[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
DOES CONGRESS DELEGATE TOO MUCH POWER TO AGENCIES AND WHAT SHOULD BE
DONE ABOUT IT?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JUNE 14, 2000
__________
Serial No. 106-219
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
__________
U.S. GOVERNMENT PRINTING OFFICE
71-984 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
Office
Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250
Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs
DAVID M. McINTOSH, Indiana, Chairman
PAUL RYAN, Wisconsin DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia TOM LANTOS, California
LEE TERRY, Nebraska PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho HAROLD E. FORD, Jr., Tennessee
DAVID VITTER, Louisiana
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Marlo Lewis, Jr., Staff Director
Barbara F. Kahlow, Professional Staff Member
Gabriel Neil Rubin, Clerk
Elizabeth Mundinger, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on June 14, 2000.................................... 1
Statement of:
Brownback, Hon. Sam, a U.S. Senator from the State of Kansas. 84
Gramm, Dr. Wendy L., distinguished senior fellow director,
regulatory studies program, Mercatus Center, George Mason
University, Fairfax, VA.................................... 129
Hayworth, Hon. J.D., a Representative in Congress from the
State of Arizona........................................... 91
Raul, Alan Charles, former general counsel, Office of
Management and Budget, partner, Sidley & Austin............ 108
Schoenbrod, David S., professor of law, New York Law School,
adjunct scholar, CATO Institute............................ 101
Spotila, John T., Administrator, Office of Information and
Regulatory Affairs, Office of Management and Budget........ 135
Letters, statements, etc., submitted for the record by:
Brownback, Hon. Sam, a U.S. Senator from the State of Kansas,
prepared statement of...................................... 87
Chenoweth-Hage, Hon. Helen, a Representative in Congress from
the State of Idaho, prepared statement of.................. 83
Gramm, Dr. Wendy L., distinguished senior fellow director,
regulatory studies program, Mercatus Center, George Mason
University, Fairfax, VA, prepared statement of............. 131
Hayworth, Hon. J.D., a Representative in Congress from the
State of Arizona, prepared statement of.................... 94
Kucinich, Hon. Dennis J., a Representative in Congress from
the State of Ohio:
Critiques................................................ 10
Prepared statement of.................................... 77
Prepared statement of Ms. Wagner......................... 58
Raul, Alan Charles, former general counsel, Office of
Management and Budget, partner, Sidley & Austin, prepared
statement of............................................... 112
Ryan, Hon. Paul, a Representative in Congress from the State
of Wisconsin, prepared statement of........................ 5
Schoenbrod, David S., professor of law, New York Law School,
adjunct scholar, CATO Institute, prepared statement of..... 103
Spotila, John T., Administrator, Office of Information and
Regulatory Affairs, Office of Management and Budget,
prepared statement of...................................... 137
DOES CONGRESS DELEGATE TOO MUCH POWER TO AGENCIES AND WHAT SHOULD BE
DONE ABOUT IT?
----------
WEDNESDAY, JUNE 14, 2000
House of Representatives,
Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:05 p.m., in
room 2247 of the Rayburn House Office Building, Hon. Paul Ryan
(vice chairman of the subcommittee) presiding.
Present: Representatives Ryan, Terry, Vitter, and Kucinich.
Present: Marlo Lewis, Jr., staff director; Barbara F.
Kahlow and Jonathan Tolman, professional staff members; Bill
Waller, counsel; Gabriel Neil Rubin, clerk; Elizabeth
Mundinger, minority counsel; and Ellen Rayner, minority chief
clerk.
Mr. Ryan. The hearing will come to order.
We are still waiting for Congressman J.D. Hayworth to
arrive, I'm told, but I see that Senator Brownback is here with
us, and the first panel is Congressman Hayworth and Senator
Brownback.
Senator Brownback, we'd love to have you get started, and
then when Congressman Hayward comes, we'll just include him in
the discussion.
The purpose of today's hearing is to examine how best to
ensure that congressional statutory intent is reflected in
regulations developed and promulgated by the agencies.
Many of us in Congress often have a sense that Federal
regulatory agencies are out of control, and they continually
try to expand their power beyond the point where Congress
indicated it should stop.
Several examples leap to mind. The Environmental Protection
Agency asserts that it has authority to regulate carbon dioxide
even though Congress has consistently rejected regulatory
proposals to control greenhouse gas emissions.
The Food and Drug Administration tried to regulate
cigarettes as pharmaceutical products, deviating from the plain
meaning of the Food, Drug & Cosmetic Act and the FDA's
longstanding interpretation of that act.
The Supreme Court just recently struck down the FDA's
tobacco rule in March of this year.
But perhaps the most shocking agency lawmaking example in
recent months is the most recent Department of Labor's proposed
regulation to expand unemployment insurance into a program of
paid leave for parents who voluntarily quit or take time off
from their jobs.
This proposed ruled, popularly known today as Baby UI,
could jeopardize the solvency of State unemployment insurance
funds; worse, this rule is illegal.
For 65 years, the Department of Labor has interpreted the
Federal Unemployment Tax Act as permitting unemployment
compensation payments only to persons who are involuntarily
jobless, the truly needy.
Furthermore, when Congress enacted the Family and Medical
Leave Act, it limited the program to unpaid leave and exempted
small businesses.
But under the Department of Labor's rule, unemployment
insurance would be used for paid leave and small businesses
would not be exempt, clearly deviating from congressional
intent.
Why is this shocking? This subcommittee reviewed the
Department of Labor's internal legal analyses, and found that
the Department of Labor was well aware that the rulemaking
lacked a valid grant of statutory authority and probably could
not survive a court challenge.
Yet, that did not stop the Department of Labor from
charging ahead with this regulation.
I suspect that one reasons agencies ignore statutory
constraints on their authority is that Congress has largely
dedicated its responsibility to control the cost and scope of
regulations.
Ever since the New Deal era, Congress has delegated vast
grants of authority to agencies. And until March 1996, when the
Congressional Review Act was enacted, Congress had no
established process or mechanism for reviewing agency final
rules.
However, in over 4 years, Congress has not used the CRA
process to veto a single agency rule. So regulatory decisions
remain firmly in the hands of non-elected Federal officials.
And this means that when agencies go too far, the regulated
public has no one to hold accountable at the ballot box.
Agencies are therefore continually tempted to go where no
statutory authority has gone before.
Agencies do face constraints of course. The courts, from
time to time, strike down agency rules as arbitrary or
capricious, or as exceeding a valid grant of statutory
authority.
And today we will examine some recent cases where courts
have vacated or remanded major agency rules. In particular,
we're going to have a look at the American Trucking Association
v. EPA, something that's a very hot topic these days, that's
being considered by the Supreme Court in this session.
The American Trucking case is noteworthy for invoking
something called the non-delegation doctrine, to challenge
EPA's new particulate matter and ozone standards.
The non-delegation doctrine provides that Congress may not
cede legislative power, the power to make the crucial policy
choices for the American people, to another branch of the
Federal Government, including a regulatory agency.
Moreover, when Congress delegates regulatory power to an
agency, that power must be constrained by an intelligible
principle that guides and limits the agency's discretion.
In American Trucking, the D.C. Circuit Court of Appeals
held that the EPA had construed sections of the Clean Air Act
so loosely as to render them unconstitutional delegations of
legislative power.
The court instructed the EPA to find an intelligible
principle within the act that would explain and justify EPA's
selection of new PM and ozone standards.
This case has generated enormous controversy, with
supporters lauding the court for taking a small but meaningful
step to curb regulatory lawmaking and critics warning that the
decision, if allowed to stand, would undermine the Clean Air
Act and other regulatory statutes.
On May 2000, the Supreme Court agreed to review this case,
and that's where we are right now. This case is important.
However, I believe Congress should not rely solely or even
primarily on judicial review to check and balance regulatory
agencies, and that's why we're hearing from the two witnesses
we have here today.
Regulations have the full force and effect of law.
Regulations are implicit taxes. When Congress authorizes an
agency to regulate, it is in effect delegating the power to
make laws and levy taxes.
There is at the very least attention, some might say
contradiction, between the post-New Deal regulatory process and
Article I of the Constitution, which grants legislative power
solely to Congress.
Why has Congress been so quick to delegate? Well, under a
delegation system, Members of Congress, such as ourselves, get
the credit for enacting popular sounding regulatory statutes
but bear none of the responsibility for the cost and burdens of
regulatory implementation.
Non-elected bureaucrats take the heat from implementing the
statutes that Congress enacts. Politically, this may be a good
deal for credit-grabbing, blame-ducking politicians but it
means that $700 billion in annual off-budget regulatory costs
escape democratic accountability.
It means that the American people live under a regime of
regulation without representation.
It is for these reasons, among others, that I'm really very
pleased to welcome Senator Sam Brownback of Kansas and
Representative J.D. Hayworth of Arizona.
Senator Brownback is the chief sponsor of S. 1348, a bill
that would require Congress to approve agency final rules by a
majority vote before those rules go into effect.
The House companion bill is H.R. 2301, which is offered and
introduced by Representative J.D. Hayworth, who is the man in
Congress who brought this issue to the forefront I believe two
Congresses ago.
J.D. is the man who paved the way on this issue in the
House of Representatives, and who helped get Senator Brownback
I believe to introduce this over in the Senate.
We are really pleased to have you here with us today, J.D.
I believe that you have 55 cosponsors on your bill, which I am
also proud to be a part of your team, J.D. I'm very excited
about hearing your testimony.
We have another panel of witnesses that will be discussing
the non-delegation doctrine, and we will introduce them
afterwards.
But let me just say that we're very pleased to have you
here today. J.D., I know you've been toiling in those vineyards
quite a bit. Sam, I know you've done a lot over in the Senate.
We're excited to have you. I understand, Senator Brownback,
you have a schedule to keep, so we'd like to start with your
testimony, if we may.
