[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
     AMENDING EXECUTIVE ORDER 12866: GOOD GOVERNANCE OR REGULATORY 
                              USURPATION?
=======================================================================



                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2007

                               __________

                            Serial No. 110-2

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      CHRIS CANNON, Utah
WILLIAM D. DELAHUNT, Massachusetts   RIC KELLER, Florida
ROBERT WEXLER, Florida               DARRELL ISSA, California
LINDA T. SANCHEZ, California         MIKE PENCE, Indiana
STEVE COHEN, Tennessee               J. RANDY FORBES, Virginia
HANK JOHNSON, Georgia                STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
ANTHONY D. WEINER, New York          LOUIE GOHMERT, Texas
ADAM B. SCHIFF, California           JIM JORDAN, Ohio
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
[Vacant]

              Perry Apelbaum, Staff Director-Chief Counsel
     Sean McLaughlin, Deputy Chief Minority Counsel/Staff Director
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                LINDA T. SANCHEZ, California, Chairwoman

JOHN CONYERS, Jr., Michigan          CHRIS CANNON, Utah
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
ZOE LOFGREN, California              RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts   TOM FEENEY, Florida
MELVIN L. WATT, North Carolina       TRENT FRANKS, Arizona
[Vacant]

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


                            C O N T E N T S

                              ----------                              

                           FEBRUARY 13, 2007

                           OPENING STATEMENT

                                                                   Page
The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................     1
The Honorable Chris Cannon, a Representative in Congress from the 
  State of Utah, and Ranking Member, Subcommittee on Commercial 
  and Administrative Law.........................................    16
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, Chairman, Committee on the 
  Judiciary, and Member, Subcommittee on Commercial and 
  Administrative Law.............................................    18

                               WITNESSES

Mr. Steven D. Aitken, Acting Administrator, Office of Information 
  and Regulatory Affairs, Office of Management and Budget
  Oral Testimony.................................................    21
  Prepared Statement.............................................    23
Ms. Sally Katzen, Professor, University of Michigan Law School
  Oral Testimony.................................................    49
  Prepared Statement.............................................    50
Mr. Curtis W. Copeland, Ph.D., specialist in American National 
  Government, Congressional Research Service
  Oral Testimony.................................................    56
  Prepared Statement.............................................    57
Mr. Paul R. Noe, Partner, C&M Capitolink LLC, and Counsel, 
  Crowell & Moring Environment & Natural Resources Group
  Oral Testimony.................................................    80
  Prepared Statement.............................................    82
Mr. Peter L. Strauss, Professor, Columbia University School of 
  Law
  Oral Testimony.................................................    91
  Prepared Statement.............................................    92

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Linda T. Sanchez, a 
  Representative in Congress from the State of California, and 
  Chairwoman, Subcommittee on Commercial and Administrative Law..     2

                                APPENDIX
               Material Submitted for the Hearing Record

Post-Hearing Questions and Responses for Steven D. Aitken, Acting 
  Administrator, Office of Information and Regulatory Affairs, 
  Office of Management and Budget................................   108
Post-Hearing Questions and Responses for Sally Katzen, Professor, 
  University of Michigan Law School..............................   125
Post-Hearing Questions and Responses for Curtis W. Copeland, 
  Ph.D., specialist in American National Government, 
  Congressional Research Service.................................   136
Post-Hearing Questions and Responses for Paul R. Noe, Partner, 
  C&M Capitolink LLC, and Counsel, Crowell & Moring Environment & 
  Natural Resources Group........................................   138
Post-Hearing Questions and Responses for Peter L. Strauss, 
  Professor, Columbia University School of Law...................   304


     AMENDING EXECUTIVE ORDER 12866: GOOD GOVERNANCE OR REGULATORY 
                              USURPATION?

                              ----------                              


                       TUESDAY, FEBRUARY 13, 2007

                  House of Representatives,
                         Subcommittee on Commercial
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room 2141 of the Rayburn House Office Building, the Honorable 
Linda Sanchez (Chairwoman of the Subcommittee) presiding.
    Ms. Sanchez. The hearing of the Subcommittee on Commercial 
and Administrative Law will now come to order.
    I would like to begin by welcoming everyone to the first 
hearing of this Subcommittee of the 110th Congress, and in 
particular I wish to extend warm regards to the Ranking Member 
of the Subcommittee, Mr. Cannon. I very much look forward to 
our working together. I would also like to welcome the two 
newest Members to the Judiciary Committee, Mr. Johnson and Mr. 
Jordan, to the Subcommittee.
    At the request of a minority Member of the Science 
Committee, we moved the starting time of this hearing from 1 to 
2 p.m. to accommodate the Science Committee hearing that has 
just concluded, and I appreciate the cooperation of our Ranking 
Member and the indulgence of our witnesses and attendees.
    I will now recognize myself for a short statement.
    Over the last several weeks, I have been reading some very 
disturbing news reports and commentaries about an Executive 
Order issued last month by President Bush. The new Order 
substantially amends Executive Order 12866, an Order that has 
guided the OMB regulatory review process for the last 13 years. 
This new Order requires agencies to identify specific ``market 
failures'' or problems that warrant a new regulation. 
Furthermore, agency heads are now required to designate a 
presidential appointee as an ``agency policy officer'' to 
control upcoming rulemaking. In a sense, the Executive Order 
politicizes regulations, many of which were specifically 
created by experts to protect the health and safety of our 
citizens. I am concerned that the main thrust of this new Order 
appears to shift control of the regulatory process from the 
agencies--the entities that have the most substantive knowledge 
and experience to the White House.
    The primary purpose of this regulatory process is to 
provide guidance and interpret technical policies, often at the 
request of industry. Unfortunately, we don't know what prompted 
President Bush to undertake a major overhaul of this proven 
process. There is some speculation as to the Administration's 
reasoning. The New York Times, for example, reported that this 
new Executive Order ``strengthens the hand of the White House 
in shaping rules that have, in the past, often been generated 
by civil servants and scientific experts.'' Others claim that 
this is just another clandestine ``power grab'' by the 
Administration.
    These thoughts and concerns are not just being expressed by 
the so-called liberal media or partisan hacks. CRS, for 
example, says that the revisions made by Executive Order 13422 
``represent a clear expansion of presidential authority over 
rulemaking agencies.'' CRS also notes that the Order can be 
viewed as part of a broader statement of presidential authority 
presented throughout the Bush administration--from declining to 
provide access to Executive Branch documents and information to 
creating presidential signing statements indicating that 
certain statutory provisions will be interpreted consistent 
with the President's view of the ``unitary executive.''
    That is a rather serious observation coming from a 
preeminently nonpartisan source. And the fact that 
Subcommittees from both the Judiciary and Science Committees 
are looking into this issue I think underscores the serious 
concerns that the Order appears to present.
    To help shed some light on these issues, we have with us 
today a truly notable witness panel. We are pleased to have a 
representative from the Administration, as well as two former 
Administration officials. We also have the author of the CRS 
report that I mentioned earlier, as well as one of the leading 
academics on presidential review of rulemaking. Accordingly, I 
very much look forward to hearing their testimony, and 
appreciate their willingness to participate.
    [The prepared statement of Ms. Sanchez follows:]
Prepared Statement of the Honorable Linda T. Sanchez, a Representative 
in Congress from the State of California, and Chairwoman, Subcommittee 
                  on Commercial and Administrative Law
    Over the last several weeks, I've been reading some very disturbing 
news reports and commentaries about an executive order issued last 
month by President Bush. The new Order substantially amends Executive 
Order 12866, an order that has guided the OMB regulatory review process 
for the last 13 years. This new Order requires agencies to identify 
specific ``market failures'' or problems that warrant a new regulation. 
Furthermore, agency heads are now required to designate a presidential 
appointee as an ``agency policy officer'' to control upcoming 
rulemaking.
    In a sense, this Executive Order politicizes regulations, many of 
which were specifically created by experts to protect the health and 
safety of our citizens.
    I am concerned that the main thrust of this new Order appears to 
shift control of the regulatory process from the agencies--the entities 
that have the most substantive knowledge and experience--to the White 
House.
    The primary purpose of this regulatory process is to provide 
guidance and interpret technical policies, often at the request of 
industry.
    Unfortunately, we don't know what prompted President Bush to 
undertake a major overhaul of this proven process.
    There is some speculation as to the Administration's reasoning. The 
New York Times, for example, reported that this new Executive Order 
``strengthens the hand of the White House in shaping rules that have, 
in the past, often been generated by civil servants and scientific 
experts.''
    Others claim this is just another clandestine ``power grab'' by the 
Administration.
    These thoughts and concerns are not just being expressed by the so-
called liberal media or partisan hacks. CRS, for example, says the 
revisions made by Executive Order 13422 ``represent a clear expansion 
of presidential authority over rulemaking agencies.''
    CRS also notes that the Order ``can be viewed as part of a broader 
statement of presidential authority presented throughout the Bush 
Administration--from declining to provide access to Executive branch 
documents and information to creating presidential signing statements 
indicating that certain statutory provisions will be interpreted 
consistent with the President's view of the `unitary executive.' ''
    That's a rather serious observation coming from a preeminently 
nonpartisan source.
    And the fact that subcommittees from both the Judiciary and Science 
Committees are looking into this issue I think underscores the serious 
concerns that the Order appears to present.
    To help shed some light on these issues, we have with us today a 
truly notable witness panel. We are pleased to have a representative 
from the Administration as well as two former Administration officials. 
We also have the author of the CRS report that I mentioned earlier as 
well as one of the leading academics on Presidential review of 
rulemaking.
    Accordingly, I very much look forward to hearing their testimony 
and appreciate their willingness to participate.

