OMB'S RECENT TESTIMONY ON PAPERWORK CLEARANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90M00004R000100140027-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: September 23, 2011
• Sequence Number: 27
• Publication Date: March 11, 1987
• Content Type: MEMO

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EXECUTIVE OFFICE OF THE PRESIDENT EFX&
OFFICE OF MANAGEMENT AND BUDGET 87-1188X
WASHINGTON, O.C. 20503
MAR 111987
AON
MEMORANDUM FOR THE PAPERWORK REDUCTION ACT AMR FO FICIALS AND
AGENCY REPORTS MANAGEMENT OFFICERS
James B. MacRae, Jr.
Deputy Administrato
Office of Information
and Regulatory Affairs
SUBJECT: OMB's Recent Testimony on Paperwork Clearance
In the past few days, you may have seen press discussion of the
IRS development of a substitute to the controversial IRS Form
W-4, "Employee's Withholding Allowance Certificate." To discuss
this effort, both the IRS and OMB testified at a hearing this
past Friday before Senator Chiles' Subcommittee on Federal
Spending, Budget, and Accounting. I have attached a copy of the
OMB testimony for your interest.
Although the focus of the hearing was the IRS Form W-4, and the
substitute IRS Form W-4A, our testimony was somewhat broader in
scope, describing the review procedures established by the
Paperwork Reduction Act with which you and the other agencies are
familiar. We also point out some of the changes required by the
1986 amendments to the Paperwork Reduction Act, particularly the
one requiring a more detailed notice to the public of OMB's
review of an agency's proposed collection of information.
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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 2=0
PREPARED WRITTEN STATEMENT
of
WENDY LEE GRAMM
ADMINISTRATOR
OFFICE OF INFORMATION AND REGULATORY AFFAIRS
before the
SUBCOMMITTEE ON FEDERAL SPENDING, BUDGET, AND ACCOUNTING
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
March 6, 1987
Mr. Chairman and members of this subcommittee:
It is a pleasure to be here with you today. I want to discuss
our ongoing efforts to implement the Paperwork Reduction Act, and
how we are moving ahead to implement an important amendment to it
that you supported last year. I also want to outline our use of
the Paperwork Reduction Act as part of our current effort to
improve the IRS Form W-4A, the "Employee's Withholding Allowance
Certificate."
The Paperwork Reduction Act of 1980
The Paperwork Reduction Act is an ambitious attempt to control
the government's collection and use of information. Building on
the Federal Reports Act of 1942, the Federal Records Act, the
Brooks Act, the Privacy Act, and related laws, it requires that
we examine and improve the management of Federal information
activities toward two ends--
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First, to minimize the burden imposed on individuals,
businesses, and other levels of government by reporting and
recordkeeping requirements; and
Second, to encourage the efficient use of information and
information processing technology within the Federal
government.
The unifying theme of the Act is that information is a scarce
economic good--which, like all goods, has costs of production as
well as benefits of use. Essentially, it is the responsibility
of the Administrator of the Office of Information and Regulatory
Affairs (OIRA) within the Office of Management and Budget (OMB)
to assure that the benefits of collecting the data outweigh the
costs of obtaining and using it.
OMB Decision Criteria. Specifically, the Paperwork Reduction Act
requires that OMB decide whether or not to approve the collection
of information by any agency. While the Act's underlying goal is
to minimize the Federal paperwork burden on the public, the Act
also recognizes the need to weigh the burdens of the collection
on the public against the needs of the agency. Thus, the Act
requires OMB to balance the needs of the agency, and the
practical utility of the information the agency may receive,
against the burden on respondents and costs involved.
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In this process, the Paperwork Reduction Act establishes an
important role for Federal agencies, and as well as providing a
coequal role for the public. Under the Paperwork Reduction Act,
agencies have to justify each proposed collection of information
in writing, and have their justification publicly available for
all to see. To help the public, agencies have to give notice in
the Federal Register of submittal of the agency's clearance
request to OMB. The public--during OMB's review and at any other
time--is to have full opportunity to make its views known
concerning any Federal data collection.
Agency Role. The agencies have to request OMB approval to use
the data collection instrument--whether it is in a written
questionnaire, an oral interview, or some obscure data collection
in a regulatory provision buried deep in the Code of Federal
Regulations. In submitting a request to OMB, an agency must
demonstrate that the collection of information is the least
burdensome necessary for the proper performance of its functions,
that the collection is not duplicative of others, and that the
collection has practical utility.
