Appendix D:
Status of Regulatory Reform Initiatives

Agency Efforts

The Clinton Administration has made reinventing the federal government's regulatory system a top priority. Consistent with this commitment, the President and the Vice President charged agencies and departments with making the regulatory process open and results-oriented. Specifically, in early 1995, the President directed agencies to:
  1. Conduct a page-by-page review of all their regulations in the Code of Federal Regulations (CFR), eliminating or revising those that are outdated or otherwise in need of reinvention.
  2. Reward results, not red tape, by changing performance measurement systems to focus on ultimate goals (e.g., cleaner air and safer workplaces) rather than on the number of citations written and fines assessed.
  3. "Get out of Washington" and create grassroots partnerships between the frontline regulators and the people affected by their regulations.
  4. Negotiate, rather than dictate, by expanding opportunities for consensual rulemaking wherever possible.
  5. Waive fines or allow them to be used to fix the problem when a small business is a first-time violator and has been acting in good faith.
  6. Double the amount of time that passes before a report is required to be filed (e.g., a semiannual report should now be required annually) and accept reports filed electronically whenever possible.
In response, agencies have taken a number of concrete steps to change the way the federal government regulates and interacts with the public. Here are some of their achievements.

Cutting Obsolete Regulations

After the President asked agencies to eliminate obsolete rules and simplify those that remained, agencies did a page-by-page review of their contribution to the CFR. On June 11, 1995, President Clinton announced that agencies had identified 16,000 pages of the CFR that had outlived their usefulness and another 31,000 pages that needed reinventing. Eliminating rules just like making them requires sufficient time for public input. But agencies are well on their way toward reform. As of June 30, 1996, 70 percent of the rules to be eliminated were gone, and almost half of the rules to be reinvented had been fixed. The rest of the work to be done is well under way.

Part of the fix for those regulations being rewritten is adopting a "plain English" approach. One of the most important ways the government interacts with the general public is through the written word. Regulations should be written so that they make sense to the reader and address the reader's concerns. This plain-English approach has to start with those who write the regulations in the first place. The National Performance Review (NPR) and the Office of Information and Regulatory Affairs (OIRA) are working with agency representatives and the Office of the Federal Register (which publishes rulemaking documents) to develop plain English guidance for regulations writers. Workshops and an Internet reference site are part of the plan to produce federal regulations that are more easily understood by the American public. The Plain English Team is building on the success of the Department of the Interior and the Small Business Administration. These agencies have replaced entire sections of their previous regulations with one or two simple sentences that anyone can understand.

Rewarding Results, Not Red Tape

Equally as important as the content of the rules that regulatory agencies enforce is the way in which they enforce them that is, the way in which federal government inspectors and employees do their business. President Clinton, on March 4, 1995, directed federal regulatory agencies to change the way they measure the performance of their frontline regulators by shifting their focus from punishment to results. Almost half of the regulatory agencies report that they have completed this shift. The other half are continuing to make progress. While maintaining its commitment to safety, the federal government is developing new ways to meet goals that result in less red tape and more flexibility for the private sector. These changes are occurring on a number of fronts, as the following examples demonstrate.

Compliance Achievement Reporting System (CARS). Food and Drug Administration (FDA) field investigators and inspectors traditionally have been rewarded for detecting violations. Their goal was to collect evidence that resulted in enforcement. In fiscal year 1995, FDA's Office of Regulatory Affairs changed investigator/inspector performance plans to emphasize safety over disciplinary action. In addition, FDA's reporting system was modified and renamed (as CARS) to encourage actions resulting in immediate compliance. This reorientation enhances, supports, and encourages more open communication between FDA and industry. For example, FDA recently inspected a low-acid canned food canning operation and identified a malfunction in the sealing equipment. The canned food was not receiving a proper seal, a serious problem that could have led to a botulism outbreak. Rather than taking disciplinary action that would have required seizing the goods and initiating litigation, the FDA inspector recommended that the canning operation destroy all cans in the lot and repair the sealing equipment. The problem was resolved immediately; the FDA inspector achieved on-the-spot compliance for which he would get credit. This type of teamwork saved the agency and industry thousands of dollars and immediately protected consumers from dangerous products.

