PAPERWORK AND REDTAPE REDUCTION ACT OF 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000300050009-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 193
• Document Creation Date: December 20, 2016
• Document Release Date: May 17, 2007
• Sequence Number: 9
• Publication Date: November 3, 1979
• Content Type: OPEN SOURCE

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PAPERWORK AND REDTAPE REDUCTION ACT OF 1979
HEARING
SUBCOMMITTEE ON FEDERAL SPENDING
PRACTICES AND OPEN GOVERNMENT
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
NINETY-SIXTH CONGRESS
FIRST SESSION
ON
S. 1411
TO IMPROVE THE ECONOMY AND EFFICIENCY OF THE
GOVERNMENT AND THE PRIVATE SECTOR BY IMPROVING
FEDERAL INFORMATION MANAGEMENT, AND FOR OTHER
PURPOSES
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COMMITTEE ON GOVERNMENTAL AFFAIRS
ABRAHAM RIBICOFF, Connecticut, Chairman
HENRY M. JACKSON, Washington
THOMAS F. EAGLETON, Missouri
LAWTON CHILES, Florida
SAM NUNN, Georgia
JOHN GLENN, Ohio
JIM SASSER, Tennessee
DAVID PRYOR, Arkansas
CARL LEVIN, Michigan
CHARLES H. PERCY, Illinois
JACOB K. JAVITS, New York
WILLIAM V. ROTH, JR., Delaware
TED STEVENS, Alaska
CHARLES MCC. MATHIAS, JR., Maryland
JOHN C. DANFORTH, Missouri
WILLIAM S. COHEN, Maine
DAVID DURENBERGER, Minnesota
RICHARD A. WEGMAN, Chief Counsel and Staff Director
PAUL HosF, Counsel
CONSTANCE B. EVANS, Minority Staff Director
ELIZABETH A. PREAST, Chief Clerk
SUBCOMMITTEE ON FEDERAL SPENDING PRACTICES AND OPEN GOVERNMENT
LAWTON CHILES, Florida, Chairman
SAM NUNN, Georgia JOHN C. DANFORTH, Missouri
HENRY M. JACKSON, Washington WILLIAM V. ROTH, JR., Delaware
DAVID PRYOR, Arkansas CHARLES McC. MATHIAS, JR., Maryland
RONALD A. CHiono, Chief Counsel and Staff Director
ROBERT E. COAKLEY, Professional Staff Member
RICHARD R. GROSSE, Congressional Fellow
ANNE M. BEAM, Chief Clerk
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CONTENTS
Deputy Associate Director for Regulatory Policy and Reports Management.. 24
J. Charles Partee, member, Board of Governors of the Federal Reserve System.. 61
John R. Evans, Commissioner, Securities and Exchange Commission .................. 66
Tyrone Brown, Commissioner, Federal Communications Commission ................. 80
Wayne G. Granquist, Associate Director for Management and Regulatory
Policy, Office of Management and Budget, accompanied by Stanley Morris,
Hon. Thomas J. McIntyre, former Senator from New Hampshire, on behalf of
the Citizens Committee on Paperwork Reduction, accompanied by John M.
Cross, executive vice president, Citizens Committee on Paperwork Reduc-
Opening statement: Senator Chiles .............................................................................
WITNESSES
TUESDAY, NOVEMBER 1, 1979
1979 ................................................................................................................. 119
Hon. William V. Roth, Jr ............................................................................... 126
Hon. Lloyd Bentsen .......................................................................................... 129
Citizens Committee on Paperwork Reduction ............................................ 138
American Civil Liberties Union .................................................................... 143
The Associated General Contractors of America ....................................... 145
Association of Records Managers and Administrators, Inc ...................... 163
Business Advisory Council on Federal Reports .......................................... 177
Aerospace Industries Association of America, Inc .................................... 188
National Association of Manufacturers ....................................................... 190
Communications from:
Elmer B. Staats, Comptroller General of the United States, October 31,
Additional material submitted for the record:
Testimony .......................................................................................................... 17
Prepared statement .......................................................................................... 22
Morris, Stanley: Testimony ................................................................................... 24
Partee, J. Charles: Testimony ............................................................................... 61
Testimony .......................................................................................................... 24
Prepared statement .......................................................................................... 40
Testimony .......................................................................................................... 66
Prepared statement .......................................................................................... 71
Testimony .......................................................................................................... 80
Letter to Senator Chiles, November 7, 1979 ................................................ 88
Cross, John M.: Testimony ..................................................................................... 17
Testimony .......................................................................................................... 9
Prepared statement .......................................................................................... 14
Alphabetical list of witnesses:
Bellmon, Hon. Henry:
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PAPERWORK AND REDTAPE REDUCTION ACT
OF 1979
U.S. SENATE,
SUBCOMMITTEE ON FEDERAL SPENDING
PRACTICES AND OPEN GOVERNMENT,
COMMITTEE ON GOVERNMENTAL AFFAIRS,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:10 a.m., in room
3302, Dirksen Office Building, Hon. Lawton Chiles (chairman of the
subcommittee) presiding.
Present: Senators Chiles and Pryor.
OPENING STATEMENT OF SENATOR LAWTON CHILES
Senator CHILES. More than a year ago, this subcommittee held its
first hearing on the impact of Federal paperwork burdens. We have
held hearings in Washington, D.C., Florida, and Missouri and
heard from people from all walks of life about how paperwork
affects them.
We have taken testimony from educators, pharmacists, senior
citizens, business counselors, veterinarians, small grocery store op-
erators, State and local government officials and almost every story
carries the same thing that Americans are fed up and frustrated
with paperwork.
People in Jacksonville do not understand why the Internal Reve-
nue Service cannot write an income tax form that they can fill out.
Veterinarians do not understand why they have to fill out a form
every time an employee is bitten by a flea or scratched by a cat.
The examples go on and on, but hopefully, we are reaching a point
this morning where we can begin trying to come to grips with some
of the frustrations and anger and often downright intimidation
caused by unnecessary paperwork.
The bill we are considering, S. 1411, the Federal Paperwork and
Redtape Reduction Act will be a start toward stopping unnecessary
paperwork and I am hopeful the full Governmental Affairs Com-
mittee and the Senate will act on it without undue delay.
The legislation takes a step to consolidate responsibility for a
beefed-up reports clearance process in OMB and to create an ac-
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countable official who has the responsibility of stopping unneces-
sary paperwork requirements
We have got to keep in mind that paperwork, in addition to the
frustrations it causes, is a tremendous contributor to inflation.
Indeed, the Paperwork Commission has reported paperwork costs
of $100 billion each year and that cost certainly is passed on to
every citizen and consumer in America in one form or another.
Today, we are going to hear from Senator Bellmon, who was the
author of S. 119, the Business Reporting Act, and Senator McIn-
tyre, who was the Cochairman of the Paperwork Commission and
now a Trustee of the Citizens Committee on Paperwork Reduction.
Also, Wayne Granquist, Associate Director for Management and
Regulatory Policy within the Office of Management and Budget
will speak for the administration.
We will also hear from Governor Partee of the Federal Reserve
System, Commissioner Evans of the Securities and Exchange Com-
mission and Commissioner Brown of the Federal Communications
Commission.
All these gentlemen represent agencies that are either exempt
from -OMB clearance authority or from any outside clearance au-
thority, whatsoever.
Let me say, the subcommittee welcomes constructive comments
from the witnesses this morning and already contemplate making
several changes which have been recommended in written com-
ments solicited from the agencies.
[The prepared statement of Senator Chiles follows:]
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OFFICE OF SENATOR LAWTON CHILES
437 Russell Senate Office Bldg.
Washington, D. C. 202/224-5274
For Release on Delivery
Expected at 10 a.m.,
Thursday, November 1, 1979
Good morning ladies and gentlemen.
More than a year ago, in July of 1978, this Subcommittee
held its first hearing on federal paperwork burdens. The
Federal Paperwork Commission had recently completed its work.
We heard from the Commission's Co-Chairmen, Senator McIntyre
and citizen groups on what the priorities and next step in
the War against unnecessary federal paperwork should be.
The Paperwork Commission's estimate was that there are a
100 billion dollars worth of federally imposed paperwork costs
annually. Every 1% reduction in that figure represents a
billion dollars of hidden taxes the taxpayers of this country
do not have to pay.
Since that first hearing, the subcommittee has participated
in four field hearings concerned with paperwork burdens. We have
been to Jacksonville, St. Petersburg, Tallahassee, and St. Louis.
People from all walks of life have talked about paperwork in their
lives.
I have learned that the impact of government paperwork on the
day to day life of people in this country goes beyond the 100
billion dollar cost of hidden taxes.
Several people, including a community veterinarian in
Jacksonville, told me they were actually afraid of their own
government.
They had been bombarded with government forms, neglected
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or wrongly answered some particular form, and were afraid that
the "government" was going to "get" them as a result -- a
nagging feeling of fear.
A small business counselor told me that many of his clients
refuse to expand their businesses just because of the added
paperwork they would face. He unwound a stand of taped together
forms that stretched across the room just to show me the amount
of material any small business person has to know to even
think about getting into business.
that neither I nor they could understand.
A pharmacist showed me how it takes some 7 minutes to fill
a prescription and get paid if someone walks off the street, but
as a medicaid provider to nursing homes he is lucky to get paid
in 7 months.
In St. Petersburg I learned that some senior citizens,
after a lifetime of paying taxes, quit trying to receive medicare
because they can't get the paper through. The burden of form
filling has caused doctors on a wide scale to discourage medicare
business or make senior citizens pay first, and fill out the
forms on their own later.
There are now private "Medicare Assistance Bureaus" which
promise older Americans to fill out medicare forms for a yearly
payment of 50$ or a percentage of their medicare reimbursement.
A Junior High School teacher told me that a study she
participated in Hillsborough County found that it takes 187 hours
of 26 extra working days to meet minimum paperwork requirements
i J
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for a classroom teacher. That is class time taken away from
the kids or time at home without pay.
In Tallahassee, we heard from state and local officials who
focused on unnecessary paperwork and administrative costs associated
with grant programs. Orange County grant administrators told me
that one CETA application for funding one year for one county
generated 5,814 pages and required 46 original signatures from
the Chairman of the Board of County Commissioners and Mayor of
Orlando.
Repeatedly, state officials indicated that from 10 to 30%
of grant funds get tied up in unnecessary paperwork. Nationally,
that would mean 8 billion dollars; in Florida some 240
million dollars.
Federal paperwork requirements, whether they be tax forms,
medicare forms, financial loans or applications of one kind
o- another are something each individual in this country touches,
feels, and works on. The cumulative impact is excessive. There
is a clear feeling among the public that paperwork demands are
out of control.
I have been working on a three pronged legislative strategy
to get a handle on the paperwork requirements government showers
on the citizens of this country. A sunset law is needed, Senate
Rule 29.5, which requires paperwork impact statements, needs
better enforcement and use, and the Paperwork and Red Tape
Reduction Act, S. 1411, needs to be passed.
Clearly, the first priority in following up on the
y Paperwork Commission's work is for the Congress to discipline
itself. As the Commission pointed out, it is the Congress
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that passes laws which are often the source of paperwork burdens.
The need is to periodically evaluate the laws on the books
now and take steps to avoid future mistakes.
I believe the national government needs sunset legislation
to get that periodic re-evaluation of old programs. Congress
needs the gun to its head that automatic termination of programs
brings about. Congress would then be encouraged to systematically
consolidate related programs and cut unneeded regulations.
In order to avoid future mistakes, I have been working with
other Senators to see that Rule 29.5 is enforced. That rule insists
that committee reports accompanying public bills to the full
Senate have regulatory and paperwork impact evaluations or they
will not be considered.
The idea is to catch the paperwork costs early in the
legislative process where you can eliminate or reduce this
burden before it's too late.
After the first hearing on Paperwork, my subcommittee
studied the legislative calendar and found that 216 of the 688
bills reported last Congress, a full third, totally ignored
the rule.
At the beginning of this Session, I and several other
Senators put the whole Senate on notice that we were going
to stop any bill that ignored the rule.
So far all 191 bills reported have referred to the
rule. Much of the statements are lip service, but progress has
been made. There are success stories. The next step will be to
encourage committees to improve the quality of their considerations
of regulatory and paperwork impacts.
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The Paperwork and Red Tape Reduction Act, the legislation
we will discuss today, is the third prong to the three part
legislative strategy.
The bill takes the statutory steps needed to control and
manage paperwork requirements generated by the executive branch
of government. S. 1411 builds upon the Federal Reports Act, and
the reports clearance authority established by that Act.
Presently, progress towards controlling the growth of
paperwork costs is slow because responsibility for checking on
whether agency requests duplicate each other, are necessary,and
cost efficient is split among four organizations -- the Office
of Management and Budget, the General Accounting Office, the
Departments of Commerce, and Health, Education, and Welfare.
Second, the Internal Revenue Service and other bank
supervisory agencies have always been exempted from any clearance
controls. The exemptions amount to 73 per cent of the paperwork
burdens on the public.
This legislation consolidates the four authorities into
one, the President's management arm, and eliminates all exemptions
from central clearing controls.
While OMB is required to supervise the approval or
disapproval of agency requests within 60 days, individuals,
businesses, and State and local governments will be told they
do not need to answer requests not acted upon by OMB.
Forms without an OMB number on them will be "bootleg forms"
:hat the public can ignore.
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In addition to placing authority for setting information
management policy in the President's central management agency,
the bill insures that paperwork reduction controls will be visibly
established and implemented by creating a watchdog office in the
White House and the agencies headed by a-Presidential appointee
confirmed by the Senate. The Administrator will be the
accountable person for the effective working of government-wide
paperwork controls.
The design is to better concentrate presently fragmented
resources for paperwork management and place the needed authorities
within 0MB so that the clout of the budget process can be used
to create incentives for agencies to meet paperwork management
and reduction goals.
The legislation further establishes a federal' Information
Locator System to contain descriptions of all information
request made by agencies on the public, and to be used to
identify duplication in existing reporting requirements, and
locate existing data that: already meet agency needs. -
To reach into the bowels of bureaucracy and change the
attitude of agency program officials who collect information,
we are going to need leadership and innovation from the
President and within the agencies.
I believe this legislation goes a long way towards
granting any chief executive the added statutory tools
needed to improve upon the reports clearance process and
run a paperwork reduction program.
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Today, we will hear from Senator Bellmon, who is the author of S. 119,
the Business Reporting Act, and Senator McIntyre, who was a co-chairman
of the Paperwork Commission and now a trustee of the Citizens Committee
on Paperwork Reduction.
Wayne Granquist, Associate Director for Management and
Regulatory Policy within the Office of Management and Budget
will speak for the Administration.
We will also hear from Governor Partee of the Federal
Reserve System, Commissioner Evans of the Securities and
Exchange Commission.
All these gentlemen
represent agencies who are either exempt from OMB clearance
authority or from any outside clearance authority whatsoever,
Let me say, that the Subcommittee welcomes constructive
comments from the witnesses this morning and already contemplates
making several changes that have been recommended in written
comments solicited from the agencies.
Senator CHILES. I am delighted to open up today with Senator
Bellmon. Senator Bellmon, you are the author of S. 119. In addition
to that, you have taken an interest in trying to alert the Govern-
ment and the Congress to paperwork for many, many years and we
are delighted to have that good work and also to have you testify
this morning on the bill before us.
TESTIMONY OF HON. HENRY BELLMON, U.S. SENATOR FROM
THE STATE OF OKLAHOMA
Senator BELLMON. Thank you, Mr. Chairman.
I want to begin by commending you for scheduling these hear-
ings and for looking into this important matter.
As you have said, I do not think there is anything that frustrates
and even angers our citizens quite as much as all the redtape the
Federal Government keeps pushing at individuals and businesses,
and I feel that Congress has the responsibility to try to bring this
whole matter under control.
At the same time, I do not envy you. This is going to be a tough
job and I feel like you are one who is tenacious enough to stay at
it. And, if I can help you in any way, I would like to do that.
Comprehensive reform such as you plan to undertake is almost
as complicated as the regulations and paperwork themselves. It is
an important job that greatly needs to be done and I feel that the
time has come that Congress will give you the support you need
and urge you to get the job done.
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The contribution I would like to make at this time is to encour-
age you to incorporate in whatever legislation is finally developed
the provisions of S. 119, which we call the Business Reporting
Reform Act of 1979.
This act was introduced last January and I am even more con-
vinced now than I was at that time of its merit.
It is intended to accomplish one simple but important objective
and that is to reduce the paperwork private individuals and busi-
nesses must complete for our Government. Very simply, the bill
would largely eliminate the duplicative reporting of the same infor-
mation to different Federal agencies. We have a situation where O,
one agency asks for information. The next week, another one is
asking for the same thing.
Senator CHILES. I hear that over and over. Everytime I go back to
the State, these people say I am furnishing exactly the same infor-
mation over and over again.
Senator BELLMON. What the bill provides is that a business may
furnish a release to the first Federal agency that requests informa-
tion stating that the information reported may be released to any
other agency. So, they just fill out the form one time and say,
"Now the Government has got it and they get it from other agen-
cies."
Senator CHILES. Under the Privacy Act, which is a Catch-22, the
agency says no, we cannot release this information under the Pri-
vacy Act, so we have got to get it again.
Senator BELLMON. That is right.
So, the bill provides that businesses furnish such a release and
businesses cannot be penalized for failure to report to another
agency in the same year. Business would have to advise the agency
that subsequently requests the already reported information, to
contact the other Federal agency to which the information has
already been provided.
The bill further provides exceptions for information requested by
the Internal Revenue Service for tax purposes. It also provides
exceptions for information provided to Federal regulatory agencies
to carry out their enforcement functions and information requested
by Federal contractors as a matter of contract compliance.
The bill does not waive any existing reporting requirements. $
Neither does it infringe on anyones right to privacy. It does permit
individual businesses to authorize the release of information they
provide and thereby avoid costly, time-consuming duplication.
That is our whole purpose.
Mr. Chairman, you may recall the "60-Minute" broadcast of
Sunday, January 14, 1979. That was based on the work of the
Federal Paperwork Commission and the subsequent work of
Murray Weidenbaum of Washington University in St. Louis on the
regulatory overburden. Weidenbaum has estimated costs at up to
$30 billion a year and that is a tremendous burden for Government
to put on our citizens.
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Past attempts to arrest the proliferation of paperwork have in-
cluded requirements for Office of Management and Budget and
GAO approval of reporting forms. Obviously, this has not been
effective in holding down reporting requirements. Each and every
Federal agency seems to continue to be able to argue that they
have unique needs which can only be met by creating their own
new forms.
It is regrettable that Congress has to legislate to correct these
problems which could obviously have been corrected by administra-
tive action or by executive order.
But, it is plain that we do have to pass legislation because the
executive branch is simply not going to act until we force their
hand.
S. 119 does not rely on the Federal agency to cut down paper-
work, it lets the businessmen decide in the interest of cost control
and convenience how much he is willing to let various Federal
agencies exchange information about his firm.
I, for one, have enormous confidence in this kind of common-
sense approach to help sort out the instances in which reporting
requirements can be consolidated.
There is one other thing this bill would do and that is to require
Congress to have the potential cost benefit of future reporting
requirements before they are enacted. The bill simply provides that
any committee of either House or Congress which would impose
new and additional reporting requirements on private businesses
must include in its report an analysis of whether the same or
substantially similar information is already available. And, if it is
not, what would be the estimated cost to the business community
to provide that information and the use to which the information
would be put.
I believe it is high time that we accept this discipline ourselves.
After all, Mr. Chairman, it is Congress in most instances which
has created the duplicative reporting about which we now com-
plain.
We all know that inflation is one of the most serious, if not the
most serious problem facing our country. We have come a long way
in recognizing the danger rampant inflation represents to our way
of life.
We have taken some giant steps in the budget process towards
more responsible fiscal policy to help control inflation, but we have
not had decisive leadership from the executive branch nor from
Congress on one of the most costly burdens we have and that is the
regulatory overburden which helps to drive inflation.
This bill provides only one small, I feel, important opportunity
for Congress to move in that direction and I am sure, during your
work, you will come up with many others that are more important.
Therefore, Mr. Chairman, I feel the work you are undertaking is
of the utmost importance. Even if the paperwork we now require of
private businesses were not too costly and inflationary, it would
not make much sense. But, it is costly and inflationary and I feel it
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is high time we take action to slow down the process and turn it
around.
Again, I congratulate you for undertaking this important task
and I hope you will consider S. 119 as part of your deliberations.
Senator CHILES. Senator Bellmon, I agree that the idea behind
your bill is a commonsense approach and we will work with you to
see if we can incorporate that idea and that approach into our
paperwork reduction bill.