                               ATTACHMENT
























    Ms. Sanchez. At this time, I would now like to recognize my 
colleague, Mr. Cannon, the distinguished Ranking Member of my 
Subcommittee, for his opening remarks.
    Mr. Cannon. Thank you, and welcome, Madame Chairman.
    This is--let me just say briefly to begin that we had a few 
problems, I think, with notice on the hearing today, and the 
rule requires a week's notice for hearings. I don't mean to be 
petty about this, but my understanding is that we have been 
assured by the Majority in the future any significant aspects 
of hearings won't be changed without the explicit sign-off of 
the Subcommittee Ranking Member. I appreciate this and look 
forward to working with you on this and other issues.
    Welcome to the world of--through the looking glass, what do 
we call this? The world of the APA, the Administrative 
Procedure Act. And let me just say that the concerns you have 
raised are very important, and this is the Committee where we 
get to work these things through. And I would hope that we 
would continue the process of looking at this. I think it is 
not so much a partisan process as it is a very important 
process for how we govern ourselves here in America.
    Let me just say that government in the sunshine is an 
improved process for the development of coordination of 
potential regulations and significant guidance documents and 
hands-on management of that process by accountable public 
officials are the heart and soul of OMB's new amendments to 
Executive Order 12866. They are to be celebrated and they are 
what this hearing really should be about: good governance and 
assuring that regulation is guided by officials accountable to 
the people through the political process and not usurped by 
unaccountable Federal agency employees.
    The Executive Order amendments are about government in the 
sunshine because they are part of OMB's commendable and 
sustained effort to bring about government by guidance without 
sufficient notice and comment by the public under control. They 
are also about government in the sunshine because they are 
specifically related to a noted and comment proceeding which 
provides every interested party in the Nation an opportunity to 
tell OMB whether they thought OMB's good guidance proposals 
were good or bad ones.
    The response was clear. The vast majority of comments 
supported the effort. OMB's Executive Order, amendments, and 
the final bulletin for agency good guidance practices that the 
amendments accompanies contemporaneously formed the capstone of 
that process. The importance of these developments to good 
government should not be underestimated, as the D.C. circuit 
trenchantly observed in 2000 when it addressed the troubled and 
widespread use of government by guidance in its Appalachian 
Power decision ``The phenomenon we see in this case is 
familiar. Congress passes a broadly worded statute. The agency 
follows with regulations containing broad language, open-ended 
phrases, ambiguous standards, and the like. Then as years 
passed, the agency issues circulars or guidance or memoranda 
explaining, interpreting, defining, and often expanding the 
commands in regulations. One guidance document may yield 
another, and then another and so on. Several words in a 
regulation may spawn hundreds of pages of text as the agency 
offers more and more detail regarding what its regulations 
demand of regulated entities. Laws made without notice and 
comment, without public participation, and without publication 
in the Federal Register or the Code of Federal Regulations.'' 
Appalachian Power Company, VEPA, et cetera.
    The Executive Order amendments in OMB's Good Guidance 
Bulletin are the latest positive steps toward turning that 
around. What better way to begin to stem this tide than to 
bring significant guidance statements under increased 
management by the accountable and responsive political process, 
and to assure that that same process remains engaged through 
the planning and development phases of regulations and 
significant guidance.
    Those are the key innovations of the Executive Order 
amendments and OMB should be praised for adopting them. Indeed, 
that praise should be high praise.
    What kind of guidance are we talking about bringing under 
the Executive Orders procedures? Guidance that may reasonably 
be anticipated to (1), lead to an annual effect of $100 million 
or more; to create serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; to 
materially alter the budgetary impact of entitlement grants, 
user fees, or loan programs, and to raise novel, legal, or 
policy issues arising out of legal mandates, the President's 
priorities or the principles set forth in this Executive Order. 
These are key examples. Bringing these kinds of truly 
significant guidance documents under increased and standardized 
review by accountable officials is a large step forward in good 
governance and should not be questioned.
    The only better approach would be for this Committee to 
proceed with its Administrative Procedure Act review, and solve 
many of these problems with clear legislation. Beyond these 
major improvements, the amendments largely provide useful 
refinements to a process where the procedure is already present 
in Executive Order 12866, which was issued by the Clinton 
administration. For example, the original Order required 
agencies to identify what market failure or other problem they 
are proposing to address. The amendments have only made that 
requirement more specific, to make clear that the 
identification must be in writing and to make clear that the 
purpose of the identification is to enable assessment of 
whether any new regulation is warranted. That is, no seen 
change in the Order's terms, but it can be expected to help 
better governance. In addition, the amendments allow more 
flexibility in the timing and use of regulatory prioritization 
and coordination meetings with agency heads. They also sensibly 
call not just for a cost benefit analysis for each planned 
regulation, but also for a cumulative cost benefit analysis of 
all regulations planned for a calendar year. That is intended 
to assist with the identification of priorities, clearly a 
salutary step.
    There have been allegations that the Executive Order 
amendments somehow usurp the regulatory process, taking it out 
of the hands of bureaucrats and placing it in the hands of 
political officials. That is not correct. The agency's 
authority to regulate is an authority delegated to the agencies 
by Congress. OMB steps to assure that Congress's delegated 
authority is watchfully overseen by officials that are 
accountable through the political process, are consistent with 
the source of the agency's authority.
    It appears that this hearing is an attempt to show that the 
Administration is placing politics over good policy. That is 
not the case. Executive Order amendments are good policy. I 
commend OMB for its efforts and I look forward to future 
hearings that focus more directly on policy solutions to the 
problems that concern the American people, such as updating the 
Administrative Procedure Act and covering some of these issues.
    I look forward to the hearing for all of the witnesses, and 
again, Madame Chairman, congratulations, welcome, and I yield 
back.
    Ms. Sanchez. I thank the gentleman.
    It is now my pleasure to recognize at this time Mr. 
Conyers, the Chairman of the Judiciary Committee and a Member 
of this Subcommittee, for his opening statement.
    Mr. Conyers. Thank you very much. I enjoy referring to the 
gentlelady from California, Linda Sanchez, as the Chair of the 
Subcommittee on Commercial and Administrative Law, and my old 
friend, Chris Cannon, as the Ranking Member of this very 
important Committee on the occasion of your very first hearing, 
and I am very proud to be here with you all.
    This is an important item of the President's Executive 
Order, a recent one altering the procedure for administrative 
rulemaking. To me, in effect the President has created a new 
obstacle to agencies doing their jobs under the law by 
requiring for the first time a political appointee to approve 
any, and maybe all, agency guidance.
    Now, this is, from a wider view I say to the distinguished 
witnesses who have been invited here, a part of this 
unprecedented reach for power on the part of this White House, 
an attempt to control the institutions that could challenge it: 
the courts, the Congress, and the press, and maybe a move to 
upset the balance of power among the three branches of 
Government. In my view, the Executive Order that we are looking 
at today represents yet another attempt to bring more authority 
into the Executive Branch, and it deserves and warrants the 
scrutiny of this Committee on behalf of the American people.
    Policies and regulations that are created to protect public 
health, safety, the environment, civil rights, and privacy 
should be created by experts in the field and in my view, not 
by political appointees. This deviation from past process only 
serves to compromise the protection of the public while 
enhancing presidential power.
    Executive Order 13422 has a requirement that a market 
failure or problem to identified to justify governmental 
intervention also marks a serious increase of regulatory 
control by the White House. It is often at the request of the 
industry that the agencies issue best practices and policies. 
To make them more complicated only seems to further interfere 
with the regulatory process.
    And so I am concerned that Orders like this will serve as 
yet another barrier to oppose consumer protection, specifically 
against exposure to harmful environmental pollutants and other 
safety and health requirements. A number of companies have 
already stated the regulatory rules have a significant impact 
on their business practices, while numerous consumer groups 
have complained about the Orders impact on public health and 
safety.
    And so this hearing starts this Subcommittee, its Chairman, 
Ranking Member, and Members of the Subcommittee to a very 
auspicious and important issue, and I congratulate you all for 
being here today.
    I thank you for the time.
    Ms. Sanchez. I thank the gentleman for his statement, and I 
would like to acknowledge that we have been joined by Mr. 
Feeney and Ms. Lofgren.
    In the interest of time, I would ask that other Members 
submit their statements for the record by close of business 
Friday. Without objection, all opening statements will be 
placed in the record.
    Without objection, the Chair will be authorized to declare 
a recess of the hearing at any point.
    We have been informed that our Administration witness, Mr. 
Aitken, has a tight schedule this afternoon and may need to 
leave before our hearing is concluded. We will hear from him 
first and proceed with a round of questions for him before 
turning to our other witnesses. Mr. Aitken is invited to stay 
with us as long as he is able to do so.
    Mr. Cannon. Madame Chairman, could we inquire of Mr. Aitken 
what his timeframe is, because I think that his insights 
through the course of the answering of other questions would be 
very important.
    Mr. Aitken. I do believe that when I was coming to the 
hearing that I received an e-mail saying that OPM had told 
Government employees to go home, so I suspect since nobody will 
be back in the office when I arrive there that my schedule will 
permit me to stay longer.
    Mr. Conyers. You don't have to go home, do you, Mr. Aitken?
    Mr. Aitken. No.
    Mr. Cannon. That is our gain and your loss, I suppose.
    Ms. Sanchez. Okay. That being the case, we will proceed as 
we normally do under our normal hearing schedule. We will allow 
all the witnesses to testify and then we will begin a round of 
5-minute questions from the Members who are present.
    I am now pleased and honored to introduce the witnesses for 
today's hearing. Our first witness is Steven Aitken, who has 
been the Acting Administrator of OMB's Office of Information 
and Regulatory Affairs since 2006. Prior to that appointment, 
Mr. Aitken was deputy general counsel at OMB, and before that 
he was an assistant general counsel at OMB. In total, he has 
worked at OMB for 17 years. Mr. Aitken also was a trial 
attorney in the civil and antitrust divisions of the Department 
of Justice. Mr. Aitken obtained his bachelor's degree in 
government from Harvard College, and a law degree from Harvard 
Law School. We appreciate your participation at today's 
hearing, Mr. Aitken, and look forward to your testimony.
    Our second witness is Sally Katzen. Professor Katzen is 
presently an adjunct professor and public interest-public 
service faculty fellow at the University of Michigan Law 
School. Prior to this assignment, she has been a visiting 
professor and lecturer at various other educational 
institutions. Prior to joining academia, Professor Katzen 
served nearly 8 years in the Clinton administration, first as 
the OIRA administrator, then as deputy assistant to the 
President for economic policy, and deputy director of the 
National Economic Council in the White House, and finally as 
the deputy director for management at OMB. Professor Katzen 
graduated magna cum laude from the University of Michigan Law 
School. Following graduation from law school, she clerked for 
Judge J. Skelly Wright of the United States Court of Appeals 
for the District of Columbia circuit. I should also note that 
Professor Katzen has testified on several occasions before this 
Subcommittee, and has contributed her expertise to the 
Judiciary Committee's ongoing Administrative Law Project, for 
which we are grateful. Welcome back, Professor Katzen.
    Our third witness is Dr. Curtis Copeland, a Specialist in 
American Government at CRS. Dr. Copeland's expertise, 
appropriately relevant to today's hearing, is Federal 
rulemaking and regulatory policy. Dr. Copeland has previously 
testified before this Subcommittee, and he is one of three CRS 
experts who are assisting the Subcommittee in the conduct of 
its Administrative Law Project. His contributions to the 
project are deeply appreciated. Prior to joining CRS, Dr. 
Copeland held a variety of positions at the Government 
Accountability Office over a 23-year period. He received his 
Ph.D. from the University of North Texas.
    Paul Noe is our next witness. Mr. Noe is a partner with C&M 
Capitolink LLC and also provides legal services to clients as 
counsel in Crowell & Moring's Environment and Natural Resources 
Group. He works on the policy, legal, political, and technical 
aspects of regulatory and legislative issues. Mr. Noe earned 
his undergraduate degree from Williams College and his law 
degree from Georgetown in 1990.
    Our final witness is Professor Peter Strauss. Professor 
Strauss is the Betts Professor of Law at Columbia University 
School of Law. A renowned scholar of administrative law, 
Professor Strauss has taught that subject at Columbia Law 
School for the past 36 years. After obtaining his undergraduate 
degree from Harvard College, Professor Strauss received his law 
degree from Yale Law School. He thereafter clerked for 
Associate Justice William Brennan and Chief Judge David Bazelon 
of the United States Court of Appeals for the District of 
Columbia. It is an honor to have you with us, Professor 
Strauss.
    At this point, I would like to extend to each of the 
witnesses my warm regards and appreciation for your willingness 
to participate at today's hearing. Without objection, your 
written statements will be placed into the record. Since you 
have submitted written statements that will be included in the 
hearing record, I request that you all limit your oral remarks 
to 5 minutes. You will note that we have a lighting system that 
starts with a green light. After 4 minutes it turns to a yellow 
light, and then after a minute longer it turns to a red light. 
If you could please finish your testimony by the time the red 
light turns on, I would appreciate that.
    After the witnesses have presented their testimony, the 
Subcommittee Members will be permitted to ask one round of 
questions, subject to the 5-minute limit.
    Mr. Aitken, you are invited to now begin your testimony.

TESTIMONY OF STEVEN D. AITKEN, ACTING ADMINISTRATOR, OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
                             BUDGET

    Mr. Aitken. Chairman Sanchez, Ranking Member Cannon, 
Chairman Conyers, and distinguished Members of the 
Subcommittee, thank you for giving me the opportunity to 
testify before you today on the recently-issued Executive Order 
13422.
    A few weeks ago, the OMB Director issued a bulletin for 
agency good guidance practices. On that same day, the President 
issued Executive Order 13422, which amended Executive Order 
12866. The bulletin and Executive Order share a common good 
government goal: to improve the way that the Federal Government 
does business by increasing the quality, accountability, and 
transparency of agency guidance documents, including providing 
the public an opportunity to review and comment on guidance.
    OMB recognizes the enormous value of the guidance documents 
that Federal agencies issue, but as Congress, the Courts, and 
others have recognized, guidance documents can sometimes have 
far-reaching effects, but they are not always developed, 
issued, and used in a transparent and accountable manner that 
includes an opportunity for the public to comment on the 
guidance.
    In order to improve the transparency, public participation, 
and accountability of guidance documents, OMB in 2005 issued 
for public comment a draft bulletin that identified good 
guidance practices. These practices were based on those already 
being used by the Food and Drug Administration. OMB recently 
issued the final version of that bulletin.
    The good government improvements that are made by the 
bulletin are reinforced by the recent Executive Order which 
provides for a relatively informal process whereby some, but by 
no means all, of the significant guidance documents that are 
developed by Federal agencies will be submitted to OMB for 
interagency review.
    The recent Executive Order makes several additional Good 
Government improvements. There has been some confusion in the 
press and elsewhere about these changes, and I would like to 
address that. First, concerns have been raised about the 
Order's provisions regarding regulatory policy officers. First, 
these officers are not new. When President Clinton issued 
Executive Order 12866 in 1993, he directed each agency head to 
designate a regulatory policy officer.
    Second, while the recent Executive Order specifies that 
these regulatory policy officers will be presidential 
appointees, the case is that for most departments and agencies, 
the regulatory policy officers already are presidential 
appointees, subject to Senate confirmation. In addition, 
concerns have been raised that the recent Executive Order may 
require each agency to establish a new regulatory policy office 
that would be headed by the agency's regulatory policy officer. 
This reference to an office was a typographical error. The 
reference should have been to an officer. The Executive Order 
will be implemented accordingly.
    In addition, the recent Executive Order increases the 
transparency of Executive Order 12866 regarding that Order's 
discussion of market failure. Before explaining what this 
amendment does do, I would like to explain first what it does 
not do.
    First, the concept of market failure is not new to 
Executive Order 12866, but instead has been an integral part of 
that Order since President Clinton issued it in 1993, when he 
not once, but twice, referred in the Order to the ``failures of 
private markets'' as a justification for regulatory action.
    Second, the recent Executive Order does not make a market 
failure the only basis on which a Federal agency can justify 
regulatory action. To the contrary, the recent Order expressly 
allows agencies to identify as a justification for regulatory 
action any ``other significant problem it intends to address.'' 
That is what the Executive Order does not do.
    What it does do is to include in the text of Executive 
Order 12866 three classic examples of what is a market failure. 
These examples are not new to the implementation of Executive 
Order 12866. In fact, in 1996, the OIRA Administrator issued 
best practice guidelines for agency use in implementing 
Executive Order 12866. The 1996 guidelines included a separate 
discussion of market failure and the 1996 guidelines discuss 
the three classic examples of market failure that are 
referenced in the recent Executive Order.
    Some have expressed concern that the recent Order could 
prevent agencies from issuing regulations to protect public 
health and safety, but this is not correct. Many of the most 
significant regulations that agencies issue are, in fact, 
responses to market failures. For example, environmental 
pollution is the classic textbook example of the market failure 
of externality. In response to this type of market failure, 
this Administration issued the Clean Air Interstate Rule, the 
CAIR rule, which will have major environmental benefits by 
reducing pollution.
    Ms. Sanchez. Mr. Aitken, you hit your time, but if you 
could just summarize briefly.
    Mr. Aitken. Another type of market failure stems from lack 
of information. In response to this kind of market failure, the 
Food and Drug Administration recently issued regulations that 
require packaged foods to include in their nutritional labeling 
the amount of trans fats that are in the food. This addresses 
another type of market failure.
    This concludes my opening statement. I would welcome any 
questions the Subcommittee has.
    [The prepared statement of Mr. Aitken follows:]
                 Prepared Statement of Steven D. Aitken




















































    Ms. Sanchez. I thank the gentleman.
    Ms. Katzen, you are now up. You may proceed with your 
testimony.

