The first Congressional Research Service (CRS) Report, Federal Regulatory
Reform: An Overview (September 2, 1998) addresses
Congressional efforts to reduce the cost and burden of
regulations by reforming the regulatory process.
The second CRS report, The Role of Risk
Analysis and Risk Management in Environmental Protection
(July 20, 1998) looks at efforts to utilize mathematical
evaluations of hazards and their potential effects in
environmental protection programs of the federal government.
The third CRS report, Federalism Legislation
in the 105th Congress: A Descriptive Overview (September 11,
1998) summarizes the debate over the appropriate relative roles
of the federal government and states in governing issues such as
The Congressional Research Service is an arm of the Library of
Congress and is no way affiliated with the CNIE, CSA or any other
The 105th Congress is continuing earlier efforts to reduce the
cost and burden of regulations by reforming the regulatory process.
Although no major regulatory measures were enacted during the
1st session, the 2nd session is expected to focus its efforts
on S. 981, a comprehensive regulatory procedural reform bill designed
to enhance and consolidate earlier accomplishments. These efforts
may prove as contentious as similar efforts in the 104th Congress.
The 104thCongress passed several procedural measures designed
to reduce regulatory costs while improving the effectiveness and
efficiency of the regulatory process but blocked more comprehensive
measures that many feared would undermine existing health, safety,
and environmental standards.
Current congressional efforts focus on enhancing and consolidating
the several major procedural or process reform measures enacted
during the 104th Congress. These include agency use of cost-benefit
or cost-effectiveness analysis when developing major regulations,
which was incorporated into the statute constraining the number
of unfunded mandates (P.L. 104-4); congressional review of major
regulations, and judicial review of the regulatory flexibility
analysis tool designed to reduce the impact of regulations on
small businesses (P.L. 104-121); the accounting statement by the
Office of Management and Budget on the cumulative costs and benefits
of regulatory programs and the costs and benefits of major regulations
(P.L. 104-208); and a specific reduction in paperwork burdens
over the next 6 years (P.L. 104-13).
The last 20 years have witnessed a significant increase in the
number and scope of federal regulations focusing on health, safety,
and environmental matters. These "social"regulations,
while providing substantial benefits, can also impose significant
costs. Congress and the President have taken a number of actions
to reduce those costs.
The most significant presidential action occurred in 1981, when
President Reagan issued Executive Order 12291, requiring federal
agencies to prepare cost-benefit analyses when developing regulations.
The Order established a centralized review and clearance procedure
in the Office of Management and Budget (OMB) to assure that only
cost-effective and necessary regulations were issued. In 1993
President Clinton issued Executive Order 12866, modifying slightly
the review and clearance policy, while continuing the cost-benefit
analysis requirement and the centralized review and clearance
of regulations by OMB.
During the same period, Congress passed legislation abolishing
certain economic regulation of various sectors of the transportation,
telecommunications, and banking industries, as well as amending
the Paperwork Reduction Act (1980) and Regulatory Flexibility
Act (1980). Various comprehensive reform bills also were considered,
but failed to pass both houses.
Although general agreement exists regarding the need to reduce
regulatory costs and burdens, disagreement exists over how it
can best be accomplished. Contending parties are split by philosophical
differences over the amount of regulation needed, how to determine
that need, and how to assure that only the most cost-effective
regulations are issued.
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The Senate Committee on Governmental Affairs reported the Regulatory
Improvement Act of 1998 (S. 981), amended, May 11, 1998. The 105th
Congress also is considering other proposals to ensure that environmental
programs manage the greatest risks to human health and the environment
in a cost-effective manner. Risk-based provisions are included
in bills reauthorizing Superfund (e.g., S. 8, Subcommittee-approved
H.R. 2727, H.R. 2750, and H.R. 3000).
Risk analysis is the systematic evaluation of hazards and their
possible effects. Views on the potential uses of risk analysis
differ. Although, most experts and policymakers agree that risk
analysis is a valuable tool to inform decisions, they disagree,
about the extent to which risk estimates inevitably are biased
and should be allowed to influence public policies for health
and environmental protection.
Some Members, many academics, and regulated industries argue
that risk analysis is objective and reflects sound science. They
argue it should be used to target federal programs to address
the worst risks to health and the environment first, to achieve
risk reduction in more cost-effective and flexible ways that minimize
overall economic impacts, and to ensure that risk reduction achieved
by regulations is worth the cost.
Other Members, some academics, and many environmentalists argue
that excessive reliance on risk analysis, especially quantitative
analysis, to evaluate problems and solutions ignores other important
facets of policy decisions, such as timeliness, fairness, effects
on democratic rights and liberties, practicality, morality, reversibility
of effects, regulatory stability, flexibility, or aesthetic values.
