not want to set up a review process that could create a litigation morass. Instead of a petition process, agencies will use independent advisory committees that would recommend a list of rules that could be improved to substantially increase net benefits to the public. The agency would defer to the recommendations of the advisory committee, but they could not be dragged into court if someone wanted a different rule to be reviewed.

Finally, this bill strikes a balanced approach to judicial review. We allow limited judicial review under the deferential arbitrary and capricious standard to ensure that agencies issue reasonable regulations using the tools of cost-benefit analysis and risk assessment. But this legislation does not provide a series of trip wires that could hinder agencies from performing their missions. In other words, we realize the agencies may not be perfect in complying with this law. They may make mistakes from time to time. We won't imperil important regulations because the agency made honest mistakes. We just ask the agency to make reasonable and honest decisions, and the public deserves no less.

M _. President, we are devoting vast resources to achieve our regulatory goals. By some estimates, the annual regulatory burden is nearly $700 billion per year -- almost $7,000 for the average American household. Our regulatory goals are too important, and our resources are too precious, to spend this money unwisely.

The Regulatory improvement Act will ensure that agencies conduct better economic and scientific analysis before they issue regulations. Government will be more open to the public, will better explain the problem, and will consider the best available information to solve the problem. Agencies will consider the benefits and burdens of different regulatory alternatives so we can reach the most sensible solutions. And agencies will modernize old rules on the books to increase the benefits to the public. In the process, we won't sacrifice our important national goals and values. We can make our government more effective, more open, and more accountable than ever.

(Note: This statement was provided to RiskWorld by Senator Thompson’s office, June 27, 1997.)

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