[The prepared statement of Hon. Paul Ryan follows:]
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Mr. Kucinich. Mr. Chairman.
Mr. Ryan. I apologize. The ranking member, Mr. Kucinich.
Mr. Kucinich. Thank you very much, and I understand the
Senator's schedule, and I'll move through this testimony as
quickly as possible. I'm also waiting, Mr. Chairman, to go to
the floor on an Interior appropriations amendment to Title I,
which as soon as they go to three bells, I'm going to have to
leave.
But I want to welcome my good friend, Senator Brownback and
my good friend Representative Hayworth for their participation.
I had a chance to read the Roll Call page, which I thought
was very well-written. I want to thank the Chair for holding
this important hearing on the impact of delegation of
legislative authority in our system of government.
As I think the Chair knows, and I'm sure the other
Representatives and Senators know, I'm not an easy sell on
these questions. I mean, at this very moment, when you talk
about the powers of Congress, I think some of you will remember
that I took a very strong stand about the war powers, that
Congress shouldn't give the President the ability to
unilaterally declare war and not check with us.
As a matter of fact, I'm with Representative Campbell and a
number of other people in a case before the Supreme Court at
this very moment. So I take very seriously questions that are
raised about the role of Congress and Congress not ceding
power.
The Constitution provides that Congress has the authority
to legislate. Congress often passes broad statutes and asks
agencies to fill in the details through regulation. This allows
agencies, which hopefully have the expertise and the staff to
address what are often extremely complicated, technical and
scientific issues, to move quickly to respond to changes in
science and political and social values. But it's very tough to
strike this balance, and I know that's what we're concerned
about.
Mr. Chairman, I want to share your concern that this
process can be abused by both the Congress and the agencies.
Congress can duck politically difficult issues by passing broad
legislation that sets politically popular goals, and blame the
administration when agencies make the tough decisions about who
will bear the burden of reaching those goals. Similarly,
agencies can overstep their authority and pass regulations
which are not authorized by the underlying statutes. I know
this is the essence of our participation here today.
Mr. Chairman, I'm looking forward to hearing from the
witnesses who hopefully will shed some light on possible ways
to protect against such abuse. However, I hope the solution
does not further limit our ability to pass competent,
politically accountable legislation that's in the public
interest.
Statutes and regulations, especially environmental
protections, are often based on complicated technical and
scientific knowledge. It's not likely that we could duplicate
the expertise provided by the agencies and we need to take
advantage of this expertise.
Along the same line, we need to be wary of solutions that
are scientifically naive and fail to recognize the inherent
limitations of scientific principles.
A large number of legal scholars have recently written on
this issue when criticizing the D.C. Circuit's recent findings
in the PM Ozone case. I'll be inserting some of these critiques
into the record.
[The information referred to follows:]
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Mr. Kucinich. I also expect to hear about political
accountability. Some argue that agencies are ruled by special
interests while Members of Congress, who are politically
accountable elected officials, respond, instead, to the public
interest.
Well, you know, when you factor through some of the
campaign finance debates, it's problematic. Political reality
is that special interests do exert influence in Congress, and
Congress can draft legislation with special interests sometimes
behind closed doors.
And that goes, by the way, for both parties, just so we
establish that real quick here. This is not about which party's
hands are clean and which party's hands are not clean.
So, on the other hand, there are a number of administrative
laws that ensure that all interested parties have the chance to
comment on agency rulemaking and the public can review these
comments.
I believe any solutions that we consider are to make sure
that the process is open, that the decisionmakers are truly
politically accountable for their actions.
Finally, Mr. Chairman, I hope that any solution we consider
would not make it more difficult to respond to the public
interest. As we know, we often learn new scientific facts which
significantly affect how to best implement a law. The social
and political values change. In response, the public often
demands better protections, yet because of certain interests,
Congress is slow to respond. I want to make sure that we do not
create a procedural maze that makes it even more difficult to
enact important public protections.
Mr. Chairman, at my request, you were kind enough to invite
Professor Wendy Wagner to testify today. She was expected to
testify on a number of these issues, and I was looking forward
to exploring them with her during the hearing.
Unfortunately, she's not able to attend because of a family
emergency, so I'm going to ask, with the Chair's permission,
unanimous consent to insert her testimony in the record, hold
the record open to include additional materials, including any
answers to questions subcommittee members may want to ask
Professor Wagner in writing.
Mr. Ryan. Without objection.
[The prepared statement of Ms. Wagner follows:]
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Mr. Kucinich. I thank the Chair again for holding this
important hearing. I look forward to the testimony of Senator
Brownback and Representative J.D. Hayworth.
Thank you very much.
[The prepared statement of Hon. Dennis J. Kucinich
follows:]
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Mr. Ryan. Thank you, Dennis.
Mr. Vitter, would you like to make an opening statement?
Mr. Vitter. No.
Mr. Ryan. At this time, I'd like to ask unanimous consent
that the statement from Congresswoman Chenoweth-Hage be
inserted into the record.
Without objection.
[The prepared statement of Hon. Helen Chenoweth-Hage
follows:]
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Mr. Ryan. Senator Brownback.
STATEMENT OF HON. SAM BROWNBACK, A U.S. SENATOR FROM THE STATE
OF KANSAS
Senator Brownback. Thank you very much, Mr. Chairman.
And if you'll pardon an old man's musings here for a
moment, it's a great pleasure to be able to be here and testify
in front of you where I got to work for a number of years, and
I'm delighted in being able to work with you and now to be able
to address you as chairman; I guess one of the pleasures of
growing older. So I appreciate the opportunity to do that.
Mr. Ryan. Thank you, old man. [Laughter.]
Senator Brownback. I feel it a number of days, too.
Let me quote the Constitution. One guy came out to Kansas
to work with a group that I was with there, and a person in the
crowd held up a copy of the Constitution and he commented, he
said, you know, isn't that a terrible thing when you get
outside of Washington, and people start waving around the
Constitution. Can you believe it? I always know when I'm
outside of Washington. People know the Constitution.
And I thought it telling that the rest of the country maybe
knows it better than people here in this town.
But you can look at Article I, Section 1, right after the
Preamble begins, ``All legislative powers herein granted shall
be vested in a Congress.''
Pretty clear. The founders clearly believed that this
included the power to regulate. As they had noted, John Locke's
wise admonition that ``the legislative branch cannot transfer
the power of making law to any other hands.'' This is John
Locke.
They understood that if a transfer did occur, legislators
would no longer be responsible for the laws that the government
imposes on the people. They would be waiving their authority
that they were to represent the people for, and they could not
do that.
And for the first 150 years of the republic, the Supreme
Court held that the transfer of legislative powers to another
branch of government was unconstitutional.
In the late 1920's, the Supreme Court essentially succumbed
to some political expediency, reversed itself, and upheld a law
which allowed Congress to delegate its authority.
The case of J.W. Hampton, Jr. & Co. v. United States,
started Congress down a slippery slope that we've gone a long
ways down.
Since then, Congress has ceded its basic legislative
responsibility to executive branch agencies that craft and
enforce regulations with the full force of law.
But perhaps the most pernicious aspect of delegation is
that voters can no longer hold government accountable.
Originally designed to be the most accountable branch of
government, congressional responsibility and accountability has
clearly eroded. The fundamental link between voter and lawmaker
has been severed.
A handful of broadly written laws has spawned a virtual
alphabet soup of government agencies, and an overwhelming
regulatory burden that undermines the very idea of
representative government.
Many regulatory analysts believe more consequential law is
generated in the executive branch than in the legislative
branch.
The Federal Register, which in 1995, churned out some 4,713
final rules, according to the Office of Management and Budget,
states in its purposes that it ``provides a uniform system for
making available to the public regulations having legal
effect.''
In short, the executive branch has assumed the lawmaking
authority given to the Congress. I think it's wrong.
I frequently get constituents in Kansas asking well, how
did that happen that some regulation went into effect or
something happened that was an extraordinary action, and they
said, don't you guys have the authority of law? I mean, aren't
you the legislative body?
To which I respond, yes, we are the lawmaking body, but
here's what's taking place. They don't understand it. They then
start whipping out and saying, well, I thought in the
Constitution, it said this.
We've waived and given up that authority.
Under the Congressional Responsibility Act that Congressman
Hayworth has been the champion of, that I'm pushing in the
Senate, all rules and regulations would have to come before the
Congress before they could be enacted into law; simple, clear,
direct, I might also add, constitutional.
Congress would then have to have an up or down vote on the
proposed rule or regulation before it could take effect. The
bill provides for consideration of rules and regulations in an
expedited manner, unless a majority of members vote to send it
through the normal legislative process.
Under the bill, if Congress did not act, then the rule
would, by default, die. This approach not only puts Congress
back in control of the legislative process, it ends the
horrendous practice of delegation without representation, and
makes Congress accountable to the laws that affect the lives of
every American. It's about the return of power, responsibility
and authority back to Congress.
I should note that this concept is non-partisan and
ideologically neutral and in fact was first offered by then-
Judge Steven Breyer who wrote that we should end delegation as
a means to satisfy, ``the literal wording of the Constitution's
bicameral and presentation clauses.''
The Constitution really has suffered greatly this century.
I think we need to restore it to its rightful preeminence as a
guarantor of our freedoms, the protector of our liberties, and
the guiding force for our form of government.
Delegation today is as wrong as taxation without
representation in the 1700's. With enactment of this
legislation, we send that clear message that it's Congress that
legislates, it is Congress that passes the law.
And, Mr. Chairman, let me just add a couple of additional
notes, if I could on this because I think this is extremely
important, particularly where we've gotten to the point today
that people question the role of Congress.
They see a lot of things happen on an international scale
to them, or that they see driven on international agreements.
They see things happening in the executive branch to them.