The approach that S. 1411 takes is to try to strengthen the
reports clearance process within the agencies and within OMB.
As you know, one of our big problems is that this desire to know
is so strong that many times it comes from someone way down the
line. But it never escalates to a decision having to be made by the
true managers themselves to weigh costs versus benefits.
Is that desire to know worth the cost that is going to be put on
the private businesses, the school boards, the teachers, whoever it
is, that will have to comply with the request I think the thrust of
S. 1411 is to escalate that management decision and to require that
the agency heads themselves really make the decision rather than
somebody way down the line that just decides he would like to
know some information. Also, OMB has to give a clearance
number.
Under S. 1411 that businessman, when he gets all these forms,
unless they have that OMB stamp in the upper right-hand corner,
that stamp of approval, he will know that that is a bootleg form
that he can throw away. We also will have a central register that
before any agency seeks any information, they will have to go to
that central register and you know how much information we have
already accumulated.
By George, we have computers full of it, but no agency really
knows what any other agency has or ever stops to look. They go get
it again.
So, hopefully, if we use that central register, the businessman
would never have to sign that waiver that you are talking about
because, if the information is already onhand, the agency and OMB
would have to check first to see whether it is there before OMB
gives the clearance number.
But, as a backup, I think what you are talking about makes
sense.
I also agree very much with your point that Congress needs to be
more aware in the early legislative stages of the benefit versus cost
of reporting requirement.
As you know, we have a rule in the Senate, rule 29.5, that
requires a regulatory and paperwork impact evaluation to accom-
pany committee reports. The House does not have a similar rule.
We have been working with other Senators to get better enforce-
ment of that rule and so far this year, we have gotten 191 commit-
tee reports to refer to the rule.
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We took the floor early this session after putting the Senate on
notice at the end of the last session that we were going to enforce
the rule and send back to the committee any bill that did not have
this requirement. Any time we have found a bill come through that
did not have the requirement, we have gotten in touch with the
committee and pointed out the error to them. We told them a
correction had to be made or a point of order would be made and
the bill would be referred back to committee.
And, so far, in each of the 191 committee reports we have refer-
ence to the rule. I think we can improve the quality and that is
what we will be shooting for now.
At least we have a rule and in the last Congress, even though we
had that rule, we found that it was ignored, over one-third of the
time. So, a key strategy, I think, to meet the spirit of the rule
would be to get agency comments on proposed legislation to focus
on the regulatory aspects and also in the economic cost-benefit
aspects.
Senator BELLMON. Mr. Chairman, it is to me a very healthy
development that you are on top of this problem and I would like
to offer my support so that I can work with you when I can.
Also, members of my staff have worked with me on that. Bob
Fulton is here, Carol Cox, who is not here.
Senator CHILES. We would like to very much and we welcome
any comments that you may have.
We all want to do something about paperwork. We all go back
home and talk about what we are going to do, but how do you come
to grips with it?
I have tried to develop a three-part strategy approach to paper-
work reduction. One is rule 29.5, which means that the Senate has
got to make sure that on the legislation we are passing, that we
take into consideration what type of paperwork requirements we
are committing to and that we have to view that and speak to it.
Second, this bill requires the clearance process and requires the
central registry, and generally escalates the level at which a deci-
sion about paperwork is made.
Third, I think passage of the Sunset bill might be the best one of
them all to give us a handle and to look at the functions of
agencies and the agencies themselves to determine if they have
outlived their usefulness.
I think the mere fact that the agencies have to come back to us
to renew their charter and renew their life span would give us
much better clout in trying to deal with them. If you can think of
any other ways; and, of course, your bill is a positive one, then we
want to try to attack it on other fronts as well.
Senator BELLMON. Very good. Thank you, Mr. Chairman.
Senator CHILES. Thank you very much for your appearance.
[The prepared statement of Senator Bellmon follows:]
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NOVEMBER 1, 1979
STATEMENT OF SENATOR HENRY BELLMON ON S. 119
"THE BUSINESS REPORTING REFORM ACT OF 1979"
BEFORE THE SUBCOMMITTEE ON FEDERAL SPENDING PRACTICES AND OPEN
GOVERNMENT, SENATE GOVERNMENTAL AFFAIRS COMMITTEE
MR. CHAIRMAN, SENATORS, THANK YOU FOR THE OPPORTUNITY TO
TESTIFY TODAY. I DO NOT ENVY YOU THE TASK YOU HAVE UNDERTAKEN:
TO REVISE AND SIMPLIFY FEDERAL REGULATORY AND PAPERWORK REQUIREMENTS.
COMPREHENSIVE REFORM, SUCH AS YOU HAVE UNDERTAKEN, IS ALMOST AS
COMPLICATED AS THE REGULATIONS AND PAPERWORK THEMSELVES. I HOPE
I CAN CONTRIBUTE TO THE PROCESS, HOWEVER, BY ENCOURAGING YOU TO
INCORPORATE IN THE LEGISLATION YOU REPORT THE PROVISIONS OF 5.119,
"THE BUSINESS REPORTING REFORM ACT OF 1979", WHICH I INTRODUCED
IN JANUARY.
S. 119 IS INTENDED TO ACCOMPLISH ONE SIMPLE, BUT IMPORTANT,
OBJECTIVE: TO REDUCE THE PAPERWORK PRIVATE INDIVIDUALS AND BUS-
INESSES MUST COMPLETE FOR THEIR GOVERNMENT. VERY SIMPLY, THIS BILL
WOULD LARGELY ELIMINATE THE DUPLICATIVE REPORTING OF THE SAME
INFORMATION TO DIFFERENT FEDERAL AGENCIES. THE BILL PROVIDES THAT
A BUSINESS MAY FURNISH A RELEASE TO ANY FEDERAL AGENCY TO WHICH IT
REPORTS ANY INFORMATION, STATING THAT THE INFORMATION REPORTED
MAY BE RELEASED TO ANY OTHER FEDERAL AGENCY. THE BILL FURTHER
PROVIDES THAT, IF A BUSINESS FURNISHES SUCH A RELEASE, IT CANNOT
BE PENALIZED FOR FAILURE TO REPORT THE SAME INFORMATION TO ANOTHER
FEDERAL AGENCY IN THE SAME YEAR. THE BUSINESS WOULD HAVE ONLY TO
ADVISE ANY AGENCY SUBSEQUENTLY REQUESTING THE ALREADY REPORTED
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INFORMATION TO CONTACT THE OTHER FEDERAL AGENCY TO WHICH THE
INFORMATION HAS ALREADY BEEN SUBMITTED.
THE BILL PROVIDES EXCEPTIONS FOR INFORMATION REQUESTED BY
THE INTERNAL REVENUE SERVICE FOR TAX PURPOSES; INFORMATION RE-
QUESTED BY FEDERAL REGULATORY AGENCIES NECESSARY TO CARRY OUT
THEIR ENFORCEMENT FUNCTIONS; AND INFORMATION FURNISHED BY FEDERAL
CONTRACTORS, AS A MATTER OF CONTRACT COMPLIANCE. THIS BILL DOES
NOT WAIVE ANY EXISTING REPORTING REQUIREMENTS. NEITHER DOES IT
INFRINGE ON ANYONE'S RIGHT TO PRIVACY. IT DOES PERMIT INDIVIDUAL
BUSINESSES TO AUTHORIZE THE RELEASE OF INFORMATION THEY PROVIDE
AND, THEREBY, AVOID COSTLY TIME CONSUMING DUPLICATION.
SOME OF YOU MAY RECALL THE "60 MINUTES" BROADCAST OF SUNDAY,
JANUARY 14, 1979. THAT PROGRAM WAS BASED LARGELY ON THE WORK OF
THE FEDERAL PAPERWORK COMMISSION, AND ON THE SUBSEQUENT WORK OF
MURRAY WEIDENBAUM, OF WASHINGTON UNIVERSITY, ST. LOUIS, ON
"THE REGULATORY OVERBURDEN." WEIDENBAUM HAS ESTIMATED BUSINESS
REPORTING COSTS, WHICH S. 119 WOULD MITIGATE, AT UP TO $30 BILLION
EACH YEAR,
PAST ATTEMPTS TO ARREST THE PROLIFERATION OF PAPERWORK HAVE
INCLUDED REQUIREMENTS FOR OFFICE OF MANAGEMENT AND BUDGET AND
GENERAL ACCOUNTING OFFICE APPROVAL OF REPORTING FORMS. OBVIOUSLY
THAT HASN'T BEEN EFFECTIVE IN HOLDING DOWN REPORTING REQUIREMENTS.
EACH AND EVERY FEDERAL AGENCY SEEMS TO CONTINUE TO BE ABLE TO
ARGUE THAT THEY HAVE UNIQUE NEEDS, WHICH CAN ONLY BE MET BY CREATING
THEIR OWN NEW FORMS.
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IT IS REGRETABLE THAT CONGRESS HAS TO LEGISLATE TO CORRECT
THESE PROBLEMS, WHICH COULD OBVIOUSLY HAVE BEEN CORRECTED BY
EXECUTIVE ORDER. BUT IT IS PLAIN THAT WE DO HAVE TO PASS LEGISLATION,
BECAUSE THE ADMINISTRATION IS SIMPLY NOT GOING TO ACT OTHERWISE.
S. 119 DOES NOT RELY ON THE FEDERAL AGENCIES TO CUT DOWN
PAPERWORK. IT LETS THE BUSINESSMAN DECIDE, IN THE INTEREST OF
COST CONTROL AND CONVENIENCE, HOW MUCH HE IS WILLING TO LET THE
VARIOUS FEDERAL AGENCIES EXCHANGE INFORMATION ABOUT HIS FIRM.
I, FOR ONE, HAVE ENORMOUS CONFIDENCE IN THIS KIND OF COMMON SENSE
APPROACH, TO HELP US SORT OUT THE INSTANCES IN WHICH REPORTING
REQUIREMENTS CAN BE CONSOLIDATED.
ONE MORE THING OUR BILL WOULD DO, MR. CHAIRMAN, IS TO REQUIRE
CONGRESS TO CONSIDER THE NECESSITY FOR, AND THE POTENTIAL COST/BENEFIT
OF, FUTURE REPORTING REQUIREMENTS -- BEFORE THEY ARE ENACTED. THE
BILL SIMPLY PROVIDES THAT, ANY COMMITTEE OF EITHER HOUSE OF CONGRESS
REPORTING LEGISLATION WHICH WOULD IMPOSE NEW OR ADDITIONAL REPORTING
REQUIREMENTS ON PRIVATE BUSINESS, WOULD HAVE TO INCLUDE IN ITS
REPORT AN ANALYSIS OF WHETHER THE SAME OR SUBSTANTIALLY SIMILAR
INFORMATION IS AVAILABLE ALREADY; AND IF IT IS NOT, WHAT WOULD BE
THE ESTIMATED COST TO THE BUSINESS COMMUNITY OF PROVIDING THAT INFOR-
MATION, AND THE USE TO WHICH THE INFORMATION WOULD BE PUT. IT IS
HIGH TIME WE REQUIRE THIS OF OURSELVES. AFTER ALL, MR. CHAIRMAN, IT
IS CONGRESS IN MOST INSTANCES WHICH HAS CREATED THE DUPLICATIVE RE-
PORTING OF WHICH WE NOW COMPLAIN.
MR. CHAIRMAN, INFLATION IS THE MOST SERIOUS PROBLEM FACING OUR
NATION TODAY. WE HAVE COME A LONG WAY, MR. CHAIRMAN, IN RECOGNIZING
THE DANGER RAMPANT INFLATION REPRESENTS TO OUR VERY WAY OF LIFE. WE
HAVE TAKEN GIANT STRIDES, THROUGH THE BUDGET PROCESS, TOWARD MORE
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RESPONSIBLE FISCAL POLICY TO HELP CONTROL INFLATION. BUT WE HAVE
NOT HAD DECISIVE LEADERSHIP FROM THE EXECUTIVE BRANCH NOR TIDE CONGRESS
ON MOST OF THE COSTLY REGULATORY OVERBURDEN WHICH HELPS DRIVE INFLATION.
THIS BILL PROVIDES ONE SMALL, BUT IMPORTANT, OPPORTUNITY FOR CONGRESS
TO PROVIDE NEEDED LEADERSHIP.
THIS SUBCOMMITTEE'S WORK IS, THEREFORE, OF THE UTMOST IMPORTANCE.
EVEN IF THE PLETHORA OF PAPERWORK WE NOW REQUIRE OF PRIVATE BUSINESS
WERE NOT SO COSTLY AND INFLATIONARY, IT WOULD NOT MAKE SENSE. BUT
IT IS COSTLY. IT IS INFLATIONARY. AND 1T IS HIGH TIME WE DO SOME-
THING ABOUT IT. I CONGRATULATE YOU FOR UNDERTAKING THIS IMPORTANT
TASK. I SINCERELY HOPE YOU WILL CONSIDER $. 119, AS APART OF YOUR
DELIBERATIONS; AND I URGE YOU TO INCLUDE THE PROVISIONS OF OUR BILL
IN THE LEGISLATION YOU RECOMMEND TO THE SENATE.
Senator CHILES. Our next witness will be Senator McIntyre, who
is very involved in the Citizens Committee on Paperwork Reduc-
tion.
He is one of the founders of the Paperwork Commission and
certainly one of its outstanding members and he is the person that
tried to escalate this paperwork burden in front of the Congress as
early as anyone did.
Senator McIntyre, we are delighted to have your continued inter-
est in the questions that you started a long time ago.
TESTIMONY OF HON. THOMAS J. 1VIcINTYRE, FORMER SENATOR
FROM NEW HAMPSHIRE, ON BEHALF OF THE CITIZENS COM-
MITTEE ON PAPERWORK REDUCTION, ACCOMPANIED BY
JOHN M. CROSS, EXECUTIVE VICE PRESIDENT, CITIZENS
COMMITTEE ON PAPERWORK REDUCTION
Senator McIrr~rstRE. Thank you very much, Mr. Chairman.
As you know, for the record, my name is Tom McIntyre and I
have served in this U.S. Senate for some 16 years.
I am accompanied this morning by Mr. John Cross, who is the
executive vice president of the Citizens Committee on Paperwork
Reduction.
Senator CHILES. We are delighted to have you with us. He has
been very helpful too.
Senator McIxTYxE. Before I launch into this brief recitation, I
could not help but hear your colloquy with distinguished Senator
Bellmon. I used to think of the insatiable desire for information
that runs abroad in this great Capital of ours. As you pointed out,
someone way down the line says, "Well, we ought to know some-
thing about this, so add this question in." I think that one of the
strongest points you are going to have to emphasize if we are going
to beat this problem, which we are going to have to do by trial and
 Approved For Release 2007105/17 :CIA-RQP85-000038000300050009-7
error, is to be sure that somewhere up the line there is a person, a
policeman, if you will, who can say, "No, you cannot have that
information. It is available over here." It is central to the whole
problem.
I agreed to come here this morning, Mr. Chairman, to talk very
briefly about Government paperwork on behalf of the Citizens
Committee on Paperwork Reduction and other interested groups.
I have come to tell you what you already know, that the Ameri-
can public is angry.
There are some towns in New Hampshire, even now, where I do
not dare to go by that florist shop because if I do, they will put one
of those tags on me and bring me in and beat me over the head,
because this fellow is filled with hate for Government and for me,
especially.
There are groups out there that are planning to send you and
your staff xerox copies of all forms they receive, so as to clutter up
the Senate's halls and offices and they are demanding relief from
Government gumshoes known in the trade as compliance officers.
The cost of Government paperwork as you have already said,
reached billions. We can only behave like the Oracle of Delphi and
estimate the level, but it is billions for postage, typewriters, secre-
taries, time, frustrations. Those costs can be traced. Where do you
think? Right here to this U.S. Senate and its colleagues over on the
other side of the Hill, the Members of the House of Representa-
tives.
And, the cost can be traced not to you, Mr. Chairman, and your
committee, nor to your subcommittee. But, generally, to inaction.
Inaction that means Government agencies can ask for more in-
formation than they need because no one is there to stop them
when they would like to ask for more.
Inaction that means we pay millions to store records which in
cases like the SEC cannot be destroyed. Inaction means more infor-
mation with every law.
Mr. Chairman, soon there will be a new Education Department.
Right now, that Department is subject to no Federal Reports Act
and no reports clearance process. I hate to think, and I am sure
you do too, of the information, the figures that it will ask our
school districts to provide.
Back home, in New Hampshire, I think in the city of Nashua,
the board committee says, "We do not want your money, just get
out of here and stop sending us all these forms."
Senator CHILES. That particular reason right there is why we
have got to pass this bill and pass it very, very quickly.
I had a little requirement on that bill. It went to the conference
committee. It still had that requirement on it. And, at the confer-
ence committee, they said, "This is causing the whole bill to be
hung up."
The only thing I got from that was a commitment from the
chairman of both of the committees, which is the parent committee
here and Jack Brooks in the House, that they move this bill very
quickly and based on that committee, Idecided--
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 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
Senator McIxTYxE. Did you get that in from the House?
Senator CHILES. Yes, sir, we did.
Senator McIxTYxE. Good.
Back in 1971, the Nation established vocational training pro-
grams. We have never had a listing of the race, or sex, or handicap
of the people. Now, there are 142 of them that are federally fi-
nanced. But, the Office of Education is asking for a census of who
is taking what.
The cost: $4 per student or half the salary of one teacher.
Senator CHILES. HOW in the world did we ever get these pro-
grams without having that information?
Senator McIxTYxE. The trouble is that somebody--
Senator CHILES. Wouldn't you think that it would just be impossi-
ble to ever have a program without all of this information and yet,
we had 140 programs?
Senator McIxTYxE. I think it would probably be very, very suc-
cessful with about one-fourth of the information. I want to keep on
track here or we will be here all day, because I just want to say,
Senator, I really appreciate your taking hold of this and working
hard on it. And, you have got a good colleague, Sam Nunn who is
very much interested in this.
Senator CHILES. Very much so.
Senator McIxTYxE. Just a few years ago, we established the
Department of Energy. We wanted to know how much oil we had
in the ground and where the oil companies make their profits.
Millions of forms and schedules later, we still do not have the
answer. And, just the other day, Scoop Jackson said, "We just do
not know."
You know, I do not think our people out there in the country
realize that the Government of the United States of America is
dependent upon what the oil companies tell us about what they
have got and what they are going to do with it.
Look at EPA. Back in the early 1970's, we wanted to have clean
water and clean air. EPA was supposed to develop plans, put out
rules and collect data. EPA has massive amounts of paperwork out
now. Plans no reduction in its data request and won't complete this
compilation for years.
Look at pension forms. Goodness knows, I do not know why we
passed it on the floor. It must have been 89-to-4. Look at the
turmoil it passed. We wanted to protect pensioners who are being
left out.
The paperwork put out now by the agencies put thousands of
pension plans out of business. They just quit. Now the IRS, the
Department of Labor and the Pension Benefit Guaranty Corpora-
tion are beginning at least their third rewrite of the pensions plan
paperwork.
Now, they propose a triennial, once every 3 years report, to save
little pensions from annual filings but the examination shows that
the triennial form that they are putting out is asking questions
that the annual form never thought of.
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
I want to say that I do not mean that EPA, the Department of
Energy and even the Department of Education are bad in and of
themselves. I am for them, but it is just how they get out of hand
with this paperwork.
We used to call it strangulation in triplicate. We must come up
with a law that says someone in the Government can stop paper-
work from going on to the public. The Citizens Committee thinks
someone should be in the Executive Office of President. That some-
one needs to be able to say: Can you handle this? "Oh, Mr. Secre-
tary of Defense, you cannot ask for that."
Early on, in my experience, we had a little group that did ana-
lyze and take a look at some of these forms coming through but if
some good bureaucrat, and we have millions, said this is duplicat-
ing, I do not think we should approve this form.
What do you think happened? So, someone back in the Depart-
ment of Commerce would go to his Assistant Secretary and say:
"Hey, some GS-8 or 9 down in the OMB says or BOB, I guess it
was at that time, says, we cannot have that form." The Assistant
Secretary calls up and says: "Who is that GS-8 down there," and
growls at him and the GS-8 says, "Sure, you can have it."
We have got to have somebody who is going to say "no" to some
of this insatiable desire for information.
I want to say right here, Mr. Chairman, that I would like to add
that the Citizens Committee on Paperwork Reduction is one of
several groups that are interested and want to work with you and
the staff of the House, too, on paperwork reduction and regulatory
reforms.
Additionally, there is the Business Advisory Council on Federal
Reports and the Council on Federal Paperwork in the Chamber of
Commerce and several other groups, many of whom are submitting
statements today.