Strong, Targeted Enforcement Program (STEP-UP). In mid-1994, the Environmental Protection Agency (EPA) Region I, New England, undertook a comprehensive assessment of the resources it historically devoted to enforcement. The analysis indicated that these resources addressed so many different program priorities, no overall direction for enforcement was apparent. Therefore, Region I decided to target enforcement resources to situations where human health and the environment face the highest risk. The region is now devoting 80 percent of its inspection resources to these targeted areas to ensure that the resulting enforcement is comprehensive in sector coverage, thorough in case preparation, and aggressive in results. Enforcement success will not be measured just by numbers of inspections or cases initiated, but by the total reduction in pollutants or environmental threats faced by the public.

Joint Training on Hazard Analysis Critical Control Points (HACCP) Based Systems. Recognizing that safe food is more important to consumers than bureaucratic checkpoints, FDA is teaming up with restaurant operators to improve restaurant food safety. FDA and the National Restaurant Association have joined forces to design and deliver workshops to regulators and industry operatives. These workshops aim to bring FDA inspectors, state and local health officials, and restaurant personnel together to discuss ways all can use the cutting-edge scientific principles embodied in HACCP systems to improve food safety. As a result of this new training partnership, regulators and industry participants have begun to realize that both have expertise to share with each other that will help make foods safer. Communication, understanding, and cooperation are enhanced as government and industry work together toward a common goal.

Creating Grassroots Partnerships

Partnerships with the private sector that have produced good results are outlined in "Secret Three: Government Is in Partnership With Business." But many other opportunities for partnership exist as well. Those that have the most immediate interest in local decisions are the people that are affected by them. Consequently, states, tribes, and communities are anxious for greater autonomy and responsibility for results. Agencies, in response, are moving regulatory decisionmaking and accountability to the level closest to the problem. A major part of achieving a shift in authority is building the capacity at the state and local levels to solve local problems.

The stories highlighted below demonstrate the importance of federal-state-local partnerships. To solve problems effectively, different levels of government must understand and integrate the needs of culturally, geographically, and economically diverse communities into the decision making process.

North Boulder Project. When EPA became involved at a potential Superfund cleanup site in North Boulder, Colorado, several parties were entrenched in litigation over groundwater contamination. EPA informed the parties of the potential risks involved in taking a status quo approach to the groundwater problem and provided an opportunity for the community to develop a solution before the agency took any steps toward creating a Superfund listing. EPA then invited all parties including citizens to accept some responsibility for resolving the situation. It assumed the role of facilitator in hearing the various disputes that had arisen among the parties. Six months later, a technically sound solution to the groundwater problem in North Boulder was developed and paid for by residents; industry; and state, city, and county governments. This approach saved millions of private and federal dollars and saved the community from being immersed in the Superfund program for the next decade.

Interstate Technology Regulatory Cooperation (ITRC) Workgroup. The Department of Energy (DOE), the Department of Defense, and EPA, along with 22 state environmental agencies, have pioneered a successful partnering effort to improve the cleanup process for contaminated toxic sites. Together, these groups break down the barriers to using innovative environmental technologies for remediation and treatment of hazardous and radioactive wastes. "The success of these partnerships proves that the President's reinventing government initiatives reduce costs and expedite cleanup at DOE sites. Progress made by the ITRC will allow DOE to move forward toward becoming a performance organization," says Alvin Alm, Assistant Secretary for Environmental Management. Partnering has streamlined the regulatory process for environmental technologies and moved states and federal agencies toward results-oriented cleanup.

Resource Advisory Councils. In 1995, the Bureau of Land Management created 27 resource advisory councils in the Western states to advise the Bureau on issues concerning management of public rangelands. These councils are made up of 12 to 15 members appointed by the Secretary of the Interior from among individuals nominated by the public and state governors. Three groups are represented on these councils: commodity interest, such as ranchers, oil and gas developers, and miners; groups interested in natural and cultural preservation; and local citizens, including representatives of local government and Indian tribes in the area covered by the councils. The councils have been very successful at bringing diverse and often competing interests to the table to deal with each other on issues of mutual concern. The approach shows great promise in successfully solving long-standing problems of public land management. Many individuals who were initially skeptical of the councils are now quite supportive of their work and are optimistic that they will be a strong force in resolving disputes about the uses of public land in the West.

Negotiating, Rather Than Dictating

Partnerships can lead to a lot more than just improved relationships. Including partners in the development of rules can educate federal agencies about specific concerns and needs and, ultimately, can lead to a better, more flexible, regulatory framework. The President is encouraging consensual rulemaking, both through partnerships and the formal process of negotiated rulemaking. In addition, federal agencies are encouraging communication in a wide range of areas. Some highlights of these negotiation and communication efforts follow.