             TESTIMONY OF SALLY KATZEN, PROFESSOR, 
               UNIVERSITY OF MICHIGAN LAW SCHOOL

    Ms. Katzen. Thank you.
    Madame Chairman, Mr. Cannon, Mr. Conyers, other 
distinguished Members, I appreciate very much the opportunity 
to testify today.
    Mr. Conyers. Mr. Aitken, have you turned your microphone 
off?
    Ms. Katzen. Is my time going?
    Ms. Sanchez. We will reset your time.
    Ms. Katzen. As you mentioned in your introduction, I served 
as the administrator of OIRA for over 5 years during the 
Clinton administration, and was involved in the drafting and 
implementation of Executive Order 12866. I am a strong 
proponent of centralized review of agency rulemaking, and have 
often spoken and written in defense and support of OIRA.
    I am also a strong proponent of regulations, believing that 
if properly crafted they can improve the quality of our lives, 
the performance of our economy, and the Nation's well-being.
    Why, then, am I so critical of this new Executive Order? I 
have prepared written testimony that provides extensive 
background and explanatory information, and would like to use 
my 5 minutes to emphasize the most important points.
    First, during the last 6 years, the Bush administration has 
taken many discrete steps to tighten incrementally, but 
nonetheless tighten OMB control over the agencies: the 
information data quality guidelines, the peer review 
guidelines, Circular A-4 for regulatory analyses, the risk 
assessment bulletin, and now the bulletin on good guidance 
practices. Each step, standing on its own, can be justified and 
none standing on its own is really as bad as the critics of the 
Administration have charged. At the same time, the cumulative 
effect of all of these is overwhelming the agencies, and there 
is a dramatically different dynamic between the agencies and 
the White House than there was at the end of the Clinton 
administration.
    In Executive Order 12866, President Clinton continued the 
practice of centralized review of rulemaking by OIRA, but at 
the same time, he reaffirmed the primacy of the Federal 
agencies which are the repositories of significant experience 
and expertise, and are the entities to which Congress has 
delegated the authority to issue rules with the force and 
effect of law. Today, those agencies have at least one arm tied 
behind their backs, two 10-pound bricks tied to their ankles, 
and they are set on an obstacle course to navigate before they 
can issue any regulations. Forgive me for mangling my 
metaphors, but the combination of all of the multiple mandates 
that OMB has imposed on the agencies makes it so much more 
difficult for them to do their jobs. More mandates and no more 
resources. In fact, the agencies have been straight-lined or 
decreased.
    Presidential oversight is one thing, but burdening the 
agencies to slow them down or destroy their morale is something 
else.
    Now, I read Mr. Aitken's written testimony and listened to 
him just now, and it is really very curious. He has not 
identified any problems that they were experiencing under the 
original Executive Order that needed to be fixed. Instead, he 
has said, again and again, that there is nothing new in the 
Executive Order, that the agencies are doing it already. What 
they are doing is not significant. It is no big deal. By the 
same token then, why did they do it? If it wasn't intended to 
accomplish anything, why use the prestige of the President and 
the status of an Executive Order for a non-event?
    Let me also be clear to the extent he says that this is 
just continuing the logical progression from the Clinton 
administration, that simply is not true. One example is that he 
cited the 1996 document that I co-authored with Joe Stiglitz 
that uses the terms ``market failure'' and ``externality,'' et 
cetera. But that was a document that was called ``Best 
Practices,'' not guidance, not bulletin, not circular, not 
Executive Order, and that is a very big difference.
    Finally, if you argue that this is simply to increase 
transparency and good government, then look at the way it was 
done, without any consultation or explanation. Look at the 
effect on the agencies, coming on the heels of all of the other 
things that OMB has done. And look at the message it sends: 
Regulations to protect the environment and to promote the 
health and safety of the American people are disfavored--let 
the market, not the Government, do it.
    Now, Executive Order 12866 as originally drafted was 
neutral as to process, even though President Clinton was highly 
supportive of regulations as part of the solution to serious 
problems plaguing our society. The Executive Order was not 
skewed to achieve a pro-regulatory result. It was not a 
codification of a pro-regulatory philosophy or ideology. It 
was, on its face and by intent, a charter for good government 
without any predetermination of outcomes.
    In light of the actions taken over the last 6 years, that 
is no longer the case with Executive Order 12866 as amended.
    As I noted at the outset, there have been--a lot of these 
steps have been taken. Each one of them has been a thumb on the 
scale. I think by now we have a whole fist influencing the 
outcome of regulatory decisions.
    Thank you very much for holding this hearing. It is very 
important, I believe, for Congress to let the Executive know 
that it takes these matters seriously and is concerned about 
the integrity of the Administrative process.
    [The prepared statement of Ms. Katzen follows:]
                   Prepared Statement of Sally Katzen
    Chairman Sanchez and Members of the Subcommittee. Thank you for 
inviting me to testify today on a subject that is vitally important to 
the American people. During the last six years, there has been a slow 
but steady change in the process by which regulations are developed and 
issued--specifically, in the balance of authority between the Federal 
regulatory agencies and the Office of Management and Budget. With its 
most recent actions, the Bush Administration has again restricted 
agency discretion and made it more difficult for them to do the job 
that Congress has delegated to the Federal agencies. It is therefore 
important that this Subcommittee consider the reasons for these changes 
and the implications of these changes for administrative law and 
regulatory practice.
    I served as the Administrator of the Office of Information and 
Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) 
for the first five years of the Clinton Administration, then as the 
Deputy Assistant to the President for Economic Policy and Deputy 
Director of the National Economic Council, and then as the Deputy 
Director for Management of OMB. I am a proponent of centralized review 
of agency rulemaking, and I was personally involved in the drafting and 
implementation of Executive Order 12866. I have remained active in the 
area of administrative law generally and rulemaking in particular. 
Since leaving government service in January 2001, I have taught 
Administrative Law and related subjects at the University of Michigan 
Law School, George Mason University Law School, and the University of 
Pennsylvania Law School, and I have also taught American Government 
seminars to undergraduates at Smith College, Johns Hopkins University, 
and the University of Michigan in Washington Program. I frequently 
speak and have written articles for scholarly publications on these 
issues.
    On January 18, 2007, the Bush Administration released two 
documents. One was expected; the other was not. I can understand why 
OMB issued a ``Final Bulletin for Good Guidance Practices.'' While I 
disagree with several of the choices made, I recognize that a case can 
be made that there is a need for such a Bulletin. On the other hand, 
there is no apparent need for Executive Order 13422, further amending 
Executive Order 12866. Regrettably, none of the plausible explanations 
for its issuance is at all convincing. As I will discuss below, there 
are at least three aspects of the new Executive Order that warrant 
attention: 1) the way it was done--without any consultation or 
explanation; 2) the context in which it was done--coming on the heels 
of OMB's imposing multiple mandates/requirements on the agencies when 
they are developing regulations; and 3) the effect it will have and the 
message it sends to the agencies--it will be even more difficult for 
agencies to do their jobs because regulations are disfavored in this 
Administration.
    To put the most recent Executive Order in perspective, a little 
history may be helpful. The first steps towards centralized review of 
rulemaking were taken in the 1970's by Presidents Nixon, Ford and 
Carter, each of whom had an ad hoc process for selectively reviewing 
agency rulemakings: President Nixon's was called the Quality of Life 
Review; President Ford's was focused on the agency's Inflationary 
Impact Analysis that accompanied the proposed regulation; and President 
Carter's was through the Regulatory Analysis Review Group. Those 
rulemakings that were considered significant were reviewed by an inter-
agency group, which then contributed their critiques (often strongly 
influenced by economists) to the rulemaking record.
    In 1981, President Reagan took a significant additional step in 
issuing Executive Order 12291. That Order formalized a process that 
called for the review of all Executive Branch agency rulemakings--at 
the initial and the final stages--under specified standards for 
approval. The Office that President Reagan chose to conduct the review 
was the Office of Information and Regulatory Affairs (OIRA), 
established by the Congress for other purposes under the Paperwork 
Reduction Act of 1980. Unless OIRA approved the draft notice of 
proposed rulemaking and the draft final rule, the agency could not 
issue its regulation.
    Executive Order 12291 was highly controversial, provoking three 
principal complaints. One was that the Executive Order was unabashedly 
intended to bring about regulatory relief--not reform--relief for the 
business community from the burdens of regulation. Second, the Order 
placed enormous reliance on (and reflected unequivocal faith in) cost/
benefit analysis, with an emphasis on the cost side of the equation. 
Third, the process was, by design, not transparent; indeed, the mantra 
was ``leave no fingerprints,'' with the result that disfavored 
regulations were sent to OMB and disappeared into a big black hole. The 
critics of Executive Order 12291, including Members of Congress, 
expressed serious and deep concerns about the Executive Order, raising 
separation of powers arguments, the perceived bias against regulations, 
and the lack of openness and accountability of the process.
    When President Clinton took office and I was confirmed by the 
Senate as the Administrator of OIRA, my first assignment was to 
evaluate Executive Order 12291 in light of the 12 years of experience 
under Presidents Reagan and Bush, and help draft a new Executive Order 
that would preserve the strengths of the previous Executive Order but 
correct the flaws that had made the process so controversial. President 
Clinton would retain centralized review of Executive Branch agency 
rulemakings, but the development and the tone of the Executive Order he 
would sign (Executive order 12866) was to be very different.
    I was told that Executive Order 12291 was drafted in the White 
House (Boyden Gray and Jim Miller take credit for the document) and 
presented, after President Reagan had signed it, as a fait accomplis to 
the agencies. The protests from the agencies were declared moot. We 
took a different route, consulting and sharing drafts with the 
agencies, public interest groups, industry groups, Congressional 
staffers, and State and local government representatives. When all 
their comments were considered and changes made to the working draft, 
we again consulted and shared our new drafts with all the groups, and 
again took comments. More changes were made, and where comments were 
not accepted, we explained the basis for our decisions.
    The tenor of Executive Order 12866 was also quite different from 
Executive Order 12291. As noted above, Executive Order 12866 retained 
centralized review of rulemakings, but also reaffirmed the primacy of 
the agencies to which Congress had delegated the authority to regulate. 
(Preamble) Among other things, Executive Order 12866 limited OIRA 
review to ``significant regulations''--those with a likely substantial 
effect on the economy, on the environment, on public health or safety, 
etc. or those raising novel policy issues (Section 6(b)(1))--leaving to 
the agencies the responsibility for carrying out the principles of the 
Executive Order on the vast majority (roughly 85%) of their 
regulations.
    Executive Order 12866 continued to require agencies to assess the 
consequences of their proposals and to quantify and monetize both the 
costs and the benefits to the extent feasible. (Section 1(a)) But it 
explicitly recognized that some costs and some benefits cannot be 
quantified or monetized but are ``nevertheless essential to consider.'' 
(Section 1(a)) I believe it was Einstein who had a sign in his office 
at Princeton to the effect that ``not everything that can be counted 
counts, and not everything that counts can be counted.''
    While Executive Order 12292 required agencies to set their 
regulatory priorities ``taking into account the conditions of the 
particular industries affected by the regulations [and] the condition 
of the national economy'' (Section 2 (e)), Executive Order 12866 
instructed agencies to consider ``the degree and nature of the risks 
posed by various substances and activities within its jurisdiction'' 
(Section 1(b)(4)), and it added to the list of relevant considerations 
for determining if a proposed regulation qualified as ``significant'' 
not only an adverse effect on the economy or a sector of the economy, 
but also ``productivity, competition, jobs, the environment, public 
health or safety or State, local, or tribal governments or 
communities.'' (Section 3(f))
    There were other significant differences between Executive Order 
12291 and Executive Order 12866, including those relating to the 
timeliness of review and the transparency of the process, but for 
present purposes, the key to the difference was that President Clinton 
was focused on a process for better decision-making and hence better 
decisions and not a codification of a regulatory philosophy or 
ideology. Centralized review was seen as a valid exercise of 
presidential authority, facilitating political accountability (the 
President takes the credit and gets the blame for what his agencies 
decide) and to enhance regulatory efficacy (that is, decisions that 
take into account the multitude of disciplines and the multitude of 
perspectives that can and should be brought to bear in solving problems 
in our complex and interdependent society). But whatever one's view of 
centralized review of agency rulemakings, Executive Order 12866 was--on 
its face and by intent--a charter for good government, without any 
predetermination of outcomes.
    The neutrality of the process was essential. President Clinton 
viewed regulations as perhaps the ``single most critical . . . vehicle 
to achieve his domestic policy goals'' (Kagan, 114 Harv. L. Rev 2245, 
2281-82 ((2001)), and he spoke often of the salutary effects of 
regulations on the Nation's quality of life and how regulations were 
part of the solution to perceived problems. But the Executive Order was 
not skewed to achieve a pro-regulatory result. The regulations would be 
debated on their merits, not preordained by the process through which 
they were developed and issued.
    When George W. Bush became President in January 2001, his 
philosophy was decidedly anti-regulatory. I know that his advisors 
considered whether to change Executive Order 12866 and they concluded 
that it was not necessary to accomplish their agenda. Indeed, President 
Bush's OMB Director instructed the agencies to scrupulously adhere to 
the principles and procedures of Executive Order 12866 and its 
implementing guidelines. (OMB M-01-23, June 19, 2001) The only changes 
to the Executive Order came two years into President Bush's first term, 
and the changes were limited to transferring the roles assigned to the 
Vice President to the Chief of Staff or the OMB Director. (Executive 
Order 13258)
    Almost five years later, President Bush signed Executive Order 
13422, further amending Executive Order 12866. So far as I am aware, 
there was no consultation and no explanation of the problems under the 
existing Executive Order that prompted these amendments, or whether the 
amendments would have a salutary effect on whatever problems existed, 
or whether the amendments would have unintended consequences that 
should be considered. Press statements issued after the fact do not 
make for good government.
    Second, the new Executive Order comes in the course of a steady and 
unwavering effort to consolidate authority in OMB and further restrict 
agency autonomy and discretion. On February 22, 2002, OMB issued its 
Information Quality Act (IQA) Guidelines. (67 Fed. Reg. 8452). The IQA 
itself was three paragraphs attached to a more than 700-page Treasury 
and General Government Appropriations Act for Fiscal Year 2001, with no 
hearings, no floor debate and no committee reports. Its objective was 
``to ensure the quality, objectivity, utility and integrity of 
information disseminated to the public.'' OMB took up the assignment 
with a vigor and determination that was remarkable. OMB's government-
wide guidelines created a new construct: now, there would be 
``information'' and ``influential information'' and different (more 
stringent standards) would apply to the higher tiers. OMB also required 
the agencies to issues their own guidelines (subject to OMB approval); 
establish administrative mechanisms allowing people or entities to seek 
the correction of information they believe does not comply with these 
guidelines; and report periodically to OMB on the number and nature of 
these complaints. The U.S. Chamber of Commerce thought this ``would 
have a revolutionary impact on the regulatory process''--keeping the 
agencies from relying on data that industry thought was questionable.
    Then came OMB's Proposed Draft Peer Review Standards for Regulatory 
Science (August. 29, 2003), in which OMB attempted to establish uniform 
government-wide standards for peer review of scientific information 
used in the regulatory process. Peer review is generally considered the 
gold standard for scientists. Yet leading scientific organizations were 
highly critical of what OMB was trying to do and how it was doing it, 
and they were joined by citizen advocacy groups and former government 
officials. They argued that the proposed standards were unduly 
prescriptive, unbalanced (in favor of industry), and introduced a new 
layer of OMB review of scientific or technical studies used in 
developing regulations. The reaction was so strong and so adverse that 
OMB substantially revised its draft Bulletin to make it appreciably 
less prescriptive and restrictive, and in fact OMB resubmitted it in 
draft form for further comments before finalizing the revised Bulletin.
    On March 2, 2004, OMB replaced a 1996 ``best practices'' memorandum 
with Circular A-4, setting forth instructions for the Federal agencies 
to follow in developing the regulatory analyses that accompany 
significant draft notices of proposed rulemaking and draft final rules. 
The Circular, almost 50-pages single spaced, includes a detailed 
discussion of the dos and don'ts of virtually every aspect of the 
documentation that is needed to justify a regulatory proposal. While 
the term ``guidance'' is used, agencies that depart from the terms of 
the Circular do so at their peril (or more precisely, at the peril of 
their regulatory proposal).
    Then came the OMB Proposed Risk Assessment Bulletin (January 9, 
2006), providing technical guidance for risk assessments produced by 
the Federal government. There were six standards specified for all risk 
assessments and a seventh standard, consisting of five parts, for risk 
assessments related to regulatory analysis. In addition, using the 
terminology from the IQA Guidance, OMB laid out special standards for 
``Influential Risk Assessments'' relating to reproducibility, 
comparisons with other results, presentation of numerical estimates, 
characterizing uncertainty, characterizing results, characterizing 
variability, characterizing human health effects, discussing scientific 
literature and addressing significant comments. Agency comments raised 
a number of very specific problems and such general concerns as that 
OMB was inappropriately intervening into the scientific underpinnings 
of regulatory proposals. OMB asked the National Academies of Scientists 
(NAS) to comment on the draft Bulletin. The NAS panel (on which I 
served) found the Bulletin ``fundamentally flawed'' and recommended 
that it be withdrawn.
    Then, on January 18, 2007, OMB issued its final Bulletin on 
``Agency Good Guidance Practices.'' Agencies are increasingly using 
guidance documents to inform the public and to provide direction to 
their staff regarding agency policy on the interpretation or 
enforcement of their regulations. While guidance documents--by 
definition--do not have the force and effect of law, this trend has 
sparked concern by commentators, including scholars and the courts. In 
response, the Bulletin sets forth the policies and procedures agencies 
must follow for the ``development, issuance, and use'' of such 
documents. It calls for internal agency review and increased public 
participation--all to the good. In addition, however, the Bulletin also 
imposes specified ``standard elements'' for significant guidance 
documents; provides instructions as to the organization of agency 
websites containing significant guidance documents; requires agencies 
to develop procedures (and designate an agency official/office) so that 
the public can complain about significant guidance documents and seek 
their modification or rescission; and extends OIRA review to include 
significant guidance documents. I do not believe it is an overstatement 
to say that the effect of the Bulletin is to convert significant 
guidance documents into legislative rules, subject to all the 
requirements of Section 553 of the Administrative Procedure Act, even 
though the terms of that Section explicitly exempt guidance documents 
from its scope. To the extent that the Bulletin makes the issuance of 
guidance documents much more burdensome and time consuming for the 
agencies, it will undoubtedly result in a decrease of their use. That 
may well have unintended unfortunate consequences, because regulated 
entities often ask for and appreciate receiving clarification of their 
responsibilities under the law, as well as protection from haphazard 
enforcement of the law, by agency staff.
    This is quite a record. While each step can be justified as helping 
to produce better regulatory decisions, the cumulative effect is 
overwhelming. Requirements are piled on requirements, which are piled 
on requirements that the agencies must satisfy before they can issue 
regulations (and now, significant guidance documents) that Congress 
authorized (indeed, often instructed) them to issue. And OMB has not 
requested, nor has the Congress in recent years appropriated, 
additional resources for the agencies to carry out OMB's ever 
increasing demands. As agencies must do more with less, the result is 
that fewer regulations can be issued--which is exactly what the 
business community has been calling on this Administration to do.
    It is in this context that Executive Order 13422, further amending 
Executive Order 12866, is released. Until the Bulletin on guidance 
documents, OIRA extended its influence throughout the Executive Branch 
without any amendments to Executive Order 12866. As discussed above, 
OMB issued Circulars and Bulletins covering a wide variety of subjects, 
virtually all of which were quite prescriptive (and often quite 
burdensome) in nature. OMB Circulars and Bulletins do not have the same 
status as an Executive Order, but they are treated as if they did by 
the Federal agencies. Why then did OMB draft and the President sign 
Executive Order 13422?
    One indication of a possible answer is that while Executive Order 
13422 in effect codifies the Bulletin on guidance documents, it does 
not pick up and codify the earlier pronouncements on data quality, peer 
review, regulatory impact analyses, or even risk assessment principles. 
It may be that it was thought necessary to amend Executive Order 12866 
for guidance documents because Executive Order 12866 was written to 
apply only where the agencies undertook regulatory actions that had the 
force and effect of law. But it is unlikely that the agencies would 
balk at submitting significant guidance documents to OIRA if there were 
an OMB Bulletin instructing them to do so, and since neither Executive 
Orders nor Circulars or Bulletins are judicially reviewable, it is also 
unlikely that anyone could successfully challenge in court an agency's 
decision to submit a significant guidance document to OIRA.
    Perhaps more revealing of the reason(s) for Executive Order 13422 
is that it is not limited to guidance documents. Consider the other 
amendments included in the new Executive Order. First, Executive Order 
12866 had established as the first principle of regulation that:

        Each agency shall identify the problem that it intends to 
        address (including, where applicable, the failure of private 
        markets or public institutions that warrant new agency action) 
        as well as assess the significance of that problem''

Executive Order 13422 amends Executive Order 12866 to state instead:

        Each agency shall identify in writing the specific market 
        failure (such as externalities, market power, lack of 
        information) or other specific problem that it intends to 
        address (including, where applicable, the failures of public 
        institutions) that warrant new agency action, as well as assess 
        the significance of that problem, to enable assessment of 
        whether any new regulation is warranted.

