REGULATORY ACCOUNTING: COSTS AND BENEFITS OF FEDERAL REGULATIONS HEARING BEFORE THE SUBCOMMITTEE ON ENERGY POLICY, NATURAL OF THE COMMITTEE ON HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION MARCH 12, 2002 Serial No. 107-155 Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house 84-600 PDF U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 2003 For sale by the Superintendent of Documents, U.S. Government Printing Office Graham, John D., Ph.D., Administrator, Office of Information and Regu- Miller, James C., III, former Director, Office of Management and Budget, counselor to Citizens for a Sound Economy; Thomas D. Hopkins, former Deputy Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, dean, College of Business, Rochester Institute of Technology; Susan Dudley, deputy director, regulatory studies program, Mercatus Center, George Mason University; Joan Claybrook, president, Public Citizen; and Lisa Heinzerling, professor of law, Georgetown University Law Center Letters, statements, etc., submitted for the record by: Claybrook, Joan, president, Public Citizen, prepared statement of Dudley, Susan, deputy director, regulatory studies program, Mercatus Center, George Mason University, prepared statement of Graham, John D., Ph.D., Administrator, Office of Information and Regu- latory Affairs, Office of Management and Budget, prepared statement Heinzerling, Lisa, professor of law, Georgetown University Law Center, Hopkins, Thomas D., former Deputy Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, dean, Col- lege of Business, Rochester Institute of Technology, prepared statement Miller, James C., III, former Director, Office of Management and Budget, Ose, Hon. Doug, a Representative in Congress from the State of Califor- nia, prepared statements of.... Sullivan, Thomas M., Chief Counsel for Advocacy, U.S. Small Business 11 Tierney, Hon. John F., a Representative in Congress from the State 164 REGULATORY ACCOUNTING: COSTS AND TUESDAY, MARCH 12, 2002 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY POLICY, NATURAL COMMITTEE ON GOVERNMENT REFORM, Washington, DC. The subcommittee met, pursuant to notice, at 2 p.m., in room 2154, Rayburn House Office Building, Hon. Doug Ose (chairman of the subcommittee) presiding. Present: Representatives Ose, Otter, Duncan, Tierney, and Kucinich. Staff present: Dan Skopec,_staff director; Barbara F. Kahlow, deputy staff director; Alison Freeman, clerk; Yier Shi, press secretary; Melica Johnson, press fellow; Elizabeth Mundinger and Alexandra Teitz, minority counsels; and Jean Gosa and Earley Green, minority assistant clerks. Mr. OSE. Good afternoon. Welcome to today's hearing. Last fall, Mark Crain and Thomas Hopkins estimated that in 2000 Americans spent $843 billion to comply with Federal regulations. Their report, commissioned by the Small Business Administration, states, "Had every household received a bill for an equal share, each would have owed $8,164." Their report also found that, "in the business sector, those hit hardest by Federal regulations are small businesses. Firms employing fewer than 20 employees face an annual regulatory burden of $6,975 per employee, a burden nearly 60 percent above that facing a firm employing over 500 employees." Regulations add to business costs and decrease capital available for investment. Today, we will examine the Office of Management and Budget's-we will refer to them as OMB-annual regulatory accounting reports. They were intended to disclose the off-budget costs and benefits associated with Federal regulations and paperwork. Because of congressional concern about the increasing costs and incompletely estimated benefits of Federal rules and paperwork, in 1996, Congress required OMB to submit its first regulatory accounting report. In 1998, Congress changed the annual report's due date to coincide with the President's budget. Congress established this simultaneous deadline so that Congress and the public could be given an opportunity to simultaneously review both the on-budget and off-budget costs associated with each Federal agency imposing regulatory or paperwork burdens on the public. In 2000, Congress made this a permanent annual reporting requirement. The |