And they're wondering, I thought the responsible branch to
us, the representative branch was the one to pass the laws. And
yet they see and sense, and I think frankly rightly so, more
happening on an international and a national basis than
legislation happening at the congressional level.
This is the sense that people are developing and it's
because we've allowed this power to go ahead and accrue further
and further into the executive branch. It's time to stop.
We've got nine sponsors to this legislation in the Senate.
This is I believe the first hearing, perhaps the second and the
first in this Congress on this bill, and I think it's important
that it start getting some airing out so that people can look
at it and say, we need to get this back where the founders
intended.
Thanks for holding the hearing, and I want to thank the
person that's championed this for so long, J.D. Hayworth, who's
really carried the torch for a long time.
[The prepared statement of Senator Brownback follows:]
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Mr. Ryan. Thank you, Senator.
Congressman Hayworth.
STATEMENT OF HON. J.D. HAYWORTH, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF ARIZONA
Mr. Hayworth. Mr. Chairman, thank you very much.
And as I look at my one-time colleague in the House, now
serving in the Senate, I don't see a great deal of gray in that
brown hair.
To my good friend, the ranking member, the gentleman from
Ohio, thank you for reading the piece in Roll Call. And for
purposes of full disclosure and my own vanity, I'm just sorry
they don't have an updated picture. If you notice, there was an
additional ham hock underneath my chin which causes me great
despair, but I'll try to update a picture and of course there's
not much improvement anyway.
And to my good friend from Louisiana, who joins us here
today, it's good to have you here on the subcommittee, and I do
want to thank you for this opportunity to testify about whether
Congress delegates too much authority and power to Federal
agencies.
The answer to the question is quite simple: yes. Congress
delegates far too much power to unelected, unaccountable
Federal bureaucrats.
One of the most important reforms we as a Congress can
undertake is reclaiming our constitutionally granted power to
make laws.
My testimony today will focus on the practice of
unconstitutionally delegating legislative powers to the
executive branch, the effects of that delegation, the flaws of
the Congressional Review Act, and why we should now enact the
Congressional Responsibility Act.
As was mentioned earlier, Mr. Chairman, last year I
reintroduced the legislation as H.R. 2301, and my good friend
who sits fittingly to the right of me right here at this table,
Senator Brownback, introduced companion legislation as S. 1348
in the Senate.
The goal of our bill is simple, to take back the
constitutionally-granted power of Congress to make laws.
Senator Brownback stated it earlier. It appears in the
Constitution following that incredibly beautiful and practical
preamble.
Article I, Section 1 states, all, let me emphasize the word
all, all legislative powers herein granted shall be vested in a
Congress of the United States.
But amazingly, for the last 60 years, Congress has been
allowed to delegate its constitutionally granted power to make
laws. In fact, the Supreme Court has not invalidated a single
delegation of power since 1935.
For the first 150 years of our republic, however, the
Supreme Court held that the transfer of legislative powers to
another branch would be unconstitutional.
Not only does designating legislative power run counter to
Article I, Section 1, it also clearly violates the
Constitution's separation of powers clause by making the
executive branch both the maker and enforcer of laws.
James Madison wrote in the Federalist Papers that the
consolidation of authority into one branch was tyrannical.
Unfortunately, by allowing the executive branch to be both the
maker and the enforcer of laws, we have created the tyrannical
branch James Madison so feared.
In 1999, the Federal Register had 4,538 proposed rules, in
essence, 4,538 laws. By contrast, Congress did not even
propose, let alone vote on, that many bills.
The cost of the regulations appearing in the Federal
Register in 1999 comes down like this. $758 billion, to think
of it another way, $7,500 for the median two-earner family, or
for the economists who join us here today, 19 percent of the
gross domestic product.
This imbalance demonstrates why many regulatory analysts
have concluded that more consequential law is generated in the
executive branch than in the legislative branch, as Senator
Brownback mentioned in his testimony.
Our founders also knew that by vesting lawmaking powers
solely in Congress, the people could hold the legislative
branch accountable for its actions.
By delegating the powers to Congress to the executive
branch, the people had no recourse because executive branch
employees are the folks who craft these rules and regulations.
And of course they are unelected and not directly accountable
to the people.
Delegation gives life to bad laws because it allows
legislators to make ambiguous laws for which they can take
credit, without having to take responsibility for the legal
consequences or the costs of these regulations.
Essentially, and this phrase may be especially apt for me,
delegation allows Congress to have its cake and eat it too.
Congress can reap the benefits of delegation and its excesses
by helping constituents through the complexities of Federal
regulations.
At the same time, and again neither party has ownership of
this little piece of political rhetoric, we in Congress can
blame those confounded bureaucrats for misinterpreting our
intent in drafting laws to begin with.
So it's a very interesting game but it has profound
consequences. We're in the congressional two-step. We can play
both sides and win. But the loser in all of this is the people.
Delegation also allows powerful special interests to expend
substantial resources in private to benefit the few at the
expense of the many. Simply put, if we're really to restore
integrity, responsibility, and confidence in our Federal
Government, one of the best ways we can do this is by ending
this unconstitutional delegation of legislative powers to the
executive branch.
The 104th Congress realized the executive branch was
wielding too much power in the legislative process so in March
1996, Congress passed the Small Business Regulatory Enforcement
Fairness Act.
A provision in the bill known as the Congressional Review
Act [CRA], now allows Congress to review new regulations and
prevent those regulations from taking effect.
Now while I'm a strong supporter of the CRA as an important
first step in having Congress assert more influence into the
regulatory process and take back its constitutionally granted
responsibilities, I regret that it has not yet been used to
overturn one proposed rule or regulation.
In fact, not one disapproval motion has even made it to the
Senate or House floor for a vote. There are many reasons why
the CRA has not been used. The most important reason may be the
fact that it takes a two-thirds majority to overturn a rule as
the executive branch is almost certain to veto a disapproving
resolution of the rule that the executive branch creates.
Therefore, executive branch employees can still craft rules
and regulations that are supported by a minority.
I have more, Mr. Chairman. If you'd like me to continue, I
shall, but I'm happy to submit the rest of my remarks for the
record and take your questions. Whatever it is the will of the
committee and the ranking member, I stand patiently and
expectantly for your verdict.
[The prepared statement of Hon. J.D. Hayworth follows:]
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Senator Brownback. If I could, Mr. Chairman, I'm going to
need to get back over to the Senate side, but thank you very
much for allowing me to be here, and thanks for holding this
hearing.
Mr. Ryan. Thank you. Thank you very much for coming by,
Senator Brownback. We appreciate all your work.
Mr. Hayworth.
Mr. Hayworth. Yes, sir?
Mr. Ryan. Why don't we start with just a dialog and then we
can finish it up.
Mr. Hayworth. Sure, that's great.
Mr. Ryan. I thought what you mentioned about the CRA was a
very important point, which is the CRA doesn't really work
because it's not used at all.
Why do you think it's not used? And if it's a political
problem, then don't you believe that we need to have more of an
active mechanism, rather than the passive mechanism that the
CRA is?
Mr. Hayworth. That's precisely the reason. And as I
mentioned in the testimony, when you have to have a super
majority vote to make a change, that just functionally ensures
that those around here who are in the business of counting
votes and planning a legislative calendar have to really have
the alarm bells go off to even begin that process. And so it's
proven very impractical.
And the other thing, it's almost the whole input/output
question, the question of process. And of course what our
legislation, the Congressional Responsibility Act, provides for
is the reassumption by the legislative branch of its rightful
role.
It's all well and good to promulgate regulation. Indeed at
the dawn of the progressive era, it was Theodore Roosevelt who
said, let's bring experts into government, men and women of
science.
But as we've seen, like most good ideas, somehow when
Washington gets a hold of them, the reality doesn't really
match the vision. The fastest growing portion of the law, it
appears to me, is the whole cottage industry of regulatory law
and regulatory lawyers and the fact is now, among many folks,
legal scholars and those who interpret American jurisprudence,
you have this phenomenon of people who say, well, yeah, you
have the Constitution, but you have this body of regulatory
law.
And some people quite seriously have given that regulatory
law more precedent. So we're just simply saying, let's start at
the beginning, let the regulators promulgate the rules, bring
it to the House and the Senate in expedited fashion, and vote
on it so we restore our rightful role under Article I, Section
1.
Mr. Kucinich. Would the gentleman yield?
Mr. Ryan. Yes.
Mr. Kucinich. I'm going to have to leave in a moment, but I
wanted to congratulate Representative Hayworth on his
presentation. As I said, I read the article you wrote in Roll
Call. I do have real concerns about the erosion of
congressional authority, whether it's with respect to the
executive branch, with respect to the WTO and these other world
or global organizations, and I think that you're raising some
points that need to be responded to, to remind people what this
is all about.
And I do have some concerns of course, particularly with
respect to the EPA how this might work out. But I think it's
important to have this kind of debate because we need to
refresh everyone's memories as to what government's about. And
I think that it always is helpful to explore the Constitution
and try to get some sense of what this experiment in democracy
has always been about.
So while we may not be in agreement on some things, I can
tell you that I think that this kind of a debate is healthy for
our country, and I thank you.
Mr. Hayworth. I thank my friend, the ranking member. If I
could just make the point again, you're right. This knows no
partisan stripe, just to reaffirm it. It appears formally in my
testimony, and I think Senator Brownback touched on it briefly.
A lot of the germination of this idea or bringing this to
bill form really came from then-Judge Steven Breyer, before he
was Mr. Justice Breyer, a Clinton appointee to the Supreme
Court, it was Judge Steven Breyer who wrote in 1984 in a law
review article how really you reassert Constitutional
authority, especially in the wake of the decision made in INS
v. Chadha on the legislative veto.