By giving special emphasis to market failures as the source of a 
problem warranting a new regulation, the Administration is saying that 
not all problems are equally deserving of attention; those caused by 
market failures are in a favored class and possibly the only class 
warranting new regulations. This could be read as a throw back to the 
``market-can-cure-almost-anything'' approach, which is the litany of 
opponents of regulation; in fact, history has proven them wrong--there 
are many areas of our society where there are serious social or 
economic problems--e.g., civil rights--that are not caused by market 
failures and that can be ameliorated by regulation.
    Second, the new Executive Order amends Section 4 of Executive Order 
12866, which relates to the regulatory planning process and 
specifically references the Unified Regulatory Agenda prepared annually 
to inform the public about the various proposals under consideration at 
the agencies. The original Executive Order instructed each agency to 
also prepare a Regulatory Plan that identifies the most important 
regulatory actions that the agency reasonably expects to issue in 
proposed or final form in that fiscal year. Section 4, unlike the rest 
of the Executive Order, applies not only to Executive Branch agencies, 
but also to independent regulatory commissions, such as the Securities 
and Exchange Commission, the Federal Communications Commission, the 
Federal Trade Commission, and the Federal Reserve Board. It is not 
without significance that the new Executive Order uses Section 4 to 
impose an additional restraint on the agencies:

        Unless specifically authorized by the head of the agency, no 
        rulemaking shall commence nor be included on the Plan without 
        the approval of the agency's Regulatory Policy Office . . .

This language should be read in conjunction with an amendment to 
Section 6(a)(2) that specifies that the agency's Regulatory Policy 
Officer must be ``one of the agency's Presidential Appointees.'' 
Executive Order 12866 had provided that the agency head was to 
designate the agency's Regulatory Policy Officer, with the only 
condition that the designee was to report to the agency head. The 
original Executive Order further provided that the Regulatory Policy 
Officer was to ``be involved at every stage of the regulatory process . 
. .''--in other words, a hands-on job. Now, there is an explicit 
politicalization of the process; a ``sign-off,'' not a hands-on, 
assignment; and, most significantly, no accountability. The newly 
appointed officer is not required to be subject to Senate confirmation, 
nor is the person required to report to a Senate-confirmed appointee.
    The other changes to Section 4 are also troubling. As amended, the 
agencies must now include with the Regulatory Plan the:

        agency's best estimate of the combined aggregate costs and 
        benefits of all its regulations planned for that calendar year 
        . . .

Very few would dispute that the Regulatory Plan has been notoriously 
unreliable as an indicator of what an agency is likely to accomplish in 
any given time frame; it is not unusual for regulations that are not 
included in the Plan to be issued should circumstances warrant, nor is 
it unusual for regulations included in the Plan with specific dates for 
various milestones to languish year after year without getting any 
closer to final form.
    In any event, the requirement to aggregate the costs and benefits 
of all the regulations included in the Plan for that year is very 
curious. We know that costs and benefits can be estimated (at least 
within a range) at the notice stage because the agency will have 
settled on one or more options for its proposal. But to try to estimate 
either costs or benefits at the notice of inquiry stage or before the 
agency has made even tentative decisions is like trying to price a new 
house before there is even an option on the land and before there are 
any architect's plans. The numbers may be interesting, but hardly 
realistic, and to aggregate such numbers would likely do little to 
inform the public but could do much to inflame the opponents of 
regulation. This would not be the first time that large numbers that 
have virtually no relation to reality have driven the debate on 
regulation--e.g., the $1.1 trillion estimate of the annual costs of 
regulations that is frequently cited by opponents of regulation, even 
though every objective critique of the study that produced that number 
concludes that it not only overstates, but in fact grossly distorts, 
the truth about the costs of regulation. The only other plausible 
explanation for this amendment to the Executive Order it that it is the 
first step toward implementing a regulatory budget. In my view, the 
concept of a regulatory budget is deeply flawed, but it should be 
debated on the merits and not come in through the back door of an 
Executive Order designed for other purposes.
    There is also a gratuitous poke at the agencies in the amendment to 
Section 4(C). The original Executive Order instructed the agencies to 
provide a ``summary of the legal basis'' for each action in the 
Regulatory Plan, ``including whether any aspect of the action is 
required by statute or court order.'' The new amendment adds to the 
previous language the clause, ``and specific citation to such statute, 
order or other legal authority.'' It may appear to be trivial to add 
this requirement, but by the same token, why is it necessary to impose 
such a requirement?
    As noted above, I am not aware of any consultation about either the 
merits of any of the amendments or the perception that may attach to 
the cumulative effect of those amendments. Therefore, I do not know 
whether the agencies have, for example, been proposing regulations 
based on problems caused by something other than market failure which 
OMB does not consider an appropriate basis for a regulation; whether 
senior civil servants at the agencies have been sending proposed 
regulations to OMB that run contrary to the wishes of the political 
appointees at those agencies; or whether agencies have been 
misrepresenting what applicable statutes or court orders require.
    If not, then there is little, if any, need for these amendments, 
other than to send a signal that the bar to issuing regulations is 
being raised; that OMB is deciding the rules of the road; and that 
those rules are cast so as to increase the I's that must be dotted and 
the T's that must be crossed. In other words, the message is that 
agencies should not be doing the job that Congress has delegated to 
them. This is not a neutral process. If the Bush Administration does 
not like some or all agency proposed regulations, they can debate them 
on the merits. But the Executive Order should not become a codification 
of an anti-regulatory manifesto. This is not good government.

    Ms. Sanchez. Thank you for your testimony, Professor 
Katzen.
    Now we move to Dr. Copeland.

TESTIMONY OF CURTIS W. COPELAND, Ph.D., SPECIALIST IN AMERICAN 
      NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE

    Mr. Copeland. Thank you very much.
    Madame Chairman, Members of the Subcommittee, I am pleased 
to be here today to discuss the changes made by Executive Order 
13422. These changes are the most significant to the regulatory 
review process since 1993, and as you mentioned, can be viewed 
as part of a broader assertion of presidential authority 
throughout the Bush administration.
    The most consistent attribute of these changes is their 
lack of clarity. Specifically, it is unclear why the changes 
were made, their effect on agencies and the public, and their 
effect on the balance of power between the President and 
Congress. My bottom line is that because of this lack of 
clarity, the ultimate effects of these changes are likely to 
become apparent only through their implementation.
    Ironically, although the Executive Order now requires 
agencies to identify the specific market failure or problem 
that prompted the issuance of the rules, the Bush 
administration has not indicated why the changes made by the 
Order are needed. For example, why did the President conclude 
that agencies regulatory policy officers now must be 
presidential appointees? Why do those policy officers no longer 
report to the agency head, and why was their authority to 
control agency's regulatory planning and rulemaking activity 
significantly enhanced? Sound public policy reasons can be 
envisioned for many of these changes, and enunciation of those 
reasons might have prevented much of the ensuing controversy.
    In some cases, the lack of clarity about the effects of the 
Executive Order is because of the broad discretion that is 
provided to both the agencies and OMB. For example, agencies 
are now required to estimate the aggregate cost and benefits of 
upcoming rules ``to the extent possible'' and are required to 
identify specific market failure or problem before issuing a 
rule where applicable, but it is unclear who decides what is 
possible or applicable. Is it the agencies or OMB?
    In other cases, the effects of the changes are unclear 
because, at least on the surface, they don't appear to change 
existing practices. For example, as Mr. Aitken just mentioned, 
regulatory officers are already presidential appointees in most 
agencies--most major agencies. Therefore, the Order seems to 
require what is already being done. However, if OMB or the 
President requires agencies to designate different presidential 
appointees to this position, then this mandate could become 
much more significant, particularly when coupled with the newly 
enhanced authority of those officers to control agencies' 
regulatory planning and output.
    Similarly, one might think that agencies could satisfy the 
requirement that they estimate the aggregate cost and benefits 
of their plan rules simply by adding up the rules individual 
estimates; however, agencies' regulatory plans rarely contain 
quantitative estimates of cost and benefit, in many cases 
because the rules are still under development and a year away 
from publication. Therefore, if agencies are held strictly to 
this requirement, developing aggregate cost and benefit 
estimates could be proved difficult for the agencies and of 
questionable validity.
    Other requirements in the Order seem to have broad or 
unclear scope. For example, it requires agencies to notify OMB 
about significant guidance documents, and defines a guidance 
document in such a way that it may cover even oral statements 
by agency staff. Also, as many others have pointed out, it is 
not clear how a non-binding guidance document can be expected 
to have the kinds of significant effects described in the 
Order; that is, $100 million impact on the economy. As a 
result, agencies may conclude that none of their guidance 
documents meet the Executive Order's requirements for OMB 
notification. On the other hand, because OMB is also given the 
authority to determine which documents are significant, the 
scope and impact of this requirement may be as broad as OMB 
determines it needs to be.
    It is also unclear whether the time limits and transparency 
requirements applicable to rules will apply to guidance 
documents. For example, will OMB have to complete its review of 
guidance documents within 90 days? Will agencies have to 
disclose the changes made to their guidance documents at the 
suggestion and recommendation of OMB?
    Finally, it is unclear what impact the changes brought 
about by the Executive Order will have on the balance of power 
between the President and Congress. As I mentioned earlier, the 
Order requires agency regulatory policy officers to be 
presidential appointees, but does not indicate whether they 
should be subject to Senate confirmation. One could argue that 
it is the role of Congress to prescribe in law whether the 
regulatory policy officer position should be subject to Senate 
confirmation. Even if an agency had designated a person in a 
Senate-confirmed position as an agency's regulatory policy 
officer, one could argue that this person would have to undergo 
another confirmation process because the scope of the person's 
responsibilities had changed significantly.
    Also, it is not clear whether the Orders and requirements 
regarding policy officers now applies to independent regulatory 
agencies that had previously been exempt from this requirement, 
and that Congress establish more--and that Congress establishd 
to be more removed from presidential influence. If so, this 
would represent a clear departure from previous practice.
    That concludes my prepared statement. I would be happy to 
answer any questions.
    [The prepared statement of Dr. Copeland follows:]
                Prepared Statement of Curtis W. Copeland
    Madam Chairman and Members of the Subcommittee:
    I am pleased to be here today to discuss the changes made to the 
Office of Management and Budget's (OMB) regulatory review process as a 
result of Executive Order 13422, issued by President George W. Bush on 
January 18, 2007.\1\ The executive order amended the review process 
that was established by Executive Order 12866 and is implemented by 
OMB's Office of Information and Regulatory Affairs (OIRA).\2\ The 
changes are the most significant changes to that process since it was 
established in 1993. The changes are also controversial, with some 
characterizing the new executive order as a ``power grab'' by the White 
House that undermines public protections and lessens congressional 
authority,\3\ and others describing it as ``a paragon of common sense 
and good government.'' \4\ However, both supporters and critics of the 
new order agree that it represents an expansion of presidential 
authority over rulemaking agencies. In that regard, Executive Order 
13422 can be viewed as part of a broader statement of presidential 
authority that has been presented throughout the Bush Administration.
---------------------------------------------------------------------------
    \1\ Executive Order 13422, ``Further Amendment to Executive Order 
12866 on Regulatory Planning and Review,'' 72 Federal Register 2763, 
Jan. 23, 2007. Five years earlier, E.O. 13258 reassigned certain 
responsibilities from the Vice President to the President's chief of 
staff, but otherwise did not change the OIRA review process. See 
Executive Order 13258, ``Amending Executive Order 12866 on Regulatory 
Planning and Review,'' 67 Federal Register 9385, Feb. 28, 2002.
    \2\ Executive Order 12866, ``Regulatory Planning and Review,'' 58 
Federal Register 51735, Oct. 4, 1993.
    \3\ Public Citizen, ``New Executive Order Is Latest White House 
Power Grab,'' available at [http://www.citizen.org/pressroom/
release.cfm?ID=2361].
    \4\ Attributed to William Kovacs, Vice President of Environment, 
Energy, and Regulatory Affairs, U.S. Chamber of Commerce, in John 
Sullivan, ``White House Sets Out New Requirements for Agencies 
Developing Rules, Guidance,'' Daily Report for Executives, Jan. 19, 
2007, p. A-31.
---------------------------------------------------------------------------
    The most important changes made by the executive order appear to 
fall into five general categories: (1) a requirement that covered 
agencies identify in writing the specific ``market failure'' or 
``problem'' that warrants the issuance of a new regulation, (2) a 
requirement that each agency head designate a presidential appointee 
within the agency as a ``regulatory policy officer'' who can largely 
control upcoming rulemaking activity in that agency, (3) a requirement 
that agencies provide their best estimates of the aggregate regulatory 
costs and benefits of rules they expect to publish in the coming year, 
(4) an expansion of OIRA review to include agencies' significant 
guidance documents, and (5) a provision permitting agencies to consider 
whether to use more formal rulemaking procedures in certain cases.
    I have provided the Subcommittee with copies of a recent CRS report 
that describes each of these changes in some detail and notes what 
observers in the public, private, and nonprofit sectors have said about 
them.\5\ Rather than reiterate what is in that report, my testimony 
today focuses on what is unknown or unclear about changes brought about 
by Executive Order 13422--specifically, (1) why the changes were made, 
(2) the effect of the changes on federal rulemaking agencies and the 
public, and (3) the effect of the changes on the balance of power 
between the President and Congress with regard to regulatory agencies. 
OMB recently indicated that it planned to issue clarifying 
``implementation assistance'' to the agencies, which may answer many, 
if not all, of these questions.\6\
---------------------------------------------------------------------------
    \5\ CRS Report RL33862, Changes to the OMB Regulatory Review 
Process by Executive Order 13422, by Curtis W. Copeland.
    \6\ Personal conversation with OMB staff, Feb. 8, 2007.
---------------------------------------------------------------------------
                       why the changes were made
    Executive Order 13422 does not indicate, and the Bush 
Administration has not explained (except in very general terms), why 
changes to Executive Order 12866 were needed at this time. For example, 
it is not clear why the President believed that federal agencies' 
regulatory policy officers should be required to be presidential 
appointees, why those policy officers should no longer report to the 
agency head,\7\ or why their authority to control their agencies' 
regulatory planning and rulemaking activities should be significantly 
enhanced.\8\ Likewise, the Administration has not explained why the new 
executive order requires agencies to provide aggregate estimates of 
regulatory costs and benefits for all of the agencies' upcoming 
regulations. The rationale behind the expansion of OIRA's regulatory 
review to include agencies' significant guidance documents can be 
inferred, at least to some extent, by reading OMB's ``Final Bulletin 
for Agency Good Guidance Practices'' that was issued the same day as 
the executive order.\9\ Nevertheless, it is not clear why the 
Administration believed that both the OMB bulletin and the changes to 
the executive order were necessary.
---------------------------------------------------------------------------
    \7\ As originally written, Executive Order 12866 required the 
regulatory policy officers to report to the agency heads; Executive 
Order 13422 eliminated that language when it required that the officers 
be presidential appointees.
    \8\ Unless specifically authorized by the agency head, the 
presidential policy officer must approve the listing of all significant 
forthcoming regulatory actions in the regulatory plan and approve the 
initiation of all rulemaking actions. Previously, only the agency head 
could approve the regulatory plan, and there was no language in the 
order prohibiting rulemaking in the absence of the regulatory policy 
officer's approval.
    \9\ Office of Management and Budget, ``Final Bulletin for Agency 
Good Guidance Practices,'' 72 Federal Register 3432, Jan. 25, 2007. To 
view a copy of this bulletin, see [http://www.whitehouse.gov/omb/
memoranda/fy2007/m07-07.pdf].
---------------------------------------------------------------------------
    Neither the President nor OMB is required to explain why executive 
orders are issued, or why existing OIRA review processes are changed. 
And sound public policy rationales can be envisioned concerning why the 
changes were made. Nevertheless, it is notable that, while OMB has 
required agencies to provide the ``specific market failure'' or the 
``specific problem'' that led to the development of draft regulations, 
the Administration has not provided similarly specific reasons why 
these five changes to the review process for all significant rules and 
guidance documents were made. Providing those rationales might have 
gone a long way toward quieting some of the concerns that have been 
voiced regarding the changes.
            effect of the changes on agencies and the public
    Also unclear is the ultimate effect of the changes brought about by 
Executive Order 13422 in terms of the burden that they may impose on 
federal rulemaking agencies, the rules that emerge from the rulemaking 
process, and the transparency of that process to the public. In some 
cases, this lack of clarity is because of the discretion given to 
agencies or OIRA in the review process. For example, the requirement in 
the new executive order that agencies estimate the aggregate costs and 
benefits of upcoming rules listed in their regulatory plans is required 
``to the extent possible.'' It is not clear whether agencies or OIRA 
will ultimately determine what is ``possible.''
    Similarly, the requirement in the ``Principles of Regulation'' 
section of the new executive order that each covered agency identify in 
writing the ``specific market failure'' or the ``specific problem'' 
that it intends to address through a draft regulation is preceded by 
language indicating that this principle should be followed ``to the 
extent permitted by law and where applicable.'' It is unclear whether 
OIRA will permit agencies to decide when the requirement is 
``applicable,'' or whether OIRA will make that determination for them. 
Also unclear is how strictly OIRA will enforce this principle. For 
example, will OIRA consider a statutory requirement that an agency 
develop a final rule by a particular date a ``specific problem'' that 
permits rulemaking to go forward? Finally, although the new executive 
order requires agencies to make this ``market failure'' or ``problem'' 
determination in writing, it does not indicate whether this written 
determination should be made public. Conceivably, therefore, agencies 
could satisfy this requirement by preparing a written determination of 
the need for a rule without showing it to anyone outside government.
    In other cases, the effect of the changes made by Executive Order 
13422 are unclear because they do not appear (at least on the surface) 
to change existing practices. For example, although Executive Order 
12866 previously required agency heads to designate regulatory policy 
officers who reported to them, the new executive order requires each 
agency head to designate one of the agency's presidential appointees to 
that position--a requirement that has stirred considerable 
controversy.\10\ However, available evidence indicates that most agency 
regulatory policy officers are already presidential appointees (e.g., 
agency general counsels), so it appears that the order simply requires 
what most agencies are already doing. Likewise, the new executive order 
states that ``each agency may also consider whether to utilize formal 
rulemaking procedures under 5 U.S.C. 556 and 557 for the resolution of 
complex determinations.'' However, agencies have always been able to 
use formal rulemaking procedures, although they almost always elect not 
to do so because those formal, trial-like processes are generally 
considered more time-consuming, cumbersome, and expensive than informal 
``notice and comment'' rulemaking. Therefore, the new order seems to 
provide discretion where discretion is already allowed (but generally 
not used).
---------------------------------------------------------------------------
    \10\ For example, see David McNaughton, ``Reverse Regulation: With 
Another Nonsense Order, President Bush Quashes Legitimate Rule-making 
by Inserting Political Overseer,'' Atlanta Journal-Constitution, Feb. 
2, 2007, p. A10, which cited Emory University Law Professor William 
Buzbee as saying that this provision ``makes it even more likely that 
regulatory decisions will be made by someone more sympathetic to 
political pressure and ideology than to the federal agency's legal 
duty.'' On the other hand, see Jim Wooten, ``Vouchers, Transit Alert, 
Sen. Obama,'' Atlanta Journal-Constitution, Feb. 2, 2007, p. A11, which 
approved of this provision and said ``There's nothing radical about 
applying cost-benefit analysis to proposed laws and regulations.''
---------------------------------------------------------------------------
    These provisions, however, may be more substantive than they 
initially appear. For example, the new executive order says agencies 
may consider whether to use formal rulemaking procedures ``in 
consultation with OIRA.'' If OIRA is able to persuade agencies during 
those consultations to use formal procedures more frequently, then the 
impact of this provision on the agencies may, in fact, be considerable. 
Also, use of formal rulemaking procedures would not permit the same 
type of public participation that are the hallmark of informal ``notice 
and comment'' rulemaking. By the same measure, if OIRA or the President 
requires agencies to designate new or different presidential appointees 
within the agencies as regulatory policy officers, then this 
provision--particularly when coupled with the newly enhanced authority 
of regulatory policy officers to control regulatory output--could 
become much more important.
    The potential effects of other requirements in the new executive 
order are unclear because of the way existing procedures operate. For 
example, as originally issued in 1993, Executive Order 12866 required 
covered agencies, as part of the regulatory planning process, to 
provide preliminary estimates of the anticipated costs and benefits of 
each planned significant regulatory action. The new executive order 
adds the requirement that each agency provide its best estimate of the 
``combined aggregate costs and benefits of all its regulations planned 
for that calendar year.'' At first impression, an agency could satisfy 
this requirement by simply tallying up the estimates for each 
forthcoming rule listed in the agency's plan. However, agencies' 
regulatory plans rarely contain quantitative estimates for forthcoming 
rules (especially for forthcoming proposed rules that may not be issued 
for as much as a year), instead either narratively describing in 
general terms the expected results of the regulatory action or simply 
indicating that such estimates are ``to be determined.'' Also, 
agencies' regulatory plans are supposed to reflect rules that are 
expected to be issued during the upcoming fiscal year, so the 
requirement that agencies develop estimates of aggregate costs and 
benefits on a calendar year basis seems inconsistent with existing 
practices.
    Other requirements in Executive Order 13422 seem to have an 
indefinite scope, making their effect on agencies and the benefits they 
may provide to the public difficult to determine. For example, the new 
order requires agencies to provide OIRA with ``advance notification of 
any significant guidance documents.'' The order (particularly when 
amplified by the OMB final bulletin on good guidance practices) defines 
a ``guidance document'' in such a way that it covers not only written 
material, but also video tapes, web-based software, and even oral 
statements by agency staff if they are of ``general applicability and 
future effect.'' The order defines a ``significant'' guidance document 
as one that, among other things, ``may reasonably be anticipated'' to, 
among other things, ``lead to an annual effect of $100 million or 
more'' or ``materially alter the budgetary impact'' of entitlements, 
grants, loans, and user fees. However, by definition, guidance 
documents cannot have a binding effect on the public (if they did, they 
would have to be rules subject to ``notice and comment'' and other 
requirements), so it is not clear how guidance can be expected to have 
the effects delineated in the definition. As a result, agencies may 
conclude that none of their guidance documents meet the executive 
order's requirements for OIRA notification. On the other hand, because 
OIRA is given the authority to determine which documents are 
``significant,'' the scope and impact of this requirement may be as 
broad as OIRA determines that it needs to be.
    Supporters of the expansion of presidential review to significant 
guidance documents have said the change will standardize and make more 
transparent the process by which federal agencies develop, issue, and 
use guidance documents.\11\ Executive Order 12866 contains provisions 
that provide a measure of transparency to the rulemaking process, 
requiring (among other things) that agencies disclose to the public the 
changes made to their rules at the suggestion or recommendation of 
OIRA, and that OIRA disclose the rules that are under review at OIRA. 
The executive order also requires that OIRA complete its reviews of 
draft rules within 90 days. However, it is unclear whether these 
transparency and time-limit provisions will apply to agency guidance 
documents, because Executive Order 13422 did not change those sections 
of Executive Order 12866. If these provisions do not apply, then 
agencies may submit guidance to OIRA for review and the public may 
never know that OIRA is reviewing them, for how long, or what changes 
were made at OIRA's direction. If the provisions are deemed applicable 
to guidance documents, then the goals of improved transparency and 
standardization would appear to be supported.
---------------------------------------------------------------------------
    \11\ John Sullivan, ``White House Sets Out New Requirements for 
Agencies Developing Rules, Guidance,'' citing Paul Noe, partner at C&M 
Capitolink, who was a counselor to former OIRA Administrator John 
Graham.
---------------------------------------------------------------------------
                       effect on balance of power
    Finally, in a larger, constitutional sense, it is unclear what 
impact the changes brought about by Executive Order 13422 will have on 
the balance of power between the President and Congress in this area. 
Congress has a vested interest in the regulations that emerge from the 
rulemaking process. Congress created each regulatory agency and enacted 
the legislation underpinning each proposed and final rule. Congress may 
also establish the criteria under which federal agencies can issue 
rules. For example, some statutes direct agencies to establish 
regulations based solely on what is required to protect human health, 
and may require agencies to regulate with a margin of safety.\12\ 
Therefore, presidentially initiated changes that may affect these 
congressional directives, such as the requirement that each agency 
identify a specific ``market failure'' or ``problem'' before issuing a 
rule, are naturally of potential interest to Congress.
---------------------------------------------------------------------------
    \12\ For example, Section 109(b)(1) of the Clean Air Act (42 U.S.C. 
Sec. 7409(b)(1)) instructs the Environmental Protection Agency to set 
primary ambient air quality standards ``the attainment and maintenance 
of which . . . are requisite to protect the public health'' with ``an 
adequate margin of safety.''
---------------------------------------------------------------------------
    Another area of potential congressional interest involves the 
requirement that agency regulatory policy officers be presidential 
appointees. Executive Order 13422 does not indicate whether these 
appointees should be subject to Senate confirmation. Senate 
confirmation of presidential appointees is generally considered a way 
to strengthen congressional influence over agency decision making, 
because (among other things) nominees often agree during the 
confirmation process to appear subsequently before relevant 
congressional committees. The most recent ``Plum Book'' indicates that 
virtually all presidential appointees in regulatory agencies are 
subject to Senate confirmation.\13\ In some agencies (such as the 
Environmental Protection Agency, the Department of Transportation, and 
the Department of Labor), all presidential appointee positions are 
Senate confirmed (unless one counts noncareer senior executives, who 
are appointed by agency heads subject to White House approval). 
Therefore, it appears that most officials designated as regulatory 
policy officers will be (or will already have been) subject to Senate 
confirmation.
---------------------------------------------------------------------------
    \13\ U.S. Congress, House Committee on Government Reform, United 
States Government Policy and Supporting Positions, Nov. 22, 2004. For 
example, the Department of Transportation had 32 positions subject to 
presidential appointment with Senate confirmation (PAS positions) in 
2004, but none without Senate confirmation (PA positions). The 
Environmental Protection Agency had 14 PAS positions, but no PA 
positions; the Department of Labor had 19 PAS positions, but no PA 
positions. On the other hand, the Department of Homeland Security had 
18 PAS positions, but also had six PA positions.
---------------------------------------------------------------------------
    In those agencies with presidential appointees who are not Senate 
confirmed, one could argue that it is the role of Congress to 
prescribe, in law, whether the regulatory policy officer position 
should be subject to Senate confirmation. To take this argument 
further, even if an agency head designated a person in a Senate-
confirmed position as the agency's regulatory policy officer, one could 
argue that this person would have to undergo another confirmation 
process because the scope of the person's responsibilities had changed 
significantly.
    One other element of this process is also unclear, and may 
represent a change in the scope of presidential influence in 
rulemaking. The requirement that each agency head appoint one of the 
agency's presidential appointees as the regulatory policy officer does 
not apply to independent regulatory agencies. However, as originally 
issued, Executive Order 12866 requires independent regulatory agencies 
to develop regulatory plans, and the requirement in Executive Order 
13422 that the ``Regulatory Policy Office'' approve items included in 
the plan and the commencement of all rulemaking amends that section of 
Executive Order 12866. Therefore, this provision could arguably be read 
to require that independent regulatory agencies have presidential 
appointees as regulatory policy officers, thereby extending the reach 
of the President and presidential review into agencies that had not 
previously been subject to such scrutiny (and commensurately lessening 
the agencies' relationships with Congress, which created them to be 
more independent of the President).
                                 ______
                                 
    Madam Chairman, that concludes my prepared statement. I would be 
happy to answer any questions that you or other Members of the 
Subcommittee might have.

                               ATTACHMENT




































    Ms. Sanchez. I appreciate your testimony, Dr. Copeland, and 
you actually went under the 5 minutes.
    Mr. Noe, you are up.

  TESTIMONY OF PAUL R. NOE, PARTNER, C&M CAPITOLINK LLC, AND 
COUNSEL, CROWELL & MORING ENVIRONMENT & NATURAL RESOURCES GROUP

    Mr. Noe. Chairman Sanchez, Ranking Member Cannon, Chairman 
Conyers, distinguished Members of the Subcommittee, my name is 
Paul Noe. I want to thank you for the honor to testify before 
you on recent changes to the regulatory review process.
    While I am in the private sector now, I have had the 
privilege to spend most of my career in public service, much of 
it on efforts to improve the regulatory process. From 1995 to 
2001, I served on the Senate Governmental Affairs Committee as 
counsel to Chairman Bill Roth, Ted Stevens, and Fred Thompson 
on bipartisan regulatory reform efforts. Then until last May, I 
worked as counselor to Dr. John Graham at OMB's Office of 
Information and Regulatory Affairs. From my experience in 
Congress and the Executive Branch, I developed a deep 
appreciation for the importance of a coordinated interagency 
regulatory review process. I also know that the public could 
not expect more talented or dedicated public servants than 
those I worked closely with at my time at OMB.
    I should note that my testimony is my personal opinion, and 
in my view, the recent changes to Executive Order 12866 and the 
accompanying OMB bulletin on good guidance practices are 
important and salutary steps toward good governance.
    When President Bush issued the amendments to clarify and 
strengthen President Clinton's Executive Order 12866, the 
reactions were remarkable, in my view, compared with the actual 
language. An attachment to my written statement shows how the 
main Bush amendments modified President Clinton's Order. I 
would like to make just a few points now about how the new 
Order and the OMB bulletin can improve the regulatory process.
    First, extending the existing regulatory review process to 
significant guidance documents is an important improvement. The 
Clinton Order appropriately sorted significant regulations from 
the insignificant, but it neglected guidance documents, and 
there is no doubt that guidance documents can be significant. 
Concerns have been raised by many quarters that agency 
guidances should be better coordinated, more consistent, more 
transparent and accountable, and not be used as legally binding 
regulations. There is a very strong foundation for these good 
guidance practices. In fact, Congress required FDA to issue the 
good guidance regulations that were a model for OMB when it 
designed its bulletin.
    Second, both the Clinton and the Bush Executive Order 
required the agencies to identify the problem that justifies 
regulation before proceeding, whether that problem is a market 
failure, or something else. Although I think the Clinton market 
failure language was adequate, the Bush Order makes a helpful 
but modest change by asking the agencies to identify the 
problem more precisely and in writing to clarify the merits of 
going forward.
    The Bush Orders language on market failure is simply not 
new, nor is it radical, as some have suggested. In fact, very 
similar language and much greater detail is in the Clinton 
administration's 1996 guidelines for economic analysis under 
Executive Order 12866.
    I would submit that carefully considering market failures 
is hardly a subversive way of thinking, and indeed, some of the 
greatest regulatory successes were made possible by market-
based approaches that are based upon an understanding of market 
failure. For example, in the 1990 Clean Air Act amendments, 
Congress established a sulfur dioxide emissions training regime 
that is one of the greatest success stories in the history of 
environmental law. The results of that program were so 
compelling that OMB supported EPA adopting this same approach 
in the Clean Air Interstate Rule that Mr. Aitken mentioned. The 
CAIR rule will cut power plant emissions dramatically by about 
70 percent without the economic disruptions and hardships 
associated with traditional command and control regulation. In 
my view, it would be most unfortunate if the concept of market 
failure and market based approaches that flow from it become 
politicized at a time when they are critically important tools 
in the regulatory policy tool kit.
    Ms. Sanchez. Mr. Noe, you have hit your time, if you could 
just briefly conclude.
    Mr. Noe. Finally, I would like to say that some have 
alleged the concept of regulatory policy officers is a radical 
change from the status quo. I respectfully disagree, and I 
would like to detail that further in question and answer.
    In conclusion, regulatory policy is important and often 
controversial. It is commendable that this Subcommittee is 
making the effort to view carefully these recent changes and to 
understand them. In my view, a careful review of the language 
will allay any concerns.
    Thank you.
    [The prepared statement of Mr. Noe follows:]
                   Prepared Statement of Paul R. Noe


















    Ms. Sanchez. Thank you, Mr. Noe.
    Professor Strauss, please proceed with your testimony.