Mr. Chairman, your bill, it seems to me, would begin to do just
that, to begin to try to tackle this problem.
I applaud again. You know, rule 29 was my amendment to a
Talmadge amendment or a modification of that. But, if you have
got staff enough. to track that thing and here again, let me just
pause and say, this is a very dangerous area.
How are we going to make sure that when that bill is reported to
the floor, that the staff of that committee, say it is the Finance
Committee, Russell Long's committee, has a statement from that
committee trying to project what they think is going to be caused
in the field of paperwork by this bill. You have got to work on that
very hard just to make that sensible. Because most of the staffers
will just turn their nose up and say: "How in the name of God can
we predict what amendments will be on the floor in Congress?"
So, anyway, enough of that. Let's hope that you can report it
quickly, that the House of Representative agrees and get a bill and
you can begin to stop the waste.
Thank you very much, Mr. Chairman, for giving me this time.
Senator CHILES. Thank you very much, Senator McIntyre.
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
I know what you are talking about when you talk about folks
organizing to send their Congressman all of the forms that they
receive.
I had one fellow come into a hearing that we had in Jacksonville
and he had pasted together all of the forms that he dealt with and
they went across the room. They were yards and yards long. I had
another witness in our St. Petersburg hearing, an insurance man,
who just said that the people are not going to comply, that they are
going to revolt and they are going to just tell the Government that
they are going to have to come get them, that they are not going to
do it. He was ready to lead the fight in that direction.
That frustration is so strong.
Senator McIrrTYxE. I would like to just say, Mr. Chairman, that
as much as I would like to see this problem solved, I realize it is
complex and difficult. So horrendous, I might say, but I hope that
we could get something on the books to begin to work at it so that
you can have an administrator come back here and say: "Mr.
Chairman, we have been trying for 2 years. Here is some of the
things we cannot do and here is some of the things we can do. We
have got to learn to tackle this miserable problem."
Senator Cxir.ES. I also agree that we have got to have some
accountable person who can say no to a Cabinet Secretary.
Senator McIrt~YxE. Let's give them a GS-18.
Senator CHILES. Very often, the program officials of an agency
can drive their information needs to the top and get their Secre-
tary to fight for them, just to say we have got to have that.
We appreciate very much the support of your group and we look
forward to continuing to work with you and we thank you for your
continued interest.
Senator McIrrTYxE. Thank you very much, Senator.
[The prepared statement of former Senator McIntyre follows:]
 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
CITIZENS COMMITTEE ON PAPERWORK REDUCTION
1625 EYE STREET, N.W. ? WASHINGTON, D.C. 20006 ? [phone]
Mr. Chairman, I'm Tom McIntyre and for 16 years I served as a
member of the Senate. I agreed to come here today to talk about
government paperwork on behalf of the Citizens Committee.
I've come to tell you that the American public is _angry,_tfiat
there are groups of them planning to send you Xerox copies
of all the forms they receive to clutter up the Senate's halls
and offices and that they are demanding relief from government
gumshoes.
The costs of government paperwork reach billions--we can
only behave like the oracle of Delphi and estimate the level,
but it is billions--for postage, typewriters, secretaries,
time, hassle s~frustrations, hair-tearing.
Those costs can be traced to this august body and the
House on the other side of the Hill. The costs can be traced
to inaction.
Inaction that means government agencies can ask for more
information than they need because no one stops them when they'd
like to ask for more.
Inaction that means we pay millions to store records,
which in cases like the Securities and Exchange Commission,
cannot be destroyed. ~ ~~ ,
Inaction that means more information with every law.
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v vvvvvi cvvcaccc
 Approved For Release 2007i05J17 : CIA-RDP85-000038000300050009-7
Mr. Chairman, soon there will be a new Education Department.
Right now that Department is subject to no Federal Reports Act
and no reports clearance process. I hate to think of the
figures it will ask our school districts to provide. We have
an idea of what it will be like with VEDS...the Vocational Education
Data. System. ~'
Back in 1917 the nation established vocational educational
training programs. We've never had a listing of the race,
sex, or handicap of the students who take these Voc Ed courses.
Now there are 142 of them that are federally financed
But the Office of Education wants to know and is asking
for a census of who is taking what. The costs: $4 per
student, or about half the salary of one teacher in a small
county: That's a lot of money for something we have never
needed to know before.
Mr. Chairman, just a few years ago we established a
Department of Energy. When we set it up we wanted to know
how much oil we had in the ground and where the oil companies
made their profits. Millions of forms later we still don't
have the answers. Just the other day Scoop Jackson said "toe
just don't know."
Look at EPA. Back in the early 1970's we wanted to
have clean water and air. EPA was supposed to develop
plans put out rules and collect data. EPA has massive
amounts of paperwork out now, plans no reductions in its
data requests, and won't complete its compilations for years.
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 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
Or look at pension reform. Back when we passed ERISA
we wanted to protect pensioners. The paperwork put out by
the agencies put the pension plans out of business. Now
the IRS, the Department of Labor and the Pension Benefit
Guaranty Corp. are beginning at least their third rewrite of
the penions plan paperwork. Now they propose a triennial
report to save little pension plans an annual filing. The
only problem is that the triennial form is asking .questions
that the annual form never had. Still more data compilation.
All this brings me to my major point:
You must come up with a law that says someone in .the
government can stop paperwork from going out to the public.
The Citizens Committee thinks that someone should be in the
Executive Office of the President. That someone needs to be
able to say: "Mr. Secretary of Defense, you cannot ask for
that."
Mr. Chairman, your bill would begin to do just that.
Let's hope that you can report it quickly, that the House
of Representatives agrees and you can begin to stop the
waste. __... .
Thank you.
Senator CHILES. Our next witness will be Wayne Granquist, the
Associate Director of Management and Regulatory Policy of the
Office of Management and Budget.
TESTIMONY OF WAYNE G. GRANQUIST, ASSOCIATE DIRECTOR
FOR MANAGEMENT AND REGULATORY POLICY, OFFICE OF
MANAGEMENT AND BUDGET, ACCOMPANIED BY STANLEY
MORRIS, DEPUTY ASSOCIATE DIRECTOR FOR REGULATORY
POLICY AND REPORTS MANAGEMENT
Mr. Gxax@uisT. Good morning, Mr. Chairman. With me is Stan-
ley Morris who is Deputy Associate Director for Regulatory Policy
and Reports Management OMB.
I would like to summarize my statement and hit some of the
high spots.
Senator Cxrr.ES. Your statement in full will be included in the
record at the conclusion of your testimony.
Mr. Gxarr@uisT. Thank you.
I am pleased to testify today on Federal paperwork and what we
in the Office of Management and Budget are doing to reduce it.
Few other topics evoke more of an outcry. In our last published
report, we counted 4,916 forms, reports and recordkeeping require-
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
25
ments in use by Federal agencies-reports that imposed an esti-
mated reporting burden of more than 786 million hours a year.
No one questions the basic need of the Government for informa-
tion to plan, make policy decisions, operate and evaluate programs
and perform necessary research.
The question is, however, how much information is essential?
The policy of this administration is to take and support strong
actions to reduce the burdens imposed by the Federal Government;
to insure that only essential or statutorily required information is
collected; and to strengthen the system for controlling and manag-
ing paperwork by administrative action.
Mr. Chairman, we appreciate your continued efforts at reducing
paperwork and subject to one important reservation strongly sup-
port your 'proposed legislation, S. 1411. Although we do not support
the provisions that would set up a new statutorily mandated Office
of Federal Information Management Policy, we believe your bill,
through provisions for a centralized forms clearance process, in-
creased agency responsibility and planning for information re-
quests, and more effective methods to eliminate duplication, is a
constructive approach to curbing the Government's sometimes in-
satiable appetite for information.
Our testimony today will cover the history of steps that OMB has
taken to reduce the paperwork burden, a discussion of how we
think S. 1411 will contribute to reducing paperwork, and some
suggested modifications of the bill.
Our experience in trying to control paperwork goes back to the
Federal Reports Act of 1942, under which act, the Office of Man-
agement and Budget is responsible for implementing the law.
This has been achieved through a centralized review of data
collection activities involving 10 or more members of the public.
From the beginning, OMB's ability to control reporting burden
has been limited by exemptions to the Federal Reports Act. All of
the forms of the Internal Revenue Service and most of the reports
of the bank regulatory agencies have not been reviewed by any
unit outside that agency and that has been the case since the
inception of the act. Because of these provisions, almost three-
quarters of the public reporting burden is excluded from OMB
review.
In addition to these original exclusions, the Congress in recent
years enacted other exclusions. In 1973, an amendment to the
Alaska Pipeline Authorization Act, transferred reports clearance
authority from OMB to the General Accounting Office for the so-
called independent regulatory agencies. In addition, the Surface
Mining Control and Reclamation Act of 1977 provides for GAO
review of reports of the Office of Surface Mining in the Depart-
ment of Interior. Reports that make up 5 percent of total reporting
burden are included in GAO's inventory.
The Health Professions Act of 1976 exempted from OMB review
certain data collection activities relating to the availability and
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
distribution of health manpower, and that is a little less than 1
percent of reporting burden.
The Education Amendments of 1978 further fragmented the
clearance process by transferring review authority from OMB to
the Secretary of Health, Education, and Welfare for most educa-
tional data collection activities; up to 2 percent of reporting
burden. Because the law affects any department or agency that
requests information from an educational agency or institution, it
totally fragments central oversight. It splits individual agency ac-
countability between controlling authorities, and renders it virtual-
ly impossible to measure progress in the paperwork reduction pro-
gram either for the Government as a whole or for the individual
agency.
Mr. Chairman, we appreciate your efforts to modify this excep-
tion.
We estimate that because of all these exemptions only 19 percent
of reporting burden is subject to OMB control under the Federal
Reports Act. We endorse the provision bf your bill that would
centralize the forms clearance process and thereby implement one
of the most important recommendations of the Commission on
Federal Paperwork.
PRESIDENT'S REDUCTION PROGRAM
To date, Mr. Chairman, more than half of the 520 recommenda-
tions directed to the executive branch have been implemented.
About one-third remain for action by March 1980. We have been
working closely with the agencies to try to insure that the March
1980 deadline is met.
At his first cabinet meeting, President Carter announced his
intention to establish a continuing program to address the paper-
work problem. Under that program, OMB establishes an overall
ceiling on the burden that each Department or agency may impose
on the public and the President asks each department head to set
an annual goal for reducing reporting and recordkeeping burdens.
We have published three reports that show agencies progress in
achieving their goals.
Mr. Chairman, we would like to submit to the subcommittee a
copy of the most recent report.
In the first 2 years of the Carter administration, the burden
levied by Federal agencies subject to the President's paperwork
reduction program, has been reduced almost 15 percent. This is a
net figure that includes both increases and decreases.
And, to help you understand how we have accomplished this, let
me describe some specific actions.
There are many ways that OMB reduces reporting burden during
the course of a review. We may reduce the number of data items
that a respondent must supply, we may reduce the frequency of
reporting requirement. We may combine forms as another way of
reducing reporting.
We may, through changes in sample design, establishing size
cutoffs, and other measures, reduce reporting burden on small
businesses. For example, the paperwork burden placed on small
businesses by the Occupational Safety and Health Administration
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
has been significantly reduced. No longer will 40,000 businesses
with fewer than 11 employees have to fill out OSHA's annual
survey.
Disapproving proposed forms is another way that we try to keep
a lid on reporting. Of about 180 reports acted on last month, OMB
disapproved 13 percent, a marked increase, and continuing in-
crease, in the disapproval rate of 3.4 percent for October of last
year and the less than 3 percent disapproval rate cited in a recent
GAO Report for the time period from January of 1975 to June of
1978.
While progress has been made, it is becoming more evident that
significant, easy targets of opportunity to reduce reporting burden
are diminishing. New legislative requirements in the areas of
energy and environmental protection, new policy initiatives to deal
with inflation, particularly in the health area, and efforts to reduce
fraud and abuse are likely to increase reporting burden on the
public.
Our preliminary review of still incomplete fiscal year 1979 fig-
ures indicates that for the first time in this administration, there
was no further decrease in total reporting burden.
Further reductions will be possible only through serious, sus-
tained, and innovative efforts in the agencies and constant atten-
tion and commitment from agency heads, OMB, the President, and
Congress. It is no longer sufficient to attack the symptoms of
excessive paperwork, it is necessary to attack its causes-bad regu-
lations, confused and inefficient organization, and flawed legisla-
tion.
The relationship of regulations and reporting burden has become
clearer over the past 2 years. We estimate that over half of total
Federal nontax reporting is based on the need to insure compliance
with laws or regulations. It is the fastest growing area of the
paperwork problem and the chief characteristics of this reporting
are that it is mandatory, usually complex and frequently requires a
considerable amount of the public's time.
In part to address this problem, President Carter issued Execu-
tive Order 12044-Improving Government Regulations-in March
of 1978, to improve the management of the regulatory system and
to assure that regulations are cost effective and operate efficiently;
unnecessary regulations are eliminated; the public is fully involved
in developing regulations; and rules are written with common-
~ sense.
The Executive order requires that an estimate be made of the
new reporting burden necessary for compliance with a given new
regulation.
Our first report on agencies progress in implementing this Ex-
ecutive order was provided to the President on September 17, 1979.
We also increased our attention to the regulatory and paperwork
burden placed on small business. We are working closely with the
Small Business Administration to take a closer look at ways to
reduce reporting burden on small businesses.
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
In preparation for the White House Conference on Small Busi-
ness, SBA is also developing a catalog of all paperwork that small
businesses must complete. We look forward to the results of the
White House Conference on Small Business to be held early next
year for suggestions on how to repair specific paperwork problems.
In September 1977, the President issued a directive to reduce
paperwork and redtape in the grant-in-aid programs to State and
local governments. The issuance prescribed that all State and local
grant programs must comply with OMB Circular A-102. The circu-
lar implements the Intergovernmental Cooperation Act of 1968 and.
establishes standards for consistency and uniformity among Feder-
al agencies.
We have been carrying out the President's directive by requiring
that grant applications or performance report forms be in compli-
ance with the circular. This has saved immeasurable hours of
reporting burden on State and local governments.
Since legislative requirements are often the source of extensive
data collection activity, we also would hope that any new reporting
requirement, evaluation study or report to the Congress is pared to
the bare minimum as required by rule 29. Your work in establish-
ing and enforcing rule 29.5 is a significant innovation. As I know
you agree, Mr. Chairman, the creation of mountains of paper
should not be a criterion for judging a program's success.
The fact is that the paperwork control system as it exists today
is flawed. It is characterized by fragmented and incomplete respon-
sibility for control; a review process that is layered, redundant, and
reactive; insufficfent public involvement in the design of reporting
requirements; absence of a comprehensive and systematic way to
identify duplication; and low priority of the reports clearance proc-
ess at the agency level.
We recognize these problems and are taking steps to counter the
weaknesses in our process.
The President will soon sign an Executive order that will start
paperwork management in a new direction. The Executive order is
complementary to your legislation. Emphasis will be given to
strengthening agency information management, and the agencies
will be required to assure more public involvement in the develop-
ment of reporting requirements, including comments on how to
minimize the burden of paperwork on individuals and small insti-
tutions.
In addition, it will implement some of the most far reaching of
the Commission on Federal Paperwork recommendations.
We can and we will take these first steps; to do more requires
action by Congress. We view your assistance on paperwork matters
and your proposed legislation as the type of support and involve-
ment needed from all Members of Congress.
Better management to reduce the burden on individuals, small
business, and other respondents requires a centralized, comprehen-
sive authority. It is essential that no agency be exempt from over-
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
sight and that authority over Federal paperwork not be splintered
among several agencies as it is now.
For example, the success of the information locator system in
identifying duplicative requests for information hinges upon that
system covering the information requests of all Departments and
agencies.
I know that you may hear concerns from the independent regula-
tory agencies about OMB review. OMB, however, had responsibility
for review of these forms for 31 years prior to the Trans-Alaska
Pipeline Authorization Act.
We know of no instances of misuse of that authority, unwarrant-
ed delay in exercising our authority, or interference or threats to
the agencies' independence.
As I mentioned at the outset, we do have concerns about the
proposed establishment of the Office of Federal Information Man-
agement Policy responsible for Government-wide oversight of pa-
perwork, statistical policy, and Privacy Act functions, headed by a
Presidential appointee confirmed. by the Senate.
First, we fear that such an appointee would be viewed as down-
grading the level of the administration's spokesperson on paper-
work reduction from the Director to the head of a component of
OMB.
Second, we are concerned about the public's reaction to establish-
ing anew office. We are afraid that it might be perceived as the
typical Government response to aproblem-create another bureac-
racy.
We believe it would be much better to change existing egencies
and current practices in order to obtain a lasting effect on paper-
work.
Third, the establishment of the new office would separate paper-
work reduction and information coordination from OMB's other
responsibilities, including regulatory reform oversight, grant con-
solidation efforts, program evaluation, and legislation and budget
oversight. In our view, this would force the unit to focus on the
symptoms, not the causes of paperwork. We do not want to build a
"Chinese Wall" between those concerned with reducing paperwork
and those concerned with minimizing the other burdens imposed
on taxpayers and the private sector by the Federal Government.
We fully understand your concern about insuring sufficient at-
tention to and resources in OMB for paperwork control. We are
adding 13 new positions to our paperwork and regulatory reform
office. We believe OMB will be well prepared to implement the
changes that the Executive order and your legislation will bring to
paperwork control.
We also understand your concern about holding OMB account-
able for performance. To assure OMB accountability to Congress,
we would support provisions to require OMB to provide an annual
report to the Congress on resour.,e allocations, accomplishments,
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 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
and plans for paperwork management in OMB and the agencies;
routine GAO assessment of this report could be stipulated
We could set milestone dates for completing key tasks, such as
implementing the Federal Information Locator System, making
needed organizational and resource changes in the agencies, per-
forming azero based review of all existing paperwork require-
ments, and proposing legislative changes based on what we learn
in such a review; and extend the date for OMB oversight of the
implementation of the Federal Paperwork Commission recommen-
dations for an additional 2 years.
Mr. Chairman, we believe we have made significant progress in
this administration in reducing the amount of paperwork imposed
on the American people.
We endorse the thrust of S. 1411. We agree that the comprehen-
sive responsibility for paperwork control should be placed in OMB.
We welcome the opportunity you have given us to work with the
Congress, and will be pleased to cooperate with you and your staff
in developing specific language to resolve your concerns with ac-
countability and resources.
Thank you very much for the opportunity to present the views of
the administration on this bill.
Senator CHILES. Thank you for your testimony. We are delighted
to have received the support of the Office of Management and
Budget and the President. I concur that the President has been
trying to do something about the paperwork, and I think that your
office has too.
Everytime that I heard reports of progress being made and I
think there has been some progress, I would go home and start
talking about this progress. I have yet, at any meeting that I have
been to, been able to find anybody that felt that we made any
progress.
I do not know whether that will ever happen, and maybe it
won't. Maybe, as long as there is any piece of paper out there, you
won't feel it. But, I think if anything, the reverse is true and the
general public still feels that there is more, I mean each segment
feels that there is more.
Now, I have gotten some people to admit that they do not have
to file some reports. But, they will immediately tell me that those
have been replaced by something else in their specif"ic endeavor.
In gasoline, for example, they will tell you how many other
forms they have to fill out.
Your testimony about not wanting the separate office is some-
thing that we will consider.
Certainly, the reason for this office is to try to escalate the
visability and, therefore, the accountability of this whole process so
that it won't get lost. The Congress in its oversight responsibility
can focus in on one office. The President can be graded on how he
has performed on whether that office is carrying out meaningful
functions and reductions. If you have that separate office, then we
can assign sufficient resources and know that those resources are
going to be used there. We will know they are not going to go to
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 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
the next little hot project that comes along. We will be able to see
if resources are siphoned off and used somewhere else.
Mr. GxaxQuisT. We are very sympathetic in your concern with
that, Mr. Chairman, and I guess I would say two things, if I could.
One is that the Director of OMB, Jim McIntyre is concerned
about the paperwork; and Senator McIntyre mentioned who is the
guy that can say "no" to Secretary of Defense Harold Brown, but
Jim McIntyre can say no a lot better, I suspect, than a lower level
Presidential appointee could.
That is something you can keep in mind when you talk about
paperwork reduction, when you talk about implementing controls
and control teams.
A person who sits astride lots of processes and is a Presidential
advisor and counsel has more clout in being able to control the
things that are important like paperwork than somebody who is a
little bit lower down in the process.