To assure practical utility of information collections, the
agency should be using effective management controls to plan and
develop agency information needs. The agency should be
collecting only such data as it can use; seeking only that level
of detail needed; having it submitted no sooner than the likely
time of actual use; and precisely defining recordkeeping
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requirements and retention periods, based on likely periods of
actual inspection and use.
For paperwork planning efforts to be effective, agencies should
be sensitive to the concerns of respondents--the money, time,
potential confusion, personal attitudes, managerial coordination,
and staff involved. Agency information management controls
should assure the careful evaluation of the impact of paperwork
on each category of respondents, particularly individuals who are
inexperienced with Federal information collection efforts.
Role of the Public. The Paperwork Reduction Act also sets forth
various procedures to facilitate public comment on proposed and
existing information collections. Agencies must give notice in
the Federal Register that OMB has a proposed collection of
information under review, and OMB must give the public meaningful
opportunity to comment.
As another procedural safeguard, OMB may not approve a collection
of information for a period in excess of three years. This
restriction forces agencies to (1) resubmit periodically each
ongoing collection of information for OMB review, (2) give notice
to the public of agency and OMB reconsideration, and (3) invite
the public and respondents to suggest improvements or to point
out unreasonable burdens.
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Improved Public Notice of Paperwork Clearances
The Paperwork Reduction Reauthorization Act of 1986 amended the
Paperwork Reduction Act of 1980. A key aspect of the Paperwork
Reduction Reauthorization Act is to foster the ability of the
public to participate fully and constructively in the paperwork
review process.
The 1986 paperwork reduction amendments require that each agency
give the public notice in the Federal Register that it has
submitted a collection of information for OMB review.
Specifically, this legislation includes clear guidelines about
information each agency should include in a federal Register
notice. At a minimum, the notice must contain a title for the
collection of information, a brief description of the need for
the information and its proposed use, a description of the likely
respondents and the proposed frequency of response to the
collection of information, and an estimate of the burden that
will result from the collection of information. The purpose of
this notice is to give a clearer signal to the public of the
proposed collection of information OMB has under review, thus
bringing home to the public who might be affected and how.
In response to this and other amendments to the Paperwork
Reduction Act, we are in the process of developing proposed
amendments to the applicable OMB rules (5 CFR 1320). The
attached memorandum has been sent to agencies, pending
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promulgation of the rule applicable to the 1986 Paperwork
Reduction Act amendments.
You might be interested to know the types of proposals our staff
is considering to ensure that the public is able to participate
in the process established by the Paperwork Reduction Act.
First, we are considering whether to require agencies, in
publishing their notices, to disaggregate their estimates of
aggregate annual burden into discrete components--the average
hours per response, the frequency of response, and the likely
number of respondents. Second, we are considering whether to
require agencies to publish the proposed form in the Federal
Register, at least on those occasions when agencies seek
expedited review or the form is highly burdensome. Third, we are
considering having agencies print, on the face of a form,
estimated average respondent burden hours, together with a
request that respondents direct any comments on the accuracy of
that estimate to OMB.
OIRA's Paperwork Clearances
Under the Paperwork Reduction Act, the Office of Information and
Regulatory Affairs (OIRA) has reviewed an average of nearly 3,800
information collections each year, or over 265 a month. Our
disapproval rate is around 7 percent, with, on average, 22
disapprovals a month. This is a heavy workload, but I believe we
have been quite successful in keeping paperwork burdens as low as
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possible.
This is not to say, however, that our paperwork clearance system
works perfectly for each transaction. In general, when agency
clearance requests come in for our review, staff and their
immediate supervisors try to separate the obvious problems from
the obvious non-problems. If an agency asserts a strong need,
and, given adequate notice and time, the public comes in and
demonstrates heavy burden, the competing interests are clear.
Likewise, if the agency seeks routine extension of a
well-established, reasonable, ongoing data collection, and there
are no complaints on file, and none come in within a reasonable
time period, then the 0MB decision-process is also
straight-forward.
The IRS Form W-4
With the IRS Form W-4, the facts were not so simple. The IRS
development, and our initial review of the IRS Form W-4 and the
IRS Form W-4A, is a case study of how the process can be
frustrated; of a situation in which it appears that burdensome
features in a form are mandated by law, yet the statutory
structure requires implementation so quickly that it precludes
adequate opportunity for public comment.
