Not long before announcing that he will be leaving the administration, Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein penned a memo to regulatory agencies urging “significant quantifiable reductions in paperwork burdens.” This latest memo comes on the heels of a variety of Executive Orders by President Obama on regulatory reform: 13610, 13609, 13579, and 13563.
Rather than issuing general guidance and vague requests for reform, Sunstein listed numbers in his recent memo. He called for every agency to eliminate at least 50,000 hours in annual paperwork burdens and for the eight agencies with the highest paperwork burdens to each reduce at least two million hours. Crunching the numbers shows that this reform will only be a “meaningful step” – again to quote from Sunstein’s memo – if most agencies can find ways to meet and exceed the higher figure.
According to White House data, there are more than 9,100 active OMB control numbers, requiring more than 10.34 billion hours of annual paperwork compliance. To put this number in perspective, New York City could build 1,477 Empire State Buildings in the equivalent amount of time.
There are 58 regulatory agencies that submit plans for the biannual Unified Agenda. If all 58, including independent agencies not bound by the memo, eliminated just 50,000 hours each (2.9 million hours total), it would reduce the cumulative burden by 0.00028 percent, a relative pittance. If the eight high-burden agencies also produced an additional two million hours in savings each, that would still only reduce the cumulative burden by 0.0018 percent.
In 2011 alone, there were at least 121 regulations with paperwork burdens exceeding 50,000 hours. In addition, the Consumer Financial Protection Bureau’s (CFPB) first rule governing remittance transfers imposed a 7.6 million-hour burden, enough to wipe out much of the savings called for in the recent Sunstein memo.
If agencies, independent or otherwise, really want to make a dent in paperwork burden, they will have to go big. Hitting the two million hour reduction each would generate 116 million hours of total savings. This would cut the cumulative burden by a more visible 1.12 percent. This result would not be trivial. Cutting more than 116 million hours would be the equivalent of wiping out the SEC Form 10-K burden, by a factor of five.
Of course, making this more visible mark presupposes 100 percent agency participation. Although some agencies have published “economically significant” deregulatory moves lately, there are several agencies — such as the National Labor Relations Board, the Department of Energy, and the Department of Interior — that have failed to act.
Of course, results from the past two years have yielded limited success. In 2012, Centers for Medicare & Medicaid Services (CMS), Environmental Protection Agency (EPA), Federal Energy Regulatory Commission (FERC), and the Federal Railroad Administration published several billion in regulatory cost savings from final rules. Combined, these regulations have also eliminated millions of paperwork burden hours.
If the administration wants to succeed in hitting its two million hour goal, it will take more than participation from a handful of executive departments. For example, the Sunstein memo highlighted the Securities and Exchange Commission (SEC) for imposing an “unusually high paperwork [burden].” Even a two million hour reduction would cut SEC’s total burden by just 0.0056 percent.
Sunstein’s latest memo is an admirable attempt to nudge agencies toward streamlining their regulatory processes. But after four executive orders, several formal memos, and 18 months, when will dormant agencies respond? Even if they do respond, they will have to meet, and exceed, Sunstein’s goals to achieve a measurable dent in the cumulative burden.
Agencies looking for other guidance beyond the Sunstein memo should heed the recommendations of the Administrative Conference of the United States. Although these recommendations are not earth-shattering in their scope, the Conference noted that the Paperwork Reduction Act (PRA), last amended in 1995, “has not been updated to account for evolved technologies.” Sunstein also highlighted this point, urging the “use of electronic communication and ‘fillable fileable’ forms (or data systems).”
Perhaps the Conference’s most salient recommendation is its urging of agencies to realize that information collections “requests” are just that: requests, not final regulatory policy. The Conference’s report suggests that instead of just reflexively imposing more paperwork burdens that “agencies should use public engagement as a way of improving their preliminary information collection plans.”
The Conference’s other notable suggestion involved reframing the three-year approval for information collection to a five-year period. This could “enable OMB to shift its focus to those information collections that require the most scrutiny.”
Perhaps another White House memo isn’t the answer. If agencies can’t rise to the challenge after numerous executive orders and memos, fundamental statutory reform might be the only answer.
Sam Batkins is the Director of Regulatory Policy at the American Action Forum. He previously worked for the U.S. Chamber of Commerce, Institute for Legal Reform and the National Taxpayers Union.