In terms of accountability of OMB, we began a year or so ago,
starting to issue reports to the public about how the agencies were
doing. The reports, first on paperwork, now in the regulatory area,
caused some amount of brouhaha in the executive branch. We
believe it is an appropriate role and we intend to continue that so
long as we have something to say about where OMB goes. And
these reports, I think, demonstrate that we take these problems
seriously. We hope that this kind of activity as well leads agencies
to take this activity of ours seriously.
Senator CHILES. The Treasury Department contains several of
the agencies presently exempt from the Federal Reports Act; the
IRS, the Comptroller of Currency, among others.
I asked Treasury to testify today. My understanding is that they
respectfully declined and indicated that OMB would present the
administration's position on the paperwork bill.
That sounds to me that a debate has been had and a decision has
been made. Is that correct?
Mr. Gxarr@uisT. There has been a decision, Mr. Chairman, yes,
sir.
The administration's position is that the activities previously
exempted in the Treasury Department should be covered by the
Federal Reports Act.
Senator Cxir~s. So, the administration has not bought the argu-
ments that used to be used by IRS why they had to be exempted?
Mr. GxartQuisT. The arguments that were made on behalf of IRS
were basically that new tax forms have to be prepared within
extremely short time limits. The delays would be extremely impor-
tant and costly to taxpayers.
They also raised the argument that the tax form is extremely
complex and technical and there was not very much that you could
do to improve the forms as a result and the third argument, I guess
I would say is that the collection of revenue is a unique function
and unlike anything else the Federal Government does and, there-
fore, nobody outside that function should have a role in deciding
what information goes in it.
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 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
We viewed those arguments as not persuasive. To take the last
one first. About everything the Federal Government does in every
department is unique from some other department. That is why we
have departments.
We do not find that that works against the argument to have
some centralized control and oversight on paperwork.
We review lots and lots of fours on a very tight schedule and we
have been able to do clearances and do them well in as little as 24
hours.
The important thing is that we get involved up front so we know
in the development of the form what is happening. Tax forms are
clearly, annually anticipated.
Senator CHILES. You are saying that you will be able to process
these forms without unnecessary delays?
Mr. GxaN@uisT. We believe we can and we believe that we can
show places where we have done that under great time constraints
rapidly and effectively and while still reducing the burden.
Senator CHILES. As you know, the 1973 amendments to the Fed-
eral Reports Act not only transferred clearance authority over the
independent regulatory agencies from OMB to GAO, but it author-
ized the independent regulatory agencies to make the final deter-
mination as to the necessity of information in carrying out its
statutory responsibilities in whether or not there was a need to
collect such information.
Would your position be that if we transferred clearance authori-
ty back to OMB, OMB cot~,ld make that determination?
Mr. GRAN@uisT. Well, I think there is a distinction between
agencies, between the staff of the agencies and the commissions
themselves. We certainly would be very sensitive to setting up a
separate category with agency heads who have aquasi-adjudicatory
function.
We do not believe, however, for paperwork functions that there
is much difference between that and anybody else. If there were
some mechanism that provided the commissioners themselves to
make some determinations along those lines, we would not object.
Senator CHILES. For the purposes of this bill, do you have any
idea how we can define independent regulatory commissions by .,-
some means other than listing them one by one?
Mr. GxarrQuisT. We labored with the same problem.
For the purposes of the Executive order on regulatory oversight,
we call an independent regulatory commission any organizations
with multiheaded commissions with substantive regulatory respon-
sibilites whose members cannot be removed except for cause by the
President and it is multiheaded.
Mr. Moxxis. There are 18 of those agencies.
Senator CHILES. Monitoring the Privacy Act is going to become a
function of the new Information Management Office if S. 1411 is
enacted.
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
Do you see any problem with an official whose major concern is
to reduce paperwork also being in charge of protecting the privacy
of individuals?
Are these functions compatible?
Mr. GxaNQuisT. Both of those functions are already in OMB, so if
there is any incompatibility there now we do not see any.
Senator CHILES. To what extent does OMB clear information
requests on the Federal Reserve System?
Mr. GxaNQuisT. I would like to submit for the record a list of the
reports that we now clear. We basically clear reports that do not
impact upon the regulatory function of the Fed: on bank informa-
tion collection, oil and gas reserves, things of that nature.
[The information referred to follows:]
Approved For Release 2007/05117 :CIA-.RDP85-000038000300050009-7
 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
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 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
Senator CiHILES. In the case of Federal Reserve System informa-
tion requests which are exempt and not presently cleared by OMB,
why are you persuaded that those activities should also be cleared?
Mr. GxANQuisT. It goes back to what I said earlier, Mr. Chair-
man, if you want to run aGovernment-wide effort to reduce paper-
work, it seems to me that the premise going in is that it should be
inclusive.
Arguments to exclude any agency or any function have to be
extremely compelling on some grounds of uniqueness which we do
not see in bank regulatory areas any more than we do in energy
regulatory areas or any other areas of Government that go out and
seek information from regulatory industries.
o So, we do not believe that there should be exceptions because of
that.
Senator CHILES. Do OMB Budget Divisions get involved in clear-
ing agency reports and then checking on agency clearance con-
s trols?
In other words, would this legislation help integrate the imple-
mentation of paperwork management objectives with the budget
process?
You know my view for the strong M in OMB. If we pass the bill,
what do you envision happening?
Mr. GxaxQuisT. If the bill, as finally enacted centralizes authori-
ty over paperwork in the Federal Reports Act in OMB, I think it
will strengthen OMB in general on the M side. I think, if there is
an independent office created inside of OMB, it will fragment
further the disconnect between budget and management affairs.
Right now, we have got a pretty good system going where budget
examiners do get involved in the reports requirements from the
agencies.
I am afraid an independent office in OMB would cause a break-
down in this relationship.
Senator CHILES. What are the estimates of cost of putting the
agency locator in place and how long will that take?
Mr. GxaNQulsT. My recollection, Mr. Chairman, and I can submit
something more exact for the record, is that it will be under $3
million a year. The best estimates I saw from the staff were $21/2
million a year.
The best estimates in terms of the test run are April of 1980,
systemwide, up and running in total about October 1981.
[The information referred to follows:]
The Federal Information Locator System will cost from $2.5 to $3 million to
develop as a prototype system. That figure includes the costs for building, designing,
and debugging the central OMB data file. In addition, individual agencies will incur
some cost preparing their data for entry into the system. In many cases the agencies
already have this done and would merely have to make certain modifications to
accomodate the central component.
Our best estimate on the timetable is that we can begin building the prototype
system by April 1, 1980. We would then test the system in several government-wide
areas, such as small business, procurement, education, housing, or other areas, to
check for government-wide duplication and overlap. We believe we can begin devel-
oping the operational FILS by November 1980, with the expectation that the gov-
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 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
ernment-wide system could be in place and operating a year later-by November
1981.
Senator CHILES. Do you have any estimates about whether there
would be any savings for having this information locator in place?
Mr. Gxart@ulsT. My assumption is yes, there would be. We have
done the test run already with Defense Department software.
Maybe Mr. Morris can address some of the findings they discov-
ered?
Mr. Moxxis. We tested the Defense Department system in six
agencies and the agencies were not the best for identifying duplica-
tion but, in fact, we did find several areas where duplication exist-
ed, particularly in the contract area.
We have an effort underway now to work with the various
agencies so that we can came up with a standardized contract form
working with the Office of Federal Procurement Policy that would
considerably simplify contractor reporting.
If we can do that, probably that in itself would pay for the
system.
Senator CHILES. Well, it would seem to me that at a cost of $2
million to $3 million which you are talking about, it would not take
much savings to offset that. If you could stop two or three forms or
even one form you might well save that much for the private sector
and the rest of the public sector.
Mr. Moxxis. That is clearly correct.
If the Commission on Federal Paperwork's figures on the cost of
paperwork are even half accurate, a marginal saving would pay off
pretty fast.
Senator ~'iHILES. Mr. Granquist, you are familiar with rule 29.5
here in the Senate. I would like to encourage the administration to
take a strong role in coordinating agency paperwork assessments
on proposed legislation. One of our problems is the quality of what
we are getting in rule 29.5. We are getting some compliance now,
but I think the quality of the assessment leaves much to be desired.
What do you think of this approach?
Mr. GxnNQulsT. We are very sympathetic with that, Mr. Chair-
man. Raising the level of attention to paperwork in every agency is
our goal.
As I said, one of the problems with the system now is that it is at
too low a level and when that is the case, you do not get a good
product nor impact on legislation.
We are pushing hard to get that into the legislative review
process in OMB, when the administration must comment on the
bill.
Senator CHILES. Senator Pryor, do you have any questions?
We are delighted to have you with us this morning. We know of
your interest in trying to come to grips with the paperwork control.
Senator PRYOR. Senator Chiles, I applaud you for not only father-
ing this piece of legislation, but also holding this hearing and I
think it is most timely.
You were on the front of this battle long before it was popular to
be involved in things like this. You leave a great record in this
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 Approved For Release 2007i05J17 :CIA-RDP85-000038000300050009-7
area. I would like to applaud you and your staff for having this
hearing today and working in this field.
I would just like to ask one or two questions and you may be
asking general questions. And, this question may be more specific
than general and if it is, you certainly can supply an answer for
the record.
DAVIS-BACON REAUIREMENTS
Back around October 2, I believe, we had a hearing relative to
the Davis-Bacon law and the amount of paperwork that the Davis-
Bacon law required of contractors and subcontractors, to wit, that
involved in any Federal job of construction, every week, not every
? month or every third month, every week, the subcontractor and
the contractor had to fill out the payroll forms, social security
withholding, FICA, all of the payroll information, ship those to the
~ contracting agency.
In most instances, it winds up being Washington and the Depart-
ment of Labor. In most instances, after that, in some warehouse
probably in Baltimore. But, a long story sl-~ort, Mrs. Kreps, in a
memorandum that we put in the record, stated that if we could do
away with this one provision of the law, if we could abolish that
provision, that we would save, I believe, 1 million employee-hours a
year.
I have got a bill keeping the same penalties under the law, but
simply that would say the contractor would only, under those
conditions, state their compliance at the beginning of the contract
and compliance at the end of the contract, same penalties prevail-
ing as several.
And, the administration came and testified against that proposal.
They think that we need all of this extra paperwork. The Office of
Management and Budget would not come and testify or take any
position on it and I wonder if you would comment on that this
morning?
Mr. GRAN@ulsT. I would be pleased to submit to you Senator, a
more detailed answer that speaks to our administration position on
the need for that information.
I can say that inside the OMB in terms of clearance process on
j individual forms, we have been working to minimize the burden
wherever possible and that we have looked at reporting compliance
problems in the Davis-Bacon area.
My colleague may be able to add some more to that in terms of
the specific review of that form?
Mr. MORRIS. We had a number of discussions with the Labor
Department about that on the Davis-Bacon reporting concerned
with burden and concerned about ways to minimize it in the most
intelligent way possible.
I understand that the Labor Department is also concerned about
it and have taken some steps to look at what they can do adminis-
tratively to reduce the burden.
I have not seen the results of any administrative step yet.
Senator PRYOR. Well, yes. It has been on the statute books for, I
think, now 41 years. So, they have had plenty of opportunity to
look at it.
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The next area that I am interested in are consultants, the con-
sulting industry, and how we are giving away all of our authority,
especially in the executive branch of the Government, to consulting
firms that are pretty well running the U.S. Government today,
especially the Department of Energy and other departments, the
consulting firms are.
I think the consultants have become breeding grounds for an
awful lot of paperwork and an awful amount of the regulations
that come pouring out of Washington.
Have you hired a consultant to do any studies on that?
Mr. GxnxQuisT. I hope not, Senator. The President, about a year
and a half ago, expressed the same kind of concern you just ex-
pressed. He asked the Office of Federal Procurement Policy to do
something about finding out how many consultants there were,
what the policies were for employing them, how we distinguish
them from other folks around Washington and that led to a rather
substantial effort to try to figure out how you define them, where
they are, how many are used, et cetera.
I would be pleased to submit to you a report. I do not have it off
the top of my head. But, let me say that we also put up guidance to
agencies discouraging the use of consultants.
There are always going to be consultants around because we
cannot afford to employ all the kind of brainpower to solve the
problems we have to solve without half of the people in America
working for the Government.
So, from time to time, there will be a need to employ expertise
from outside. The important thing is whether or not they become
substitutes for policy officials.
That is the kind of consultant you want to knock out. If you
want to buy brainpower cheap without putting a Federal employee
on the payroll for temporary purposes, that is fine, but the other
concern is the pernicious problem.
Senator PRYOR. With respect to the President and the Office of
Management of Budget, what really has happened, I am afraid,
since the 1977 directive from the President to OMB went out, what
I am terribly afraid has happened is nothing. And, I have seen the
results, what results there are available of the requests by the
President and the response of the Office of Management and
Budget and today, I would say that since that time, I imagine we
have increased the consulting dollar, I imagine by one-fourth.
Every time we put any kind of a personnel ceiling on the Federal
agencies out there, then that is good for the consulting business
and that is when the consultants get hired and that is when all the
money goes out there.
And, sir, I know that we have got to have consultants, we have
got to utilize them. I am in favor of utilizing them. But, I am also
very fearful that we have absolutely no checks and balances on
consultants, who gets hired, who gets the contracts.
We see those repeat performers out there time and time again
and with literally no controls whatsoever. I think in the Depart-
ment of Energy, the 26 areas of that Department that have the
authority to run consulting contracts and I think there is just an
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opportunity there for some awful, awful scary things that could
develop. And, I see a great number of problems and we are looking
into it.
What I was saying, is I think the consultants today area breed-
ing ground for a lot of the paperwork that we have, a lot of the
regulations that come out of Washington, D.C., and we are just
abrogating our responsibility and giving our responsibility and re-
sponsibilities away and running from them in the executive branch
of the Government and giving them to the consultants.
It really is a concern to me. I just wanted to mention that.
Mr. GxaxQuisT. I understand.
Senator PRYOR. Once again, Senator Chiles, I applaud you for
your effort in this entire undertaking.
Senator CiHILES. Thank you.
Thank you, Mr. Granquist. We agree that it is going to take
leadership and partnership between the President and Congress, if
~ we are going to reduce paperwork costs to provide a record that
will enable the American public to believe that paperwork de-
mands are not out of control.
I think there has been some progress made in OMB, but I think
before we can get any measurement of that, there is a lot more to
do. We may well have some more questions that we want to ask
you for the record.
Mr. Gxax@uisT. Thank you, Mr. Chairman.
[The prepared statement of Mr. Granquist follows:]
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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE. OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20507
For Release on Delivery
Expected at 10:00 a.m.
Thursday, November 1, 1979
Statement of Wayne G. Granquist
Associate Director .f or Management and Regulatory Policy
Office of Management and Budget
Before the Subcommittee on Federal Spending
Practices and Open Government of The
Senate Governmental Affairs Committee
I am pleased to testify today on Federal paperwork and what
we at the Office of Management and Budget are doing to reduce
it. Few other topics evoke more public outcry than the
amount of time and money the American people expend each year
providing or maintaining information for Federal Departments
and agencies. In our Iasi published report, we counted 4,916
forms, reports and reeordkeeping requirements in use by
Federal agencies. Those reports imposed an estimated
reporting burden of more than 786 million hours. 'The forms
that account for the.t reporting burden are :. 'applications, 98;
requests for information in connection with regulatory, finan-
cial and other management activities; 138; program evaluations,
research and statistical surveys, 58; and tax reporting, 738.
The term "burden hours" is an estimate of the average amount
of time it takes to gather the information necessary and
complete a report form, multiplied by the number of. times in
a year that the form must be filled out.
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41
No one questions the basic need of the government for
information to plan, make policy decisions, operate and
evaluate programs, and perform necessary research. The
question is rather how much informat-ion is essential. The
policy of this Administration is to take and support strong
actions to reduce the burdens imposed by the collection of
information by the Federal government; to ensure that only
Z essential or statutorily required information is collected;
and to strengthen the system for controlling and managing
paperwork by administrative and legislative actions. From
Z
our experience with administering the Federal Reports Act, it
is clear that the Legislative and Executive Branches are
jointly responsible for the paperwork burden and that both
must take action to reduce the amount of information
collected from American citizens.
Mr. Chairman, we appreciate your continued efforts at .
reducing paperwork and, subject to one important reservation,
strongly support your proposed legislation, S. 1411.
Although we do not support the provisions that would set up
a new, statutorily mandated Office of Federal Information
M.anaaement Policy, we believe your bill, through provisions
for a centralized forms clearance process, increased agency
responsibility and planning for information requests, and
more effective methods to eliminate duplication, is a
constructive approach to curbing the government's sometimes
insa.ti.able appetite for information. We have made progress
in controlling paperwork over the past 2-1/2 hears, but it is
our opinion that the Federal Reports Act reeds to be
strengthened if we are to be truly successful in reducing
paperwork to the lowest level and keeping it there.
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My testimony today will cover a history of paperwork control,
steps the Office of Management and Budget has taken to reduce
reporting burden, weaknesses in the current system, a
discussion of how we think~S. 1411 will contribute to
reducing paperwork, and some suggested modifications that we
feel may strengthen the government's approach to the
paperwork problem.
Our experience in.trying to control paperwork goes back to
the Federal Reports Act of 1942. The Act states that:
"Information needed by Federal agencies stall be_
obtained with a minimum burden upon business
.enterprises, especially small business enterprises, and
other persons required'to furnish the information, and
at a minimum cost to the Government. Unnecessary
duplication of efforts in obtaining information through
the use of reports, questionnaires, and other methods
shall be eliminated as rapidly as practicable.
information collected and tabulated by a Federal agency
shall, as far as is expedient, be tabulated in a manner
to maximize the usefulness of the information to other
Federal agencies and the public" (44 U.S.C. 3501).
The Office of Management and Budget is responsible for
implementing the law.. This has been achieved through a
centralized review of data collection activities involving 10
or more members of the public.
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From the beginning, OMB's ability to control reporting burden
has been ,limited by exemptions to the Federal Reports Act.
The 1942 Act excluded certain basic governmental functions,
such as, the collection of taxes, management of the public
debt and other government financial operations, and
supervision of the nation's financial credit system. This
means that all of the forms of the Internal Revenue Service
and most of the reports of the bank regulatory agencies
(e.g., the Federal Deposit Insurance Corporation, the Federal
Reserve Board, the Federal Home Loan Bank Board, the Farm
'i
Credit Administration, and the Controller of the Currency)
are not reviewed by any unit outside the agency. Because of
these provisions, almost three quarters of the total public
reporting burden is excluded from OMB review.
In addition to these original exclusions, the Congress
in recent years enacted other exemptions to the Federal
Reports Act or transfers of clearance authority away from
OMB.
A 1973 amendment to the Trans-Alaska Pipeline Authorization
Act (P.L. 93-153) transferred reports clearance authority
.from OMB to the General Accounting Office (GAO) for the
so-called independent regulatory agencies. The transfer also
reduced the authority of the reviewing agency, so that GAO
does not have the same degree of authority as existed under
the original Act.
In addition, Section 201(e) of the Surface Mining Control and
Reclamation Act of 1977 (P.L. 98-87).provides for GAO review
of reports of the Office of Surface Mining in the Department
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of Interior. Reports that make up 58 of the total reporting
burden are included in GAO?s inventory and stem from the
following agencies: Civil Aeronautics Board, Commodity
Futures Trading Commission, Consumer Product Safety
Commission, Federal Communications Commission, Federal'
Election Commission, Federal Maritime Commission, Federal
Trade Commission, Interstate Commerce Commission, National
Labor Relations Board, Nuclear Regulatory Commission, Office
of Surface Mining, and the Securities and Exchange
Commission.
The Health Professions Act of 1976 (P.L. 94-484; Section
708(g)) exempted from OMB review certain data collection
?activities relating to the availability and distribution of
health manpower.
The Education Amendments of 1978 (P. L. 95-SE 1) further
fragmented the clearance process by transferriny review
authority from OMB to the Secretary of Health, Education and
Welfare for most educational data collection activities
(about 2$ of the total reporting burden). This law is
particularly troublesome because it means that Federal
agencies must determine whether or not a report is
"education-related" and thus subject to HEW review. This law
is the single most grievous weakening of the Federal Reports
Act. Because the law affects any Department or agency that
requests information from an educational agency or
institution, it fragments central oversight, splits
individual agency accountability between controlling
authorities, and renders it virtually impossible to measure
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accurately progress in the President's Paperwork Reduction
Prograri either for the government as a whole or for
individual agencies. Neither the Secretary of HEW nor the
statutorily established Federal Education Data Acquisition
Council have been able to agree upon a definition of an
.educational program. Accordingly, the exact scope and effect
of the transfer is unclear. Mr. Chairman, we appreciate your
past efforts to modify this exemption.