Critics charge that quantitative methods cannot assess very long-term
or newly discovered threats. They also believe that quantitative
cost-benefit analyses undervalue environmental and health benefits,
exaggerate costs, and focus on relatively widespread but individually
small costs and risks rather than on much larger costs and risks
to smaller, and often more vulnerable, groups.
The quality of risk analysis depends on adequacy of data and
validity of method. For environmental hazards and most health
and ecological effects, there are few data, and methods are controversial.
S. 981, as reported, addresses all risk analyses that the Office
of Management and Budget determines have a potentially significant
policy impact, as well as risk and economic analyses of proposed
and final environmental rules with expected annual cost of at
least $100 million. S. 981 has bi-partisan support, but also faces
significant opposition. Senator Lott introduced a risk-only version
of the bill, S. 1728, on March 6, 1998. The House Judiciary Committee
reported H.R. 1704 March 13, 1998 (H.Rept 105-441), and the House
Committee on Government Reform and Oversight approved the bill
May 21, 1998. It proposes establishing a Congressional Office
of Regulatory Analysis to analyze major rules and non-major rules
at the request of a Member of Congress.
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|Federalism Legislation in the 105th Congress:
A Descriptive Overview
Since ratification of the Constitution established a union of
states under a federal system of government, two questions have
generated perennial debate: What is the nature of the Union? What
powers, privileges, duties, and responsibilities does the Constitution
grant to the national government and reserve to the states? American
Federalism balances a national government empowered with certain
authority, duties, and responsibilities with state governments
and individual rights. One scholar referred to the balance as
one of "permanent points of tension."
Since President Franklin D. Roosevelt's New Deal, the federal
government's role in domestic policies has expanded into areas
previously considered the purview of states and localities. This
expansion has been accompanied by cooperation as well as acrimony.
Some have characterized the change as intrusive, unconstitutional,
and inefficient; others argue that considerable social benefits
have been achieved because of the shift. Court decisions, economic
conditions, and social and political events have all shaped today's
In recent years, some have argued that greater authority should
be exercised by the states and that the federal role should be
circumscribed. To this end the 104th Congress passed legislation
that 1) encourages Congress to consider the costs of federal legislation
and regulations to nonfederal units of government and the private
sector (Unfunded Mandates Reform Act of 1995, P.L. 104-4); and
2) reformed federal welfare authority to allow States and localities
to administer income support programs (Personal Responsibility
and Work Opportunity Act of 1996, P.L. 104-193). The welfare reform
amendments transformed the entitlement program into a block grant
(Temporary Assistance for Needy Families) and gave states greater
Despite these examples of devolution, certain authorities were
maintained at the federal level by the 104th Congress. Welfare
reform requires that states establish registries to track absent
parents and meet requirements concerning unwed mothers. Other
legislation requires that states adhere to federal sentencing
requirements in order to receive prison construction funds (Section
114 of the Omnibus Consolidated Rescissions and Appropriations
Act of 1996, P.L. 104-134), and imposed national standards governing
chemical residue allowed on food (Food Quality Protection Act
of 1996, P.L. 104-170).
The Supreme Court has become a focal point in defining the boundaries
of American federalism. Advocates of "state centered federalism"
have successfully challenged the constitutionality of federal
legislative actions and authority under the interstate commerce,
state sovereign immunity, and reserved powers provisions of the
Constitution. Two decisions issued in June 1997 are pertinent.
The Court upheld a constitutional challenge to the Brady Handgun
Control Act of 1993, in Printz v. U.S., and in Boerne, Texas
v. Flores, held the Religious Freedom Restoration Act to be
unconstitutional, in part, because it infringed on state rights.
The 105th Congress will continue to debate actions that could
fundamentally reconfigure contemporary federalism.
Most Recent Developments
The Senate, on September 2, 1998, approved the conference
report to accompany H.R. 629, the Texas Low-Level Radioactive
Waste Disposal Compact. The legislation would grant congressional
approval of an interstate compact that provides for interstate
transportation of low-level radioactive waste from Maine and Vermont
to Texas. Critics contend that the compact ignores environmental
dangers that will affect low-income residents of the area in which
the waste would be stored. Supporters contend that state and local
officials in all affected states approve of the compact and that
it resembles 9 similar compacts previously approved by Congress.
On August 5, 1998, the President suspended Executive Order
13083, "Federalism." The suspended executive order,
issued May 14, 1998, would have established new Administration
policy regarding the balance of powers among the federal government
and the states. Congress also took action. On August 4, 1998,
the House passed appropriations legislation (H.R. 4276) for the
Departments of Commerce, Justice, State and related agencies with
an amendment that prohibits funds to be used to implement the
Executive Order. A similar provision was approved by the House
on July 29, 1998, in the VA/HUD appropriations legislation (H.R.