Federal Railroad Administration (FRA). Rail workers performing routine maintenance on railroad tracks were sometimes hit and killed by trains running on adjacent tracks. There was no federal safety rule to address this issue. FRA's initial inclination was to rely on the traditional rulemaking process the agency would write a rule, affected parties would comment, FRA would revise the proposed rule, and the cycle would continue until the final rule was issued. This is a time-consuming process that minimizes real and meaningful communication. So this time, FRA decided to do it differently: It brought interested parties into roundtable discussions from day one. Out of those conversations grew a powerful negotiated rulemaking process and a proposed rule that is satisfactory to all. The final rule should be issued in early fall of 1996, well ahead of the traditional rulemaking timeframe.

The Access Board. The Americans With Disabilities Act (ADA) was passed to give all Americans greater access to facilities and opportunities. The U.S. Architectural and Transportation Barriers Compliance Board, commonly known as the Access Board, wrote guidelines for accessibility required in the construction or alteration of any building covered by ADA. When the guidelines were issued, they often were met with confusion, anger, and uncertainty. Those who had to comply with the guidelines found them to be unclear and, in some cases, in conflict with existing building codes. Disability advocates grew concerned that if people were confused by Access Board guidelines, they might refuse to comply with ADA.

To address these concerns, the Access Board set up an advisory group that included representatives from all sides of the issue and committed itself to working through the problems the guidelines had created. As a result, groups that always seemed to meet on the battleground to resolve issues are now working together to find common ground. The rules are being rewritten, and ADA will now be implemented in a more inclusive and effective way.

The Orange County Central and Coastal Natural Communities Conservation Plan (NCCP). In Orange County, California, biologists cited 42 species they believe are in danger of extinction, six of which are already on the endangered species list. At the same time, the area is grappling with suburban development and land values as high as ˆ1 million per acre. To preserve the quality of life in Orange County and allow developers to build free of red tape, local citizens, businesses, and state and local governments developed a landmark conservation plan that will protect the wildlife-rich coastal sagebrush landscape in the area while permitting development. By shifting its emphasis from species protection to a multi-species habitat conservation approach, the Department of the Interior is able to offer participating landowners long-range certainty about the future development of their land.

NCCP is a first of its kind partnership among federal, state, and county governments; municipalities; land developers; and other property owners sharing a common interest in protecting open space. The plan will serve as a model for the nation, pointing the way to protect wildlife and conserve open space in areas of increasing urban pressure. It creates a win-win situation for both economic security and species conservation.

Putting Fines to Good Use

Even companies that are trying to comply with laws and regulations can make mistakes. Many of these mistakes can be prevented with a little education another reason that partnering is so important. President Clinton asked agencies to give companies a break when they have a first-time offender who has been acting in good faith. As a result, over 50 percent of regulatory agencies have taken steps to introduce waivers into their enforcement strategy. By being flexible where appropriate, agencies are finding that industry becomes better educated and better able to comply. For example:

Making Reporting Easier

While the federal government needs certain information to compile national statistics, allocate resources, etc., the need to reduce reporting burdens is just as important. Much of the information currently gathered by the federal government is required by statute. Agencies do, however, have some discretion in their collection efforts. Notably, they can collect data less frequently, thereby imposing less burden on reporting entities. As a result of the President's April 24, 1995, memorandum permitting agencies to double reporting periods, over eight million work hours will be eliminated by having agencies extend the time that passes between report filings. The Paperwork Reduction Act (Public Law 104-13), which the President signed in May 1995, will also lead agencies to reduce the amount of required reporting.

Regulatory Sector Report Updates

In addition to their work in the areas highlighted above, selected federal regulatory agencies have also prepared 10 reports that contain recommendations for reinventing entire regulatory systems. Following are brief descriptions of these reports and agency progress in meeting report recommendations organized chronologically by publication date. Also included are agency contact points for obtaining additional information about sector-specific regulatory reform.

Reinventing Environmental Regulations

Released March 17, 1995. For plan copies or additional information, contact Jay Benforado at (202) 260-4255.

Principles for Regulatory Reform. EPA protects the public health and safeguards and improves the natural environment. It is focusing its regulatory review around preventing pollution rather than simply controlling pollutants and cleaning them up. Further, the agency is designing regulations to achieve environmental goals that minimize costs to individuals, businesses, and other levels of government; to use market incentives to achieve environmental goals whenever appropriate; and to revise government regulations so they can be understood by those affected by them. EPA is basing environmental regulations on the best scientific and economic analysis and fostering collaborative not adversarial decisionmaking in devising environmental standards. Additionally, EPA is committed to protecting minority and low-income populations from disproportionately high and adverse health or environmental impacts. The agency is determined to protect national goals for public health and the environment as it compels individuals, businesses, and government to take responsibility for the impacts of their actions.

