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Tuesday, August 28, 2007

For Regulatory Reviews, Too Many Cooks...

The Small Business Administration's Office of Advocacy has launched a new program which will increase the Office's interference in federal agencies' regulatory practices — specifically, in the selection of regulations agencies choose to review after they have already taken effect.

The Government Accountability Office (GAO) recently issued a report which describes what it calls retrospective reviews. These reviews are attempts by federal agencies to assess the effectiveness of federal regulations and identify opportunities for improvement.

Agencies may conduct these reviews for a variety of reasons. Under Section 610 of the Regulatory Flexibility Act, agencies are required to perform reviews of major rules every ten years. However, the GAO report finds agencies often choose to review rules earlier, either in response to public or industry requests or at their own discretion. From reading the report, it appears as though this ad hoc method is more effective than the prescriptive Section 610 reviews.

The GAO report also finds agencies have limited time and resources to devote to regulatory reviews. What agencies don't need is more forced reviews and outside meddling from SBA or their White House cronies at OMB's Office of Information and Regulatory Affairs. (OMB has engaged in a similar program during the Bush administration, strong-arming agencies into reviewing rules it finds objectionable. About 20 percent of the reviews studied by GAO were conducted at OMB's behest.)

Agencies are handling the selection of rules to review just fine on their own. Room for improvement does exist though, according to GAO. Agencies should adopt standard practices for conducting reviews, should document the reviews more thoroughly, and should improve participation by engaging the public in the review process and making results more transparent.

Agency resources would be better spent working toward those goals rather than dealing with this new SBA program.