And at the same time, Nadine Strossen of the ACLU, not
somebody with whom I line up on every issue of public policy--
--
Mr. Ryan. You were her ``man of the year,'' weren't you?
Mr. Hayworth. Pardon me? I think I was the man of--well, I
won't go into that because none of those cheap bad jokes----
Mr. Kucinich. Representative, I want to thank you for being
here. I have to go.
Mr. Hayworth. Thank you, I understand, Mr. Kucinich. So I
think we have, this shows really that our political spectrum is
not linear when it comes to this. You don't have a situation
where it's right versus left or Republican versus Democrat come
to this.
Mr. Ryan. Well, J.D., let me ask you because, I think
that's a very profound point that this is not a Republican/
Democrat issue, but given that fact, don't you think that
Congress has become cozy with the idea of delegation, the two-
step as you mentioned.
You can pass the vague law, you can take credit for it,
then when your constituents are under the opression of the
regulatory implementation of it, you can say I really feel for
you, sorry this is happening to you. It's the regulatory
agency, it's not me. I'll see what I can do to help you.
And then we go through the maze of trying to help our
constituents through this regulatory framework which is because
of the delegation.
Do you think we're going to be able to get this passed? And
what do you think it's going to take to get this done and to
get members off this cozy?
Mr. Hayworth. Well, I thank you, Mr. Chairman, for having
this subcommittee hearing. I think this is an important first
step.
Because again, as I mentioned earlier, with the legal
community and others quite fairly who could claim some
jurisdiction over this, there is a bias in favor of the breadth
and body of regulatory law and regulatory precedent.
And I think that is cause for great concern. But what I
find heartening, the previous writings of now-Justice Breyer,
and input of Judge Robert Bork, many other legal scholars, at
least the embrace of the concept by some of the folks from the
ACLU, so I think you have the makings of a grand coalition
across party lines.
But you are quite right to reiterate for the record what we
have going on right now is the Washington two-step where we can
say, look at the laws we've passed on one hand, and on the
other hand, have a situation where constituent rights are
calls, and it's added a whole new area of constituent service.
And at the risk of sounding like a poor impersonation of
Bill Murray and Caddyshack, we have a situation where you have
really turned the Constitution on its ear because you have a
duly elected Member of Congress, either in writing or--probably
in writing instead of a phone call--but something alone the
lines of:
Dear Mr. and Mrs. Unelected, Unaccountable Federal
Bureaucrat, won't you please, please, please, please take a
second look at the way you are administering this rule to my
constituent because I remember working on this in Congress and
we meant something totally different from the way you're
interpreting it.
And I make that somewhat jocular statement because you
really need to laugh to keep from crying because what has
happened is a perversity of what our founders intended because
we have taken the power, the very thing to distinguish us in
the first three words of the Constitution, We, the People, in
this Constitutional Republic, where we operate on the consent
of the governed, we have taken away accountability by taking
legislative powers from the hands of those who stand at the bar
of public opinion every 2 years, in a unique institution that
our founders created in Article I, we have taken that away and
we have put power in the hands of folks who are unaccountable,
and that is where you have all the bureaucratic inertia and red
tape and other terms that are probably too colorful for
congressional testimony in mixed company that I shant go into.
It is a severe problem, and I hope the jocularity of my
comments only serve to reflect just how serious a structural
systemic problem this is when you ignore the Constitution,
ignore the warnings of our founders, and somehow end up with
this hodgepodge that we face today.
Mr. Ryan. Thank you very much, Congressman Hayworth. Thank
you very much for your leadership on this issue, and we look
forward to working with you on this in the future.
Mr. Hayworth. Thank you, sir.
Mr. Ryan. I appreciate you coming by and testifying.
Now we'll call panel II to the desk. On panel II, we have
David Schoenbrod, a professor of law at New York Law School,
and author of ``Power Without Responsibility: How Congress
Abuses the People Through Delegation.''
We have Alan Raul, former Office of Management and Budget
general counsel, and partner at Sidley & Austin.
We have Wendy Lee Gramm, former Administrator of OIRA, OMB,
and director of Regulatory Studies Program & distinguished
senior fellow at the Mercatus Center at George Mason
University.
And John Spotila, the Administrator of OIRA.
As Mr. Kucinich said, Wendy Wagner, who is an assistant
professor at Case Western, had a family emergency and could not
be joining us today, but her statement shall be included in the
record.
If each of you will stand, please.
[Witnesses sworn.]
Mr. Ryan. Mr. Schoenbrod, we'll start with you and move
down. If you could start, and if we could ask our witnesses to
please try and keep your comments within the 5-minute rule
because we want to get to some good questions as well.
STATEMENT OF DAVID S. SCHOENBROD, PROFESSOR OF LAW, NEW YORK
LAW SCHOOL, ADJUNCT SCHOLAR, CATO INSTITUTE
Mr. Schoenbrod. Thank you, Mr. Chairman.
My written testimony makes for pivotal points.
First, legislators want to avoid politically difficult
choices. Second, they avoid those choices in many ways, one of
which is to delegate lawmaking authority to administrative
agencies. Third, the result is that legislators fail to fill
their fundamental function under the Constitution, to be
responsible for the scope of the national government; and
fourth, Congress could, if it wished collectively to do so,
take responsibility.
Because these points are obvious to anybody in Washington,
I will not belabor them now, but rather go on to discuss what
can be done to restore the Democratic accountability that was
guaranteed to the people under the Constitution.
What about the courts as a solution to the problem?
The courts can do more and there are signs that they are.
The Supreme Court's decision in the legislative veto case, and
in the line item veto case, as well, in Loving v. United
States, and in AT&T v. Iowa Utility Board, and now the lower
court's decision in American Trucking, are all hopeful signs.
But the courts work incrementally; whereas, the problem we
have today is massive and structural. If the problem is to be
solved, the political branches must do more than stand on the
sidelines and cheer the courts on. Congress, in particular, has
an independent responsibility to uphold the Constitution.
But what could Congress do to play its part? One option is
for Congress to make the hard choices in the statutes
themselves. Now that's the ideal thing. It's what Mr. Raul
calls for and I'm all for it, but I have my doubts about how
realistic it is.
We have a massive body of statute already on the books
which ducks the hard choices.
Moreover, the incentives, realistically speaking for
individual legislators, are not to do this. Why? Because any
time you face the hard choice and the other guy ducks it by
taking the high ground, you suffer politically. Besides, then
you marginalize yourself because nobody wants to listen to you
if you rain on the parade of happy promises.
So functionally, I think the realistic outcome will be that
most of the time, Congress is going to want to duck the hard
choices, so long as we operate under the current political
ground rules.
So what we really have to do is to change the ground rules.
The genius of the Congressional Responsibility Act is that it
would change the ground rules. You can duck the hard choices
but they're coming right back at you.
That's the great thing about it. And at the same time, they
come back at you with all the expertise of the agencies so you
have the best of both worlds.
With a statute like the Congressional Responsibility Act,
then the political incentives all change. You get the benefits
of standing for the Constitution. That's great.
But the question is, is it going to get passed. Now, you
know what's happened is that the congressional leadership in
the Senate has been putting the brakes on the bill. The same
has been going on in the House.
And the reasons for this are all together clear. If, for
example, the Republicans come forward with the bill, there's no
question that they're going to get demagogued on it. It's an
easy kind of issue to demagogue.
And so we really have to change the political environment
in which this issue comes up. But I think that could be done,
and I think it could be done for the kinds of reasons that
Senator Brownback and Congressman Hayworth talked about.
This is an issue that people understand. In the cab on the
way over here, the cabdriver asked me what's the hearing about,
and I said the hearing is about does Congress delegate too much
power to agencies and what should be done about it.
He said, well, why do they want to hear about that? They
know the answer. [Laughter.]
On basic structural questions like this, questions about
congressional responsibility, about cheating on the basic
ground rules of politics with the American public, people
understand it. That's why they supported unfunded mandate
reform. That's why they support term limits because they know
that long terms come out of cheating. That's why they support
the balanced budget concept. That's why they support the line
item veto.
Now some of these reforms were not successfully executed,
but I think the potentials in there with the right kind of
leadership in Congress to bring the issue back to the people,
to get the kind of broad based support we need to make the real
change that ought to take place.
[The prepared statement of Mr. Schoenbrod follows:]
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Mr. Ryan. Thank you, Mr. Schoenbrod.
Mr. Raul.
STATEMENT OF ALAN CHARLES RAUL, FORMER GENERAL COUNSEL, OFFICE
OF MANAGEMENT AND BUDGET, PARTNER, SIDLEY & AUSTIN
Mr. Raul. Thank you.
Professor Schoenbrod didn't mention, I was his taxi driver
coming over. [Laughter.]
No, no. I'm just kidding.
Mr. Chairman and members of the subcommittee, my name is
Alan Raul. I'm a partner in the Washington, DC office of Sidley
& Austin. I'm testifying today in a personal capacity.
Thank you for the opportunity to testify on the issue of
delegation of congressional power to administrative agencies.
In particular, it's a great honor for me to appear on this
distinguished panel, each of whom in different ways is a hero
of mine, and certainly on this issue.
Professor Schoenbrod deserves profound credit for
reinvigorating the thinking on the nondelegation doctrine
through his important book ``Power Without Responsibility.''
I know that it influenced my own personal thinking, as well
as others involved in various aspects of the issues.
Wendy Gramm is a former colleague at OMB. Any OIRA
Administrator is a hero to the Nation, and I will include Mr.
Spotila in that category as the current incumbent, and
therefore victim of numerous slings and arrows.
Wendy Wagner, is a hero as well, and I'm sorry that she's
not here. I have cited Professor Wagner's article, the Science
Charade of Toxic Risk Regulation, both in the full text of my
testimony here today as well as in briefs that I was privileged
to submit on behalf of Senator Hatch and Congressman Bliley as
amici in the American Trucking Association case in the D.C.
