Here's an OMB Watch update on President Bush's recent changes to the regulatory process and Congress's efforts to stop them:

Congress Fails to Mitigate Executive Order's Damaging Impacts

In January, President Bush made significant changes to the regulatory process by issuing Executive Order 13422. (Click here for background.) Since then, OMB Watch has voiced its opposition to E.O. 13422 for three primary reasons:

• It requires agency regulatory policy officers to be presidential appointees and gives them new power to start and stop regulations.
• It shifts the focus for promulgating regulations from the identification of a problem like threats to public health to the identification of a "specific market failure."
• It allows the White House to exert control over agency guidance documents — subjecting a new class of information to political considerations and possible delay.

On June 28, the House passed the Financial Services and General Government Appropriations Act, FY 2008, and included an amendment which would have prevented the White House from spending money to implement any part of E.O. 13422. Although the bill would not have fully countered the E.O.'s effects, it would have eliminated some White House interference in agencies' work this year. The amendment was offered on the House floor by Reps. Brad Miller (D-NC) and Linda Sanchez (D-CA).

The inclusion of Miller and Sanchez's amendment created a golden opportunity for the Senate to follow suit and pass a defunding provision of its own. OMB Watch asked you to contact your senators and urge them to pass such a provision and send a clear signal to Bush that his attempts to erode our public safety net would not go unnoticed.

And you responded whole-heartedly. More than 2,000 citizens sent emails through our website to their senators. A similar effort by the Union of Concerned Scientists, a nonprofit group that advocates for scientific integrity in public policy, generated more than 10,000 phone calls.

However, the Senate never debated or voted on their version of the Financial Services appropriations bill. Congress was unable to complete its work on individual appropriations bills and instead, resorted to a consolidated, or omnibus, bill in order to avoid a government shut down.

Unfortunately, when preparing the omnibus bill, the Democratic leadership decided to remove the Miller/Sanchez provision in spite of the thousands of citizens who had called on their representatives to take action. The omnibus appropriations bill cleared both the House and Senate, and is expected to be signed by the president this week.

OMB Watch is disappointed that Congress was unable to combat Bush's efforts to expand White House interference in the regulatory process. On the amendment defunding E.O. 13422 (along with a number of other contentious provisions), the Democratic leadership lacked the broad congressional support necessary to overcome the Bush administration's attacks on the regulatory process.

What's next?
OMB Watch will continue to monitor developments on E.O. 13422 and look for ways to oppose it whenever possible. Your voice will continue to be critical in proving public opposition to Bush's changes and calling on Congress to create a more responsive regulatory system that reflects the positive role government can play in our society. Thank you for your continued support.

Yesterday, the House Energy and Commerce Committee unanimously approved H.R. 4040, the Consumer Product Safety Commission Modernization Act of 2007. The bill is similar to a bill passed by the Senate Commerce Committee in October which would expand the resources and authority of the agency.

Among other things, the bill would:

• Dramatically increase the budget and staffing at CPSC and dedicate funds for improving its much-maligned testing facility;
• Require third-party testing and certification for children's products;
• Ban lead in children's products; and
• Enable CPSC to levy greater fines on delinquent manufacturers.

Both the House and Senate bills await floor consideration. Legislators had hoped to finalize the legislation by the end of the year, wanting to be seen taking positive action on children's product safety during the Christmas-shopping season.

Meanwhile, CPSC announced two more recalls of children's products due to high levels of lead. CPSC has announced 106 such recalls in 2007, totaling more than 17 million individual products. That's six times more than the number of products recalled in 2006.

Last week, the House Small Business Committee unanimously approved H.R. 4458, the Small Business Regulatory Improvement Act of 2008 (SBRIA). Among other things, SBRIA would amend the Regulatory Flexibility Act to force agencies to perform yet more analysis of proposed regulations' impact, while continuing to allow industry lobbying groups to have access to agency proposals before they are released to the public.

The specters of "regulatory burden," "excessive paperwork requirements," and "bankrupting compliance costs" loomed over the mark-up hearing as Democrats and Republicans alike parroted the usual industry objections to regulation. (No one raised the opposition to the bill voiced by OMB Watch and a broad coalition of other groups expressed in a letter sent to all committee members.)

A press release from Chairwoman Nydia Velasquez (D-NY) touting the approval of the bill states, "Just this week, the Federal Register exceeded 70,000 pages for the year, making clear the threat that small businesses face in their path to success."

Huh? That's the Democrats' rationale for this legislation? Are the Federal Register pages literally blocking their path? Are owners and employees unable to traverse the hallways of their office because they are littered with old copies of the Federal Register? That certainly would be an impediment to success, but nothing that couldn't be solved with a well-organized office cleaning day.