We estimate that because of these exemptions only 198 of
reporting burden is subject to OMB control under the Federal
Reports Act. We believe that the exclusions to the
Federal Reports Act have confused accountability for the
paperwork problem-and made it impossible to identify and
control duplicative reporting requirements. We endorse the
provision of your bill that would centralize the forms
clearance process and thereby implement one of the most
important recommendations of the Commission on Federal
Paperwork.
During the 1960`s and 1970's several Congressional
investigations criticized the excessive paperwork being
required by the Federal government and the lack of effective
action by O'riB. Too often the criticisms 'produced one-time
intensive campaigns, without causing any real change in the
way the government managed its information needs.
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46
In 1974, the Congress established the Commission on Federal
Paperwork to carry out an extensive examination of the
paperwork problem. To date more than half of the 520 recom-
mendations directed to the Executive Branch have been imple-
mented. About one-third remain for action by March, 1980.
We have been working closely with the agencies to ensure '.
that the t4arch, 1980 deadline is met,
President Carter's Reporting Burden Reduction Program
.Following through on the recommendations of 'the Commission on
Federal Paperwork is but one part of our efforts to control
reporting burden. At his first Cabinet meeting, President
.Carter announced his intention to establish a continuing
program to address the paperwork problem. The President's
program focuses directly on the burden of Federal. reporting
and recordkeepng requirements and uses familiar managerial
tools. OMB establishes an overall ceiling on the burden that
? each Department or agency may impose on the public and the
_. _ _..
President asks each Department and agency head to set an
annual goal for reducing reporting and recordkeeping
burdens. We have published three reports that show agencies'
progress in achieving their goals. If you have no objection,
Mr. Chairman, we request that a copy of the most recent of
these reports be placed in the record:
In the first two years of the Carter Administration, the
reporting burden levied by Federal agencies'subject to the
President's paperwork reduction program, has been reduced
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 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
almost 158. This is a net figure that includes both
increases and decreases. ~TO help you understand how we have
accomplished this, let me describe some specific actions.
_ _.
There are many ways that OMB reduces reporting burden during
the course of a review. We may reduce the number of data
.September of this year, a Department of Energy report from
first purchasers of crude oil was simplified, resulting in a
228 reduction in burden. A proposed National Institutes of
Health report from program directors or principal
investigators was reduced in August through eliminating
certain requirements and limiting the amount of information
required on research plans resulting in a reduction in
reporting of 140,000 hours.
Or we may reduce the frequency of a reporting requirement,
For example, the Department of Transportation's "Screening
Activities and Arrest Report" used for airport security
purposes was reduced in January from monthly to quarterly,
resulting in an 188 reduction in reporting burden. At OMB's
direction, annual reports imposed by the Veteran's
Administration on colleges and universities were changed to
biennial reports. This resulted in a savings of 625,000
hours every two years for higher education institutions.
Combining forms is another way we reduce reporting burden.
Under OMB leadership, a combined form for the States' quality
control reporting systems for Aid to Families with Dependent
Children, Medicaid and Food Stamps was developed in
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September. Almost 150,000 reporting hours will be saved this
year with an estimated 15 states converting to the integrated
Through changes in sam le design, establishing size cut-offs,
and other measures, we have reduced reporting burden on
small businesses. For example, the paperwork burden placed
on small businesses by the Occupational Safety and Health
Administration has been significantly reduced. 40,000
businesses with fewer than 11 employees no longer have to
fill out OSHA's annual survey. In addition, those businesses
that do have to comply with OSHA's reporting requirements now
are required to provide much less information than was
previously required. These two actions combined reduced the
annual reporting burden by almost 808 -- from 320,000 hours
to 70,000 hours. Similarly, employers, particularly those
with small pension plans, have benefited by a 1.4 million
hour reduction in ERISA pension plan reporting. No longer
does each plan have to refile a plan description (on form
EBS-1) when the plan is amended, a significant change from
earlier requirements.
Last year, thousands of small contracting firms were believed
of a massive reporting requirement when the Labor Department
exempted these employers from having to file monthly employ-
ment utilization reports if they were participating in a "home
town" plan (:such as the Philadelphia Plan) for assuring
adequate affirmative action programs. This change resulted
in a 908 reduction in the paperwork burden -- from an
estimated 1.2 million hours to 120,000 hours.
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49
Many of our reviews that result in reduced burden are a
- The Council on Wage and Price- Stability (COWPS)
submitted for Ot4B clearance a revised version of its
price/profit monitoring form (PM-1). Industry comments
indicated that the proposed revision would significantly
than 708 of the proposed reporting burden for States
participating in the Community Services Administration's
Energy Crisis Assistance Program was eliminated in October.
OMB's review brought about major reductions in the proposed
reporting burden including a reduction in reporting frequency
from biweekly to quarterly. Reporting requirements levied on
Community Mental Health Centers were reduced 86~ annually by
the reduction in frequency of reporting and by the reduction
of information required.
Disapproving proposed forms is another way OMB keeps a lid on
reporting burden. Of approximately 180 reports acted on
last month, OMB disapproved 138, a marked increase in the
disapproval rate of 3.48 for October of last year and the
?less than 38 cited in a recent GAO report for the time period
from January 1975-through June 1978.
increase the reporting burden associated with the form.
In October, OMB approved a report that deleted many
items, and limited the number of firms that were
required to provide the new data elements. The 120,000
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hours of burden associated with the approved PM-1 is
about half of the burden that have been imposed by the
original version.
- The Environmental Protection Agency, within the last
week, proposed a' revised premanufacture notification
rule (PMN) governing information required to introduce
new chemicals in the market (part of its toxic
substances program). EPA's original proposal contained
such burdensome paperwork requirements that it was
feared the form would stifle innovation, particularly in
small, low volume chemical businesses. EPA's own
economic analysis showed that the forms alone could keep
from 258 to 758 of new chemicals off the market. The
new proposal reduces mandatory reporting from 34 to 13
pages and achieves an estimated 50-608 reduction in the
costs to businesses of preparing the forms when compared
to the earlier version.
While progress has been made, it is becoming more evident
that significant, easy targets of opportunity to reduce
reporting burden are diminishing. New legislative
requirements in the areas of energy and environmental'
protection, new policy initiatives to deal with inflation,
particularly in the health area, and efforts to reduce fraud
and abuse are likely to increase reporting burden.
Preliminary review of still incomplete FY 1979 figures
. indicates that for the first time in this Administration,
there was no further decrease in total reporting burden.
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51
Further reductions will be possible only through serious,
sustained and innovative efforts in the agencies and constant
attention and commitment from agency heads. OMB, the
8resdent, and Congress. It is no longer sufficient to
attack the symptons of excessive paperwork; it is necessary
to attack its causes ~- bad regulations, confused and in-
efficient organization, and .flawed legislation.
become clearer over the past two years. We estimate that,
over half of total Federal nontax reporting is based on the
need to ensure compliance with laws or regulations. It is
the fastest growing area of the paperwork problem. The chief
characteristics of this reporting are that it is mandatory,
usually complex, and frequently requires a considerable
,amount of the public's time. In part to address this
problem, President Carter issued Executive Order 12044
(Improving Government Regulations) in March 1978 to improve
the management of the regulatory system and assure that:
- regulations are cost-effective and operate
efficiently;
- unnecessary regulations are eliminated or never
issued;
- the public is fully involved in developing
regulations; and
- rules are written with common sense and in plain
English.
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52
The Executive Order requires that an estimate be made of the
new reporting burden or recordkeeping requirements necessary
for compliance with the regulation.
The public comment feature has been very helpful in
identifying potentially burdensome provisions and having
alternatives substituted. In addition, the combined
responsibility for paperwork and regulations in one division
in OMB has been extremely useful in helping to cut down on
?the burden of Federal regulations.
Our first report on agencies' progress in implementing E.O.
12044 was provided to the President on September 17, 1979.
If you have no objection, Mr. Chairman, we request that a
copy of this report be placed in the record.
We also have increased our attention'to the regulatory and .
paperwork burden imposed on small businesses. Some examples
of improvements in this area are:
- The Food and Drug Administration has set up a program
to give special assistance to small businesses that are
trying to cope with FDA regulations. Service desks to
help manufacturers will be established in East Orange;
N. J., Chicago, Atlanta, and Santa Ana, California.
Desk officers will help businesses dealing with problems
such as: how to fill out applications and other
government forms; how to determine what regulations
must be followed to market a new product; and how FDA
regulations affect manufacturers' products or processes.
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53
- The Agriculture Department has reduced the compliance
burden for smaller export firms arising from the grain
standards regulations. By increasing the minimum
threshold of tons of grain exported, up to 1/4 of the
original 200 firms affected by these costly e~ew
regulations are exempted from compliance with only a 28
reduction in the surveillance on export grains.
- EPA has implemented a thorough revision of its
regulations governing sewerage treatment grants,
speeding up processing time for several water and sewer
grants by more than a year and resulting in a 30-408
reduction of the paperwork requirement for a small
town's grant application.
We are working closely with the Small Business Administration
to take a closer look at ways to reduce reporting burden on
small businesses. SBA.is now monitoring the effects of new
and revised regulations on small businesses - both reporting
and operating requirements. In preparation for the White
?House Conference on Sma11 Business, SBA is also developing a
catalogue of all paperwork that small businesses must complete.
The catalogue is arranged by kind of business; this will provide
info=mation from the perspective of the respondent that will be
most useful to us and the agencies. We look forward to the results
of the White House Conference on Small Business to be held early
next year for suggestions on how to repair specific paperwork
problems.
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In September 1977 the President issued a directive to reduce
paperwork and red-tape in the grant-in-aid programs to State
and local governments. The issuance prescribed that all
State and local grant programs must comply with OMB Circular
A-102. The circular implements the Intergovernmental
Cooperation Act of 1968 (82 Stat. 1101) and establishes
standards for consistency and uniformity among Federal
agencies in the administration of grants. OMB has been
carrying out the President's"directive by requiring that
grant applications or performance report forms be in
compliance with the circular. This has saved immeasurable
hours of reporting burden on State and local governments.
For example, ACTION successfully achieved a 528 reduction in
its reporting burden on the public over the last 9 months by
bringing its grant reporting into compliance with OMB
Circular A-102 and reducing the number of references
necessary for an applicant to become an ACTION volunteer.
Since legislative requirements are often the source of
extensive data collection activities, we also would hope that
before any law is passed, the responsible committee would
pare to the bare minimum any new reporting requirement,
evaluation study and report to the Congress as required by
Rule 29. Your work in establishing and enforcing Rule 29 has
been a significant innovation. As I know you agree,
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55
Mr. Chairman, the creation of mountains of paper should not
be a criterion for judging a program's success.
The paperwork control system is flawed. It is characterized
~ by fragmented and incomplete responsibility for control; a
review process that is layered, redundant, and reactive;
.insufficient public involvement in the design of reporting
a
requirements; absence of a comprehensive and systematic way
to identify duplication; and low priority of the reports
clearance process at the agency level. The General
Accounting Office issued in September of this year a report
"Protecting the Public from Unnecessary Federal Paperwork:
does the Control Process work?" (GGD-79-70). The report
identifies opportunities for improving the process for
controlling Federal paperwork demands on the public and
recommends changes in the role played by the Office Of
Management and Budget in the process.
We recognize these problems and are taking steps to counter
the weaknesses in our process. The President will soon sign
an executive order that will start paperwork management in a
new direction. The Executive Order is complementary to your
legislation. Emphasis will be given to strengthening agency
?information management, and the agencies will be required to
assure more public involvement in the development of
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reporting requirements, including comments on how to minimize
the burden of paperwork on individuals and small
institutions. In addition, it will implement. some of the
most far-reaching of the Commission on Federal Paperwork
recommendations.
The Executive Order will provide for: sunset of new forms
within two years of initial use and of all forms every five
years; a Federal Information Locator System (FILS) to
identify and eliminate duplicative reporting requirements,
and the development of comprehensive agency plans covering
all requests for information. Such plans will include the
purpose of each information request, the estimated reporting
burden to be imposed, and identify the respondent group. The
plan will be used by OMB to establish an agency paperwork
budget.
We can and will take these first steps; to do more requires
action by Congress. Since Congress stated general policy on
.paperwork for the first time in the Federal Reports Act in
1942, every significant statutory change regarding paperwork
has had the effect of weakening this policy. It is time for
Congress to reaffirm and strengthen the policy of restraining
Federal paperwork.
As I stated earlier, to be successful in this area requires a
partnership between Congress and the Executive. We view your
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 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
assistance on paperwork matters and your proposed legislation
as the type of support and involvement needed from all
members of Congress.
Better management to reduce the burden on individuals, small
business, an6 other respondents requires a centralized,
comprehensive authority. It is essential that no agency be
exempt frori oversight and that authority over Federal
paperwork not be splintered among several agencies as it is
now. For example, the success of the information locator
system in identifying duplicative requests for information
hinges upon that system covering the information requests of
all Departments and agencies.
I know that you may hear concerns from the independent
regulatory agencies about OMB review. However, OMB had
responsibility for review of these forms for 31 years prior
to the Trans-Alaska Pipeline Authorization Act. We know of
no instances of misuse of that authority, unwarranted delay
in exercising our authority, or interference or threats to
the agencies' independence. In fact, by special arrangement,
we approve for the International Trade Commission, a strong
independent agency, dozens of reports each year on a two day
turn around basis. Already OMB approves more than a score of
~ reports from the banking agencies, including the Federal
Reserve Board, that collect non-bank supervisory information.
Many of these reports collect vital economic information used
i
by these agencies in making key policy decisions. We know of
few complaints on the part of these agencies with our review
process.
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Nor do we feel that out performance in reviewing reporting
requirements levied on the education community was
is essential to a credible paperwork control program and
would contribute to the development of tax forms that are
'less burdensome and easier to understand. Therefore, we see
no reason to treat some agencies or types of reports
differently.
As I mentioned at the outset, we do have concerns with the
proposed establishment of an Office of Federal Information
Management Policy (OFIMP) responsible for government-wide
oversight of paperwork, statistical policy, and Privacy Act
functions, headed by a Presidential appointee confirmed by
the Senate.
First, we fear that such an appointee would be viewed as
downgrading the level of the Administration's spokesperson on
paperwork reduction from the Director to the head of a
component of OMB.
Second, we are concerned about the public's reaction to
establishing a new office. We are afraid that it might be
perceived as the typical government response to a problem -
create another bureacracy. We believe it would be much
better to change existing agencies and current practices in
order to obtain a lasting effect on paperwork. '
-Third, the establishment of the new office would separate
paperwork reduction and information coordination from
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OMB'a other responsibilities, including regulatory reform
oversight, grant consolidation efforts, program evaluation,
and legislation and budget oversight. In our view this would
force the unit to focus on the symptoms, not the causes of
paperwork. We do not want to build a "Chinese wall" between
those concerned with reducing paperwork and those concerned
with minimizing the other burdens imposed on taxpayers and
the private sector.
~ attention to and resources in OMB for paperwork control. We
are adding 13 new positions to our paperwork and regulatory
reform offices. We believe OtdB will be well prepared to
implement the changes that the executive order and your
legislation will bring to paperwork control.
We also understand your concern about holding OMB accountable
for performance. To assure OMB accountability to Congress,
we would support provisions in the bill to:
- require OMB to provide an annual report to Congress on
resource allocations, accomplishments, and plans for
paperwork management in OMB and the agencies; routine
GAO assessment of this report could be stipulated;
- set milestone dates for completing key tasks, such as
implementing the Federal Information Locator
System, making needed organizational and resource
changes in the agencies, performing a zero based
review of all existing paperwork requirements, and
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- extend the date for OMB oversight of the
implementation of the Federal Paperwork Commission
recommendations for an additional two years.
this Administration in reducing the amount of paperwork
imposed on the .American people, and we are proud of that.
continue this progress and ensure sustained attention to
control of paperwork in the future requires further steps.
We have made and are making important changes in the way we
carry out our existing responsibilities. The Congress has
?its turn now to reaffirm and strengthen its policy toward
control of paperwork. We endorse the thrust of S. 1411. We
agree that comprehensive, unified responsibility for
paperwork control should be placed in OMB. We welcome the
opportunity you have given us to work with the Congress, and
will be pleased to cooperate with you and your staff in
developing specific language to resolve your concerns with
accountability and resources.
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Senator CHILES. Now, we will hear from Hon. J. Charles Partee
who is Governor of the Federal Reserve.
TESTIMONY OF J. CHARLES PARTEE, MEMBER, BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. PARTEE. I am pleased to appear before the committee today
to present the views of the Federal Reserve Board on S. 1411. The
Board is sympathetic with the general objective of the bill-to
reduce paperwork and to put effective controls on the process of
imposing reporting and recordkeeping requirements on the public.
Reporting burdens have grown sharply over the years and there
can be no question of the need for stern discipline on agency
reporting activities. As a matter of proper procedure, all statistical
initiatives should be required to demonstrate (a) that there is a
pressing need for every piece of information requested; (b) that
there are no unnecessary duplicative collection efforts; (c) that
information is asked for in the most efficient and least burdensome
manner; and (d) that existing data sources, from whatever agency,
have been utilized to the extent feasible.
The Federal Reserve has always endeavored to conduct its data
collection efforts with this kind of discipline. Over the years we
have strengthened and intensified our report controls. Since 1975,
we have had in place a comprehensive system of clearance proce-
dures. These procedures are reviewed periodically, and any changes
in clearance standards promulgated by Executive order or by OMB
guidelines have been incorporated in our program to the extent
appropriate.
Our program applies both to proposals for new reports and to all
existing reports. Under the program, every Board reporting series
is periodically reexamined on a zero-based approach to see whether
it can be eliminated, cut back with respect to contents or reporting
panel, or otherwise improved with respect to reporting burden.
Every Board report is subjected to critical review at several levels
and must be justified in detail before it is adopted or renewed. We
devote a substantial amount of resources to this program, which is
coordinated at the senior staff level. Moreover, the program in-
volves active participation by several members of the Board, and
the final decision on all report proposals is made by the Board as a
whole. We believe that our program for the control and review of
reporting is one of the most comprehensive in the Federal Govern-
ment, and we are confident that it would meet and surpass, the
program and procedural criteria set forth in section 3504(c)(2) of
the bill.
We have had good success in recent years with the Board's
program of reducing reporting burden. From the end of 1975 to
midyear 1979, we managed to reduce by almost 25 percent the total
number of items of information reported to us on all ~ our reporting
forms-other than those directly related to the accounting for de-
posits subject to reserve requirements. This total is measured by
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taking the number of items of information on each report multi-
plied by the number of respondents and the frequency of reporting
within a year and then aggregated for all reports. I should hasten
to add that we do not expect to be able to continue this rate of net
reduction. Given new legislation, new supervisory and monetary
policy needs, and the fact that we have completed the first cycle of
review of existing reports, I would anticipate that we have already
accomplished most of the net reduction possible for now. Neverthe-
less, the Board's clearance and review program will continue to
insure that reporting burdens are kept to the minimum consistent
with,the effective discharge of our responsibilities.
While our statistical clearance procedures incorporate appropri-
ate OMB clearance guidelines and standards, the reports collected =-
by the Board from banking institutions that are used for supervi-
sory purposes have been exempt since 1942 from submission to
OMB for approval under the Federal Reports Act. The banking
supervisory reports of the Comptroller of the Currency and the r
FDIC are also exempt. According to the legislative history of the
Federal Reports Act, the exemption was intended to insure that
the Bureau of the Budget-OMB's predecessor-would not be able
to prohibit the banking agencies from independently collecting in-
formation with respect to the banks they supervise if they deter-
mined that the direct collection of such data was necessary. Among
the reasons for such treatment are: One, the sensitivity of such
supervisory information and of the examination process; two, the
necessity at times of obtaining information quickly in response to
urgent policy needs; three, the highly technical content of much of
the data that needs to be obtained; and four, the fact that many of
the data collection activities and recordkeeping requirements of the
Federal banking agencies are based on specific statutory mandates.
The Board believes that the rationale underlying the current
exemption of banking reports from submission to OMB remains
operative, particularly in view of our own rigorous report clearance
and review procedures. Retention of the exemption is necessary to
insure the continued and unhindered capability of the financial
supervisory agencies to collect information they regard as essential
for maintaining the soundness of the banking system. Involving the ~
proposed Administrator for statistical management in the clear-
ance of reports collected from banking institutions would seem to
serve no constructive purpose. At a minimum, such involvement
would raise serious problems in view of the sensitivity of the data
and would necessarily occasion delays that could interfere with the
effective discharge of our responsibilities.