Circuit. That case is now pending before the Supreme Court.
I commend the committee for addressing this issue now, as
the Supreme Court is poised to consider the implications of the
nondelegation doctrine for EPA implementation of the Clean Air
Act in the American Trucking case.
This case is crucial because it presents a challenge to one
agency's unilateral decision to overhaul environmental policy,
and at the same time transform the Nation's economy
dramatically without a congressional mandate or a scientific
imperative to do so.
Of course, the environment must be protected in the public
interest, but EPA must exercise its administrative functions
within the parameters established by the Constitution.
An executive agency may simply not take the country in a
major new regulatory direction without warrant from Congress.
This same issue was also at play in the Supreme Court's
recent invalidation of the FDA tobacco rule in Brown &
Williamson v. FDA. I believe there is certainly a reasonable
case, which I would support, for the regulation of tobacco, but
it should come from Congress and not as a usurpation by the
executive branch through FDA.
Similarly, the dispute in American Trucking is not about
the Nation's commitment to protecting and cleaning up the
environment. That is nearly universal and certainly a
commitment which I share.
In fact, EPA's data demonstrate a phenomenal success story
in this area, through the efforts of various Congresses,
Administrations, and EPA, the air has become vastly cleaner and
healthier over the last 30 years.
So the debate instead is over the scope of EPA legal
authority under the Constitution to commit enormous additional
resources, without any assurance that such resources will not
be wasted.
While Congress may have the constitutional power to throw
the country's money away, which I don't think it generally
does, EPA certainly does not.
It should be noted that EPA may be the rare administrative
agency in the United States and perhaps anywhere in the world
that believes itself to be legally precluded from adopting
cost-effective regulatory standards.
I think that this issue is going to be considered by the
Supreme Court in the American Trucking case, which the Lead
Industries Association decision decided by the D.C. Circuit in
1980, which barred EPA from considering cost-effectiveness.
Much of the mischief in the Clean Air Act and environmental
regulation derives from not an act of Congress or perhaps even
from a lack of precision by Congress, but rather from an
interpretation by the D.C. Circuit Court of appeals in the Lead
Industries case in 1980. That decision held that the Clean Air
Act precludes EPA from considering costs and, more importantly,
cost-effectiveness in setting standards under the Clean Air
Act.
If the Supreme Court is likely to overrule the Lead
Industries decision because it is inconsistent with its own
Benzene decision. In Benzene, the Supreme Court found there was
a requirement that regulatory agencies, in that case OSHA,
regulate on the basis of a finding of ``significant'' risk,
thereby leading to a balance between the risks and the costs
imposed.
I think they'll find the same factors are relevant under
proper construction of the Clean Air Act.
I would note that the Lead Industries decision was decided
in 1980, and I believe Professor Schoenbrod was involved in the
argument of that case in an earlier incarnation, 5 days prior
to the decision of the Supreme Court in the Benzene case.
We might not be here today having this hearing if the
Supreme Court decision had been handed down first and the D.C.
Circuit in 1980 had had the opportunity to consider the Supreme
Court's decision in Benzene.
What steps should Congress take to enhance accountability?
We are talking about the nondelegation doctrine, which is of
course a constitutional provision under Article I, Section 1,
that provides all legislative powers are to be exercised by
Congress.
Since 1935, which was the last time that the Supreme Court
has struck down any act of Congress under the doctrine, the
doctrine is made very much alive. It is applied now, not as a
basis to strike down statutes, but rather as a rule of
construction to limit excessive usurpations by the executive
branch under broad mandates.
So what can Congress do to rein in those broad mandates?
First I think, as Mr. Hayworth testified earlier, the
Congressional Review Act should be utilized more frequently.
Not one measure has been brought to a vote for disapproval on
any regulation since the act has passed. That certainly is a
measure which is on the books and could be utilized.
And perhaps in connection with that, OMB review and GAO
review could be promoted and further strengthened to get
independent analysis.
Congress should adopt a regulatory budget which recognizes
that regulatory expenditures by society are every bit as
important as tax expenditures or fiscal expenditures, so that
they should be disciplined.
The executive branch's incurring of regulatory expenditures
or impositions should be disciplined.
Congress of course should set regulatory standards with
greater precision in the laws. As Professor Schoenbrod
mentioned, in the Iowa Utilities case the Supreme Court ruled
that the Telecommunications Act of 1996 was a model of
ambiguity. Clearly, there's a responsibility up on the Hill for
drafting with greater precision.
I also think that Congress should consider what I've dubbed
the ``Honest and Cost-Effective Regulatory Policy Act.'' It's
important that the assumptions that agencies use, the
uncertainties that are factors in their decisionmaking, should
be disclosed, their default assumptions and so on, the policies
that are implicit in the scientific choices that they make.
But also and perhaps equally important, agencies like EPA
should not only be empowered but encouraged to consider the
cost- effectiveness of their regulations to ensure that
society's resources are not wasted.
The question of diverting additional resources, enormous
resources for environmental protection, such as EPA's ozone
rule, is not that environmental protection is not worthwhile;
of course, it is. But if $9 billion are being spent to recover
$1 billion worth of benefits, according to some of EPA's own
data, that's an unnecessary diversion of society's resources
that could be better deployed for other forms of environmental
protection, public health protection, fighting cancer, and so
on.
I would also, in closing, suggest that the Supreme Court,
starting in 1993, decided three cases beginning with the
Daubert decision which required Federal judges to serve as
gatekeepers for the reliability and relevance of the scientific
evidence that is presented in court in civil litigation.
Civil litigation is very important, but administrative
litigation involving judicial review to ensure accountability
of agency action, is often at least as important.
If you're talking about judicial review of agency action
that can affect the entire society, it is at least as important
in that context that judges look very carefully at the
scientific methodologies and the relevance and reliability of
the science that agencies use in setting their regulatory
standards based on science.
So I would encourage the Congress to adopt legislation
bringing Daubert-type principles into administrative law.
Thank you, Mr. Chairman.
[The prepared statment of Mr. Raul follows:]
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Mr. Ryan. Thank you, Mr. Raul.
Dr. Gramm.
STATEMENT OF DR. WENDY L. GRAMM, DISTINGUISHED SENIOR FELLOW
DIRECTOR, REGULATORY STUDIES PROGRAM, MERCATUS CENTER, GEORGE
MASON UNIVERSITY, FAIRFAX, VA
Ms. Gramm. Thank you very much, Mr. Chairman.
I'm pleased to be here and I should point out that we
should all listen to the wisdom of the taxi drivers.
I'd like to summarize my testimony.
In response to the question you posed, my answer is yes.
Congress has delegated too much authority to the executive
branch.
In addition, sometimes the executive branch has taken
authority not given it. Agencies have indeed expanded on the
authority granted. The end result is the same. Agencies have
too much power over American individuals and businesses as well
as over State and local governments.
Regulations have been growing unchecked and agencies are
not sufficiently accountable to the public with regard to the
exercise of this power, and estimates are now that regulations
cost Americans more than $700 billion per year.
Congressman Hayworth pointed out the most recent estimate
of $758 billion per year.
For the past two decades, Congress and every President
since President Nixon, have tried to implement procedures to
assure accountable and reasonable regulations. We've had
studies and commissions, like the Commission on Federal
Paperwork.
We've had laws like the Paperwork Reduction Act, the Reg
Flex Act, UMRA, SBREFA, and the CRA, and we've had Executive
orders instructing agencies to perform analyses.
Unfortunately, these past laws and procedures have not been
very effective at controlling the problem of unduly burdensome
regulation or the expansion of agency authority, in part
because the analysis required by many of these laws must be
prepared by the agency writing the regulation, not a
disinterested party in the issue.
The voice of the citizen or average consumer is not well-
represented in the regulatory debate. Furthermore, there is
little truly unbiased analysis of the impact of a regulation in
the rulemaking process.
Such analysis could help agencies write better regulations,
avoid the consequences of unduly burdensome regulations, as
well as help Congress in its oversight role.
For these reasons, I established the Regulatory Studies
Program at the Mercatus Center, George Mason University. Our
objective is to advance knowledge of regulations and their
impact on society by providing careful, high quality analyses
of agency rulemakings from the perspective of the public
interest.
Since our first public interest comment in December 1996,
our program at Mercatus has commented on 45 regulatory
proposals, ranging from EPA's ozone and particulate matter
proposals to OSHA's ergonomics to the Army Corps of Engineers'
nationwide wetlands permitting process, to the SEC's market
fragmentation concept release and several agencies' privacy
regulations.
While the Mercatus Center has written many analyses,
there's clearly a need for more and better analysis that is
independent of the agency writing the regulation.
For these reasons, I have supported and continue to support
the establishment of some kind of congressional Office of
Regulatory Analysis.
In my view, Congress cannot carry out its responsibilities
effectively without such analysis, and the American public will
be better served if regulatory burdens are accounted for and
monitored.
And let me just pick up on a point that Alan Raul made
recently. It's also been my view that not only is analysis
needed, but also so is a really true and accurate measure of
the cost of regulations. As soon as Americans begin to track--
Americans and Congress--begin to track regulations the way we
track expenditures in our fiscal budget, we will pay more
attention, we will monitor, and everyone I think will be more
accountable and make the agencies more accountable for the
costs that they impose.
Thank you very much.
[The prepared statement of Dr. Gramm follows:]
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Mr. Ryan. Thank you, Dr. Gramm.
Mr. Spotila.
STATEMENT OF JOHN T. SPOTILA, ADMINISTRATOR, OFFICE OF
INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND
BUDGET
Mr. Spotila. Good afternoon, Mr. Chairman, and members of
the committee.
The administration has worked hard to improve the Federal
Government's regulatory system. We hope that today's discussion
will lead to further progress in this important area.