Background And Analysis
Over the 210 years since the U.S. Constitution was drafted in
1787, public officials and others have debated time and again
how to allocate responsibility, authority, and power between the
states and the federal government. Ratification of the Constitution
did not settle the debate. Ambiguities in constitutional language
and decisions by the Supreme Court have kept the question in the
congressional arena for more than two centuries. This issue brief
discusses how that debate, as embodied in legislation before the
105th Congress, may affect the balance of responsibility, authority,
and power between the states and the federal government.
Federalism is a system of governance in which sovereignty is
shared between two or more levels of government. On some matters
the national government is supreme; on others the state, provincial,
or regional governments are supreme. Three essential features
characterize a federal system of governance:
The Constitution of the United States recognizes both a national
government and state governments. The Constitution vests responsibility
and authority for certain functions, such as foreign affairs and
national defense, solely in the national government. Other powers,
such as the power to regulate interstate commerce and the power
over copyrights and patents, are delegated to the national government,
but the states are not constitutionally barred from sharing in these
powers. The Constitution grants the national government the authority
to enact laws "necessary and proper" to carry out its
delegated authority and responsibilities, and it further strengthens
the power of the national government by declaring the U.S. Constitution,
laws, and treaties to be supreme when federal and state authority
conflict or, even in the absence of conflict, simply when Congress
chooses to exercise exclusive power.
- two or more levels of government act simultaneously on the same
territory and the same citizens;
- each level of government has
its own authority and sphere of power, though they may overlap;
- and neither level of government can abolish the other.
The Constitution does not delineate the role and powers of the
states beyond requiring a republican (representative) form of
government and prohibiting a change in state borders without the
consent of Congress and the affected states. It reserves to the
states and people unspecified powers not granted to the national
government. Further, it grants to the people certain protections
and rights that cannot be abridged by federal or state governments.
In recent years, advocates who emphasize the role of the states
have won a number of legislative and Supreme Court victories.
They favor the view that the Constitution created a league of
sovereign states and a federal government with limited powers
and responsibilities. They espouse the authority of each state
government to establish its own standards or protections for its
residents. They share the Jeffersonian or anti-federalist view
that the "mass of human affairs may be best managed"
by states and their counties and localities. The assumption is
that even if states and their units of local government are not
able to govern perfectly, the administration of government at
those levels is preferable to that of a centralized federal government.
Advocates who emphasize the role of the national government espouse
the need for consistent national domestic policies and minimum
national standards. Proponents of this view share Madisonian or
Hamiltonian concerns about factional state politics and the tyranny
of local majorities (For example, see a paper on the Twentieth
Century Fund's web site at http://epn.org/tcf/sullivan.html).
They favor the view that the Constitution grants broad authority
to the national government. To support their position they point
to such constitutional provisions as
The issues surrounding the balance of power between state governments
and the federal government are sometimes debated in absolute terms:
one is a proponent either of state dominance or of national dominance.
But since the enactment of New Deal legislation sixty years ago,
it is often argued that effective federalism involves gradations
and mixes of federal and state authority. Some federal block grant
programs, for example, seek to balance national and state concerns
by establishing national goals while giving states considerable
discretion and autonomy in program implementation.
- the supremacy clause of Article
- provisions of Article I, Section 8, related to the "general
welfare of the United States," laws "necessary and
proper," and the regulation of commerce "among the
several States"; and
- the "equal protection" and "due process" clause
of Amendment XIV, Section 1.
Contemporary congressional debate about federalism-related issues
will take place within the context of the federal budget. Efforts
to reduce the federal budget deficit and balance the budget will
have a significant impact on intergovernmental fiscal relations.
Supporters of a balanced federal budget argue that congressional
approval of a constitutional amendment to require a balanced budget
by the year 2002, if ratified by the states, would lead to economic
expansion. Opponents contend that it would constrain federal spending
and shift fiscal pressure to states and other subnational units
of government. State and local policymakers would be left to grapple
with such options as restricting eligibility and access to certain
benefits, increasing state and local taxes and spending in order
to fill the gap, or abandoning certain activities completely.
For example, governors attending the National Governors Conference
in early February 1997, voiced concern that a proposal to place
a cap on the federal share of Medicaid spending would result in
increased state expenditures.
In formulating domestic policies, the 105th Congress has wrestled
with balancing federal and state responsibilities, duties, and
prerogatives while providing for greater state autonomy in some
areas and less in others. Proposals to devolve certain authorities
to the states or their local governments, to require matching
funds from grantees, eliminate federal funding, or enact unfunded
mandates may gain support because they would reduce federal expenditures.
Policymakers concerned with balancing the federal budget may support
legislation that devolves authority and funding responsibility
to states. However, Congress may also act in favor of national
concerns. For example, the agreement in the closing days of the
104th Congress to auction part of the communications spectrum
used by public safety agencies was approved over the objections
of state and local representatives because those funds were needed
to pay for expenditures sought in the omnibus reconciliation act
of 1996 (P.L. 104-193). The 105th Congress may revisit the issue
of spectrum sales.
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