Before moving to the House floor, the bill will also have to go through the House Judiciary Committee which has jurisdiction on the bill. (Because the bill would amend the part of the U.S. Code pertaining to administrative procedure, it is an administrative law issue and therefore falls under the jurisdiction of the Judiciary Committee's subcommittee on Commercial and Administrative Law.)

No word yet on hearings from the Judiciary Committee. Stay tuned to Reg•Watch for more.

Resources on SBRIA:

OMB Watch fact sheet on the bill

The Regulatory Flexibility Act, annotated as it would read if amended by SBRIA

As Reg•Watch blogged Tuesday, Sen. Kit Bond (R-MO) was pushing an amendment which would have forced agencies to analyze a rule's potential impact on "agricultural entities." Because of the way the amendment is written, this designation could apply to almost any business or even entire industries.

In addition to the analytical requirements, the amendment would force EPA and the Department of the Interior (two big environmental regulatory agencies) to convene special panels of agricultural industry representatives who would be allowed to review and edit rules before they are released to the public.

The Senate has finished debate on the bill and the amendment was never voted on. Thanks to those of you who contacted your senators and urged them to oppose the Bond amendment!

Thursday morning, the House Small Business Committee is scheduled to mark-up the Small Business Regulatory Improvement Act. The Act would amend the Regulatory Flexibility Act which requires agencies to perform a "regulatory flexibility analysis" on rules which are "likely to have a significant economic impact on a substantial number of small entities." (The term small entities primarily refers to small business, but may also refer to non-profit organizations or small governmental jurisdictions.) The Regulatory Flexibility Act also requires agencies to review such rules at least every 10 years.

The bill being considered by the Small Business Committee would create additional analytical burdens for agencies. The bill would do this by changing the definition of "economic impact." Under the bill, the definition would so broad as to encompass almost any agency rule. Because of that, agencies would have to expend valuable resources hunting down and attempting to guess at a proposal's potential impact on small entities.

OMB Watch, along with environmental groups, unions, and other good government groups, has written committee chairwoman Nydia Velasquez outlining the groups' concerns. Download it here.

Reg•Watch Update: "House Panel Moves Regulatory Analysis Bill"

Sen. Kit Bond (R-MO) has introduced an amendment to the Farm, Nutrition and Bioenergy Act (H.R. 2419) which would add another analytical burden to the regulatory process. Bond's amendment would require federal agencies to perform additional impact analyses on any rules that may affect a "substantial number of agricultural entities." Because of the way the amendment is written, this designation could apply to almost any business or even entire industries.

In addition to the analytical requirements, the amendment would force EPA and the Department of the Interior (two big environmental regulatory agencies) to convene special panels of agricultural industry representatives who would be allowed to review and edit rules before they are released to the public.

For more information, see a factsheet OMB Watch has sent to all Senate members. Ultimately, the amendment could further slow the rulemaking process and give industry representatives yet another opportunity to alter public policy.

The Senate may consider Bond's amendment as early as this afternoon. Call your senators and tell them to oppose Bond amendment 3771. Senate office phone numbers: senate.gov/general/contact_information/senators_cfm.cfm

Update on the Bond Amendment

Friday, Reps. John Dingell and Bart Stupak wrote to EPA administrator Stephen Johnson asking about the agency's transparency policies. The congressmen point out that previous EPA administrators have issued memos outlining proper transparency measures for agency activity but that Johnson has not.

Dingell and Stupak do not identify any specific points of opacity or examples of EPA cover-ups; but one issue piqued Reg•Watch's interest. In their final question to Johnson (to which they request responses by Dec. 17), the congressmen ask the following:

Administrators [Lee] Thomas and [William] Reilly also stated that "procedures have been established with OMB to ensure that such material received by OMB from outside parties will be placed in the EPA public record." What specific procedures are in place in this Administration to ensure that materials from outside parties received by OMB on EPA rules are placed in the EPA public record? Please provide a copy of any documents that describe these procedures.

For EPA's current revision to the national standard for ozone pollution, EPA's online docket does contain two letters sent to then-OMB Director Rob Portman from the Utah Manufacturers Association and the Mississippi Manufacturers Association. (Incidentally, both groups lobbied against a tighter standard, and the White House has worked to undermine scientific evidence in favor a stricter regulation.)

EPA is right to post such information. Laudably, EPA has also posted correspondence between OMB and agency officials. However, without knowing EPA's policy on transparency, we do not know whether the agency has posted all relevant information.

Reg•Watch will be interested to see if EPA is fully disclosing communications with OMB. Public access to these correspondences is important because, as we have seen all too often, OMB's Office of Information and Regulatory Affairs can influence or materially alter the policies of EPA and other agencies.