Sound regulation is essential in our society. At the
President's direction, we have concentrated on ensuring that
new regulations provide as much benefit as possible to the
American people while minimizing burdens.
We have encouraged regulations that are streamlined,
customer friendly, and cost effective. We have looked for
opportunities to substitute innovative alternatives for
traditional command and control regulations.
We have also changed the way we enforce regulations.
Agencies have increasingly moved from an adversarial approach
to a partnership approach that rewards efforts to reach outcome
based roles, such as cleaner air and safer workplaces.
While our job is not complete, we have made real progress,
and we must build on that progress as we look to the future.
In some instances, laws are very specific about what
agencies can do and what they must include in the regulations
they issue. In other areas, agencies have more discretion in
how to implement Federal programs or take other action.
At the President's direction, OMB's Office of Information
and Regulatory Affairs [OIRA], helps agencies strike the right
balance. For significant rules, we work to ensure that agencies
ask the right questions, consider relevant data, employ sound
analysis, and balance competing concerns in a reasonable,
practical way.
We are very conscious of the constitutional framework in
which we operate. While the executive branch bears much of the
responsibility for sound regulation, agencies must always act
in compliance with the statutory authority granted to them by
Congress.
Implementing legislative policies can present a complex and
difficult challenge. Laws passed by Congress often provide
general grants of authority to agencies to achieve particular
policy goals.
In such cases, Congress recognizes that it cannot
anticipate and account for every relevant real world factor.
Instead, it gives agencies the discretion necessary to deal
with changing circumstances and detailed program needs.
The agencies must use this discretion wisely and with a
practical bent. For the most part, we believe they do a good
job, exercising in a principled and careful manner the
discretion given them by Congress.
In developing regulations, public involvement is essential.
The President has emphasized that there is no better way to
achieve common sense regulation than to draw on the common
sense of the American people. When those affected by
regulations participate in the development process, we often
end up with a much better product.
This emphasis reinforces the statutory requirement, the
notice and comment rulemaking established more than 50 years
ago by the Administration Procedure Act [APA].
It also extends to more recent legislation that has added
new procedures to encourage public participation.
Agencies now engage in more outreach and communication than
ever, and their decisions on rules are better for it.
For more than 50 years, individuals and businesses who
believe they had been adversely affected by agency regulations
have had the right, under the APA, to seek judicial review of
regulatory decisions. This is an important check on any agency
rules that exceed relevant statutory authority or that have not
complied with applicable APA procedures.
In a series of important cases, the Supreme Court has
developed standards used by courts to review agency regulatory
decisions.
The Supreme Court has acknowledged the important role of
agencies in issuing regulations. It has confirmed that agencies
should have broad discretion in interpreting legislation and
implementing statutory directives in their areas of
responsibility.
This discretion is not unlimited, however, and on occasion
the courts have found some rules to be inappropriate. The fact
that regulations are challenged in court and sometimes
overturned does not mean that the regulatory system is broken.
Both the legislative and executive branches of our government
work hard at helping and protecting the public.
Given our complex world and the often difficult problems
that laws and regulations address, some of these actions will
be controversial. Occasionally, the courts strike down a law as
unconstitutional or a regulation that's not in compliance with
the law.
The checks and balances of our Constitutional system work
to protect our citizens by reviewing the actions of both the
legislative and executive branches.
We believe the Federal regulatory system today works well
to serve the interests of the American public. Federal agencies
make good faith efforts to develop, assess, implement and
enforce regulations that implement important government
programs.
The system is not perfect, however, and we share your
interest in improving it further. We welcome the opportunity to
work with the Congress on constructive efforts in this area.
Thank you, Mr. Chairman. This concludes my remarks.
[The prepared statement of Mr. Spotila follows:]
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Mr. Ryan. Thank you, Mr. Spotila.
Did I pronounce your name correctly, Spotila?
Mr. Spotila. Spotila, yes.
Mr. Ryan. Spotila, OK.
I'd like to start with you before we go through the rest of
the panel, and Mr. Terry has just joined us now.
Mr. Spotila, on May 18 of this year, the chairman of this
subcommittee, Chairman McIntosh, wrote OMB Director Jack Lew
about the Department of Labor's pending at OMB final rule
entitled, ``Birth and Adoption Unemployment Compensation,''
which we all refer to as Baby UI.
The chairman objected to a number of things. First, the
absence of a regulatory impact analysis, the absence of a
Paperwork Reduction Act submission for the Baby UI experiment
prior to its finalization, and the absence of a specific
congressional delegation for the Department of Labor's proposed
expansion of the 65-year-old unemployment compensation system,
which was designed for the truly needy people who are
unemployed involuntarily.
Under what specific congressional delegation of authority
did OMB and OIRA approve the Department of Labor's Baby UI
rule?
Do you agree with the Department of Labor's own internal
legal analysis documents that admit that the Baby UI rule will
not withstand a court challenge? And if not, why not?
Mr. Spotila. I believe that the Director did answer that
letter but let me go into more detail than he went into.
We did review that regulation under Executive Order 12866,
as we do other significant rules.
Mr. Ryan. It was a letter from you. It was just a couple of
paragraphs. It didn't go into enough detail, so if you could
expand a little bit.
Mr. Spotila. That's what I'm saying, let me go into a
little more detail now.
Let me start with the agency's determination of its
regulatory authority because I think that's something you've
referenced earlier today and will be a key issue.
The Department of Labor and its Solicitor conducted a legal
analysis internally. They conclude that, just as they have
exercised authority in the past to interpret the statutory
reference to being ``able and available for work,'' just as
they've interpreted it in the context of training and of
illness and temporary layoffs and I think in other instances as
well, they came to the conclusion, from a legal standpoint,
that they had authority to extend this particular opportunity
for States to enable the States to adopt legislation that would
allow parents to apply for unemployment compensation when they
take time off to take care of a new birth or an adopted child.
That's a legal analysis that my office did not attempt to
make independently. We did review the fact that they had made
that internal determination. And we did have some discussions,
including internally with OMB counsel, Mr. Raul's successor, to
make certain that that was a credible legal argument.
We recognize that reasonable people will differ just as
others have commented that they had questions about this
authority.
Ultimately, in conducting our review under the Executive
order, we concluded that the Department had a credible enough
legal position that we could proceed. We then turned to the
question of regulatory impact analysis.
The initial proposal of this rule had predicted that it
would have minimal effect because it worked on the assumption
that only a few States would take advantage of it.
The Department received a lot of comments to the extent
that that was not likely to prove true, that in fact more
States would take advantage and the impact would be broader.
And so the department did a regulatory impact analysis
which we reviewed in some detail. In fact, my staff worked
closely with them on that.
Our sense is that--the sense of my staff is that the
ultimate analysis was actually pretty good, and it reflected a
number of public comments that had been received which included
estimates of numbers and cost impacts and the like.
So it is something we actually gave some thought to.
And on the issue of the Paperwork Act submission, which you
referenced, this is again a rule which will authorize States to
take other action.
Our sense was that it did not contain an information
collection at the moment. There was, therefore, not something
that we could traditionally review under the Paperwork Act,
although we certainly are interested in how the States might
take action to implement this in the future.
We do work pretty closely with agencies whenever an
information collection is involved. In this particular case, we
concluded that it was not appropriate to do a paperwork review
since the rule itself did not contain an information
collection.
Mr. Ryan. So what specific congressional delegation of
authority are you citing to justify OMB's legal analysis which
seems to contradict the Department of Labor's own legal
analysis that concedes that there is no statutory authority
here?
Mr. Spotila. Actually, we relied on the Department of
Labor's internal legal analysis that they had authority. They
take the position that they have the authority to interpret the
Federal Unemployment Compensation statutes, including this
requirement that individuals be able to work and available for
work.
They have taken the position, and not just in this
instance, that they have the authority to interpret that
provision. While we looked at that analysis, we did not do, nor
would we normally do, an independent legal analysis of their
individual authority.
Mr. Ryan. Well, let me move on to the RIA, why did OMB not
require public comment on the draft RIA, the Baby UI, rule
before the rule was finalized?
Has the OMB ever approved an agency's final major rule
prior to public comments on its RIA?
Mr. Spotila. Actually, yes.
I asked my staff this question. I'm told there has been a
long practice--it doesn't happen all the time--but it's
happened more than 40 times in the last 5 years, for example--
--
Mr. Ryan. It's happened more than 40 times in the last 5
years?
Mr. Spotila. In the last 5 years is what I was told by my
staff. In these instances, an agency has published a proposal
without an impact analysis and has gotten comments suggesting
they should do one, including often comments indicating what
the cost impact would be.
They then actually do an impact analysis which we review in
detail, and then they include that analysis in their final
rule.
Mr. Ryan. For major rules. If you could, that's an
interesting statistic. I had not heard that before. Could you
please provide for the record the list of 40 major rules that
did not receive public comment before the RIA?
Mr. Spotila. We'll attempt to do that. As I say, my staff
had briefed me on this as I came here today, so we'll put that
list together and send it to you.
Mr. Ryan. Yes. We'll give you time if you could give that
to us for the record.
Mr. Schoenbrod, let me go to you.
And then I'll come back to you, Mr. Spotila.
In the American Trucking case, Cass Sunstein commented, in
the wake of the American Trucking decision that the
nondelegation doctrine had only one good year, 1935.
Do you disagree with this statement?
What case law, including specific statements therein, do
you think Congress needs to be aware of to understand the
importance of the nondelegation doctrine in current
jurisprudence?
And do you believe that other cases since 1935 have helped
us in constricting regulatory nondelegation?
Mr. Schoenbrod. Well, when Professor Sunstein wrote that
about the one bad year, he was having one bad moment.
[Laughter.]