Agency Progress. Of the 39 recommendations laid out in EPA's initial report, the agency has completed 11 and is making significant progress on 16 others. Here are some highlights:

Reinventing Drug and Medical Device Regulations

Released April 5, 1995. For plan copies or additional information, contact Brad Stone at (301) 443-3285.

Principles for Regulatory Reform. FDA is the agency within the Department of Health and Human Services charged with ensuring that drugs, vaccines, and medical devices are safe and effective, and that foods meet basic safety standards. In carrying out its regulatory review, FDA carefully considered the financial burdens that its requirements impose on industry and consumers. It looked for ways to lessen these burdens so that its regulatory systems would not stand in the way of bringing beneficial new products to market. As a result, FDA is now implementing performance standards, rather than command-and-control regulations, whenever possible. FDA expedites product review without sacrificing the public health and safety. The agency also is eliminating unnecessary requirements that may once have been appropriate but that are now no longer necessary for public health.

Agency Progress. Of the 14 recommendations laid out in FDA's initial report, the agency has completed 10; it is making significant progress on the remaining four. Here are some highlights:

Reinventing Worker Safety and Health Regulations: The New OSHA

Released May 16, 1995. For plan copies or additional information, contact Frank Frodyma at (202) 219-8021.

Principles for Regulatory Reform. The Occupational Safety and Health Administration (OSHA) within the Department of Labor ensures safe and healthy working conditions for America's workers. OSHA's approach to regulatory reform dramatically increases safety and eases the adversarial relationship between regulators and industry by placing primary responsibility for ensuring safety in the hands of managers and workers at worksites across the country. In its report, OSHA changed its approach to regulation by focusing on key building block rules such as training programs, maintenance of records, monitoring of risk exposure, and medical surveillance. In addition, OSHA is identifying clear and sensible priorities, eliminating or fixing out-of-date or confusing standards, and emphasizing interaction with business and labor in rule development. Also, to save lives and protect against workplace injuries and illnesses, OSHA is developing performance measures so that programs will be evaluated based on results achieved rather than procedural checkpoints.

Agency Progress. Of the 15 recommendations laid out in OSHA's initial report, the agency has completed five and is making significant progress on the remaining 10.

Reinventing Pension Regulations

Released June 11, 1995. For copies of the report or additional information, contact Vicki Judson at (202) 622-1357.

Principles for Regulatory Reform. Among their many tasks, the U.S. Departments of the Treasury and Labor, including the Pension Benefit Guaranty Corporation, regulate pensions to ensure that pension tax benefits are used to increase retirement savings for a broad cross-section of workers and that all participants in pension plans get the benefits they have earned. The two departments, working in coordination with the National Economic Council, have developed recommendations that would eliminate complex pension rules that were outmoded, redundant, or no longer necessary to achieve policy goals. The basic aim here is to reduce the administrative and paperwork burden on employers.

Agency Progress. Of the 32 recommendations laid out in the initial report, 21 have been implemented, although some have been modified in the legislative process. Many of these were included in the recently enacted Small Business Job Protection Act of 1996 (Public Law 104-188), which, among other things:

The Administration will continue to pursue implementation of the remaining recommendations both legislatively and administratively. For example, steps will be taken in further simplifying the rules applicable to multi-employer plans, further promoting portability, and better ensuring that moderate and lower wage workers receive a fair share of the benefits.

Reinventing Service Regulations to Small Business: The New Small Business Administration

Released June 11, 1995. For plan copies or additional information, contact Ronald Matzner at (202) 205-6882.

Principles for Regulatory Reform. SBA champions the entrepreneurial spirit of America's small business community to create the jobs and opportunities necessary for this country to remain competitive in the global marketplace. SBA works with the private sector to expand access to credit and capital, provide needed training and assistance, and serve as an advocate and watchdog for small business owners. In line with this reinvention enterprise, SBA is reducing paperwork burdens on small business and streamlining regulations as much as possible. Most significantly, SBA ensures that affected small businesses are included at every important step in the regulatory development process.

Agency Progress. Of the 18 recommendations laid out in SBA's initial report, the agency has implemented 10; it is making significant progress on six others.

Reinventing Health Care Regulations

Released July 11, 1995. For plan copies or additional information, contact Mary Ann Troanovitch at (202) 690-7890.

