NP Action - Paperwork Reduction Act

Paperwork Reduction Act

In 1942 Congress passed the Federal Reports Act, which required that the government collect information "with a minimum burden upon . . . [the public] and at a minimum cost to the Government." To ensure this result, Congress authorized the Bureau of the Budget (which became OMB in 1970) to "determine whether or not the collection of information by a Federal agency is necessary for the proper performance of the functions of the agency or for any other proper purpose."

Despite such efforts, government paperwork continued to grow. Congressional legislation, presidential initiatives, and agency regulations and research efforts all contributed to this trend. Moreover, according to OMB, by 1979 Congress had exempted over 80 percent of the federal paperwork burden from the Reports Act clearance process. In 1974, for example, Congress authorized the General Accounting Office to clear the paperwork of independent regulatory agencies because of what it saw as improper attempts by OMB to exert control over the independent agencies.

Public criticism of government red tape grew. The political reaction took the form of a federal commission and presidential and congressional proposals, leading to the enactment of the Paperwork Reduction Act of 1980.

The Act created the Office of Information and Regulatory Affairs (OIRA) within OMB and gave it a number of very specific assignments, which included meeting annual paperwork reduction goals, review of every agency's information management activities, and improvements in federal information policy. Despite this broad mandate, the heart of the law turned out to be the paperwork clearance process resurrected from the 1942 Federal Reports Act, minus the exemptions that had cropped up over the years.

The basic requirements of the paperwork clearance process are very simple. OIRA reviews all activities of federal agencies, including the independent regulatory agencies, which involve collecting information from ten or more persons. This includes application forms, questionnaires, surveys, and reporting or recordkeeping requirements. Thus, OMB must approve everything from tax forms to health research questions.

OMB approval of agency information collection proposals depends on "whether the collection of information by an agency is necessary for the proper performance of the functions of the agency," including whether the information will have "practical utility for the agency" (sec. 3504 (c)(2)).

To accommodate this broad standard to the APA rulemaking process, Congress distinguished between regulatory and nonregulatory paperwork. The latter is referred to as "information collection requests" and involves gathering data independent of a rule, such as when an agency wants to research an issue for some future agency action. Regulatory paperwork, on the other hand, is called "information collection requirements." They are reporting or recordkeeping requirements contained in or associated with a regulation.

Congress authorized OMB to review paperwork requirements in proposed rules when agencies issue a notice of proposed rulemaking in the Federal Register. The results of OMB's review are referred to as "public comments." While the law uses the term "public comments," in deference to the notice-and-comment principles of the APA, the OMB action is actually a clearance decision. The agency knows that if OMB does not approve, the agency will not be able to keep that provision in its regulation.

When the final rule is published in the Federal Register, the agency must explain how it has responded to OMB's comments. However, OMB has the last word, because after the final rule is issued, it can disapprove the paperwork requirement if the agency:

Missed any of the required procedural steps;
Substantially changed the paperwork requirement without giving OMB sufficient opportunity to review it; or
Gave an "unreasonable" response to the OMB comments.

What this means, in effect, is that if the paperwork requirement is intrinsic to the regulation, then OMB disapproval of that paperwork requirement will affect the regulation and probably will force the agency to reenter rulemaking if it wants to make the regulation work. It also means that public comments, which may have shaped the regulation, will be moot. Finally, there can be no judicial review of OMB's paperwork review decisions. There is one exception to OMB's tight control on information collection ? independent regulatory agencies can override an OMB disapproval.

In drafting the Paperwork Reduction Act, lawmakers made clear that their purpose was to give OMB the tools it needed to control unnecessary and excessive paperwork demands on the public. In a report accompanying the bill, legislators said they did not intend OMB to use the Act to tackle "regulatory reform issues which go beyond the scope of information management and burden."

In 1981, James C. Miller, who was OIRA Administrator at the time, told a Senate subcommittee: "Regulations and paperwork are identified together in the public mind, and realistically we cannot expect to reduce paperwork without also addressing regulatory excess."

In 1982, Miller's successor Christopher DeMuth said: "Our responsibilities under the Paperwork Reduction Act and E.O. 12291 are completely intertwined, both in terms of staff and use of funds."

OMB also expanded on the Paperwork Reduction Act by putting into place an "information collection budget" (ICB), which the Carter Administration had started to develop. As opposed to the form-by-form clearance process, the paperwork budget allows OMB each year to set overall limits on agency information collection activities.

Agencies are required to compute their paperwork in "burden hours," i.e., the time and expense it takes for people to fill out agency forms, reports, and other paperwork. OMB reviews the totals and set limits. Through the year it is up to the agency to stay within its ICB limits. This may involve discontinuing or modifying information collection activities to reduce the total burden hours imposed by the agency. It may also lead to OMB disapproval of specific paperwork proposals because the agency has reached or surpassed its budget limit.

In its ICB review of agency activities, OMB often singles out particular programs for special scrutiny and may intruct agencies to change regulations in order to reduce paperwork. Conversely, during the year OMB review of specific information collection proposals allows OMB to monitor agency compliance with its ICB decisions.

OMB's consolidation of this comprehensive paperwork clearance process, with that of regulatory review, has given the agency unprecedented power to scrutinize and affect the substance of agency programs and policies.

While Congress has resisted the use of the Paperwork Reduction Act to fund regulatory review, it has basically acquiesced to OMB's development of its closely related paperwork and regulatory review processes. For instance, when Congress reauthorized the Paperwork Reduction Act in late 1986, it prohibited the use of paperwork reduction funds for any regulatory review beyond that of paperwork associated with regulations. However, at the same time, it said that OMB was free to conduct regulatory review with money from other agency sources.

The Paperwork Reduction Act was also amended in 1995.