His concept of what nondelegation is, is very limited. He
ignores the line item veto case, ignores the legislative veto
case, he ignores many other precedents where the Supreme Case
in one way or the other has given force and vitality to the
nondelegation idea.
For one example, the void-for-vagueness doctrine, which
says that laws can't be enforced, police can't enforce laws if
there isn't a clear rule of conduct is, in and of itself, a
nondelegation idea.
Now, the court has to acknowledge the obvious, has not been
altogether straightforward about this in dealing with the line
item veto and the legislative veto. It said it wasn't talking
about delegation. Most legal scholars disagree with that kind
of distinction. They don't really buy the court's
compartmentalization.
Aside from striking down statutes, Cass Sunstein himself
has written about many instances where the court has used the
nondelegation idea to limit grants of statutory authority as it
did in the Benzene case, as Alan Raul talked about this.
My book, ``Power Without Responsibility'' in chapter 2,
cites many, many cases where the delegation idea has had
vitality before and after 1935.
Mr. Ryan. Thank you.
Mr. Raul, I'd like to ask you a question, but before I do,
I'm going to go and Mr. Terry's going to take over the chair,
but there was something new to these New Hampshire debates, if
you watched the Presidential elections, where you had this very
interesting dynamic where each of the Presidential contenders
could ask each other questions.
And I'd like to ask you to start thinking about who on the
panel you would like to ask a question, what question you would
like to ask them, and then ask away and get an answer, and
we'll try and keep the discussion within 5 minutes.
I think that's a great way to go when it comes to doing
witness testimony.
It sounds like we've got a vote coming.
Mrs. Gramm, I would like to ask you to tell me specifically
how you think this congressional Office of Regulatory Affairs
will work.
Mr. Raul, if you could comment briefly on section 109 of
the Clean Air Act which instructs the EPA to set National
Ambient Air Quality Standards [NAAQS], at a level requisite to
protect public health with an adequate margin of safety.
That's a very, very important comment there. But the EPA
assumes that particulate matter and ozone may harm public
health at any level above zero. The EPA also assumes that when
setting a NAAQS, it may not consider the cost, the feasibility,
or the health hazards of poverty, as you mentioned in your
testimony.
Doesn't this mean that under the EPA's reading of section
109, the EPA could prohibit all emissions from all sources, in
other words, implement essentially a policy of de-
industrialization?
Isn't it clear that Congress never intended to delegate
such power to EPA?
I was interested in a comment you made in your testimony
where you thought that EPA saw itself as rare among other
regulatory agencies with respect to this perspective.
Could you please comment on that?
Mr. Raul. Sure.
Well, with regard to the rarity of EPA's position, I think
the Clean Air Act, certain aspects of the Clean Water Act, and
certain other statutes that are administered by the
Environmental Protection Agency are, within my experience,
somewhere between rare and unique in that they have been
construed by courts, and in some cases by Congress, to preclude
considerations of cost effectiveness. No other agency is
operating under a similar statutory framework.
OSHA, to some extent, considered itself to be in a non-
cost-effectiveness consideration mode before the Benzene
decision, and the Supreme Court set them straight on that.
The Food & Drug Administration, the Department of
Transportation, U.S. Department of Agriculture, are all, to my
knowledge, operating under principles that allow them to
balance costs and benefits.
Similarly, in the rest of the world, to the extent that I'm
familiar with it, executive agencies, regulatory agencies set
cost-effective regulations that are reasonable balances to
protect our public and their public against significant risks.
It is really only EPA that has what is perceived to be a
statutory framework that precludes consideration of cost
effectiveness and efficiency in regulation.
Not all of this is due to EPA's own misguided or churlish
view. As I indicated, the D.C. Circuit, in 1980, with regard to
the Clean Air Acts provisions that we've been talking about,
said that EPA really could not consider the question of cost
effectiveness in regulations, even though, as you quoted, Mr.
Chairman, from section 109, the language says nothing about the
inability to consider the effectiveness of the regulation that
the EPA would set in order to protect the public.
You have got words like endanger, safety, adequate. All of
these certainly would allow for the agency to consider how
significant is the risk, how effective is this regulation that
we're proposing in abating that particular risk.
It is that type of analysis that the Supreme Court engaged
in in the Benzene case when it applied nondelegation principles
to rein in the agency.
So when I say that EPA views itself as rare, I don't know
whether they consider themselves rare. My point was they are
rare in that their statutes, as construed by the courts, really
seem to require the agency to throw cost effectiveness to the
winds.
We should recognize that, often, we have a very limited
science mandate that doesn't answer all the questions.
Mr. Ryan. Well, going further, and taking your point even
further, given the broad parameters here, isn't it true that
the nondelegation principle is applied here because with EPA's
interpretation, you could possibly implement a policy of de-
industrialization, and doesn't that then say that this is
clearly not what Congress intended in statutory authority?
Mr. Raul. Sure, right.
Well, in the case of the Clean Air Act rules, which at the
time were perhaps the rules with potentially the greatest
impact on society, there really is a question of whether
Congress would have intended, in its grant of authority to the
agency, that the agency could go that far down the road to
imposing such dramatic costs on society.
Really, though, the costs are not imposed merely on
industry. I think there's a misconception that cost-benefit
analysis, requirements of cost-effectiveness, and so on are
really a one-sided ideological perspective designed to preserve
industry from incurring excessive costs.
We're talking about society's resources here. So in the
case of the Clean Air Act Rules, which are, according to EPA's
own conservative estimates, in the range of at least $10
billion compliance each, and in the case of particulate matter,
it's about $10 billion for compliance for partial attainment.
I don't think that even the agency believes that the
particulate matter standards proposed in the Clean Air rules
under discussion could be achieved by industry. So it was $10
billion for partial compliance.
Now I see the parallel in the Brown & Williamson v. FDA
case over regulation of tobacco. This is an area which, again,
impacts society and people throughout the country so
profoundly, where Congress has spoken on this issue a number of
times and has never provided the authority to the agency. One
must analyze where you're talking about these dramatic impacts
on the economy, the society, the possible reduction in economic
output such as the de-industrialization that you've mentioned,
could it possibly be that Congress intended to delegate such
power.
In the Brown & Williamson case, Justice O'Connor said that,
where such sweeping impacts are possible, it's only common
sense that Congress did not intend the agency to go this far
without a more express warrant to do so.
Mr. Ryan. Thank you, Mr. Raul.
Ms. Gramm, I'd like to ask you--I have to go and will turn
it over to Mr. Terry--I'd like to ask you to explain how you
think this congressional Office of Regulatory Analysis would
work, and then I'd like to read later the testimony of the New
Hampshire-style questioning.
If each of you would think of a question to ask each other.
I find that the experts are sitting out here, and it's
interesting to hear the give-and-take and the Q&A between
witnesses and what that offers to help enlighten us.
So after your question, Ms. Gramm, if you could each ask
each other a question, one witness to one other witness, a
witness of your choosing, we'd appreciate that.
Thank you.
Ms. Gramm. OK, thank you.
You ask about how a congressional Office of Regulatory
Analysis would work, and I would just say, use as a model, a
shadow OIRA, to perform independent, high-quality analysis of
agency regulations at the proposal stage.
Use guidelines that OMB has prepared about how to do
regulatory impact analyses. Evaluate the agency with regard to
whether or not they have followed the law, including the intent
of the law or have they gone beyond the law. Have them review
the rulemaking proposal, whether or not this solves the
problem, whether or not there was a market failure to begin
with that called for a regulation, unless it was a regulation
that was explicitly required by the law.
Ask the question of whether or not the agency has
considered different alternatives, what might be other
alternatives; whether or not the Federal Government is the
appropriate level to regulate if there was a market failure.
You can also ask if a very good cost benefit analysis,
weighing the benefits and the costs of the regulation in order
to maximize net benefits was done.
I would suggest that all this analysis be done at the
proposal stage so that this information can be put into the
rulemaking record of the agency's file.
And I would also say that such information would be helpful
for Congress in its oversight function if the rule goes final
without taking into account the independent analysis.
My view is that even when I was at OIRA trying to perform
these functions, I felt the need for some outside independent
analysis because even OIRA, as part of the administration, is
not entirely unbiased in its review of the agency regulations.
Mr. Terry [presiding]. Thank you.
Ms. Gramm. Do I get to ask a question? [Laughter.]
Mr. Terry. I have a question, but I'll let my question be
the closing question. We do have votes coming up here in a few
minutes.
Actually, we did this in Nebraska a few years ago, so we'll
let New Hampshire take the credit though.
Mr. Raul. Can we get the taxi driver back up here.
[Laughter.]
Mr. Schoenbrod. In spite of the taxi driver, I have a
question to ask Mr. Spotila.
It seems to me, it strikes me that you, in your present
position, know as much as anybody about how the process of
reviewing agency rules works, because you do it.
So I'm wondering whether you agree with then-Judge Breyer
when he floated this idea that's behind the Congressional
Responsibility Act. I want to be clear, Judge Breyer wasn't
saying he was favoring this but he said it could work. As a
practical matter, congressional responsibility could work, and
he had a number of formats under which it could take place.
What I'm asking you, is can you imagine some format where
as a practical matter, the idea behind the Congressional
Responsibility Act could work.
After you answer, I'd love to hear Dr. Gramm because she
had the same kind of experience.
Mr. Terry. That would probably be the Iowa plan to ask two
questions. [Laughter.]
Mr. Spotila, if you would answer that question.
Mr. Spotila. Thank you, Mr. Chairman.
Mr. Terry. Actually, that's a good question. I appreciate
that.
Ms. Gramm. Can Mr. Hill help me with an answer to that too.
Mr. Spotila. Let me start by saying that the administration
hasn't taken a position on the bill, so I don't want to state
an administration position.
Rather, I'll give you an initial reaction if you will. I
think that we have some concerns; I would have some concerns as
to the practicality. We start certainly by being very
deferential to the Congress. When the Congress makes decisions
about what it needs to do its job, clearly we're deferential to
those decisions.