Principles for Regulatory Reform. The primary mission of the Health Care Financing Administration (HCFA) is to ensure health care security for nearly 37 million Medicare beneficiaries and in partnership with state governments for another 36 million Medicaid beneficiaries. HCFA's approach to regulatory reform is defined by three principles underlying the agency's new, improved approach to customer service:

At HCFA, communication, cooperation, and partnership are the guiding principles for the regulatory process, replacing the adversarial environment that often existed in the past.

Agency Progress. Of the 13 regulatory reform initiatives in HCFA's initial report, the agency has completed five and is making significant progress on the remaining eight. Here are some highlights:

Reinventing the Regulation of Drugs Made From Biotechnology

Released November 9, 1995. For plan copies or additional information, contact Lisa Helmanis at (301) 443-3480.

Principles for Regulatory Reform. FDA houses two product centers responsible for helping to regulate biotech drugs: the Center for Biologics Evaluation and Research and the Center for Drug Evaluation and Research. In accordance with FDA's efforts to reform the regulation of biotech drugs used for therapy, these centers are undertaking initiatives that will greatly streamline the regulation of biotech drugs, harmonize manufacturing requirements, and facilitate the development and marketing of biotech drugs while not diminishing the safety and effectiveness of these drugs. According to the biotechnology industry, these changes will save companies millions of dollars, reduce required paperwork by thousands of pages, and cut months off drug development time.

Agency Progress. FDA committed to six specific reforms in the regulation of biotech products. To date, the agency has completed three of these commitments.

Reinventing Food Safety Regulations

Released January 1996. For plan copies or additional information, contact Judith Riggins at (202) 720-7025.

Principles for Regulatory Reform. FDA is charged with ensuring that foods are safe, wholesome, and properly labeled. The agency also protects consumers from economic fraud and promotes sound nutrition. The Food Safety and Inspection Service (FSIS) is a consumer protection safety agency of the U.S. Department of Agriculture that regulates meat and poultry products. FDA and FSIS are working together to adopt a common approach to food safety. The agencies agree that the regulatory efforts that successfully protected the public over the past century must be reassessed as new food safety inspection techniques are developed. As they design new food safety regulations, both agencies are shifting away from command-and-control requirements to performance standards. They are eliminating unnecessary requirements in regulation and incorporating science-based systems of preventive controls for food safety. FDA and FSIS are reinventing food safety regulations to provide consumers with safe foods and the knowledge to make informed choices in the marketplace.

Agency Progress. These initiatives require that FDA and FSIS work both independently with their respective constituencies and closely with each other. As a result of that work, the Administration recently announced a new regulatory framework to ensure safe food for Americans which uses modern science and performance standards. Here are some highlights:

Reinventing the Regulations of Cancer Drugs

Released March 29, 1996. For plan copies or additional information, contact Randy Wykoff at (301) 827-3320.

Principles for Regulatory Reform. As the agency charged with ensuring that drugs and vaccines are safe and effective, FDA has demonstrated a long-standing commitment to the prompt consideration and when appropriate early approval of new therapies for cancer patients. FDA is providing greater patient access to potentially effective cancer treatments and accelerating the entire cancer drug approval process for drugs that show evidence of tumor shrinkage. In addition, FDA now provides patient representation on its cancer-related advisory committees. The agency is undertaking these initiatives after careful consideration of suggestions and advice offered by patients and their advocates, pharmaceutical industry representatives, and physicians and researchers.

Agency Progress. As this report is quite recent, no formal assessment of progress has been undertaken. FDA is moving forward to implement all initiatives. For example:

Reinventing the Regulation of Animal Drugs

Released May 10, 1996. For plan copies or additional information, contact Lisa Helmanis at (301) 443-3480.

Principles for Regulatory Reform. FDA is charged with ensuring that drugs used to treat animals are safe and effective. In reinventing its regulation of animal drugs, the agency is working on a series of regulatory and procedural initiatives designed to speed the development and review of new therapies to treat animals. The central concept behind these reforms is to encourage greater direct interaction between animal drug sponsors and FDA at every stage of the drug development process. This close interaction provides manufacturers with greater guidance in study design and data submission, and grants FDA reviewers quicker access to the pivotal data on which drug approval decisions can be based. These reforms promise to cut FDA's review time significantly for a new animal drug application and thereby shorten products' overall development time.

Agency Progress. As this report is quite recent, no formal assessment of progress has been undertaken. FDA is moving forward to implement all initiatives. For example:

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