I am aware that a section of the proposed bill (3509(a)(3)) con-
tains an "override" provision that would enable the Board, by a
two-thirds vote, to void the Administrator's disapproval of a pro-
posed reporting requirement and that another section (3511(b))
would permit the Administrator to "delegate his power to approve
proposed information requests" to any agency under certain condi-
tions. But neither of these provisions is a workable substitute for
the continuation of the current exemption. The exercise of the
J
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override could involve a significant lapse of time since some of the
specified procedures for submitting a request to the Administrator
may be quite time consuming and, in addition, the Administrator is
given up to 90 days to render his decision. Similarly, use of the
"delegation" provision would be at the discretion of the Adminis-
trator and there can be no commitments in advance as to whether
or on what conditions it would be utilized.
Aside from the substantive merits of preserving the current ex-
emption of banking reports from any centralized clearance process,
the Board submits that S. 1411 would grant authority to the Ad-
ministrator in terms so broad as to raise concern that it might
constitute an undue and unwarranted invasion of our statutory
responsibilities. For example, under section 3515, the Board's au-
thority "under any other law" to describe 'policies, regulations, or
procedures in connection with information requests would be sub-
ject "to the authority conferred on the Administrator" and section
3516 would make all existing policies, regulations, or procedures in
connection with information requests subject to repeal, amend-
ment, and supersession by the Administrator. It is difficult to
assess the consequences of these sweeping provisions without de-
tailed analysis of all statutes related to the Board and the policies
and regulations adopted under those statutes. But it seems clear to
us that these provisions go beyond a reasonable grant of authority
consistent with the specific purposes of the legislation.
There are a number of specific provisions with respect to privacy
and availability of data that are of some concern. For example,
section 3518(b), which lists the conditions under which information
obtained by one Federal agency may be released to another Federal
agency, would seem to prevent or delay the Board in referring
evidence of criminal violations of law obtained during the course of
a bank examination to the Department of Justice. Such referrals of
information are specifically provided for under the Right to Finan-
cial Privacy Act (see 12 U.S.C. 3412(a)).
Similarly, the Right to Financial Privacy Act (see U.S.C. 3412(d)),
authorizes the exchange of examination or other information
among financial supervisory agencies, notwithstanding the act's
basic prohibitions on the transfer of such information. S. 1411, in
section 3518(b), does not include a similar provision and could
impede or eliminate the sharing or exchange of examination mate-
rial among the Board, Comptroller of the Currency, and FDIC.
Section 3519(a) removes all sanctions for failure to provide infor-
mation to a Federal agency unless collection of the information has
been approved by the Administrator. This provision would appear
to deny the possibility of applying legal penalties for the failure to
provide information in cases where the Administrator's disapproval
of the collection of information is overridden by a two-thirds vote of
the members of an independent regulatory agency, or where the
Administrator's approval is implied by his failure to respond to an
agency request within the specified time limit. The possibility of
legal sanctions should be available in such cases.
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There are also some administrative provisions of the bill that are
troublesome to us in that they appear to be inconsistent with the
Board's independent status under the Federal Reserve Act. For
example, section 3504 would appear to give the Administrator re-
sponsibility for setting certain aspects of budget and management
policies for all agencies covered by the bill. For the Board, this
would involve areas placed within its discretionary authority by
statute. Similarly, section 3513 appears to us to be too broad, both
with respect to the Administrator's possible use of Board personnel
and resources and with respect to his access to information and
records in the Board's possession. As worded, these sections will
likely give rise to problems more serious than those they are
intended to solve.
I would like also to comment on some technical operating aspects
of the bill that could have serious effects on the operation of the
Federal statistical system. One operational problem arises in con-
nection with section 3509(b), which sets a 2-year approval time
limit on all new reports. This appears too restrictive and probably
an inappropriate detail for legislation. There will be new reports
for which an approval for more than 2 years is entirely appropri-
ate. Moreover, our own experience is that, given the length of time
required to go through all the steps of a rigorous clearance process,
a universal 2-year limit may prove costly and inefficient.
Another operational problem arises in connection with title II of
the bill. That title would establish, with detailed specification, a
"Federal Information Locator System" and section 3509(a) would
require its use. We have had some experience in related types of
procedures for the description and specification of banking data,
though of course not on the scale mandated here. On the basis of
our experience, it appears that development of a Federal informa-
tion locator system as comprehensive as that called for by the bill
would be an extremely complicated task and may in the end prove
unworkable. For now, any legislation with respect to such a system
might better mandate a program of experimental and development
work, including the question of whether it is likely to be cost-
effective service. Such experimental work should include investiga-
tion of the alternative of having separate systems for different
families of statistics that could be geared to the characteristics of
each family. Even so, it is likely to require a great deal of time and
effort to obtain a clearer picture of what a practical operational
system would look like and to provide an informed appraisal of its
probable costs and benefits. Our experience with similar types of
systems on a smaller scale has impressed us with the enormous
costs and difficulties involved in designing a comprehensive system
and in trying to force different kinds of data into a standard
format. Again, considerable developmental work seems called for
before such a sweeping and costly system is required as a matter of
law.
That concludes my statement, Mr. Chairman. I will be glad to
try to answer your questions.
Senator CHILES. Thank you very much, Governor.
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To what extent does the Board's clearance and review already
involve OMB clearance of information requests and what has been
your experience with this OMB rule?
Mr. PARTEE. We have a relatively small number of reports in-
volving nonbanking institutions or private people that do require
OMB clearance. They have always required OMB clearance and
we, of course, obtain that clearance before proceeding to collect the
information.
It is no great problem to us with the very small volume of data
that we have collected that way; and it has become a less substan-
tive kind of discussion over the years with OMB than it used to be
as to the content, character, and quality of the reports that we get.
Senator CHILES. Then, over the years, OMB has decided that you
know what you are seeking in those reports and thus they do not
have to go into the substance of them?
Mr. PARTEE. We do not usually have anything new in that area
but sometimes there is something different. For example there was
a consumer survey, conducted for us by the University of Michigan
a couple of years ago that required OMB clearance, but our regular
continuing reports that require OMB clearance have changed only
occasionally over this period of time.
Senator CHILES. Let me ask you about the four reasons that you
cite for maintaining the present exemption of certain activities
within the Federal Reserve System.
One, you listed sensitivity, and two, the necessity to obtain infor-
mation quickly and, three, your technical content of your data and,
four, the specific statutory mandate.
It seems to me that nearly any of the agencies covered by the
clearance process, particularly the independent regulatory commis-
sions subject to GAO clearance could all raise these same issues.
They are all dealing with something sensitive. They all have a
necessity or I am sure they too must have the information quickly.
It is all technically complex depending on what the agency is and
they all have their statutory requirements.
Mr. PARTEE. I agree that it is a listing that could be generally
utilized and I suspect you will hear that from other agencies as
well. In this connection, we noticed that there is no fast-track
alternative in the system as proposed to take care of situations
where a very fast response is needed.
For example, a few weeks ago the Federal Reserve initiated some
changes in monetary policy. They involved the imposition of a
marginal reserve requirement on managed liabilities that took
effect immediately and that required reports in order to determine
what the amount of reserves would be within 2 weeks.
Now, how could we clear that through the statistical Administra-
tor? We could not tell him or her beforehand that we were plan-
ning to do it because it is a matter of great confidentiality. So, he
or she could not know until after we had taken the action and by
then it would have been too late to process a report request since
the reports had to be ready to go out immediately to the Reserve
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Banks and the member banks in order to implement the policy
adopted.
That is, perhaps, an extreme example, but it seems to me there
are many developments that occur in the financial sector that
require a prompt response in terms of learning something about
the situation. And the procedures provided in the bill are too
ponderous and cumbersome to make that possible.
Senator Cxi~s. Well, we thank you very much for your testi-
mony. We will certainly consider it.
Mr. PARTEE. Certainly. Thank you very much.
Senator CHILES. We will now hear from a panel of independent
regulatory agencies, the Honorable Tyrone Brown, the Commission-
er of the Federal Communications Commission and the Honorable
John R. Evans, the Commissioner of the Securities and Exchange
Commission.
I understand Mr. Evans has some kind of a time problem. If that
is true, we will take you first.
Mr. Evans, we will print your statement in full in the record.
You can proceed.
TESTIMONY OF JOHN R. EVANS, COMMISSIONER, SECURITIES
AND EXCHANGE COMMISSION
Mr. Evnrrs. On behalf of the Securities and Exchange Commis-
sion, I am pleased to testify today on S. 1411, the Paperwork and
Redtape Reduction Act of 1979.
The Commission strongly supports the goal of reducing the pa-
perwork and reporting burdens on the public. Responding to legiti-
mate expressions of concern from the business community, many of
the Commission's recent regulatory initiatives have been designed
to reduce these types of burdens, especially on small firms.
We fully support the provisions of the bill dealing with inter-
agency cooperation and coordination as an appropriate means of
pursuing these goals.
We have serious concerns, however, about the provisions of the
bill that would establish a system of review of the Commission's
information collection actions by the Office of Management and
Budget. These provisions would be inconsistent with the often-
stated congressional policy to preserve the Commission's policy-
making independence and could impose burdens and delays on the
administrative process that would outweigh any possible benefits.
Moreover, these provisions are needlessly vague in certain re-
spects and might be construed to establish a basis for a person
subject to our jurisdiction to disregard or even delay essential
filings or reporting requirements mandated by Congress.
Unless the bill is changed to meet these concerns, we cannot
support its adoption.
At the outset, I must emphasize that information collection by
Government agencies serves many different purposes. Some infor-
mation is for research purposes, perhaps with a view toward con-
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sideration of future legislation, rulemaking, or other administra-
tive action. Other information is collected from regulated entities
for use in enforcing the law, and to assure that such entities are
not conducting themselves in a manner inconsistent with the
public interest.
Finally, and perhaps of most importance to the Commission,
information is collected that forms a basis for disclosure to the
public.
For example, filings pursuant to the Federal securities laws by
issuers of securities are designed for use by persons making invest-
ment decisions.
Congress has made the determination that the public is entitled
to complete and accurate disclosure in order to make informed
investment decisions.
In collecting information disclosed by issuers and by persons
subject to our regulatory jurisdiction, the Commission is assuring
that this information is available and to a large degree, serves
simply as a repository for data that is intended for use of the
investing public.
In our view, the definition of collection of information in the
Federal Reports Act under current law is limited to collection for
statistical purposes and does not authorize review of disclosure or
enforcement related information gathering.
By contrast, the definition of "collection of information" in sec-
tion 3502 of this bill which makes any request for information to 10
or more persons in a standard form subject to the approval provi-
sions of the bill appears to be far more extensive. This expansion of
the scope of the Federal Reports Act is of major concern to us.
We do not think that the purpose of the bill is, or should be, to
subject the Commission's disclosure and enforcement efforts to
oversight by the Office of Management and Budget. We do not
believe, for example, that OMB should determine whether informa-
tion about corporate officers and the company ought to be disclosed
in a proxy statement.
The definition of "collection of information" is so broad, however,
that it could be read as encompassing this information which is
collected on standard statutory authorized forms.
~To take another example, in the course of enforcement actions or
investigations of possible violations of the securities laws, the Com-
mission's staff might pose identical questions in written form to
more than 10 persons. Read literally, the bill would require submis-
sion of these interrogatories to OMB for approval. The disruption
of important Commission activities that could result. The overly
broad definition of "information collection" is the basis of our
fundamental concern about the possible impact of the bill.
An independent regulatory agency like the Commission is cur-
rently not and should not be subject to policy or procedure review
by the executive branch. But, on this very point, the bill would
create substantial confusion.
Section 3509 would prohibit an agency from using a standard
form for information collection unless the Administrator of the
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Office of Federal Information Management Offices has approved
the proposed information collection request.
The need to preserve some agency independence is recognized by
providing in paragraph (a)(3) of the section that an independent
agency can override the administration's decision by atwo-thirds
vote, although a simple majority override would seem to satisfy
fully the bill's objectives.
On the other hand, section 3507, with no provision authorizing
the agency to override this decision, would allow the Administrator
on his own motion to prohibit absolutely any information that he
finds "unnecessary for any reason" or, that does not have practical
utility to the agency.
The relationship between proposed sections 3507 and 3509 is, at
best, difficult to understand. The extensive and apparently unlimit-
ed review power given to OMB in section 3507 would seem to make
the protections afforded in 3509 relatively meaningless.
Moreover, the standards in section 3507 demonstrate that it
should not apply to the Commission's requirements for disclosure
to the public. These standards are based on the Government's need
for information, but Commission disclosures are based on the need
of the public for the information; the information does not have
practical utility to the Commission, but rather to the public.
ADMINISTRATOR'S ROLE
There are a number of both practical and policy-related difficul-
ties with the review authority given by section 3507 to OMB. It is
unlikely that the Administrator of the Office of Federal Informa-
tion Management Policy would expect or even particularly be fa-
miliar with the field of securities regulations. Yet any judgment as
to the need for information collected can be considered only in the
context of the agency's full regulatory program.
The Administrator could not develop the expertise necessary to
make such judgments unless he assembled a large staff. Even then,
that staff could not obtain day-today experience with the workings
of the securities industry and with the ongoing administration of
the Federal securities laws and rules thereunder, that should form
the basis of any judgments about the necessity of disclosure and
regulatory proposal.
By allowing the Administrator under supervision of the White
House, to second-guess decisions about the need for information
collection, and possibly overrule them on grounds unrelated to
investor protection, the Commission's independence as a regulatory
agency would be inappropriately impaired. We note that OMB's
power under the bill is extremely expansive.
Section 3507 permits the Administrator to base decisions on the
need for the information and its "utility" for the agency. OMB is
given rulemaking authority to carry out the supervisory functions
in section 3511. And, sections 3515 and 3516 provide that the Ad-
ministrator's authority under the bill supersedes existing laws and
regulations to the extent that any conflict arises.
The dangers posed by this sort of oversight power are particular-
ly significant in the Commission's case since, as noted above, infor-
mation collection is the basic means of assuring full disclosure of
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material corporate information which is the Commission's primary
statutory responsibility.
Moreover, we do not believe that such review would provide any
redeeming benefits. Although designed to streamline the Govern-
ment process the bill paradoxically sets up an additional layer of
interagency review that would create additional paperwork and
delays in inplementing or continuing regulatory programs.
The Commission usually receives comment from the public on
the collection burden in response to the initial proposal of dis-
closure rules and a subsequent hearing would be unnecessary
duplication.
In addition, there could be judicial review of the Administrator's
decision, which would also contribute to disruption and delay.
Since approval by the Administrator has only a 2- or 5-year
duration, this burden would be compounded as agencies con-
tinuously submit and resubmit their rules and requirements for
approval.
The Commission is also concerned that section 3519(a) appears to
allow a reporting entity to refuse to provide information to the
Commission, and, I am quoting, "Unless the collection of informa-
tion has been authorized" under the standards set forth in the bill.
Such a provision is likely to encourage noncompliance or delay
in fulfilling important regulatory functions under the pretext of
raising technical or procedural deficiencies in the approval process.
The Federal courts would be forced to decide the disputes, adding
unnecessarily to their dockets.
Again, we must emphasize that the Commission's statutory re-
sponsibilities often depend on information collection.
As for section 3519(b), we believe it would be contrary to the
public interest and wholly inconsistent with the intent of the Fed-
eral securities law to enable persons subject to those laws to insist
that the Commission may not deny them a "right, privilege, prior-
ity allotment or immunity" because of an alleged failure of the
Commission to comply with requirements of the bill.
We believe that the limiting phrase, "except where the [right or
privilege] is legally conditioned on facts which would be revealed
by the information requested" is meant for situations that would
arise under Federal securities laws, but the language is extremely
vague.
We assume that issuers of securities could not assert noncompli-
ance by the Commission as a basis for refusing to submit essential
information and then offer and sell securities to the public without
accurate disclosure.
It is less clear whether a broker dealer registered under the
Securities Exchange Act of 1934 might refuse to notify the Commis-
sion of a dangerous reduction in net capital, as required by Com-
mission rules, because of an alleged failure by the Commission to
comply with the procedures mandated by the bill.
Finally, we are concerned with section 3518(b) dealing with un-
lawful disclosure of information. The Commission would be prohib-
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ited from releasing information collected "under this chapter" to
another agency, except under specific conditions.
Given the breadth of the definition of information collected
"under this chapter," this provision would lead to the result of
placing restrictions on our release of information that was collected
for the very purpose of public disclosure.
In conclusion, it is our belief that although S. 1411 may make
sense as a bill intended to apply to research type statistical data, it
makes little sense as it applies to information that is disclosure or
enforcement oriented or to reporting obligations of regulated indus-
tries imposed by statute.
Accordingly, we strongly recommend that S. 1411 be amended to
narrow the definition of "collections of information" exclude re-
porting required in connection with statutory authorized regula-
tory enforcement or oversight efforts.
In any event, section 3507 should be revised to permit an agency
to override the Administrator's decision to prohibit certain infor-
mation collection activities along the same lines as section 3509,
and section 3519, dealing with refusal to provide information,
should be deleted from the bill entirely.
I appreciate this opportunity to present the views of the Commis-
sion on this bill and would be pleased to try to respond to any
questions that you might have.
Senator CHILES. Thank you, sir.
[The prepared statement of Mr. Evans follows:]
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STATEMENT OF THE HONORABLE JOHN R. EVANS, CONAIISSIONER,
UNITED STATES SECURITIES AND EXCHANGE OOP44ISSION, ~ S. 1411
As just one example, the Commission recently simplified regis-
tration and reporting procedures for small businesses through
the adoption of Form 5-18. This form is available to certain
domestic and Canadian wrporate issuers who are not subject to
the Commissice's continuous reporting requirements for the
registration of securities to be sold for cash not exceeding
an aggregate offering price of $5 million. The .form calls for
less narrative and financial disclosure than Form S-1, the
standard registration form. The form may be filed with the
regional offices of the Commission, in order to facilitate
handling for the issuer. Also, pursuant to corresponding
amendments to Form 10-K (the annual report for certain
publicly-held companies under the Securities Exchange Act
of 1934), issuers may include in their initial annual report
information substantially similar to that included in their
Form S-18 registration statement.
On behalf of the Crnmission, I am pleased to testify today cn
S. 1411, "The Paperwork and Redtape Reduction Act of 1979." The
Commission strongly supports the goal of reducing the paperwork
and reporting burdens on the public. Responding to legitimate ex-
pressions of concern from the business ccmmunity, many of the Ccm-
mission's recent regulatory initiatives have been designed to reduce
these kinds of burdens, especially on 'small firms. f We fully
support the provisions of the Bill dealing with inter-agency co-
operation and coordination as appropriate means of pursuing these
goals.
We have serious concerns, however, about the provisions of the
Bill that would establish a system of review of the Commission's
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72
information collection actions by the Office of Management and Budget.
These provisions would be inconsistent with the often stated Congres-
sional desire to preserve the Commission's policy-making independence,
and could impose burdens and delays on the administrative process that
outweigh any possible benefits. Moreover, these provisions are needlessly
vague in certain respects, and might be construed to establish a basis
for persons subject to our jurisdiction to disregard or delay essential
filing and reporting requirements. mandated or authorized by Congress.
Unless the Bill is changed to meet these concerns, we cannot support
its adoption.
At the outset, I must emphasize that "information collection"
by government agencies serves many different purposes. Some informa-
tion is collected purely for research purposes, perhaps with a view
toward consideration of future legislation, rulemaking or other ad-
ministrative action. Other information is collected from regulated
entities for use in enforcing existing law, and to assure that such
entities are not conducting themselves in a manner inconsistent with
the public interest. Finally - and perhaps of most importance to
the Ca~mission - information is collected that forms the basis for
disclosure to the public. For example, filings pursuant to the federal
securities laws by issuers of securities are designed for use by persons
making investment decisions.
Congress has made the deternrination that the public is entitled to
complete and accurate disclosure of material information in order
to make informed investment decisions. In collecting information dis- ..
.closed by issuers, and by persons subject to our regulatory jurisdiction,
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 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
the Commission is assuring that this information is available, and to
a large degree serves simply as a repository for data that is intended
for the use of the investing public.