So certainly in an overall atmosphere of respect, I still
try to look to the practicality of it.
I think that many of the instances where people are most
concerned about regulations come because of statutes where the
Congress found it very difficult to be specific, either because
the subject was very complex, or because it was too difficult
to reach a consensus.
They then delegate authority to an agency which goes
through an extended comment period, does outreach to the
public, does a lot of analysis and all the rest, comes up with
what may well be a very complex and extensive rule.
I'm not sure that it's practical to expect that when that
rule comes back to the Congress in this construct, in the
context of limited debate, probably limited--perhaps limited
additional analysis over and above what the agency has done--
that you're going to get the kind of, you know, long and
extensive consideration by the Congress that would really add
meaningfully to the ultimate decisionmaking.
You might get a political judgment again, but you wouldn't
necessarily get significant input on the merits, simply because
the Congress is so busy doing other things.
And, if you then added to it a long list of these rules
coming, one after another, each of which may have years of work
behind it, I'm not saying that it's impossible but from a
practical standpoint, I think the Congress might find that very
difficult to manage.
The real difficulty here is in getting the agencies to do
the job right in the first instance. To get the Congress to
delegate as specifically and as clearly as possible, so that
the parameters become clear, and then to get the agencies to do
their job properly.
That's why in my testimony and in the work we've been
doing, our emphasis has been in trying to improve the way the
agencies do it. Because I think ultimately that's where the
solution lies.
Mr. Terry. Mr. Schoenbrod, do you want to have a quick
analysis of----
Mr. Schoenbrod. I'm actually encouraged by what he says
because it seems to me the purpose of the Congressional
Responsibility Act is not for Congress to add additional
cogitation. Certainly we get enough cogitation in the Federal
Register.
The purpose of the act is to get Congress to take
responsibility. And so if it's possible for Congress to do
that, I'm glad to hear that.
Mr. Terry. Ms. Gramm, do you have a question?
Ms. Gramm. Well, my view, in response to that question was
that I think, even if it is hard for Congress, that that is
what their job is. It might be a very useful exercise at the
beginning, and it may make them do some of the other things
that will really make them pay attention to the regulatory
costs that are being imposed on the American people.
You have to do this in Congress every day for the fiscal
budget side, so you can have a situation maybe where there are
things that can be done in a similar way for the regulatory
side.
It's not going to be easy, but that's exactly the point.
My question that I have is for my colleague here. And that
is having had, over the last 2 years, reviewed some of the
regulations that have come out, I have a whole series of
questions that I would love to have your answer on.
For example, the Clean Air Act----
Mr. Terry. This is a great example of congressional
responsibility right here. [Laughter.]
Ms. Gramm. Well, I wold point out that under the Clean Air
Act Amendments of 1990, in fact those amendments state that for
tier two vehicle standards, EPA must consider whether or not
new tier two standards are necessary, feasible, and cost-
effective. This is in the Clean Air Act Amendment.
So there is cost-effectiveness on this part of the Clean
Air Act Amendments that were put in in 1990. And our analysis
pointed out that EPA failed all three of those tests: That
those standards in fact were not necessary, and in some areas
they would make the air quality worse off--in certain midwest
areas, for example. And they technologically were not feasible
and certainly not cost-effective.
In OSHA's ergonomic standards, for example, we have a
situation where OSHA does not have a very good definition, a
very explicit definition of what a musculoskeletal disorder is.
And currently, you have many businesses that have been
trying very hard to try and reduce those disorders. And yet we
have a proposal that is going forward and I have a question
about how did that get out of your scrutiny.
You have the Army Corps of Engineers' nationwide wetlands
permitting process which withdrew automatic permitting
procedure and expedited permitting procedure for small parcels
of property that had minimal environmental impact, and that
expedited process was pulled a year ago, and with enormous
impact; it would account for maybe, in the proposal stage, some
86 percent of the Army Corps of Engineers' workload.
And so my question is, did you consider the effect of the
regulation on the workload, the impact on property owners, the
delay that would occur?
FDA's recent required labeling for transfatty acids--and I
won't go on and on, this is my last--transfatty acids. For
example, FDA has not allowed truthful statements about
transfatty acids, and yet in this proposal, FDA is suggesting a
label that would be indeed incorrect, but in FDA's opinion, it
would be OK because it would make people think that transfatty
acids were like saturated fats and therefore we could free ride
on that information that consumers think that saturated fats
are bad, and so they were proposing something that was indeed
incorrect.
And so my question is, how does this comport with your
testimony of trying to make regulations that indeed make sense,
and follow the Presidents', including this President's
Executive order.
Mr. Terry. All right.
To whom is that directed? [Laughter.]
I'm just kidding.
Mr. Spotila.
Mr. Spotila. I was going to ask for a ruling of the Chair
there, Mr. Chairman.
Ms. Gramm. And you're allowed to ask a nasty question too.
Mr. Spotila. Well, I guess I should start by saying the
lord's work is never done. [Laughter.]
Ms. Gramm. And I'm sympathetic.
Mr. Terry. Response?
Mr. Spotila. On the tier two rule, clearly an important
rule, there was an examination of feasibility, technological
feasibility, both as to engines and fuel.
The determination was that there is technology out there to
do it. There were some issues about cost, but the technology
does exist. I met with both industries, and both of them
acknowledge it exists.
The necessity of it relies upon the need to achieve
important reductions in nitrogen oxide emissions in areas that
currently fail to meet the 1-hour ozone National Ambient Air
Quality Standards.
As far as being cost effective, this is something we spent
a lot of time on. EPA estimated that the control cost was, as I
recall, something less than $2,000 a ton in cities that are at
or above the standard.
There are some areas where we had issues, local issues, as
to cost effectiveness. Ultimately, we did do a rigorous
analysis and concluded that the benefits did justify the costs
in that instance.
On ergonomics, of course, we have a proposed rule and it's
out for comment. We've gotten thousands of comments, and the
process continues. These issues, including definitional issues,
will be very important to be resolved before any final rule
could be put out. We welcome the kinds of comments that we've
gotten from yourself and others to help inform that decision.
On the other two rules, the Corps of Engineer rule and the
FDA rule, I have not been personally involved in either of them
that I recall, and so I'd have to abstain in terms of that, but
I certainly welcome comments and would welcome any kind of
further discussion on it.
Mr. Terry. Did you have 30 seconds that you'd like to make
a comment in response to the answer, Ms. Gramm.
Ms. Gramm. No, I'll just be happy to give him our public
interest comment; I brought some of these along with me.
Mr. Terry. Very good.
Mr. Spotila, do you have a question for anyone?
Mr. Spotila. I certainly would not want to pass up this
opportunity.
Mr. Raul was so kind to me when he called me his hero at
the beginning of his remarks, that I'd like to ask him a
question.
Mr. Raul. No good deed goes unpunished.
Mr. Spotila. But it's not a nasty question. You know, I'd
like to make use of this.
I know that you follow what's happening in the regulatory
area. I'm interested in your thoughts looking forward, leaving
aside the possibility of any legislative change, as to what
rules in particular you think I should give most attention to.
And in the context of this discussion, where perhaps could
I have the most value in the course of performing my duties?
Mr. Raul. You honor me by directing that question to me. I
think that Dr. Gramm has just given you a nice list.
Mr. Spotila. I knew that I would get her suggestions. I
didn't have to ask her.
Mr. Raul. And I follow the rules of course when invited to
do so on behalf of clients, and more generally as a matter of
my own legal and policy interests when important policy issues,
regulatory policy issues are involved.
I know that the ergonomics rule, in particular, is one
which poses many issues, both in terms of its reasonableness
and perhaps with regard to its authority as well, but it's one
that's generated enormous comments.
As a matter of interest, the organics rule, which has been
up through OMB and at USDA, poses I think interesting issues as
to the law required the Organic Foods Production Act required
certain standards for organic foods, that the administration,
not unreasonably, decided were quite onerous, and the rule came
out of the organic community was not too pleased with the
result.
I think OMB had actually performed a useful service in the
first instance, and now will need to bring the second rule into
compliance with what perhaps the Congress and the organic
community had expressed an interest in and what the intent was.
That's not a criticism. I'm just saying these are
interesting issues as to implementing the congressional intent,
responding to the interest of the affected community, so
certainly ergonomics is one that I would say is quite
controversial and would warrant your attention.
Mr. Terry. Does that conclude?
Mr. Raul. That does indeed.
Mr. Terry. Let me ask you, you're the last one to ask a
question. We can recess for 20 minutes to half an hour, for you
to come back, or you can sit there and say----
Mr. Raul. I can ask it very quickly.
Mr. Terry. I only have 4 minutes.
Mr. Raul. If I could, if that would be the end of the
hearing, maybe I should do it.
Mr. Terry. Yes.
Mr. Raul. I don't want to gang up on Mr. Spotila,
especially since his question to me was so kind.
I would redirect it back to the committee and perhaps as a
question to be directed really to EPA and the administration,
and that is, if I'm correct that EPA views itself as precluded
from considering cost-effectiveness in the Clean Air Act
regulations and elsewhere, do they favor that, and would they
be willing to support legislation recommended to Congress that
would lift the 1980 interpretation by the D.C. Circuit that
precludes consideration of cost effectiveness and join with
industry and other members of the public who would like to see
more reasonable, rational regulations, not to require that the
most cost-effective rule be adopted, but only to permit cost
effectiveness to be considered.
That would resolve the American Trucking case.
Mr. Terry. I think those are very good points. We'll put
them in the record.
Mr. Spotila, we will be sending you additional written
questions, as usual, that we'd appreciate your written
responses to.
This subcommittee stands adjourned.
[Whereupon, at 3:45 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
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