In our initial review of the IRS Form W-4, we heard from the
agency, which asserted a problem of time pressure, but we did not
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hear from the public. The IRS sent us the proposed IRS Form W-4
on Monday, October 6, 1986. The IRS sent the public notice to
the federal Register on October 8, and the Federal Register
published the public notice on Thursday, October 9. We approved
the form on Tuesday, October 14. Our normal review process was
truncated by Treasury's need to print more than 360 million
forms, and to send them to employers early enough so that workers
could fill them out by the end of December, in time for the new
tax year. On the other hand, the public had only two working
days in which to comment before OMB approved the form.
As a result of subsequent public reaction, IRS has developed a
new IRS Form W-4A. IRS provided copies of the form to us and the
public on Monday of this week, when our formal review began. On
Tuesday, the second day of our formal review, we provided some
suggestions for improving the proposed IRS Form W-4A to members
of the IRS staff. Since then, IRS and OMB have met to discuss
the suggestions we have made. We also met yesterday with
representatives of the business community who wished to provide
comments to us about the costs associated with providing
employees advice and time off in the'job to complete their
withholding statements.
Let me tell you now, our initial response is that IRS has done an
excellent job of simplifying a complex form. This proposed IRS
Form W-4A is a significant improvement over the existing IRS Form
W-4. We hope to complete our ongoing review within a week, after
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the public has had some additional time to provide comments.
We believe that our procedures will not impede the timely
delivery of IRS's proposed Form W-4A to the public, and that they
will ensure at least some participation by the public as required
by the Paperwork Reduction Act.
Thank you for the opportunity to appear before you. I would be
most willing to answer any questions you may have.
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EXECUTIVE OFFICE OF THE PRESEEWT
OFFICE OF MANAGEMENT AM BUDGET
WAOMP 3TCN. D.C. 30603
F E B 131987
MEMORANDUM FOR THE PAPERWORK REDUCTION ACT SENIOR OFFICIALS AND
AGENCY REPORTS MANAGEMENT OFFICERS
FROM: James B.- MacRae, Jr. ~
Deputy Administrator,
Office of Information
and Regulatory Affairs
SUBJECT: Public Notice Under the Paperwork Reduction Act
.The Congress passed the "Paperwork Reduction Reauthorization Act
of 1986" as part of the recent Continuing Resolution (H.J. Res.
738; P.L. 99-591). This reauthorization amended the "Paperwork
Reduction Act of 1980" in it number of ways, and in response, we
are in the process of developing amendments to the applicable OMB
rules (5 CFR 1320).
The amendments to the Paperwork Reduction Act took effect upon
enactment. One legislative amendment, in particular, requires
your prompt attention, and should be complied with prior to any
issuance of our regulatory amendments.
This amendment to 44 U.S.C. 3507(a)(2)(B) states explicitly the
minimum information that an agency must provide the public in its
Federal Register notice of submission of an information
collection for OMB clearance. Specifically, this agency notice
is to set forth:
a title for the information collection request, a brief
description of the need for the information and its proposed
use, a description of the likely respondents and proposed
frequency of response to the information collection request,
and an estimate of the burden that1will result from the
information collection request....
The congressional intent behind this standardization of
information to be contained in agency notices is to encourage
both more and better public comments on proposed information
collections. Even before we issue any amendments to our rules,
we ask you to review your existing Federal Register notices of
submission of an information collection for OMB clearance in
1We note that these amendments now define "collection of
information request" to include a "collection of information
requirement" (44 U.S.C. 3502(11)).
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order to assure that your notices are in compliance with this new
legislative amendment. WI also remind you that, in accordance
with OMB's existing rules, you are to submit a copy of this
Federal Register notice to us, along with your paperwork
clearance packages.
The Office of Information and Regulatory Affairs will be
reviewing your paperwork clearance requests for compliance with
these rules and the spirit of this new statutory amendment. To
provide flexibility to agencies, we have decided not to require
agencies to adopt a rigidly defined, standardized notice. On the
other hand, consistent with the Paperwork Reduction Act, we view
our role in this review process to encourage more and better
public participation. We will review agency clearance requests,
and disapprove or return for corrective action any clearance
request that fails to provide full and timely notice to the
public. If you have any questions concerning this matter, please
contact your Desk Officer.
20ur April 2, 1982, Memorandum entitled, "Federal Register
Announcements of Proposed Collections of Information," sent
to you by Administrator Christopher DeMuth included other
recommendations as well:
[T]he notices should ask the public to send any comments they
may have on the proposals to the agency and to the OMB Desk
officer for the agency. [The agency] should provide the
public with an earlier opportunity to comment on proposed
information collections than is now the case.
35 CFR 1320.12(a); 1320.13(a)&(b); and 13220.14(b).
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