In our view, the definition of "collection of information" in
the Federal Reports Act under current law is limited to collection
for statistical purposes, and does not authorize review of disclosure
or enforcement related information gathering. , By contrast, the
definition of "collection of information" in Section 3502 of this
Bill, which makes any request for information to ten or Hare persons
in a standard form subject to the approval provisions of the Bill,
appears to be far more extensive. This expansion of the scope of
the Federal Reports Act is of major concern to us. We do not think
that the purpose of the Bill is, or should be, to subject the Com-
mission's disclosure and enforcement efforts to oversight by the
Office of Management and Budget. We do not believe, for example, that
ONID should determine whether information about possible self~3ealing
between corporate officers and the company ought to be disclosed
in a proxy statement. The definition of "collection of information"
Although the current statutory language is somewhat ambiguous,
''the legislative history of the Act makes plain that the scope of
the Act is relatively narrow. Accordingly, the Commission has
taken the position that, within the meaning of the Federal Reports
Act, the Commission does not "conduct or sponsor the collection
of information" in connection with the Commission's in~lementation
of the disclosure requirements of the federal securities-laws,
in connection. with the exercise of the Commission's regulatory
responsiblity or, generally, in connection with the Ca~mission's
enforcement activities. On the other hand, to the extent that
` the Commission gathers information having primarily statistical
significance, the Commission has always recognized its respons-
ibilities under the Federal Reports Act.
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 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
74
is so broad, however, that it could be read as enoa~assing this
information, which is collected on standard, statutorily authorized
forms. To take another example, in the course of an enforcement
action or an investigation of possible violations of the securities
laws, the Commission staff might pose identical questions, in written
form, to more than ten persons. Read literally, the Bill would
require sutmission of these interrogatories to OMB for approval.
"The disruption of important Ccmnission activities that could result
is obvious.
The over-broad definition of "information collection" is the
basis of our fundamental concern about the possible impact of the
Bill. An independent regu]atory agency like the Commission is
currently not, and should rnt be, subject to policy or procedure
review by the Executive Branch. But on this very point, the Bill
would create substantial confusion. Section 3509 would prohibit
an agency fr~n using a standard form for information wllection
unless the Administrator of the Office of Federal Information
Management Policy has approved the proposed information collection '
request. The need to preserve some agency independence is recognized
by providing in paragraph (a)(3) of this section that an~independent
agency can override the Acfininistrator's decision by a two-thirds
vote, although a simple majority override would seem to satisfy
dully the Bill's objectives. On the other hand, Section 3507, with
no provision authorizing the agency to override his decision, would
allow the Administrator, on his own motion, to prohibit absolutely
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 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
any information collection activity that he finds "unnecessary, for
any reason," or that it does not have a "practical utility" to the
agency. The relationship between proposed Sections 3507 and 3509
is, at best, difficult to understand. The extensive and apparently
unlimited review power given to OMB under Section 3507 would seem to
make the protections afforded by Section 3509 relatively meaningless.
Moreover, the standards in Section 3507 demonstrate that it
y
should not apply to the Commission's requirements for disclosure
to the public. These standards are based on the Government's
t need for the information. But Commission disclosures are based
on the need of the public for the information] the information does
not have "practical utility" to the Commission, but rather to the
public.
There are a number of both practical and policy-related dif-
ficulties with the sort of review authority given by Section 3507
to O[~. It is unlikely that the .Administrator of the Office of
Federal Information Management policy would be an expert - or even
particularly familiar -with the field of securities regulation.
Yet any judgment as to the need for information collected can be
considered only in the context of the agency's full regulatory pro-
gram. The Administrator could not develop the expertise necessary
to make such judgments unless he assembled a large staff. Even then,
that staff could not obtain the day-to-day experience with the workings
s
of `the securities industry, and with the ongoing administration~of
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
the federal securities laws and rules thereunder, that should form
the basis of any jud3mer-ts about the "necessity" of disclosure and
regulatory proposals.
By allowing the Aclninistrator, under the supervision of the
White House, to secorX7~uess decisions about the need for information
collection, and possibly overrule them on grounds unrelated to investor
protection, the Commission's independence as a regulatory agency would
be inappropriately impaired. We note that OMB's power under the Bill
is extremely expansive. Section 3507 permits the Administrator to base
his decision both on the need for the information aril its "utility"
for the agency. OMB is given ruleynaicing authority to carry out its
supervisory functions in Section 3511. And Sections 3515 and 3516
provide that the Administrator's authority under the Bill supersedes
existing laws and regulations to the extent that any conflict arises.
The dangers posed by this sort of oversight power are particularly
significant in the Commission's case, since, as noted above, information
collection is the basic means of assuring full disclosure of material
corporate information, which is the Commission's primary statutory
responsibility.
Moreover, we do not believe that such review would provide any
redeeming benefits. Although designed to streamline the government
process, the Bill paradoxically sets up an additional layer of inter-
agency review that would create additional paperwork and delays in
i~lementing or wntinuing regulatory programs. The Cormission
usually receives comment from the public on the collection burden
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 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
in response to the initial proposal of disclosure rules, and a sub-
sequent hearing would just be unnecessary duplication. In addition,
there could be judicial review of the Ac3ninistrator's decision, which
also would contribute to disruption and delay. Since approval by
the Administrator has only a two or five year duration, this burden
would be compounded as agencies continuously submit and resubmit their
rules and requirements for approval. *,
~ The Commission is also concerned that Section 3519 (a) appears
to allow a reporting entity to refuse to provide information to the
Commission "unless the collection of the information has been authorized"
under the standards set forth in the Bill. Such a provision is
f Perhaps our concerns on this point can be illustrated best
through an example. The Commission recently adopted new
simplified registration and reporting obligations for small
businesses through Form S-18. Among other things, this form
requires disclosure through a description of the company's
properties, its business, legal proceedings in which it is
involved, etc. Under the Bill, this form would be reviewed
by ONIB. Upon submission, the Aclninistrator might sirg~ly
approve the request, thereby confirming the Commission's
jud3ment. This would merely constitute a delay in the Com-
mission's rule-making effort. On the other hand, he could
decide that such information is not sufficiently material
to investors to warrant the reporting burden. We submit
that the latter sort of judgment is a securities law ques-
tion, not a papezwork question, and is one that the Ad-
ministrator should not be empowered to make. Of course,
our concern here would be alleviated if both Sections 3507
and 3509 make clear that independent agencies can override
the Administrator's decision. But, then, what would the
Bill accomplish, other than delay and additional adminis-
trative burdens and expense, (which, incidentally, will be
paid by the taxpayers)? If the only relevant input from OMB
is whether the information can be obtained elsewhere, with
less burden on the public, this can be done through less
cumbersome and disruptive channels.
 Approved For Release 2007/05117: CIA-RDP85-000038000300050009-7
78
likely to encourage non-compliance or delay in fulfilling important
regu]atory obligations under the pretext of raising technical
or procedural deficiencies in the approval process. The ,federal
courts would be forced to decide these disputes, adding unneces-
sarily to their dockets. And again, we must emphasize that the
Commission's statutory responsibilites often depend on informa-
tion wllection.
As to Section 3519(b), we believe it would be contrary to the
public interest and wholly inwnsistent with the intent of the
federal securities laws to enable persons subject to those laws
to insist that the Commission may not deny them a "right, privilege,
priority, allotment or immunity" because of an alleged failure
by the Commission to oanply with the procedural requirements of
the Bill. While we believe that the limiting phrase "except where
the [right or privilege] is legally conditioned on facts which
would be revealed by the information requested" is meant to apply
in most situations that would arise under the federal securities
laws, the language is extremely vague. We assume that issuers of
securities could not, assert nonoanpliance by the Commission with the
requirements of the Bill as the basis for refusing to sutmit es-
sential information, and then offer and sell securities to
the public without adequate disclosure. it is less clear whether a
broker-dealer registered under the Securities Exchange Act of
1934 might refuse to notify the Commission of a dangerous reduction
 Approved For Release 2007105/17: CIA-RDP85-000038000300050009-7 --
in net capital, as required by a Commission rule, because of an
alleged failure by the Commission to oanply with the procedures
mandated by the Bill.
Finally, we are concerned with Section 3518(b), dealing with
unlawful disclosure of information. Here, the Commission would be
prohibited from releasing information collected "under this chapter"
to another agency except under specific conditions. Given the
breadth of the definition of information collected "urrler this
chapter," this provision would lead to the anomolous result of
~ placing restrictions on our release of information that was collected
for the very purpose of public disclosure.
In conclusion, it is our belief that although S. 1411 may make
sense as a Bill intended to apply to research-type statistical data,
it makes little sense as it applies to information that is disclosure
or enforcement oriented, or to the reporting obligations of regulated
industries imposed by statute. Accordingly, we strongly recatenend that
S. 1411 be amended to narrow the definition of "collection of information"
to exclude reporting required in connection with statutorily-authorized
regulatory, enforcement or oversight efforts. f In any event, Section
*f At the very least, the Bill should make clear that traditional
enforcerent activities - gathering information or evidence
pursuant to a subpoena or other process in the course of an
investigatory, adjudicatory or judicial proceeding -are out-
? side the scope of the proposal. See 4 C.F.R. ~10.6(c)(4), (5)
(8) (GA4 regulations exempting enforcement related information
.collection).
~~~"T?elease-~~)871C~~-17 ? ~.I.A-F~C~P~~AtifL'~Rnnn~nnn5nnnn 7
 Approved For Release 2007105/17 :CIA-RQP85-000038000300050009-7
80
3507 should be revised to permit an agency to override the Administrator's
decision to prohibit certain information collection activities, along
the same lines as Section 3509, and Section 3519, dealing with refusal
to provide information, should be deleted from the Bill entirely.
I appreciate this opportunity to present the views of the Com-
mission on this Bill, and would be pleased to answer any questions
that the members of the Committee might have.
TESTIMONY OF TYRONE BROWN, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Mr. Bxowrr. Good morning, Mr. Chairman.
Senator CHILES. Good morning. We are delighted to have you
here.
Mr. Bxowrr. Thank you.
I suppose I could summarize my testimony in a nutshell by
saying, sir, that when you and I arrived here 8 years ago-I as a
young staff member-I knew that you would not put up with the
nonsense of the overburden of unnecessary governmental paper-
work, but I did not know, sir, that you would go quite this far.
Senator CHILES. You created a monster.
Mr. Bxowrr. Thank you for this opportunity to testify on S. 1411,
a bill whose goal is to reduce paperwork burdens resulting from
requests for information by agencies of the Federal Government.
I appear in my capacity as a.member of the Federal Communica-
tions Commission. However, my testimony represents my views
and not necessarily those of my colleagues at the Commission.
I endorse the purposes of the proposed legislation. The bill would
require first, an advance determination of whether an agency's
information requests are necessary to the proper functions of the
agency; second, coordination of information collection among Fed-
eral agencies in order to reduce duplicative information requests;
and third, periodic review by each agency of its information collec-
tion burden with the objective of reducing the burden.
I believe that adoption of a bill along these lines should reduce
the regulatory burden on the public and improve the overall effi-
ciency of information collection.
My testimony is directed specifically to the applicability of sec-
tions 3507 and 3509 of the proposed legislation to the independent
regulatory agencies. In my judgment, most of the provisions of S.
1411 would improve information management within the independ-
ent agencies.
However, because information gathering and substantive policy-
making are so closely intertwined, I fear that the requirement of
executive branch approval set forth in sections 3507 and 3509 could
significantly impair the historic independence of agencies such as
mine.
Ar~ornved Fnr RPIPasP ~CIC171r1~,117 ? (`IA_RnPRti_nnnn~QnnnznnnFnnno ~
vevevvvvvvv~
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
Proposed section 3507 would grant the Administrator of the
Office of Federal Information Management Policy the authority to
determine that an independent agency's determination of its infor-
mation needs is incorrect.
Under this section, the Administrator would determine whether
collection of information is necessary for the proper performance of
the functions of the agency and whether the information has prac-
tical utility for the agency.
Apparently, and this is a point I will come back to later, the
Administrator's determination under this section would not be sub-
ject to review, since the independent agency would be barred from
collecting information which the Administrator finds to be "unnec-
'` essary, for any reason," language which in my mind contemplates
no judicial review.
Only 6 years ago, Congress transferred the authority for clearing
< the information requests of independent agencies from the Office of
Management and Budget to the General Accounting Office.
Unlike S. 1411, that amendment expressly stated that it was the
independent agency which would make the final decision on wheth-
er the information was necessary. The legislative history makes it
clear that this action was taken to preserve the independence of
the decisionmaking processes of these agencies and to assure that
clearance procedures would not be used to delay or obstruct agency
investigations and data collection or to subject their deliberations
to undue executive branch influence. These concerns remain valid
today. And, they reflect the principle that agencies are responsible
to the Congress and not to the executive branch.
To understand the problems this bill's clearance procedure would
cause, it is necessary to appreciate the relationship between infor-
mation gathering and agency policymaking and rule enforcement.
Data collection is often a necessary part of our decisionmaking
process. This is particularly true as the courts in recent years have
required extensive records to justify agency rulemakings.
Further, at my agency at least, data collection is often the only
practicable way to monitor compliance with our substantive rules
and regulations. Thus, authority given the Administrator to over-
rule agency information requests could have the effect of frustrat-
ing the adoption or implementation of policies that a majority of
the particular agency would pursue.
To illustrate my point, I would cite the daily program logkeeping
requirements that the FCC currently imposes on its radio broad-
cast licensees.
These logkeeping requirements recently gained some notoriety as
the governmental paperwork requirement second only to the
income tax form in terms of its overall burden.
It is generally conceded that these rules impose a heavy burden.
At the same time, it is also generally conceded that the daily
logkeeping requirement is the only practical way the Commission
can monitor compliance with its substantive rules relating to com-
mercialization on radio and to other substantive requirements.
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
The Commission is in the midst of a proceeding to determine
whether these substantive rules should be abolished. If they are,
this logkeeping requirement would also fall.
Undoubtedly, our final decision on the merits will be reviewed by
the courts. However, under section 3507, the Administrator could
determine-for any reason-that our logkeeping requirement is
unnecessary, thus undermining our determination on the substan-
tive issues and frustrating court review on the merits.
A second area in which the FCC has for some years made infor-
mation requests similarly demonstrates the inadvisability of grant-
ing an executive branch administrator the broad powers set forth
in section 3507.
At the same time, I believe this illustration points out the poten-
tial benefits of other provisions of the proposed legislation. The
FCC, beginning in 1968, required its broadcast licensees to refrain
from employment discrimination.
To monitor compliance and to determine whether additional
action in this area was required, the agency imposed a statistical
reporting requirement. Based on the results of monitoring, the
agency in 1972 imposed an affirmative action requirement on
broadcasters.
Our substantive rules in this area have been approved by the
courts, and we continue to monitor the progress of each licensee's
affirmative action effort by means of an annual reporting require-
ment.
Undoubtedly, my agency's information gathering requirements
in this area can and should be coordinated with those of the EEOC.
I believe sections 3505 and 3508 of the bill would assure that type
of coordination. And, for that reason, I support the principle em-
bodied in those provisions.
On the other hand, I am convinced that we have no means other
than periodic reporting to assure compliance with our affirmative
action policies. Thus, if the Administrator were to determine that
the reporting requirements were unnecessary, he would in effect
overrule the agency's substantive affirmative action policies be-
cause we would have no way of policing the requirement.
Because section 3507 on its face gives the Administrator such
authority, I urge revision of this provision.
For basically the same reasons, I also urge revision of section
3509 which would require advance approval by the Administrator
before new information requests could take effect. That section
appears to recognize the unique status of the independent agencies
by permitting such agencies to overrule an adverse determination
of the Administrator by a two-thirds vote.
In my judgment, however, this provision does not adequately
address the problem I have discussed above. If it is clear-and I
believe it is-that the Administrator through a determination on
an information request, can reverse the substantive policy decisions
of an independent regulatory agency, I do not believe such execu-
tive branch intervention is cured merely by allowing a greater-
 Approved For'Release 2007/05117 :CIA-RDP85-000038000300050009-7
than-majority vote of the agency to, in turn, overrule the Adminis-
trator.
Moreover, even if it is assumed that the two-thirds vote provision
of section 3509 would adequately preserve the independence of
agencies such as mine, that provision could be rendered a nullity
by section 3507.
As the bill is currently drafted, at any point an interested party
can challenge an information request under section 3507 and the
Administrator could, under that section, "for any reason," make a
determination that collection of the information is unnecessary,
thereby, circumventing the possibility of agreater-than-majority
vote to overrule his determination under section 3509.
This, it seems to me, Mr. Chairman, is something that could be
handled in draft, during the markup.
Apart from the need to preserve the decisionmaking role of
independent agencies, I believe there are two additional reasons
why the approval mechanism of sections 3507 and 3509 should not
be applied to such agencies.
First; I think this mechanism may be unnecessary because there
are already procedural safeguards against excessive paperwork re-
quirements imposed by independent regulatory agencies like the
FCC.
I heard, with interest this morning, the OMB witness testify to
the effect that independent agencies account for substantially less
than 5 percent of the paperwork burden that you and we are
concerned with today.
Because new information demands, at least as far as my agency
is concerned, depend on changes in regulatory policy, these de-
mands generally occur only after full rulemaking proceedings.
The public and the regulated industry have full opportunity to
comment and can-and usually do-seek judicial review.
Second, and this is something that concerns me greatly, I see the
potential in S. 1411 for administrative overlap and procedural com-
plications arising from atwo-tiered decisionmaking process on in-
formation requests-that is, initial agency decision, and then
review by an executive branch administrator. These are some ques-
tions which immediately come to mind:
Would the Administrator rely on the agency record in making
his determination or create a new record? Would the Administra-
tor's decision be independently reviewable in court if not over-
turned by two-thirds of the agency?
Would the Administrator's decision be independently reviewable
even if the agency's information request was approved by the Ad-
ministrator? If so, would the two decisions-the agency's and the
Administrator's-be consolidated for judicial review?
In fact, with respect to the independent agencies, I believe it
would be dangerous to make the Administrator's determination
final and not subject to judicial review.
Because of the impact that his decisions will have on the agen-
cy's substantive policies in many cases.
 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
On the other hand, I believe the two-tiered decisionmaking proc-
ess contemplated by the bill, plus judicial review could result in
such delays and uncertainty that the overall effect would be coun-
terproductive
In sum, Mr. Chairman, I believe the internal information man-
agement functions and the coordination of information collection
mandated by S. 1411 could be profitably extended to the independ-
ent agencies.
For the reasons cited above, however, I would not extend the
approval requirements of sections 3507 and 3509 to such agencies. I
continue to believe the soundest way to assure that independent
agencies do not impose unnecessary paperwork burdens is through
regular review of their activities both internally and by appropri-
ate oversight committees of the Congress. '
In this connection, I would suggest to the committee that it
consider, not a mandatory approval requirement for the independ-
ent agency, but a reporting requirement either to GAO, or to OMB.
Then, if such agencies do not concur in the agency's judgment, the
Administrator may issue a public report to that effect and transmit
that report to the appropriate oversight committee of the Congress.
Thank you for this opportunity to testify and I would be glad to
respond to questions.
Senator CHILES. Thank you.
Let me ask you both about your position that a regulatory
agency, due to its regulatory mission, should be able to make the
final determination as to the necessity of the information in carry-
ing out its statutory responsibilities and whether to collect that
information.
But, why is it, each of your independent regulatory missions are
any different from that of any executive agency regulatory mission
like EPA or OSHA?
Mr. Bxowrr. To respond to that, Mr. Chairman, I would have to
go back to the establishment of the independent regulatory agen-
cies. Congress, in its wisdom, determined that such agencies should
not be part of the executive branch and established a number of
statutory provisions to assure that such agencies, in their decision-
making, would be insulated from the executive branch and from
the political process itself.
I suspect that the reason why Congress made that kind of deci- ~'
sion was in each case different. With respect to my agency, I
suspect that it was a problem that we would allocate very valuable
rights in the area of radio and television broadcast licenses and the
Congress felt that allocation policy should be insulated to the
greatest extent possible.
Another reason has to do with the requirement of technical
expertise and the great deal of technical information that is neces-
sary for us to make reasoned decisions.
All of this, it seems to me, points to the soundness of continuing
that insulation and continuing a policy under which our substan-
 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
tive rulemaking, either directly or indirectly, is not subject to
influence by the executive branch.
Mr. EVANS. I think I would respond in a similar manner.
Congress established a system whereby certain agencies were
separate. They are the agencies that Congress believed should not
be part of the administration's program. The administration and
the independent regulatory agencies work together and yet, I be-
lieve Congress must have concluded that certain types of agencies
should not be subject to any political pressure or to the the kind of
decisionmaking to which other executive departments and agencies
are subject.
In our own case, for example, I am sure you are aware that we
y have taken action in some instances against people in the adminis-
tration. How that would occur if we were part of an administration
program, I do not know, We value our independence very highly
and I believe that our decisionmaking should be on the basis of the
facts, and not political.
We are very careful not to respond unduly to input from the
administration. If the administration wants to give us information,
we accept it, but we do not consider the policy decisions of the
administration to be binding on us.