TESTIMONY OF PETER L. STRAUSS, PROFESSOR, LCOLUMBIA UNIVERSITY 
                         SCHOOL OF LAW

    Mr. Strauss. Chairman Sanchez, Ranking Member Cannon, 
Chairman Conyers, distinguished Members, thank you very much 
for inviting me to testify before you today. Given the time 
constraints, I hope you won't mind if I launch right into what 
I have to say and not who I am.
    Our Constitution is very clear, in my judgment, in making 
the President an overseer of all the varied duties that you 
create for Government agencies to perform. But the Constitution 
is equally clear in permitting you to assign those duties to 
them, to the agencies, and not to the President. He is not the 
decider, but the overseer of decisions by others. When the 
President fails to honor this admittedly subtle distinction, he 
fails in his constitutional responsibility to take care that 
the laws be faithfully executed. The assignment of decisional 
responsibility to others is a part of the laws to whose 
faithful execution he is obliged to see.
    Executive Order 13422 amends the longstanding Executive 
Order 12866 in a number of ways that you have heard about. I am 
going to focus on two aspects of the Order that, in my 
judgment, threaten this difficult but necessary balance between 
politicians and experts, between politics and law, that 
characterizes agency rulemaking.
    First, amendments to sections 4 and 6 effect a dramatic 
increase in the President's asserted control over regulatory 
outcomes--an increase that, in my judgment, requires 
congressional authorization that has not occurred.
    The second amendment threatens a revival of a discredited, 
remarkably expensive rulemaking procedure that delivers 
substantial control over the timing and cost of rulemaking into 
the hands of private parties, just those whose dangerous 
activities proposed regulations are generally intended to 
limit.
    So first as to presidential control of rulemaking agendas.
    The regulatory plan was first rationalized as an aid to the 
political heads of administrative agencies, requiring career 
staff to reveal their priorities and plans for rulemaking to 
agency leadership in the same way that the annual budget 
process does. It, I think, is sensible in that respect. It 
injects the agency's political leadership into the picture 
before matters get set in concrete. While there have been some 
hints that it might be used for presidential control over the 
years, trying to follow that issue I have never heard a whisper 
of it until this Order.
    President Bush's Order purports to confer legal authority 
on a junior officer in each agency, whose identity has to be 
coordinated with OIRA, to control the initiation of agency 
rulemaking and, it seems to be intended, its continued 
processing in the agency. Conferring this kind of authority is 
Congress's business, not the President's, and I would urge you 
not to do it. It diffuses political authority within the agency 
that you would generally entrust to the agency head.
    Congress, as well as the President, has political 
relationships with the agency head. While the President can 
cashier an agency head whose work he doesn't like, that comes 
at high political cost, including having to get the Senate's 
concurrence on a successor.
    A well-connected friend remarked to me ``I have personally 
watched two agency heads tell the President to pound sand. They 
wouldn't do what they told and the President knew they had the 
political capital to win.'' Junior officers appointed under 
close White House supervision, knowing that they can be 
dismissed at any moment--that is what it means to be a 
presidential appointee--don't have this political capital. 
There isn't much chance that firing them will have political 
costs for the White House. They are not ever going to be 
telling the President or OIRA to pound sand.
    There are a number of gaps in the Order that make this 
problem much worse, in my judgment. First, the Clinton 
Executive Order provided that the regulatory policy officer 
``shall report to the agency head.'' That language has been 
deleted from the Executive Order. Second, the amended Order 
doesn't tell us what kind of presidential appointee the 
regulatory policy officer is to be. You have verbal assurances 
oh, it will be someone confirmed by the Senate, albeit not for 
that purpose. Here is a road around constraints that the 
Constitution insists upon, that people who exercise major 
authority in Government can do so only with the Senate's 
blessing, as well as the President's. The consequence is 
divided Administration within each agency, with real power 
vested in a shadow officer who answers basically to the 
President, not to the agency head.
    Ms. Sanchez. Mr. Strauss, you have hit your time. If you 
could just conclude briefly.
    Mr. Strauss. Okay.
    So let me conclude, if I may, with a suggestion for you. It 
seems to me that this is a simple affront to two of Congress's 
responsibilities: to confer organization and authority on 
elements of Government by enacting statutes, and to approve in 
the Senate all appointments to high office. You couldn't change 
it directly, that would encounter a presidential veto, but 
maybe there are the do not spend riders for appropriations 
measures that have been used in the past that could be employed 
to keep the President from paying salary to persons who are 
doing work that you have not designated for those persons to 
do.
    In my printed remarks, I also address the question of 
formal rulemaking, and I would be happy to address that in 
question and answers.
    [The prepared statement of Mr. Strauss follows:]
                 Prepared Statement of Peter L. Strauss
    President Bush's recent amendments to Executive Order 12866Thank 
you very much for inviting me to testify before you today. I am a 
scholar of administrative law, who has had the privilege of teaching 
that subject at Columbia Law School for the past 36 years and who for 
two years in the 1970's had the honor of serving as the first General 
Counsel of the Nuclear Regulatory Commission. I was later Chair of the 
ABA's Section of Administrative Law and Regulatory Practice, a 
consultant to the ABA's Coordinating Committee on Regulatory Reform, 
and long-time chair of the Section's Rulemaking Committee. My 1984 
analysis of agency relations with the President won its annual prize 
for scholarship. I have continued since then to write about separation 
of powers and, in particular, the President's constitutional 
relationship to the agencies on which Congress has conferred regulatory 
authority. Attached to this testimony is the current draft of my most 
recent writing on this subject, an essay to be published this summer by 
the George Washington Law Review entitled ``Overseer or `The Decider'--
The President in Administrative Law.'' This draft will have to be 
revised in light of the executive order you are hearing about today, 
but its bottom line will not. Our Constitution is very clear, in my 
judgment, in making the President an overseer of all the varied duties 
the Congress creates for government agencies to perform. Yet our 
Constitution is equally clear in permitting Congress to assign these 
duties to them and not to the President. He is not ``the decider,'' but 
the overseer of decisions by others. When the President fails to honor 
that admittedly subtle distinction, he fails in his constitutional 
responsibility to ``take Care that the Laws be faithfully executed.'' 
The assignment of decisional responsibility to others is a part of 
those laws to whose faithful execution he must see.
    Our subject is Executive Order 13422, 72 Fed. Reg. 2763 (January 
23, 2007), that amends the long standing Executive Order 12866, 
concerning regulatory planning and review. Others here today may speak 
to those elements of the order that reach guidance documents, another 
of its important elements, and that heighten the specificity of the 
analysis the order requires agencies to perform. I will leave those 
elements largely to them. Let me say only, as a long-time advocate of 
the proper use of guidance to help the public deal with agency 
regulatory standards, that I find the extension of the order to 
guidance documents possibly troubling only in its details. As a long-
time supporter, as well, of the President's constitutional authority 
and wisdom in commanding regulatory analyses in connection with 
important rulemakings, I find that heightened specificity troubling 
only insofar as it may be administered to require agencies to decide 
matters on the basis of factors Congress has not authorized them to 
consider.
    In these remarks I want to address two other aspects of the order, 
that I find particularly troubling--first, enhancements to the existing 
provisions respecting the regulatory planning office and officer that 
amended Sec. 4(c)(1) of E.O. 12866 by adding

        Unless specifically authorized by the head of the agency, no 
        rulemaking shall commence nor be included on the Plan without 
        the approval of the agency's Regulatory Policy Officer,

and Sec. 6(a)(2) of EO 12866 by adding

        Within 60 days of the date of this Executive order, each agency 
        head shall designate one of the agency's Presidential 
        Appointees to be its Regulatory Policy Officer, advise OMB of 
        such designation, and annually update OMB on the status of this 
        designation.

and second, an entirely new idea added to Sec. 6(a)(1) of EO, requiring 
that

        In consultation with OIRA, each agency may also consider 
        whether to utilize formal rulemaking procedures under 5 U.S.C. 
        556 and 557 for the resolution of complex determinations.

    Both additions threaten to disturb the difficult but necessary 
balance between politicians and experts, between politics and law, that 
characterizes agency rulemaking. The first threatens a dramatic 
increase in presidential control over regulatory outcomes, to an extent 
Congress has not authorized and in my judgment must authorize. The 
second threatens redeployment of a discredited, remarkably expensive 
rulemaking procedure that delivers substantial controls over the timing 
and cost of rulemaking into the hands of private parties--notably, I 
fear, those whose dangerous activities proposed regulations are 
intended to limit.
             i. presidential control of rulemaking agendas
    When President Reagan elaborated the idea of a regulatory agenda in 
Executive Order 12498,\1\ Christopher DeMuth, who had responsibilities 
for these issues in his administration, characterized it as essentially 
an aid to the political heads of administrative agencies--requiring 
career staff to reveal their priorities and plans for rulemaking to 
agency leadership, just as the annual dollar budget process does, and 
consequently injecting the agency's political leadership into the 
picture before matters got set in bureaucratic concrete. Seen in this 
way, the measure supported Congress's assignments of responsibility--it 
is, after all, on the agency's political leadership alone that 
Congress's statutes confer the power to adopt rules. To judge by its 
own actions in measures like the Regulatory Flexibility Act, Congress 
like the private community was also attracted by the transparency and 
added opportunities for broad public participation early notice of 
rulemaking efforts would provide. President Clinton's Executive Order 
12866 continued and in some ways strengthened this measure, requiring 
agencies to designate a regulatory policy officer who would coordinate 
general issues under the Executive Order--in effect be the agency's 
designated contact person for the OMB Office of Information and 
Regulatory Affairs (OIRA). While there were hints that it might be used 
to effect presidential control over agency policy choices, after years 
of paying fairly close attention to this question in my scholarship and 
professional associations, I have never heard that that had happened. 
On specific issues of importance to him, as Dean Elena Kagan of Harvard 
has detailed, President Clinton through his domestic policy office--not 
OIRA--would issue directives to particular agencies on particular 
issues of importance to his program. President Bush's first head of 
OIRA, John Graham, initiated a practice of occasional ``prompt 
letters'' publicly directing agency attention to matters that he 
concluded might warrant regulation. But a general centralization of 
actual control over regulatory agendas, so far as I could tell, was 
never effected. Until this order.
---------------------------------------------------------------------------
    \1\ A predecessor provision may be found in President Carter's E.O. 
12044.
---------------------------------------------------------------------------
    President Bush's order purports to confer authority on a junior 
officer in each agency, whose identity must be coordinated with OIRA, 
to control the initiation of agency rulemaking and, it seems to be 
intended, its continued processing within the agency. I would have 
thought conferring this kind of authority Congress's business, not 
something the President is authorized to accomplish on his own say-so. 
And if Congress were to ask my judgment about such a step I would call 
it unwise--as a diffusion of political authority within the agency, 
that Congress generally entrusts to the agency head. While legislation 
may permit the head to subdelegate some of her authority to persons she 
trusts and will take responsibility for, it wisely has rarely if ever 
permitted subdelegation of ultimate control over rulemaking, and it 
certainly would be unwise to permit that to persons who are controlled 
by others outside the agency. Congress as well as the President has 
political relationships with the agency head. While the President has a 
formal capacity to discipline agency heads whose work displeases him, 
that capacity is sharply limited by the political costs of doing so--
including the necessity of securing senatorial confirmation of a 
successor. As a well-connected friend of mine recently remarked,

        I personally have watched two agency heads tell the President 
        to pound sand--they wouldn't do what they were told and the 
        President knew they had the political capital to win.

Junior officers, given their responsibilities in a process under close 
White House supervision, knowing as ``presidential appointees'' that 
they can be dismissed at any moment, and lacking both this political 
capital and much prospect that their dismissal would have, in itself, 
political costs for the White House, are not ever going to be telling 
the President or OIRA to pound sand.
    A number of gaps in the order make this problem, in my judgment, a 
lot worse.

          First, the Clinton executive order reinforced 
        ordinary agency hierarchy by providing in Sec. 6(a)(2) that the 
        regulatory policy officer ``shall report to the agency head.'' 
        That language has been omitted. Now it is at least ambiguous to 
        whom the RPO reports. Anyone aware of the change--the agency 
        head, for example--will know that this mandatory relationship 
        has been eliminated.

          Second, the amended order now requires that the 
        ``policy officer'' be a ``presidential appointee,'' but it 
        doesn't tell us what kind of presidential appointee--one who 
        must also be confirmed by the Senate? One the President can 
        name without need for confirmation? Perhaps a non-career 
        officer in SES, whose appointment occurs only after White House 
        clearance and with a presidentially-signed commission? If it is 
        either of the latter, then the President has found his way 
        around the constraints the Constitution insists upon, that 
        people who exercise major authority in government can do so 
        only with the Senate's blessing as well as his. Then it becomes 
        obvious that the President has created a divided administration 
        within each agency, with real power vested in a shadow officer 
        who essentially answers only to him. As my friend also 
        remarked, this would be ``disastrous.''

               First as a practical matter it takes regulatory power 
        away from the head of the agency where Congress has vested it. 
        Second, it continues the political accretion of power in the 
        bureaucracy of the White House, away from public scrutiny. But, 
        the worst part from my vantage point is that it treats the 
        agency as a conquered province--the career staff is explicitly 
        told it is distrusted and is not to make recommendations to the 
        agency head but to the White House's political officers. That 
        in turn destroys communication between the staff and the 
        political level of the agency. And, the agency is quite 
        ineffective when that happens.

          Third, it is unclear to what extent the new controls 
        extend to the independent regulatory commissions. Section 4's 
        language, including the requirement that ``Unless specifically 
        authorized by the head of the agency, no rulemaking shall 
        commence nor be included on the Plan without the approval of 
        the agency's Regulatory Policy Officer,'' is explicitly 
        applicable to independent regulatory commissions. Section 6, 
        that defines the regulatory policy officer's appointment, is 
        not. As a legal requirement of agencies Congress has chosen to 
        constitute as independent regulatory commissions, this is truly 
        extraordinary.

