Dr. Winslow Sargeant is the sixth Chief Counsel for Advocacy of the U.S. Small Business Administration’s Office of Advocacy, appointed by President Obama August 19, 2010. The Office of Advocacy...
Letter dated 5/01/2012 - Administrative Conference of the United States
May 1, 2012
H. Russell Frisby, Jr, Chair
Committee on Regulation
Administrative Conference of the United States
1120 20th Street, NW
Suite 706 South
Washington, DC 20036
Dear Mr. Frisby:
The Small Business Administration Office of Advocacy (Advocacy) would like to offer comments on the Administrative Conference of the United States (ACUS) Review of Regulatory Analysis Requirements and the April 24 draft Recommendations. We believe that this project presents an opportunity to make a stronger statement about the role of regulatory analysis in policymaking and the value of early public engagement.
Advocacy was created by statute in 1976 to represent the views of small entities before Federal agencies and Congress. Advocacy is an independent office within the Small Business Administration (SBA), so the views expressed in this letter do not necessarily represent the views of SBA or the Administration.
Advocacy believes that the overall purpose of regulatory analysis is to inform and guide policy decisions. The ACUS report aptly focuses on the ways in which agencies communicate the current wide range of analytical requirements to the public. However, it does not emphasize the important role these tools also play in forming policy. Agencies should begin developing supporting analysis, including the identification and consideration of significant alternatives, in advance of identifying regulatory provisions, or even, if possible, choosing a regulatory strategy. Analysis that focuses only on informing the public misses an opportunity to improve the quality of regulatory decisions when they are being made. In the case of the Regulatory Flexibility Act, Advocacy advises agencies to develop economic analyses early in the process, so impacts on small entities can be presented to agency leaders before a preferred alternative is selected. Similarly, Executive Order (EO) compliance for issues such as energy supply and children’s health should be part of the supporting documents presented to policymakers rather than relegated to boilerplate in the preamble.
Advocacy therefore suggests that ACUS recommend agency best practices to incorporate analytical requirements into the earliest stages of policy development. This should include early consultation with the public, for example through Advance Notices of Proposed Rulemaking, Requests for Information, or Notices of Data Availability that inform the public of the analyses that the agency anticipates conducting and the data currently available to support those analyses. This approach is also consistent with OIRA Administrator Cass Sunstein’s recent memorandum on Cumulative Effects of Regulations (March 20, 2012). Advocacy believes this approach offers the dual benefit of encouraging robust analysis in advance of policy formation while minimizing the burden of multiple analytic requirements. Early planning and consideration of all requirements is the most effective way to reduce the overall burden of the individual requirements without compromising their underlying purpose.
With respect to particular draft Recommendations, Advocacy offers the following thoughts:
- Draft Recommendation 5 may unfortunately encourage the idea that compliance with an EO dealing with particular policy priorities is in fact a ‘checkbox’ exercise, rather than a statement of the Administration’s policy preference in decisionmaking. Advocacy believes that, even when the applicability of a particular EO appears obvious, the agency should explain to the public its reasoning. Assertions that the data indicate a particular outcome, as in the draft example, should be supported and available to the public for comment. Therefore, Advocacy suggest that a tabular format include cross-references to any analysis performed to support the requirement, whether it be a complete analysis or a screening analysis.
- In the context of draft Recommendation 6, Advocacy has recommendations for statutory revisions to the RFA. These legislative priorities are attached.
- Advocacy recommends that the last sentence of Recommendation 8 be deleted. Even regulations that stimulate consumer spending should be supported by an analysis of alternatives to demonstrate that the agency has maximized net benefits and that the distribution of those benefits do not disproportionately favor large businesses at the expense of small businesses.
Thank you for the Committee’s attention to regulatory analysis requirements. If you have questions or require additional information, you may contact Assistant Chief Counsel David Rostker, at (202) 205-6966 or firstname.lastname@example.org, or Economist Christine Kymn, at (202) 205-6972 or email@example.com. I am looking forward to the continuing dialogue on this important matter.
Winslow Sargeant, Ph.D.
Chief Counsel for Advocacy
David J. Rostker
Assistant Chief Counsel
Attachment: Legislative Priorities for the 112th Congress, Office of Advocacy, U.S. Small Business Administration