Senator Cxi~s. Well, you both make very persuasive arguments
for the independence of your agencies and the sensitivity of what
you are protecting.
However, I fail to see that that is more persuasive than the
environmental protection of this country. I fail to see that it is
more sensitive. I fail to see that there is less pressure by concerns
that would be trying to stop reports of regulations in regard to
environmental matters or the safety of workers at the workplace.
I cannot think of anything in which there is more concern or
more pressure and you point out that Congress, in its wisdom,
created these things.
Does Congress only express its wisdom once, and is that only in
the creation of your agencies? Can Congress, in its wisdom, decide
that it wants to now require a review?
Mr. Bxowx. I could have said Congress in its wisdom. It may be,
Mr. Chairman, that EPA and some of the others could cite sound
reasons why they might have been regulatory agencies. But I think
that the way to address that question is to ask whether, after
starting with the ICC, given 85 years of experience with independ-
ent regulatory agencies, that is, the way a particular business
should be regulated or whether the agency should be part of the
executive branch,
My point, sir, is that the mandatory approval requirement in
this legislation is inconsistent with the notion of independence in
such regulatory matters.
Senator Cxir.ES. Well, prior to 1973, was it inconsistent?
Mr. Bxowx. I certainly would have argued that it was inconsist-
ent.
 Approved For Release 2007105/17 :CIA-RDP85-000038000300050009-7
Senator CHILES. Well, Congress again, in 1973, in responding to
what was an abuse that was being exercised at that time, felt that
it wanted to make a change and it did so in its wisdom, in 1973.
Today, Congress is hearing a different drumbeat out there in the
countryside. And, that drumbeat is in people that are being choked
to death by overregulation, by excessive paperwork. Congress in
1973 decided to change that.
We are going to take this out from under the executive branch
and put it in the GAO, because we think there have been some
abuses.
Now, I think Congress is hearing another drumbeat in this mul-
tiplicity of regulations and is deciding that they are ready to try to
do something about that. And, if there is an abuse of that, I would ,t.
assume very quickly that Congress would again do something as
they did in 1973, if it was necessary, and if there was abuse of it.
Mr. Evnivs. Of course, Congress can make different decisions and
should continue to review these types of things. It is my view that ~
it is probably not appropriate for me to comment about other
agencies because I am not familiar enough with why they are or
are not independent.
I am familiar with why we are. We are trying to give you the
best advice we can from the SEC. We think that this bill would not
be in the interest of investors and investor protection and this is
the primary reason the SEC exists.
Senator CHIr.ES. Well, we are delighted to get that best advice
and that is the reason for this hearing, to get your concerns about
it. I do happen to remember that at the time that we were dealing
with the sunshine bill, SEC felt if that bill were passed, they were
going to be out of business. It just could not even exist. SEC is still
operating, aren't they, and we did pass the Sunshine Act?
Mr. EVANS. Yes, we are. And the sunshine bill, as it was finally
enacted, reflected some changes that were helpful to us in our
enforcement actions. I would have to say, however, that there are
instances in which it would be beneficial to have meetings that
were not public.
Senator CxiLES. I would love to have some that were not public,
too.
Mr. Evaxs. But, generally, we get along well. There are some
instances in which the Sunshine Act creates a problem. We do the
best we can.
Senator CHIr.ES. Well, again, that is what Congress is continually
trying to do, weigh out these things. I certainly recognize that
there are a lot of times it would be easier to conduct business with
the doors closed.
Part of the weighing out is what does that cost us? What did it
cost us in regard to public confidence in regard to the people's fear
of what went on in that closed meeting, whether it was going on or
not?
Now, again, we are talking about atrade-off. What is it costing
us now to allow every group, independent regulatory agencies as
well as the others to decide, if they will issue any form they want
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
to. Or will they be their own control. We have heard from the
Federal Reserve Board patting themselves on the back this morn-
ing and I think they have been a very good agency in regard to
their own requirements for forms. They are saying, "We are doing
a good job, trust us, don't put us under this."
Again, I think that is part of the testimony that each of your
groups have given us today and are concerned as you and the
Congress are. We are monitoring that and we are doing something
about it. Yet, when we go out into the countryside, when we go out
and listen to people, they do not feel anybody is doing a good job,
the Congress, the executive branch, the independent regulatory
agencies, or anyone. They are demanding that something be done..
So, again, we are talking about weighing something here. We are
talking about not wanting to cripple the mission of the independ-
ent regulatory agencies nor the mission of the executive agencies
like EPA and OSHA and all of the other agencies that are vital to
the well-being of this country. But at the same time, we are trying
to put some governor on this thirst for information and some
rational decisionmaking processes that Congress can review and
that the people can hold accountable, and that we can say we are
trying to get a handle on.
Mr. Bxowrr. Mr. Chairman, I have not meant to suggest that I
felt the mission of my agency would be crippled if this bill were
adopted.
In fact, as I indicated in my testimony, I believe that the provi-
sions of the bill will substantially improve our information gather-
ing processes. What I would argue is that bottom line, in many
cases, at least in my agency, information requests are not going to
be removed unless some existing substantive policies of the agency
are changed.
I have indicated that I feel many of those policies need to be
changed. By way of illustration, I have made a suggestion for a
different approach to radio regulation. In part, due to the work
that Senator Hollings and Congressman Van Deerlin have done,
this has become a very heated issue.
Through their oversight activities, in my judgment--
Senator Cxir.ES. I do not think there is any substitute for that.
Mr. Bxowrr. They have helped to move my agency toward taking
a look at long-standing substantive policies. As a result of changes
in those substantive policies some of which have taken place, the
paperwork burden has been and will continue to be reduced.
But, to look at it only from the angle of the paperwork require-
ment, I think will not result in substantial reductions of the
burden.
Senator Cxir~s. That is a good point.
Well, we thank you both for your testimony. We appreciate your
comments. We will recess our hearings now, subsequent to the call
of the Chair.
[Letter to Senator Chiles from Mr. Brown follows:]
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FEDERAL COMMUNICATIONS COMMISSION,
Washington, D.C., Nouember 7 1979.
HOn. LAWTON CHILES, ,
Chairman, Subcommittee on Federal Spending Practices and Open Government,
Senate Committee on Gooernmental Affairs, U.S. Senate, Russell Senate Office
Building, Washington, D.C.
DEAR CHAIRMAN CHILES: I am writing to supplement my testimony last week on S.
1411. As I recall, with respect to Sections 3507 and 3509, Mr. Grandquist from the
Office of Management and Budget testified that OMB might find acceptable an
approach which accords finality to independent regulatory agency form requests if
the request is made after a vote on the specific request by the members of the
agency. By contrast, Mr. Grandquist would not accord finality to requests made by
agency staff on delegated authority.
I would support the approach suggested by Mr. Grandquist. It would assure that
agency members formally deliberate with respect to information requests in the
light of policies reflected in the proposed law. Short of such deliberation, the
Executive Branch office would have authority to overrule regulatory agency staff
determinations. Such an approach, I believe, would accomplish the objectives of S.
1411 without compromising independent agency decisionmaking.
I request that this letter be included in the hearing record. Again, thank you for
the opportunity to testify on S. 1411.
Sincerely,
TrRONE BROWN,
Commissioner.
[Whereupon, at 12:20 p.m., the hearing was adjourned.]
 Approved For Release 2007/05117 :CIA-RDP85-000038000300050009-7
96TH CONGRESS.1411
1sT SESSION
To improve the economy and efficiency of the Government and the private sector
by improving Federal information management, and for other purposes.
r IN THE SENATE OF THE ITNITED STATES
JUNE 26 pegisla.tive day, JUNE 21), 1979
11fr. CHII.ES (for himself, Mr. BENTBEN, and Mr. DANFO&TH) introduced the
a following bill; which was read twice and referred to the Committee on
Governmental Affairs
~ sa~.L
To improve the economy and efficiency of the Government and
the private sector by improving Federal information man-
agement, and for ether purposes.
1 Be it enacted by the Senate and House o f Representa-
2 tives o f the United States o f America in Congress assembled,
3 That this Act may be cited as the "Paperwork and Redtape
4 Reduction Act of 1979".
eJ FINDINGS AND DECLARATIONS
6 SEC. 2. (a) The Congress hereby finds that unnecessary
7 paperwork and redtape-
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2
1 (1) are weakening the effectiveness of Federal
2 programs; .
3 (2) are costing excessive amounts of money
4 through direct taxes or the hidden taxes of higher pro-
5 duction costs and consumer prices; and
6 (3) are contributing to losses of productivity and
7 increases in inflation.
8 (b) The Congress further finds that problems of unneces-
9 sary paperwork and redtape can be eliminated or substantial-
10 ly ameliorated if the following principles are followed when
11 legislation and regulations are being drafted and when pro-
12 grams are being planned and evaluated:
13 (1) The full costs and value of Government pro-
. 14 grams, not only to the Government, but also to indi-
15 viduals and groups outside the Government, must be
1__6 . _ ,examined. ~. ..
,_.. f-
17 (2) Alternative -ways to -run programs must be
18 taken into account so that a conscious choice can be
19 made as to who will bear the costs of the programs
20 and who will receive benefits from them.
21 (3) Individuals, business enterprises, State and
22 local governments, and other organizations and institu-
23 tions involved in Federal programs must be allowed to
24 make suggestions regarding the design and evaluation
25 of those programs so that Government agencies can be
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91
3
1 alerted to potential problems of unnecessary costs,
2 losses in effectiveness, and inefficient approaches.
3 (4) The full array of information and paperwork
4 handling technologies which might aid in operating
5 programs must be identified and analyzed, to insure
6 that their application is carefully coordinated within
7 and among agencies and that waste, overlap, and du-
b plication are avoided. These technologies include, but
9 are not restricted to, computers, communications equip-
10 went, word processors, office machines, and micro-
11 forms.
12 (c) The Congress hereby determines that new informa-
13 tion policies and management procedures are necessary to
14 eliminate needless paperwork and redtape and make the Fed-
15 eral Glovernment an effective and efficient instrument in serv-
16 ice to the American people. These policies and procedures
17 should be founded on the realization that information is not a
18 free good, but a valuable resource.
19 TITLE I-CENTRAL MANAGtEMENT AND
20 CONTROL RESPONSIBILITY
'vt 21 OFFICE OF FEDE$AL INFOEMATION MANA(}EMENT POLICY
22 SEC. 101. (a) Title 44 of the United States Code is
23 amended by striking out chapter 35 and inserting in its place
24 the following new chapter:
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92
-4
1 ".CHAPTER 35-COORDINATION OF FEDERAL
2 INFORI~TATION MANAGEMENT POLICY
"Sec.
"3501. Information for Federal agencies.
"3502. Definitions.
"3503. Office of Federal Information Management Policy.
"3504. Authority and functions of Administrator.
"3505. Designation of central collection agency.
"3506. Independent collection by an agency prohibited.
"3507. Determination of necessity for information; hearing.
"3508. Cooperation of agencies in making information available.
"3509. Information collection activities-submission to Administrator; approval.
"3510. Time limit for action by Administrator.
" 3511..Rules and regulations.
" 3512. Consultation with other agencies.
"3513. Administrative powers.
" 3514. Responsiveness to Congress.
"3515. Effect on existing laws. -
" 3516. Effect on existing regulations.
"3517. Access to information.
"3518. Unlawful disclosure of information; penalties; release of information to other
agencies.
"3519. Penalty for failure to furnish information.
3 "~ 3501. Information for Federal agencies
4 "Information needed by Federal agencies shall be ob-
5 tained with a minimum burden upon business enterprises, es-
6 pecially small business enterprises, State and local govern-
? menu, and other persons required to furnish the information,
8 and at a minimum cost to the Government. Unnecessary du-
g plication of efforts in obtaining information through the use of ~#
10 reports, questionnaires, and other methods shall be elimi-
11 nated as rapidly as practicable. Information collected and
12 tabulated by a Federal agency shall, as far as is expedient, be
13 tabulated in a manner to maximize the usefulness of the in-
14 formation to other Federal agencies and the public.
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1 "? 3502, Definitions
2 "As used in this chapter, the term-
3 ? : "(1) `Administrator' means the Administrator for
4 Federal Information .Management Policy in :the Office
5: of Management :and Budget;
6 "(2) `Federal agency' means ,any executive de-
-7 partment, military department, Government corpora-
8 tion; Government. controlled corporation, or .other es-
9 tablishment in the executive branch of the Government
10 (including the Executive Office of the President), or
11 any independent regulatory agency; but. does not in-
12 elude the General Accounting Office or th'e govern-
13 ments of the District of Columbia and of the territories
14 and possessions of the United States, and their various
1:5- - -subdivisions; -
16 ".(3).. `independent regulatory agency' means the
17 Board: of Governors of the. Federal. Reserve System,
18 the Civil Aeronautics Board, the Commodity Futures
19 -Trading Commission, the Consumer Product Safety
20 Commission, the Federal Communications Commission,
21. the, Federal Deposit Insurance Corporation, the Fed-
22 eral Election Commission, the Federal Energy Regula-
23 tory Commission, the Federal Home Loan Bank
24 Board, the Federal Maritime Commission, the Federal
25 Trade Commission, the Interstate Commerce Commis-
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94
6
1 sion, the Mine Enforcement Safety and Health Review
2 Commission, the National Labor Relations Board, the
3 Nuclear Regulatory Commission, the Occupational
4 Safety and Health Review Commission, the Postal
5 Rate Commission, and the Securities and Exchange
6 Commission;
7 "(4) `person' means an individual, partnership, as-
8 sociation, corporation, business trust, or legal repre-
9 sentative, an organized group of persons, a State, terri-
10 torial, or local government or branch thereof, or a po-
11 litical subdivision of a State, territory, or local govern-
12 went or a branch of a political subdivision;
13 "(5) `collection of information' means the obtain-
14 ing or soliciting of facts or opinions for any purpose by
15 a Federal agency by the use of written report forms,
16 application .forms, schedules, questionnaires, reporting
17 or recordkeeping requirements, or other similar meth-
18 ods calling for either-
19 "(A) answers to identical questions posed to
20 or identical reporting or recordkeeping require-
21 _ manta imposed on ten or more persons-other than
22 :. :agencies,: instrumentalities, or employees of. the
2i3 .... .:.:..1rTpited States;. or :: .:..:.: .:. :..
... .. , -.
. .,.
_ : " ~ answers -to questions, posed to agencies,
25...: _ ~..:. :: ~.:instrumentaltics;~.: or- employees :vf _-tlie United
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1 Statics and which are to be used .for statistical
2 compilations of general public interest;
3 "(6) `information collection request' means awrit-
4 ten report form,. application form, .schedule, question-
s naire, or reporting or recordkeeping requirement for
6 the. collection of information;
7 "(7) `burden'. means the time, effort, .and financial
8 resources expended by. persons. to provide information
9- . collected by a Federal agency; and .
10 "(8) `practical utility' means the ability of an
11 agency to use information it receives, particularly the
12 capability to process such information in a timely and
13 useful fashion.
14 "x.3503.: Office of FedersL Information .Management
15 . ... - ... Policy : ::.; .. ; _ . ...;
16 ".(a) -There is established. in the Office of Mariagement
17 and Budget an office to be known as the Office of Federal
18 Information Management Policy (hereinafter.in this chapter
19 referred to. as the `Office').
20 "(b) There shall be at the head of the Office:an Adminis=
21~ orator for Federal Information Mariagement Policy (herein=
2~ after in. this chapter referred to as the. `Administrator'), who
23 shall be appointed by the President, by and with the advice
24 acid consent of the Senate. ... .
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I "$ 3504. Authority and functions of Administrator
2 "(a) The Administrator shall have Government-wide re-
3 sponsibility for setting policies and coordinating procedures
4 governing the planning, budgeting, management, and control
5 of Federal information management activities and of the
6 measurement of burdens imposed by such activities on busi-
7 ness enterprises, State and local governments, and other per-
8 sons outside the Federal Government. Each agency shall
9 have responsibility to account for and m;n;m;ze the external
10 burdens imposed by programs for which it is responsible, op-
11 crating within the guidance provided under subsections (b)
12 through (g) of this section.
13 "(b) The Administrator shall publish annually, with an
14 analysis by agency and by such other categories as he may
15 deem useful, a report describing the compliance burden of
16 -public-use reports, recordkeeping, 'and other information re-
17 quirements imposed by agencies on persons outside the Fed-
18 eral Government. The report shall describe the burdens of all
19 such requirements on such persons, as well as the costs to
20 agencies.
21 "(c)(1) The .Administrator shall .review, at least once
22 every three years, by means .of reports and seiECtive inspec-
23 tions,-the information management activities, information col-
24 lection and clearance activities,.and.the paperwork reduction
25 activities of each agency to ascertain their adequacy. Upon
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9
1 completion of such review, which shall include the accom-
2 plishments made by the agency since the preceding review
3 (or, in the case of the first review of an agency's activities,
4 the accomplishments of the preceding three years), the Ad-
s ministrator shall-
6 "(A) evaluate the adequacy and efficiency of the
7 activities; and
8 "(B) set target goals for further reductions of the
9 numbers and burdens of Federal reports and other rec-
10 ordkeeping requirements imposed on persons outside
11 the Federal Government.
12 "(2) In evaluating the adequacy and efficiency of the
13 information management activities, information collection and
14 clearance activities, and paperwork reduction activities of
15 each agency pursuant to paragraph (1)(A), the Administrator
16 shall pay particular attention to whether-
17 "(A) a senior official of the agency has been des-
18 ignated to act as the coordinator of such activities
19 within the agency;
20 "(B) the agency has systematically inventoried
21 and periodically reviewed its information resources;
22 "(C) the agency has integrally planned and man-
23 aged its information resource needs in conjunction with
24 the agency's other resource needs; and
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10
1 "(D) the agency has taken steps to ensure that its
2 information systems do not overlap each other or dupli-
3 cate those of other Federal agencies.
4 "(3) In setting goals for further reductions pursuant to
5 paragraph (1)(B), the Administrator shall take into considera-
6 tion the time, effort, and financial costs of reviewing data and
7 putting it into usable form that such reductions would impose
8 on Federal agencies. He shall not set any goals which would,
9 in his opinion, unreasonably increase those costs.
10 "(d) The Administrator shall conduct advance planning
11 of Federal information collection, storage, and use activities,
12 provide technical assistance to agencies which are developing
13 such programs, and promote the use of standards and guide-
14 lines for data presentation.
15 "(e) The Administrator shall develop and recommend to
16 the President and the Congress policies and standards on in-
17 formation disclosure, confidentiality, and safeguarding the se-
18 curity of information collected or maintained by Federal
19 agencies, or in conjunction with Federal programs. The Ad-
20 ministrator shall provide agencies with advice and guidance
21 about information security, monitor compliance with privacy
22 aspects of information management laws, and issue such
23 standards and regulations with regard to privacy and confi-
24 dentiality of information as he may deem necessary.
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1 "(f) Trie Administrator shall conduct a research program
2 to develop improved information and paperwork cost ac-
3 counting and reduction techniques.
4 "(g) The Administrator shall conduct studies and pro-
s mulgate standards with respect to records retention require-
6 ments imposed on the public by Federal agencies.
7 "(h) Except as otherwise provided by law, no duties,
8 functions, or responsibilities, other than those expressly as-
9 signed by this chapter. shall be assigned, delegated, or trans-
10 (erred to the Administrator.
11 "? 3505. Designation of central collection agency
12 "When, after investigation, the Administrator is of the
13 opinion that the needs of two or more Federal agencies for
14 information from business enterprises and other persons will
15 be adequately served by a single collecting agency, he shall
16 fix a time and place for a hearing at which the agencies con-
17 cerned and other interested persons may have an opportunity
18 to present their views. After the hearing, the Administrator
19 may issue an order designating a collecting agency to obtain
20 information for two or more of the agencies concerned, and-
21 prescribing .(with reference to the collection- of information)'
22 the duties anal functions of the collecting agency so designat-
23 ed and the Federal agencies for which it is to act as agent, so
24 long as such sharing -of data does not conflict with section
25. 3518 of :this chapter; section 552a of title 5 (commonly
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1 known as the Privacy Act of 1974), or any other law. The
2 Administrator may modify the order from time to time as
3 circumstances require, but modification may not be made
4 except after investigation and hearing. If, during an investi-
5 gation or hearing, the Administrator concludes that a Federal
6 agency needs certain information from business enterprises
7 and other persons but does not have authority to collect that
8 information, he shall make a report to the President of the
9 Senate and the Speaker of the House of Representatives de-
10 scribing legislative impediments to such information collec-
11 tion and citing reasons for eliminating them.
12 "? 3506. Independent collection by an agency prohibited
13 "