OMB Director’s Exit Memo and Retrospective Review
As part of our online symposium on the ABA Section of Administrative Law and Regulatory Practice 2016 Report to the President-Elect, Adam White had a great post about the ABA AdLaw Section’s recommendation on the importance of retrospective review.
Yesterday, Shaun Donovan, the director of the Obama Administration’s Office of Management and Budget, posted his Exit Memo. The whole memo is worth a read, but I thought I’d highlight here his report on retrospective review:
The President also challenged the Federal government to establish and institutionalize a retrospective review process – an unprecedented, government-wide review of existing regulations that was launched in 2011 to create a more cost-effective, evidence-based regulatory system for the 21st century. This initiative is a hallmark of this Administration’s commitment to a transparent and accountable regulatory process. Its requirement for bi-annual, public updates of agency progress on retrospective review allowed for public participation and identification of areas where regulations were overly burdensome.
From maximizing savings and reducing burdens for State and local governments and industry, to eliminating tens of millions of hours of paperwork burden for our nation’s citizens and businesses, to removing duplicative and burdensome regulatory provisions from the books altogether, this Administration has made more progress on retrospective review and achieved more cost savings than any prior Administration.
To date, the retrospective review initiative has achieved an estimated $37 billion in cost savings, reduced paperwork, and produced other benefits for Americans over five years. As of July 2016, agencies had completed more than 800 retrospective review initiatives. While a key aspect of retrospective review is to review and revise regulations to better adapt to a dynamic world of evolving technology and changing circumstances, the President has directed agencies to go beyond this and eliminate rules or provisions of rules that are unnecessary. In fact, to date, agencies have removed more than 70 notable regulatory provisions from the books.
This effort has driven down costs for the American consumer. For example:
- The Environmental Protection Agency eliminated part of a 40-year-old rule that required some dairy farmers to prove that they could contain a milk spill – because milk had been classified as an oil because it contains animal fat. By exempting milk and milk product containers from the Oil Spill Prevention, Control, and Countermeasure (SPCC) program, the EPA helped milk and dairy industries save an estimated $800 million over five years, which, in turn, can help reduce costs for consumers.
- The Environmental Protection Agency also eliminated an obligation on many states to require local gas stations in areas with moderate ozone pollution to install plastic sleeves over gas pump nozzles and other associated equipment, also known as an air pollution vapor recovery system. This measure was imposed in 1990, before vehicles were required to have built-in vapor recovery technologies. Once the vehicle vapor recovery technology became widespread, EPA finalized a rule eliminating the longstanding requirement for this now redundant technology. The anticipated five-year savings from this reform are estimated at $270 million.
- The Department of Labor worked to harmonize its chemical hazards warning requirements with those of other nations in 2012. This provided a common and coherent approach to classifying chemicals and communicating hazard information on labels and safety data sheets, helping to reduce trade barriers and saving employers more than an estimated $3 billion over five years.
- The Department of Transportation rescinded a requirement that commercial motor vehicle drivers operating in interstate commerce submit, and motor carriers retain, driver-vehicle inspection reports when the driver has neither found nor been made aware of any vehicle defects or deficiencies. The final rule, issued in 2015, is projected to save over 40 million hours in paperwork burden per year, for approximately $8.9 billion in savings over five years.
- And in December of 2016, the Federal Aviation Administration released a rule promoting increased flexibility in the airline certification process. This rule also promotes regulatory cooperation and design with our European, Canadian and Brazilian airline partners. This harmonization should lower costs for airplane and engine manufacturers with estimated benefits of $27.8 million.
The progress to date makes a strong case for the benefits of an ongoing, thoughtful review of regulations already on the books. Each dollar saved, each paperwork burden hour reduced, and each retrospective review initiative conducted means bigger savings, greater efficiencies, and a more effective government for the American people. We worked hard to institutionalize this proven and effective practice, including requesting that agencies submit reports in January 2017. I encourage the next Administration to continue this effort, pursuing a thoughtful and data-driven approach to assessing regulations that are currently on the books.
Definitely go check out the full memo here.