          The final gap I want to note for you, one of signal 
        importance in my judgment, concerns political access. Among the 
        elements that have made the Executive Order regime acceptable 
        to Congress, and I might add to much of the academic community, 
        are the commitments it contains to a professionalized, 
        unusually transparent and apolitical administration. Oral 
        contacts with outside interests are limited to OIRA's senate-
        confirmed Administrator or his particular designee; agencies 
        attend any meetings with outsiders; written communications from 
        outsiders are also logged; and all of this information is 
        publicly disclosed. My understanding is that Congress has 
        properly insisted on these elements of transparency, as a 
        condition of its acceptance of this generally valuable regime. 
        The OIRA website, within a generally closed White House 
        environment, has been a remarkable monument to the worth of 
        this insistence.\2\ The professional qualities, too, of OIRA's 
        staff, and the striking qualities of its leadership over time, 
        have offered reassurance. Notice that none of these constraints 
        are made applicable to the Regulatory Policy Officer or his 
        office.
---------------------------------------------------------------------------
    \2\ This is not the setting to explore the accounts I am beginning 
to hear of increasing, and in my judgment, regrettable, politicization 
and transparency violations in OIRA functioning--for example, 
deliberate holding back the clock on formal submission of agency 
proposals to OIRA, so that negotiations and ``adjustments'' can be 
complete before the transparency provisions of EO 12866 kick in. See 
United States General Accounting Office, Report to Congressional 
Requesters,''RULEMAKING, OMB's Role in Reviews of Agencies' Draft Rules 
and the Transparency of Those Reviews'' GAO-03-929, September 2003, pp. 
47-48. When evidence of OIRA changes has been available, it has been 
available to assist reviewing courts in determining whether agencies 
have themselves reached the decisions statutes commit to their 
responsibility, and done so only on consideration of the statutorily 
relevant factors. See Riverkeeper, Inc. v. EPA, No. 04-6692-ag(L), 2007 
U.S. App. LEXIS 1642 (2d Cir. Jan, 25, 2007), where the published 
documents showed 58 ``major'' changes having been made ``at the 
suggestion or recommendation'' of OIRA at the proposal stage, and 95 
``major'' changes made ``at the suggestion or recommendation'' of OIRA 
in the rule as finally promulgated.

    So the President has attempted to do by executive order something 
that, in my judgment, can only be done by statute. Moreover, in doing 
so he threatens excessive politicization of agency rulemaking, the 
subversion of a public process by back-corridor arrangements, and 
compromising the lines of authority Congress has created. These 
officers will, in practice, be answerable only to him, as is 
underscored by the disappearance of ``shall report to the agency head'' 
from Sec. 6(a)(2). Their conversations with him, his lieutenants, and 
any political friends he may send their way will be invisible to us.
    You will likely hear from the other side that the President is, 
after all, our chief executive, that our Constitution embodies the 
judgment that we should have a unitary executive, and so even if the 
result were to convert agency judgments about rulemaking into 
presidential judgments, that would only be accomplishing what the 
Constitution commands. This is the subject of the writing I have 
attached to this testimony. In my judgment it is not only an erroneous 
argument, but one dangerous to our democracy. The President is 
commander in chief of the armed forces, but not of domestic government. 
In domestic government, the Constitution is explicit that Congress may 
create duties for Heads of Departments--that is, it is in the heads of 
departments that duties lie, and the President's prerogatives are only 
to consult with them about their performance of those duties, and to 
replace them with senatorial approval when their performance of those 
duties of theirs persuades him that he must do so. This allocation is 
terribly important to our preservation of the rule of law in this 
country. The heads of departments the President appoints and the Senate 
confirms must understand that their responsibility is to decide--after 
appropriate consultation to be sure--and not simply to obey. We cannot 
afford to see all the power of government over the many elements of the 
national economy concentrated in one office.
    Professor Peter Shane, a highly respected scholar of the presidency 
and a former lawyer in the Office of Legal Counsel, put the matter this 
way in a recent discussion of President Bush's use of signing 
statements, which I know is not our subject today.

          The Bush Administration has operated until recently in 
        tandem--can there be a three-part tandem?--with Republican 
        Congresses and a Supreme Court highly deferential to executive 
        power. . . . It has not only insisted, in theory, on a robust 
        constitutional entitlement to operate free of legislative or 
        judicial accountability, but it has largely gotten away with 
        this stance. And that success--the Administration's unusual 
        capacity to resist answering to Congress and the courts--has 
        fed, in turn, its sense of principled entitlement, its theory 
        that the Constitution envisions a Presidency answerable, in 
        large measure, to no one.
          Critics of the Administration have not infrequently charged 
        that the Administration's unilateralism is antagonistic to the 
        rule of law. After all, the ideal of a ``government of laws, 
        not of men'' seems conspicuously at odds with a President's 
        expansive claims of plenary authority. But no sane President 
        claims to be above the law and, indeed, President Bush takes 
        pains repeatedly to defend his controversial actions as legal, 
        including the widespread warrantless electronic surveillance of 
        Americans, the incarceration of U.S. citizens as enemy 
        combatants, and the intense interrogation of detainees in Iraq 
        and Afghanistan. I doubt that President Bush thinks himself 
        antagonistic to the rule of law; he just has a different idea 
        of what the rule of law consists of. But what the 
        Administration seems to believe in is a version of the ``rule 
        of law'' as formalism. It is the rule of law reduced to ``law 
        as rules.'' Under the Bush Administration's conception of the 
        rule of law, Americans enjoy a ``government of laws'' so long 
        as executive officials can point to some formal source of legal 
        authority for their acts, even if no institution outside the 
        executive is entitled to test the consistency of those acts 
        with the source of legal authority cited. . . .
          The Bush signing statements, like the doctrines they 
        advocate, are a rebuke to the idea of the rule of law as norms 
        or process. They are a testament to the rule of law as law by 
        rules, preferably rules of the President's own imagination.

This executive order is cut from the same cloth.
    What might Congress do about this? This looks like a simple affront 
to two of Congress's responsibilities--to confer organization and 
authority on elements of government by enacting statutes, and to 
approve (in the Senate) all appointments to high office (thus creating 
one of the Constitution's many checks on unilateral authority in any 
branch). Change here, though, would likely encounter a presidential 
veto. Can you find a way to avoid that? There remains the power of the 
purse. While the use of ``do not spend'' riders in appropriations 
measures has often been criticized, perhaps this is a setting in which 
such a rider would be appropriate, attached to a budget the President 
will find himself compelled to sign. Why should Congress tolerate the 
expenditure of government funds to pay the salary of one whose powers 
it has not authorized, and whose functioning can prove destructive of 
the public institutions it has worked to create?
                   ii. outsider control of rulemaking
    I can be much briefer in addressing the provision of the executive 
order that invites agencies to ``consider whether to utilize formal 
rulemaking procedures under 5 U.S.C. 556 and 557 for the resolution of 
complex determinations,'' ``in consultation with OIRA.'' This is 
permissively worded, but one must wonder how permissive its 
implementation will be. And the point to note is that the difference 
between ``formal rulemaking procedures under 5 U.S.C. 556 and 557'' and 
the notice-and-comment procedures agencies generally employ, is that 
the former put rulemaking under the procedural control of an 
administrative law judge, a person trained in trials not policy-
setting, and confer on participants in the rulemaking the kinds of 
rights parties to trials have--rights to put on witnesses, engage in 
cross-examination, and in other ways slow rulemaking down and add to 
its internal costs. It is, simply, the delivery of the henhouse to the 
foxes.
    Experience with on-the-record rulemaking led to its virtual 
abandonment decades ago, and for good reason. Those familiar with the 
process have recognized for 40+ years that it is simply too clumsy to 
work except in very isolated instances. In its 1973 judgment in U.S. v. 
Florida East Coast Rwy, 410 U.S. 224, the Supreme Court essentially 
ruled that agencies did not need to use it in the absence of the 
clearest of statutory instructions. Congress hasn't been giving those 
instructions, and agencies haven't been using that process ever since, 
and for good reason. Experience has taught us that the use of formal 
rulemaking is cumbersome and out of all proportion to its benefits 
because trial-type hearings are poorly suited for determinations that 
turn on policy judgments, and too subject to unwarranted extension and 
complication by the participant parties. Why, then, revive it now? Just 
to help one's friends slow things down--throw a good dose of sand into 
the gears of rulemaking?
    Thank you for the opportunity to address you today. I would be 
happy to answer any questions you might have.

    Ms. Sanchez. Thank you, Professor Strauss.
    I want to thank all of the panelists for testifying today, 
and I want to remind you that your full written statements will 
be placed into the record.
    We are now going to proceed with questions under the 5-
minute rule, and I will begin by recognizing myself for 5 
minutes.
    Mr. Aitken, you noted that Executive Order 13422 encourages 
rulemaking agencies to consider using the Administrative 
Procedure Act's formal rather than informal rulemaking 
procedures for the agency's resolution of complex 
determinations. Why do you think that that encouragement is 
necessary?
    Mr. Aitken. Thank you for your question.
    The reason that that provision is in the Executive Order is 
simply to remind agencies that under the Administrative 
Procedure Act, they have a tool in their tool belt that they 
can use to resolve complex determinations. As I mentioned in my 
prepared testimony, that provision has been in the 
Administrative Procedure Act for decades. Agencies have been 
able to use that authority for decades, and the Executive Order 
simply reminds the agencies of this authority and encourages 
them to consider it.
    Ms. Sanchez. But is there any evidence to the contrary that 
they don't use the formal rulemaking procedures when 
appropriate and necessary?
    Mr. Aitken. I don't think the Executive Order is premised 
on a view that agencies were using it insufficiently; it simply 
reminds agencies that there is a provision in the APA that is 
available for their use if they believe it is appropriate.
    Ms. Sanchez. Okay, thank you.
    Professor Katzen, what do you believe Congress should do 
about this Executive Order? Congress, as Professor Strauss 
suggested, could put a rider on OMB's or an agency's 
appropriation prohibiting the implementation of the Order, or 
is there something else that Congress can do?
    Ms. Katzen. As an alum of OMB, I am always somewhat nervous 
about talking about riders on spending bills.
    I think, first and foremost, you have done the right thing 
by calling a hearing. Oversight by Congress is incredibly 
important and has not been in vogue for the last several years. 
Knowing that you will be held accountable and asked why is this 
section in there, what does that section do, what is the 
problem, has a very salutary effect. I also believe that Dr. 
Copeland has put his finger on something with respect to the 
appointments power and Senate confirmation. I personally 
believe that if you are going to hold the position of 
regulatory policy officer as it is described in here and not be 
reporting directly to the head of the agency, which was the way 
we had structured the job, then it would be appropriate for the 
Senate to inquire as to both the competence and the temperament 
and perhaps the regulatory philosophy of the person who would 
hold that job. And so I would use the power of appointment.
    Authorizing Committees could also do legislative work. As I 
said, these are the agencies. These are not free agents. They 
do what Congress has told them to do, and if Congress says that 
a factor is to be--is irrelevant or not to be considered, the 
agencies will follow and the Executive Order as originally 
structured said ``subject to existing law,'' that means subject 
to what you all say. So I would use those routes.
    Ms. Sanchez. I appreciate your answer.
    Mr. Noe, will Executive Order 13422, as asserted by New 
York Times columnist Paul Krugman, ``make it easier for 
political appointees to overrule the professionals, tailoring 
Government regulations to suit the interests of companies,'' 
and if not, please explain.
    Mr. Noe. Madame Chair, I think the answer is no because I 
think that the changes that are made, for example, to the 
provisions on regulatory policy officer are insignificant, 
other than creating greater, not less, political 
accountability.
    This position was created by the Clinton Order. There was 
no constraint on who could serve as a regulatory policy 
officer. You could have had someone who was non-accountable to 
the Congress serve in that position. Under the change, the 
benefit for Congress will be that person will serve in a 
congressionally created position that is typically subject to 
Senate confirmation, and typically engages with the Congress in 
oversight. So I think as far as oversight committees go, this 
Executive Order is good news.
    Ms. Sanchez. Professor Katzen, I notice that you did not 
seem to agree. Could you just briefly respond to that?
    Ms. Katzen. Under the Clinton Order, the regulatory policy 
officer had to report directly to the agency head. That was the 
accountability within the agency.
    Ms. Sanchez. Okay, thank you.
    I would now like to recognize the Ranking Member of my 
Subcommittee, Mr. Cannon, for 5 minutes.
    Mr. Cannon. I think we have identified the problem, and it 
is not you, Ms. Katzen, it is the mic--the button. We are going 
to have to get that fixed.
    It has been very interesting hearing, a little more 
animated than I would have guessed at the outset. We have Dr. 
Copeland, who is very jealous of Congress's prerogatives and 
his comments were directed that we have two people that have 
the view that Government and bureaucracy has a tendency to 
perpetuate itself and sometimes perpetuate stupidity. We have 
two people, Professor Katzen and Professor Strauss, who believe 
that bureaucracy should be a counterweight to the role of the 
President. And of course, that is, at least in this given 
presidency, you have some conflict with the stayed problems 
that this Administration has decided exist within the 
regulatory context. I personally served in an agency. I had 100 
lawyers who worked for me. We developed regulations and I have 
the greatest respect for civil servants. The problem is civil 
servants are part of bureaucracy, and bureaucracies don't 
change very quickly.
    So what we are dealing with here, it seems to me at a 
higher level, is how we deal with a world that has changed 
radically around us and has resulted in a proliferation of 
Government law in the context where we don't have--we, that is, 
Congress, does not have the kind of controls that these--
Professor Katzen and Professor Strauss and Dr. Copeland are 
insisting are important here.
    Let me just--one example that I had, a political friend 
came in and told me that I should take the Code of Federal 
Regulations into my next meeting. I said, do you know how tall 
that is? And then he raised his arm about six feet high, and I 
said when was the last time you saw the Code of Federal 
Regulations? I brought him down here and showed him our 
library--Majority's library. Our library, I guess, but in their 
side. He was dumbfounded. He was absolutely dumbfounded 
because--I don't know what it is, but my guess is that if you 
stack the Code of Federal Regulations up it would be about 25 
or 30 feet, far more than what he had anticipated, and that 
doesn't include the guidance documents and the informal 
guidance which never gets in a document. What we have here is a 
Government that has vastly insinuated itself in the fabric of 
American life. And Professor Strauss, you mentioned that we are 
dealing with dangerous people who we have to control. Granted, 
there are people who will take advantage. We need sometimes to 
have some control, especially--well, there are some things we 
need to control and probably some things that we just interfere 
with and cause pain and suffering by trying to control.
    And so what I would hope--we have worked together over a 
long period of time, many of us, on the APA. Many of these 
issues are going to be--are issues that we need to look at from 
the very highest level. In other words, there are differences 
that are very apparent in this discussion and I think those are 
legitimate differences, but we need to take a look at how we 
actually govern ourselves and look back at the APA to get some 
guidance.
    We need to come up with a thoughtful bipartisan new 
approach to the APA that will allow us to deal with this much 
more complex world that we are engaged in, because really what 
we are talking about here--I mean, for people who don't 
understand this discussion, we are not talking about 
regulations. We are not talking about law. We are not talking 
about that law which is passed by Congress and signed by the 
President. We are talking about guidance when a company or a 
person has a problem understanding what a regulation means in 
his evolving business environment or other environment in his 
life, and he says tell me what this means. And that answer can 
come from a bureaucrat in a regional office who may not want to 
be bothered, or it can come through a process that evolves into 
a directive that has profound influence. And in the world today 
with oil at 70, 80, 90, maybe at some point in the future $100 
a barrel, that drives issues and creativity and that is just 
one of the many things that are happening in our society. 
Communication has evolved rapidly. That drives innovation and 
we find ourselves regulating in a context of a presumed danger, 
when at the same time we have great opportunities for a better 
society.
    And so I am--I actually very rarely do this. I have 
lectured and I apologize, but what I hope comes out of this 
discussion is that instead of blaming this President--and by 
the way, Professor Katzen and Professor Strauss, your comments 
were well-taken and I appreciate them, and you have educated me 
on the subject. But this seems to be a canard. It seems to be 
off the track of what we need to do as a Committee, and Dr. 
Copeland, from your perspective, we need--and others in the 
audience, we need to deal with a world that is different, 
entirely different from the world that we inherited 10 or 20 or 
45 years ago, 44 years ago when we passed the APA the first 
time----
    Ms. Sanchez. The gentleman's time has expired.
    Mr. Cannon. I thank the gentlelady for indulging me, and 
yield back.
    Ms. Sanchez. Thank you.
    The gentleman from Michigan is recognized.
    Mr. Conyers. I thank the gentlelady and Chair.
    The gentleman from Utah can tell the witnesses that he 
doesn't lecture very often, but you know, we are on the 
Committee, Chris. We know a lot better than that. And we enjoy 
your criticisms and comments.
    I would ask unanimous consent to place into the record Paul 
Krugman's ``New York Times'' column of February 5, 2007.
    Ms. Sanchez. Without objection, so ordered.
    [The information referred to follows:]
    
    
    Mr. Conyers. And I hate to read the last two sentences, 
because we may get another lecture before this hearing is over.
    ``What's truly amazing is how far back we've slid in such a 
short time. The modern civil service system dates back more 
than a century; in just six years the Bush administration has 
managed to undo many of that system's achievements. And the 
Administration still has two years to go.''
    You know, this brings in the notion of conservatism, 
contracting, and I need some guidance from some of our 
witnesses. We have got the appropriations process, passing 
laws, confirmation proceedings, and any succeeding President 
can revoke any Executive Order that he or she chooses. Those 
aren't a very tasty set of options to me. What do you think, 
Professor Strauss? Is there--it seems like we are something 
like in the position of trying to get out of Iraq. We don't 
want to cut off the funds. We are--we want to pass non-binding 
resolutions. We want to voice our opposition.
    Mr. Strauss. I find a lot of merit in that analogy, 
unhappily. I think you are stuck. I mean, if you were to take 
the position which, in my judgment, is the right position, that 
authorizing someone in Government to act with the force of law, 
which is what this Executive Order does for the regulatory 
policy officer, is something that only Congress can do and the 
President can not do. You are not in the position of being able 
to undo that by a simple statute unless you can get it past a 
presidential veto, which as I read the newspapers, my guess is 
you can not. So then you are left with a series of unpalatable 
other alternatives. I don't, myself, like appropriations riders 
at all. I think they have been misused in the past, but----
    Mr. Conyers. I don't even think we can sue in court, unless 
it is a constitutional issue.
    Mr. Strauss. I don't know how.
    Mr. Conyers. How did you find this subject matter to start 
the hearing off on administrative law? I mean, this is more 
difficult than most of the other issues that we handle. I am 
wondering--perhaps a very detailed examination of this is going 
to make it clear to the public. I mean, this may be another 
case for public sentiment to kick in, because most people of 
course haven't the vaguest idea that this has occurred.
    Mr. Strauss. Newspaper reporters tend to describe stories 
about process, as one did to me in the work-up of this 
occasion, as three bowlers. That is to say, the reader's face 
will predictably plop in the oatmeal three times before they 
finish the story. I don't know that it will be easy to make it 
into----
    Mr. Conyers. Dr. Copeland, what is your diagnosis here?
    Mr. Copeland. I would refer to a document that was prepared 
by a colleague of mine at CRS, TJ Halstead, on Executive 
Orders, and he mentions previous instances where Congress has 
revoked them, most recently Executive Order 12806, where 
Congress revoked an Order by President George H.W. Bush to 
establish a human fetal tissue bank for research purposes. To 
effectuate this repeal, Congress simply directed that ``The 
provisions of Executive Order 12806 shall not have any legal 
effect.'' While this seems to be the most recent action, there 
have been numerous similarly revoked Executive Orders.
    So there is precedent for Congress revoking Executive 
Orders.
    Ms. Sanchez. The time of the gentleman has expired.
    Mr. Conyers. Thank you.
    Ms. Sanchez. Thank you.
    I now recognize the gentleman from Georgia, Mr. Johnson, 
for 5 minutes.
    Mr. Johnson. Thank you. I have got some questions, Mr. Noe.
    You were quoted in the Washington Post as saying that the 
controversy about this new Executive Order is ``a tempest in a 
teapot.'' Given that the Order appears to create a cadre of 
presidentially appointed regulatory police officers who no 
longer report to the agency heads who designate them, how can 
this be considered a ``tempest in a teapot''? Isn't it more 
serious than that, more fundamentally earth-shaking than that?
    Mr. Noe. Thank you for your question, Congressman.
    The reason I would call it a ``tempest in a teapot'' is 
because I think a lot of the concerns that were raised in the 
initial press reports were not based on a reading of the actual 
language of the Order, or an understanding of what was already 
in the existing Executive Order that President Clinton issued. 
It was not based on an understanding that these regulatory 
policy officers were not created by President Bush, they were 
created by President Clinton, and----
    Mr. Johnson. But this is a fundamental reordering of this 
Executive Order, is it not?
    Mr. Noe. Well, sir, I think that the main change in that 
part of the Order is to say a regulatory policy officer, who 
admittedly was appointed by the agency head under the old 
Order, now actually had to be in a congressionally created 
position which is going to be more accountable politically and 
more accountable to congressional oversight, I would submit, 
than what was previously undefined. And that is what I mean 
when I say I think that there has been a lot of 
misunderstanding about these provisions, that when they are 
actually read closely I don't think there is less political 
accountability. I don't there is anything new or radical. I 
actually think this could be used to provide greater 
accountability to the Congress, and I respect the importance of 
that, having worked in Congress as a staffer for 7 years.
    Mr. Johnson. Well, you were also quoted as saying that the 
Executive Order promotes better informed and more accountable 
regulatory decisions. Can you explain that a little more?
    Mr. Noe. Yes, sir.
    I think it is a real improvement over President Clinton's 
Order to include guidance documents within the interagency 
review process, because I have seen many instances where 
businesses, small businesses especially where people can not 
keep up with these things, schools, farmers are hurt or 
affected by these things and they don't have any idea that they 
are coming at them. They have no idea of how to access them. 
And I could tell you, just having heard a number of stories 
about this, that I think it is very important that that very 
important component of regulation is brought within the 
interagency review process. I think that is a big improvement.
    Mr. Johnson. Professor Katzen, what is your response?
    Ms. Katzen. Well, I find it ironic that on one hand they 
say it is not doing anything, and on the other hand they say it 
is doing something. I really don't think they can have it both 
ways.
    On the guidance documents, they do not have the force and 
effect of law, but they do have an influence, and I am 
interested in the fact that in Mr. Aitken's testimony he keeps 
referring back to the FDA guidance process. That process had 
Congress intimately involved. It was Congress that authorized 
the FDA to----
    Mr. Johnson. By the way, Mr. Noe was here before you came 
in and he made sure to change that microphone.
    Ms. Katzen. I am not paranoid, it just doesn't work.
    But Congress was the one that authorized the FDA to issue 
these guidance documents. Congress was the one that called for 
public participation. So if you are using the FDA guidance 
documents as a model, then Congress needs to be involved. 
Incidentally, Congress did not authorize OMB to review those 
FDA guidelines that it authorized. What has been done here is 
like cherry picking, where they take what they like and they 
add to it what they really like, and they now have got a 
different kind of an animal.
    The bottom line is that Congress has to act. Congress has 
to become involved, and I think that whether it is looking at 
the APA generally or looking at the provisions of how the 
Executive Order is being implemented, Congress has a 
constitutional obligation and a constitutional role to play, 
and I encourage you to do it.
    Mr. Johnson. Professor Strauss, in your testimony----
    Ms. Sanchez. The time of the gentleman has expired.
    Mr. Johnson. All right, thank you.
    Ms. Sanchez. It is now my pleasure to recognize the 
gentleman from Massachusetts, Mr. Delahunt, for 5 minutes.
    Mr. Delahunt. Thank you, Madame Chair. It is very 
reassuring to serve on this Committee under your leadership.
    Professor Katzen, it is good to see you once more.
    You know, I look at this in a larger sense. We have had an 
Administration that has spoken time and time again about this 
concept of--I think the term is unitary Executive power, which 
I view as a continuing encroachment on legislative authority. I 
see this just as another piece of that. Is that a comment that 
you would like to respond to, Professor Strauss?
    Mr. Strauss. I think you heard that from Professor Katzen 
as well. There has been----
    Mr. Delahunt. I came too late for her testimony.
    Mr. Strauss. There has been a clear acceleration, and to be 
fair about it, this is a process that began with President 
Nixon, and since his Administration, President after President 
has done more and more to bring the bureaucracy within the 
political influence over the White House. I think what Mr. 
Cannon had to say in his statement has an awful lot of merit to 
it.
    The question for me is when you cross the line, you have 
some wish to have not only politics, but also expertise, and 
when what one sees is just politics, one gets----
    Mr. Delahunt. Well, I think maybe, you know, the Ranking 
Member and I would agree on some of this. I think this is an 
institutional--this is institutional combat, if you will. And I 
think we have got to be prepared to go to war. Enough is 
enough, and without even getting into the merits of this 
particular Executive Order, because I think it is a statement 
as to whether this institution, the first branch of Government, 
has the capacity to retain its constitutional authority. And I 
would hope that, given the leadership of Congresswoman Sanchez, 
that there might exist the possibility of a discussion with the 
Executive Branch to determine what modifications ought to occur 
from the perspective of Congress as to this Executive Order, 
and if that just simply is not feasible, if it is not welcome 
by the Administration, then we ought seriously consider 
legislative action rescinding the Order.
    Mr. Cannon. Would the gentleman----
    Mr. Delahunt. I yield to my friend from Utah.
    Mr. Cannon. Thank you. You know, we live in a very 
political world and we just lost on the Republican side and 
were much chastened.
    But let me just remind the gentleman that when you suggest 
we go to war over this issue that America has changed 
profoundly. Before President Reagan, at the beginning of his 
Administration, the vast majority, over 60 percent of all 
people were employed by large corporations of over 5,000 
employees. Today, the vast majority are employed by small 
companies. So what we are doing here, and what I hope this 
Committee will do over the long term, is create a context where 
Americans can thrive, and in this battle, we need to remember 
that this is not us against the President, although Dr. 
Copeland, as you are aware, I am keenly concerned with the 
prerogative----
    Mr. Delahunt. Reclaiming my time.
    I am not in disagreement and I clearly am sympathetic to, 
you know, the small business owner. I think Members of Congress 
are. That is not the issue here.
    The issue is whether this is appropriately within the 
prerogative of Congress pursuant to our constitutional 
authority, and if it is, I think that we can demonstrate as 
much sympathy and support for the small business community. 
This, to me, is a constitutional issue. It has got nothing to 
do with the merits of a particular Executive Order. I mean, I 
am concerned. I mean, the--what was the book, the Imperial 
City. I mean, we had political appointees there that were 
running the Stock Exchange who didn't have a degree in 
economics. You know, is there--I haven't really--I will 
acknowledge that I haven't read the Executive Order, but the 
idea of some sort of confirmation process by the Senate just to 
assure Members of Congress that we are getting people who have 
an expertise and are not just simply political appointees like 
we see. We have seen them in Iraq, we saw them in the aftermath 
of Katrina, and there was much to be revealed.
    I don't mean to just beat up on the Bush administration, 
but they are handy right now.
    Ms. Sanchez. The time of the gentleman has expired.
    I would like to thank again all the witnesses for their 
testimony. Members may have additional written questions for 
our witnesses which we will forward to you and ask that you 
answer as promptly as you can so that they can be made part of 
the record.
    Without objection, the hearing record----
    Mr. Delahunt. Madame Chair?
    Ms. Sanchez. The gentleman is recognized.
    Mr. Delahunt. If I could ask for unanimous consent for an 
additional minute.
    Ms. Sanchez. The gentleman----
    Mr. Delahunt. I would like to congratulate the Chair for 
conducting her first hearing. You did it with your customary 
aplomb and professionalism, and I know I speak for Mr. Cannon. 
We all look forward to working with you.
    Ms. Sanchez. Thank you.
    As I was saying before I was so pleasantly interrupted, we 
will be submitting additional questions in writing. We ask that 
you respond to those questions so that they can be--as quickly 
as you can so that they can be made part of the record.
    Without objection, the hearing record will remain open 
until the close of business on Friday for the submission of 
additional materials.
    [The material in the following list was submitted by the 
Minority for inclusion in the hearing record. The material is 
not reprinted in this hearing but is on file at the 
Subcommittee. The information referred to is as follows:]
       List of material submitted by the Minority for inclusion 
                         in the hearing record
 1.  Food and Drug Administration Modernization Act of 1997, 21 U.S.C. 
Sec. 371(h)
 2.  ``Food and Drug Administration Modernization and Accountability 
Act of 1997,'' S. Rep. 105-43, at 26 (1997)
 3.  Executive Order No. 13422, 72 Fed. Reg. 2763 et seq. (Jan. 23, 
2007)
 4.  Executive Order No. 12866, 58 Fed. Reg. 51,735-44 (Oct. 4, 1993)
 5.  Executive Order No. 13258, 67 Fed. Reg. 9,385-86 (Feb. 28, 2002)
 6.  Redline-strikeout version of E.O. 12866 as amended by E.O. 13422
 7.  U.S. Office of Management and Budget Bulletin No. 07-07, ``Final 
Bulletin for Agency Good Guidance Practices,'' 72 Fed. Reg. 3,432-40 
(Jan. 25, 2007)
 8.  U.S. Office of Management and Budget, ``Proposed Bulletin for Good 
Guidance Practices,'' 70 Fed. Reg. 71866 et seq. (Nov. 30, 2005)
 9.  U.S. Office of Management and Budget Circular A-4, ``Regulatory 
Analysis,'' (Sept. 17, 2003)
10.  U.S. Office of Management and Budget, ``Stimulating Smarter 
Regulation: 2002 Report to Congress on the Costs and Benefits of 
Federal Regulation,'' (2002)
11.  U.S. Office of Management and Budget, ``Draft 2002 Report to 
Congress on the Costs and Benefits of Federal Regulation,'' 69 Fed. 
Reg. 15014 et seq. (March 28, 2002)
12.  U.S. Office of Management and Budget Memorandum, ``Economic 
Analysis of Federal Regulations under Executive Order No. 12866,'' 
(Jan. 11, 1996)
13.  U.S. Office of Management and Budget, M-00-08, ``Guidelines to 
Standardize Measures of Costs and Benefits and the Format of Accounting 
Statements,'' (March 22, 2000)
14.  Regulatory Program of the United States (April 1, 1990 March 31, 
1991), at pp. 653-54
15.  Appalachian Power Co. v. EPA, 208 F.3d 1015, 1019 (D.C. Cir. 2000)
16.  Robert A. Anthony, ``Interpretive Rules, Policy Statements, 
Guidances, Manuals and the Like--Should Federal Agencies Use Them to 
Bind the Public?'' 41 Duke L.J. 1311 (1992)
17.  Robert A. Anthony, `` `Interpretive' Rules, `Legislative' Rules 
and `Spurious' Rules: Lifting the Smog,'' 8 Admin. L.J. (Spring 1994).

    Ms. Sanchez. I thank everyone again for their time and 
patience, and without objection, the hearing of the 
Subcommittee on Commercial and Administrative Law is adjourned.
    [Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

   Post-Hearing Questions and Responses for Steven D. Aitken, Acting 
Administrator, Office of Information and Regulatory Affairs, Office of 
                         Management and Budget


































   Post-Hearing Questions and Responses for Sally Katzen, Professor, 
                   University of Michigan Law School






















  Post-Hearing Questions and Responses for Curtis W. Copeland, Ph.D., 
  specialist in American National Government, Congressional Research 
                                Service




  Post-Hearing Questions and Responses for Paul R. Noe, Partner, C&M 
  Capitolink LLC, and Counsel, Crowell & Moring Environment & Natural 
                    Resources Group with Attachments














                              ATTACHMENTS






























































































































































































































































































































 Post-Hearing Questions and Responses for Peter L. Strauss, Professor, 
                   Columbia University School of Law


















                                 
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